Coffee is not just limited to brewing and sipping every morning. You can start a coffee business in no time. Perhaps, you can be the next Starbucks…who knows!
Though I’m a great lover of coffee and regularly search for some delicious recipes, I’ve never thought of running my coffee shop; however, I researched the cost issues and other things.
So, here is a rough estimate of how much does it costs to open a coffee shop.
Cost to Start A Coffee Shop
While this is not something that I could answer exactly as it depends a lot on the size and standard of your shop.
However, a coffee shop can cost you somewhere between $10,000 to as much as $300,000.
Also, with a $300,000 budget, it is much easier to succeed than with $10,000. I’m not saying it is impossible, but for the sake of being ruthlessly realistic, you must understand this.
Roughly, a coffee cart can cost you $20,000 while a proper shop will cost $200,000.
Things To Know Before Starting A Coffee Business
Apparently, starting a coffee business seem very easy. You just need a small space, a couple of coffee makers, some mugs, and chairs and that’s it?
My intention here is to help and guide you properly and not to discourage anyone. I’m just being realistic and telling you the truth.
The good thing here is 85% of US visits a coffee shop at least once a week. So, there is a fruitful market with potential buyers that could visit your shop as well.
Even though we have some big brands like Gloria Jeans Coffees, Starbucks, Dunkin’s Donuts and a few others to name, you shouldn’t fear the competition just because you are a small business.
People in the USA are looking for better coffee, and they tend to steer towards the new options to avoid the big players.
Now, if we talk about the margins, which of course is the key factor here, the misconception is coffee yields higher margins.
But does it equates to big profits?
Well, Alex Galatino, founders of Italian espresso bar La Bottega Milanese says, “Everybody seems to think that there is lots of money in coffee, that ‘the margins are so high. Having a high margin on a small-ticket value is not the same as having a low margin on a high-ticket value. You need volume and a lot of it. If then you start talking about specialty coffee, it’s an expensive product. The practice, done properly, involves a lot of calibrating, testing, tasting, and wastage.
How To Run A Successful Coffee Business?
You have to deliver something different to stand out from your competitors. I still remember the time when people believe 100% Arabica to be the only premium species of coffee but Black Sheep made a big name for itself as the first coffee company to develop a specialty grade 100% Robusta.
You deliver quality; you get more customers. There are tons of blends nowadays but what do the coffee buyers love?
The answer is “Good Coffee”!
For your new coffee shop to be successful, the first thing to ensure is that your coffee tastes good.
Coffee consumers only care about the taste of the coffee and not which type of coffee was used. If you brew coffee which tastes good, your customers will come back every day.
A Dedicated Team
Of course, you’ll be hiring a team at your coffee shop, and it must be a dedicated one. Your staff way of welcoming your customers counts a lot in building your business. Just think of yourself as a customer and how you should be treated at a coffee shop.
A warm, welcoming environment is one of the major reasons why customers come back.
It’s a 24/7 Business
To be honest, coffee business is 24/7, and this requires sacrifices. You can’t put a ‘closed’ sign and rest. The moment you do that, your customers flee to the next coffee shop and might be possible the next day he’ll skip your shop.
To encourage new customers and to retain the existing ones, you must be willing to work hard. By 24/7 it is not just at the shop. You should actually love coffee and your customers. Run your mind to think of new ideas that your customers would love.
Important Things To Consider
John Richardson, with multiple coffee shop business, has some great tips for those who are starting a coffee shop.
- Don’t go over budget when you start a coffee shop. This can be disastrous for the business before it has started.
- To ensure quality and taste, you must give proper care and attention in all the business matters, especially during the baby days of your business. Whether it be your suppliers or customers, treat them well.
- From day one, start the profit and loss for your business to have a firm grasp of the money matters.
- From day one, focus on fixing issues and problems that occur in the way of your business.
Things You Will Need Before Starting A Coffee Shop
- A Space along with construction and design cost. If it is your personal space, well and good else you need to rent one.
- The cost of setting up a business. This includes all the legal fees and licensing.
- Supplies like coffee, milk, syrups, teas, and a smoothie. You can also include food items. Other supplies include napkins, stirrers, etc.
- Advertising fee, payroll costs and other taxes.
- Espresso machine
- Espresso grinder
- Coffee brewer
- Coffee grinder
You can also use French Press coffee makers.
Before i conclude, here is a great infograpghic on Coffee Business Startup.
I hope you have a clear idea of how much it costs to start a coffee shop and what things to consider before you take a step.
Do share this guide with someone who is planning to open a coffee shop.