A deli sells three things from the same case: meats and cheeses by the pound, sandwiches built from them, and trays for offices and parties. The plan turns on two numbers a first plan can miss. The first is the cost of a sliced pound: every roast and chub loses its heels and trim before it's sold, so a pound sold costs more than a pound bought. The second is the clock: under the FDA Food Code, which states adopt in their own versions, an opened deli meat is date marked and sold or thrown away within 7 days, counting the day it's opened as day 1. A slow seller in a big chub loses money every week. The plan below works in categories per $100 of sales. In the example, a Cleveland deli opens with $161,500, loses $7,227 in its first year before the owner's pay while sales build, and makes about $5,000 a month at full speed. Below is each part of the plan, the rules, the first year month by month, the startup budget, and a free template.
The short version
- Describe the deli in a paragraph: the street, who's eating lunch there, what's missing nearby, the goals.
- Price each meat from its cost per sellable pound: cost a pound ÷ the share left after heels and trim.
- Check each chub sells inside 7 days once opened; buy smaller ones of slow sellers.
- Plan sales by category per $100: sandwiches, sliced meats, salads and soups, trays, chips and drinks.
- Sandwiches and trays keep the most of each dollar; sliced meat by the pound keeps the least.
- Clean the slicers at least every 4 hours.
- TaroStack keeps each roast and chub as a lot with its use-by date, oldest first. More below.
Part 1: the business description
Tremont Deli & Provisions, a made-up deli in Cleveland, Ohio, writes:
Tremont Deli & Provisions is a 1,400-square-foot deli with a meat and cheese case sliced to order, hot and cold sandwiches, soups and salads made in house, catering trays for nearby offices, and chips, drinks and pickles. In its first year it aims to reach $50,000 of sales a month.
Part 2: what a sliced pound costs, and how long it has
| Meat | Size | Cost a pound | Sellable | Cost a sellable pound | Price a pound | Margin | Sells a day | Days once opened |
|---|---|---|---|---|---|---|---|---|
| Roast turkey breast | 9 lb | $5.80 | 92% | $6.30 | $13.99 | 54.9% | 4 lb | 2.1 |
| Pastrami | 10 lb | $8.40 | 90% | $9.33 | $17.99 | 48.1% | 3 lb | 3.0 |
| Smoked ham | 10 lb | $4.90 | 95% | $5.16 | $10.99 | 53.1% | 2.5 lb | 3.8 |
| Roast beef | 8 lb | $7.60 | 94% | $8.09 | $15.99 | 49.4% | 3.5 lb | 2.1 |
| Liverwurst | 5 lb | $4.10 | 96% | $4.27 | $9.99 | 57.2% | 0.5 lb | 9.6 |
Cost a sellable pound = cost a pound ÷ the share left. Days once opened = size × sellable ÷ what sells a day. The liverwurst is the problem: a 5-pound chub takes almost 10 days to sell and has 7, so over a quarter of it goes in the bin. The deli switched to a 2.5-pound chub at $4.40 a pound, which costs $4.58 a sellable pound and sells in 4.8 days. How a yield changes the cost of what comes out is in batch yield formula.
Part 3: the rules for the case and the slicer
Refrigerated, ready-to-eat food that needs temperature control and is held more than 24 hours is marked with the day by which it's sold or thrown away, at most 7 days at 41 °F or below. For a deli meat from a processor, the day it's opened counts as day 1, and a sandwich or salad keeps the date of its oldest ingredient. Hard and semi-soft cheeses, shelf-stable dry sausages such as Genoa salami, and shelf-stable cured hams such as prosciutto are exempt (Food Code 2022, 3-501.17). Slicers and other equipment used with these foods are cleaned at least every 4 hours through the day (4-602.11(C)). The deli's retail food license comes with inspections of both. This is general information, not legal advice.
