Prepare for the Bain case interview.

A coffee-shop opening is a useful practice decision. Estimate demand, calculate break-even and use the result to judge whether opening the shop is a sensible investment.

Pay particular attention to its comparison between a good answer and a better one. A small required share of a large market does not settle the investment decision. The stronger discussion also examines the owner’s investment horizon, differentiation and ability to compete.

Use that distinction in your own practice. After calculating a threshold, ask what would have to happen for the client to reach it. A numerical answer becomes commercial advice when you connect it to a plausible operating plan.

Here is an original exercise. A retailer is considering home delivery. The client wants the expansion to add cash during its first year and has enough funding for the stated setup spending.

The initial proposal is a full-year service. It would produce £100,000 of contribution before £140,000 of additional fixed operating costs. On those assumptions, it reduces annual cash by £40,000 even before any setup spending.

You can reject that proposal as presented. You cannot yet recommend a seasonal service simply because it sounds cheaper. The seasonal option needs its own demand, cost and capacity analysis.

A useful transition is: “The full-year plan does not meet the objective. I would now test whether concentrating delivery in the peak season can generate enough contribution to cover a smaller cost commitment.”

The interviewer supplies a three-month seasonal option:

First-year incremental cash surplus is 3,000 × £20 − £30,000 − £20,000 = £10,000.

That meets the stated objective. It also leaves a fairly small cushion. The plan needs 2,500 incremental orders to cover its £50,000 of operating and setup spending.

The important word is incremental. If customers simply move purchases from the shop to delivery, the full £20 may not be additional contribution. You need to understand what the business would have earned without the service.

At 15% below forecast, the seasonal service receives 2,550 orders. Cash surplus falls to £1,000. At 20% below forecast, it receives 2,400 orders and loses £2,000.

These are useful sensitivities because order volume can reverse the recommendation. You do not need to vary every input by an arbitrary percentage.

Now consider cannibalisation. If the service displaces £10,000 of contribution from existing shop sales, the forecast cash surplus falls from £10,000 to zero. The launch no longer adds cash in its first year.

The next investigation should therefore establish how many orders are truly additional and whether peak-season demand supports the 2,500-order threshold. Test that before negotiating a larger year-round commitment.

A supported answer might sound like this:

“I would pursue the seasonal option and reject the full-year plan. The seasonal forecast adds £10,000 of first-year cash, while the full-year service loses at least £40,000. Before committing, I would validate that we can generate more than 2,500 additional orders and that existing store sales will not be displaced enough to remove the surplus.”

This gives the client a direction and identifies the evidence needed before spending. It also keeps the difference between a forecast and a validated plan clear.

If the interviewer asks for an immediate go/no-go on an irreversible contract, make that decision explicit: you would not sign until the demand condition is sufficiently supported. “Pursue” and “commit” are different actions.

Suppose the interviewer says, “The owner mainly wants to learn about delivery for next year.”

Clarify whether the first-year cash objective still applies. If learning is now the main purpose, assess a smaller pilot by the information it will produce and the amount the client is willing to spend obtaining it.

You might test delivery in one neighbourhood, measure repeat purchases and compare existing-customer behaviour with genuinely new demand. A pilot should answer the uncertainty that blocks the larger decision. Calling any small launch a pilot does not make it useful.

If the original cash requirement remains binding, learning value does not erase the economics. Explain the trade-off and let the client make an informed choice.

Prepare concrete examples of how you solved problems with others, handled a setback and took responsibility for an outcome. Make time to explain your experience and motivation alongside case practice.

For your motivation answer, identify the work that interests you and explain why. If private equity, a particular industry or implementation appeals to you, connect that interest to something you have done or learned. Then check how it relates to the office and role you are applying for.

If your invitation includes a digital assessment, follow the provider instructions in that invitation. Keep them separate from the rules for live interviews.

Give the seasonal-delivery exercise to a partner. Ask them to introduce either lower demand or cannibalisation after you have calculated the initial result. Your task is to update the recommendation and explain exactly what changed.

In the debrief, look for a specific failure: did you confuse revenue with contribution, recommend an untested alternative or keep the old answer after the new fact? Repair that step and try a fresh scenario.

The final-recommendation guide helps you choose the evidence that belongs in the closing answer. Aim for a recommendation that another person could act on and question intelligently.