How to turn kababs into gold in Venice

Nearly all of us have discovered the value of the close, fast, and delicious Kabab restaurant around the corner from the beautiful and peaceful Hotel Nuove Mestre. Have you thought about how the owners and managers of this store might run this business profitably? This restaurant is not in the heart (or even the chest cavity) of Venice, yet it draws satisfied customers consistently each day. How much in revenues do you think this place takes in each day? (# of customers X sales per customer / day). E.g., 150 customers X 6 euro = 900 euro. Subtract out wages (100 euro?), cost of goods sold (100 euro?), and fixed costs (rent, utilities, insurance, maybe 50 euro) and you have 650 euro profit. If my average sales per customer goes up by just one euro, then my profit for the day is 800. Just some back-of-the-envelope stuff, but you can quickly do some numbers to see how kebabs can turn into gold. The purpose of the exercise is not to reverse-engineer the numbers to complete accuracy, but to gain an understanding about the moving parts - revenues per customer, number of customers, additional incremental revenues, cost of goods sold, and fixed costs - that make or break a small business.


Thanks to Andrew Slusser for putting down his gyro long enough to take this picture!