How can I find out whether a butcher shop’s custom orders are profitable?

Start by asking how custom orders come in: phone calls, online forms, holiday pre-orders, restaurants or events. Ask for a sample of recent orders with the price charged, the product used and who prepared them. Look at how much work each takes, such as boning, trimming, tying, grinding and packaging.

Next, look for the costs that hide. Trimmed fat and bone is lost weight, and a special request may leave cuts that are hard to sell. Ask how that is handled. Check whether the shop charges for the extra time, and whether the people who take the orders also serve the counter. A custom customer who always haggles on price may not be worth keeping.

Finally, check how steady the orders are. Do they come from loyal regulars, or from a few big seasonal jobs? Ask which customers would stay if the owner left. Your accountant can help you work out the margin on a sample of orders, and what the shop’s books can and cannot show. Treat the result as a question to put to the seller, not a verdict.

Key takeaways

• Split custom orders from counter sales before drawing any conclusion.
• Account for trim loss, labour time and packaging, not just the sale price.
• Find out whether custom customers are loyal regulars or one-off seasonal jobs.
• Treat your margin estimate as a question to put to the seller, not a verdict, because the books may not show it clearly.