A Mexican grocery, a tienda with a carnicería, earns its living from what the big supermarket nearby doesn't do well: marinated meats cut to order, fresh tortillas and pan dulce from local bakers, the right chiles, cheeses and brands, and often a taco counter on weekends. Each department keeps a different share: canned and dry goods keep about 30 cents of each dollar, the meat counter more when it marinates its own carne asada, and a taco counter the most. The plan turns on the meat counter and the coolers, which are most of the build-out and much of the power bill, and on shrink, wilted produce and day-old bread. The plan below works in departments per $100 of sales. In the example, a Dalton tienda starts with $252,000, ends its first year about $11,900 behind before the owner's pay while sales build, and makes about $5,200 a month at full speed. Below is each part of the plan, the first year month by month, the startup budget, and a free template.
The short version
- Describe the store in a paragraph: the neighborhood, the departments, what's missing nearby, the goals.
- Cost a few items: distributor price, the card fee, the shelf price.
- Plan sales by department per $100: produce, groceries, meat counter, tortillas and bakery, drinks, hot food.
- The carnicería's marinated meats and the taco counter carry the margin.
- Coolers and the meat case are most of the build-out and the power bill.
- A hot food counter needs its own permit and a hood.
- TaroStack keeps dates on the meat and tortillas and records shrink by reason. More below.
Part 1: the business description
Mercado La Esperanza, a made-up Mexican grocery store in Dalton, Georgia, writes:
Mercado La Esperanza is a 3,500-square-foot Mexican grocery in Dalton with a carnicería that cuts and marinates its own meats, produce, groceries from Hispanic distributors, tortillas and pan dulce from local bakers, and a taco counter Friday to Sunday. In its first year it aims to reach $86,000 of sales a month.
Part 2: what an item costs
| Item | Cost | Card fee | Total cost | Price | Cost share |
|---|---|---|---|---|---|
| Corn tortillas, 2 lb pack from a local tortillería | $1.80 | $0.08 | $1.88 | $3.29 | 57.1% |
| Carne asada, marinated, per lb | $4.45 | $0.20 | $4.65 | $7.99 | 58.2% |
| Glass-bottle soda | $1.45 | $0.06 | $1.51 | $2.49 | 60.6% |
| Avocado, each | $0.55 | $0.03 | $0.58 | $1.00 | 58.0% |
| Three tacos at the counter | $2.10 | $0.24 | $2.34 | $9.50 | 24.6% |
The carne asada is beef at $4.20 a pound and 25 cents of marinade. The department costs in Part 4 run higher than these items, because they carry shrink: trim, wilted produce, bread past its day. How margins differ by department is in grocery store profit margins by department.
Part 3: suppliers, the meat counter and permits
Groceries come from two Hispanic distributors weekly; produce three times a week; tortillas and pan dulce daily from local bakers; beef, pork and chicken from inspected suppliers, cut and marinated at the counter. The store holds a retail food license that covers the meat counter, and the taco counter needs a food service permit and a hood of its own, in grocery store license. Shrink is tracked by department; produce and bread are where it hides, in grocery store shrink.
Part 4: what each category earns
| Category | Sales | Variable cost | Contribution | Margin | Hundreds a month at full speed |
|---|---|---|---|---|---|
| Produce | $100.00 | $65.00 | $35.00 | 35% | 120 |
| Groceries, canned and dry | $100.00 | $70.00 | $30.00 | 30% | 250 |
| Carnicería, cut and marinated meats | $100.00 | $64.00 | $36.00 | 36% | 200 |
| Tortillas, pan dulce and bakery | $100.00 | $65.00 | $35.00 | 35% | 80 |
| Drinks and snacks | $100.00 | $68.00 | $32.00 | 32% | 150 |
| Taco counter | $100.00 | $38.00 | $62.00 | 62% | 60 |
At full speed the business sells $86,000 a month and keeps $30,220, 35.1%; groceries brings $7,500 of it.
Part 5: the first year, month by month
Fixed costs are $25,000 every month: rent ($5,500), wages ($14,000), utilities, mostly the coolers ($3,000), equipment upkeep ($600), insurance ($500), register and software ($300), ads ($300), and other costs ($800). Sales start at half of full speed:
| Month | Sales | Profit | Cash, year to date |
|---|---|---|---|
| 1 | $43,000 | −$9,890 | −$9,890 |
| 2 | $48,200 | −$8,052 | −$17,942 |
| 3 | $53,300 | −$6,276 | −$24,218 |
| 4 | $58,500 | −$4,438 | −$28,656 |
| 5 | $63,600 | −$2,662 | −$31,318 |
| 6 | $68,800 | −$824 | −$32,142 |
| 7 | $73,200 | $718 | −$31,424 |
| 8 | $76,600 | $1,902 | −$29,522 |
| 9 | $80,100 | $3,148 | −$26,374 |
| 10 | $82,600 | $4,036 | −$22,338 |
| 11 | $86,000 | $5,220 | −$17,118 |
| 12 | $86,000 | $5,220 | −$11,898 |
The year's sales are $819,900, and the business ends it $11,898 behind, before the owner's pay. It breaks even at about $71,140 of sales a month, in the seventh month. The lowest cash point, −$32,142 in month 6, is covered by the $40,000 of working cash with about $7,900 to spare. Wages and the coolers' power are fixed whatever sells, so the carnicería and taco counter, the two departments that keep the most, decide whether the store makes money.
Part 6: the startup budget
| Item | Example |
|---|---|
| Opening inventory | $60,000 |
| Build-out | $40,000 |
| Coolers and freezers | $35,000 |
| Taco counter and hood | $25,000 |
| Meat case, saw and grinder | $18,000 |
| Shelving | $12,000 |
| Lease deposit and first month | $11,000 |
| Register | $4,000 |
| Signs | $4,000 |
| Licenses and permits | $3,000 |
| Working cash | $40,000 |
| Total to start | $252,000 |
The $212,000 before working cash is earned back in about three and a half years at full speed. A general small grocery is in small grocery store business plan, and a corner store with less fresh food in bodega business plan.
Get the template
Download the Mexican grocery store 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, the lowest cash point and whether the working cash covers it; 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 uses one shrink allowance per department. The carnicería marinates a different amount each day, the tortillas come in twice, and what was thrown out on Monday is a guess by Friday.
How TaroStack does it
TaroStack keeps dates on the meat and tortillas, records shrink by reason, and makes the carnicería's marinated meats batches from stock.
The carnicería's batches. Carne asada and al pastor are recipes: a batch takes the beef or pork and the marinade off stock, costs what it used, and gets a lot of its own with a date.
Dates, oldest first. Meat, cheese, cream and tortillas keep their dates, the oldest goes first, and an alert comes before a date runs out, so it's marked down instead of thrown away.
Shrink with a reason. Every adjustment carries its reason, expired, spoiled, damaged or lost, reported by reason, item and site.
| The job | Notebook | In TaroStack |
|---|---|---|
| What the carne asada cost | Guessed | The batch's cost from what it used |
| Cream about to expire | Found on the shelf | An alert before the date |
| Shrink by department | One plugged-in number | By reason, item and site |
Recipes, batches, lots, expiry and losses by reason 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.