Part 4: what each category earns
| Category | Sales | Variable cost | Contribution | Margin | Hundreds a month at full speed |
|---|---|---|---|---|---|
| Sandwiches | $100.00 | $38.00 | $62.00 | 62.0% | 220 |
| Meats and cheeses sliced by the pound | $100.00 | $64.00 | $36.00 | 36.0% | 120 |
| Prepared salads and soups | $100.00 | $40.00 | $60.00 | 60.0% | 50 |
| Catering trays | $100.00 | $45.00 | $55.00 | 55.0% | 60 |
| Chips, drinks and pickles | $100.00 | $66.00 | $34.00 | 34.0% | 50 |
Variable costs include heels and trim, paper, card fees and what's thrown out at the 7-day mark. At full speed the deli sells $50,000 a month and keeps $25,960, 51.9%; sandwiches bring $13,640 of it. Sliced meat by the pound keeps the least once the heels, trim and the 7-day bin are counted; the same meat on a sandwich keeps far more. How trays are priced is in how to price charcuterie boards.
Part 5: the first year, month by month
Fixed costs are $20,950 every month: rent ($4,000), wages for the counter and kitchen ($14,000), utilities ($1,300), insurance ($350), the register and software ($200), ads ($500), and other costs ($600). Sales start at half of full speed:
| Month | Sales | Profit | Cash, year to date |
|---|---|---|---|
| 1 | $25,000 | −$7,970 | −$7,970 |
| 2 | $27,600 | −$6,625 | −$14,595 |
| 3 | $30,000 | −$5,374 | −$19,969 |
| 4 | $33,000 | −$3,814 | −$23,783 |
| 5 | $35,900 | −$2,309 | −$26,092 |
| 6 | $39,100 | −$651 | −$26,743 |
| 7 | $41,700 | $694 | −$26,049 |
| 8 | $44,100 | $1,945 | −$24,104 |
| 9 | $45,900 | $2,883 | −$21,221 |
| 10 | $48,000 | $3,974 | −$17,247 |
| 11 | $50,000 | $5,010 | −$12,237 |
| 12 | $50,000 | $5,010 | −$7,227 |
The year's sales are $470,300, and the deli ends it $7,227 behind, before the owner's pay. It breaks even at about $40,350 of sales a month, in the seventh month; the lowest cash point, −$26,743 in month 6, fits inside the $30,000 of working cash. Catering trays for office lunches are what get a new deli to full speed fastest, because one order can be dozens of sandwiches.
Part 6: the startup budget
| Item | Example |
|---|---|
| Build-out and signs | $45,000 |
| Hood and range for soups | $18,000 |
| Walk-in cooler | $15,000 |
| Deli case | $14,000 |
| Sandwich prep table and reach-ins | $9,000 |
| Two slicers | $7,000 |
| Opening inventory | $12,000 |
| Lease deposit and first month | $8,000 |
| Register | $2,000 |
| Licenses and permits | $1,500 |
| Working cash | $30,000 |
| Total to start | $161,500 |
The $131,500 before working cash is earned back in a little over two years at full speed. A shop built around the cheese side of the case is in cheese shop business plan.
Get the template
Download the deli business plan workbook. Four sheets: your categories, each per $100 of sales with its variable cost and hundreds a month at full speed; the first year, month by month, with sales ramping up, profit, cash, the first profitable month and the lowest cash point; your fixed costs; and the startup budget. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The plan assumes the 7-day bin is small. In the case, every opened chub has its own clock, and a deli with 30 meats and cheeses open has 30 dates to watch, on tape that's hard to read through plastic wrap.
How TaroStack does it
TaroStack keeps each roast and chub as a lot with its use-by date, and sells the oldest first.
Each chub a lot. Each roast or chub is received with its lot and the maker's use-by date, so the walk-in's dates are on a list, not only on tape.
First-expired-first-out. Sales and trays take the oldest lot first by default, so the turkey opened Monday goes before Wednesday's.
Counts with no signal. The walk-in can be counted on a phone with no signal.
| The job | Tape and marker | In TaroStack |
|---|---|---|
| Which meats are near their date | Reading every label | Lots with use-by dates |
| Which turkey to slice first | Remembered | First-expired-first-out |
| What's in the walk-in | A clipboard | A count on a phone, offline |
Lots, counts and recipes are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.