Target has pointed out in the past that its biggest single line item expense (other than inventory)isn't wages, isn't benefits, but is credit card fees. ButterflyEffect and I had drinks at a bar in Seattle last year that had a sign on the wall that said something like "prices include a 15% surcharge to provide our servers a $15/hour living wage." It made the math pretty simple: tip nominally as your server is no longer living off tips. I'd be curious as to cgod's thoughts. He's in a retail reality that I happily will never inhabit. I did an episode of Bar Rescue where Tapper was saying things like "You've got two thousand dollars a month in rent." (check!) "You're a quarter million dollars in debt." (likely to be check!) "You've got 30,000 cars a day in front of this business." (We've got closer to 50k) "Isn't that suffocating?" That's when I realized these poor sonsobitches needed to make their nut one order of buffalo wings at a time... rather than needing to make two four-thousand-dollar sales a month. I said some likely dumb shit about coffee back before cgod opened a shop; I'm curious how dumb my shit actually was.
This post Has some great statistics about how, as small businesses go, coffee shops are stunningly survivable. That said, having been through the tenant improvement wringer I have gained a lot of respect for businesses that attempt to make their nut off of simple retail markup.