If you’re dreaming of opening a coffee shop, two questions you’re probably asking yourself are: “How much does it cost to open a coffee shop?” and, “Do I need a coffee shop business plan?”
How Much Does It Cost to Open a Coffee Shop?
There’s no hard answer on how much it costs to start your own coffee business. Your costs will depend upon the type of coffee shop you want to open, the costs of retail space in your community and other variables.
With that caveat, here are cost ranges for opening or expanding various coffee businesses.
- Coffee kiosk/Coffee stand: $60,000 to $105,000
- Mobile coffee food truck: $50,000 to $154,000
- Coffee shop with seating: $80,000 to $300,000
- Drive-thru only coffee shop: $80,000 to $200,000.
- Coffee shop with seating and drive-thru: $80,000 to $300,000
- Add a brew bar to an existing coffee shop: $5,500 to $25,000
- Add specialty coffee service to a bakery or cafe: $25,000 to $75,000
Costs are based on proprietary research of independent coffee shops and are current as of July 2020.
Coffee Shop Startup Costs
Consider this list of startup costs for opening or expanding a coffee shop, along with some recommended maximums:
- Rent and build-out costs for your chosen location. As a rule, rent should be no more than 15 percent of projected sales.
- Coffee Shop Equipment, including a top-of-the-line espresso machine, espresso and coffee grinders, blenders, gourmet drip coffee brewers, refrigerator, etc.
- Coffee, milk, chocolate, syrups and other drink ingredients as well as pastries, muffins and other baked goods, which should be no more than 40 percent of projected sales.
- Professional fees for architects, attorneys, accountants and business consultants.
- Payroll costs, including wages, benefits, payroll taxes, worker’s compensation and costs of payroll processing. As a rule of thumb, payroll costs should be 35 percent or less of sales.
- Principal and interest costs (if you plan to borrow money).
- Income taxes (usually about 35 percent of operating profit).
- Other expenses, including business insurance, supplies (napkins, stir sticks, porcelain cups, etc.), licenses and permits, office supplies, utilities, advertising, and repairs and maintenance.
Remember that costs vary depending on the region, state, city or rural area in which you plan to operate. If you already own a suitable building or have a complementary business such as a bakery, your costs might be much lower.
In addition to start-up costs, you should have cash on hand to cover your operating expenses for the first six months.
A Guide for Owning a Coffee Business
You’ll find a more detailed explanation of how to calculate coffee shop start-up costs plus a full coffee shop business plan in Seven Steps to Success in the Specialty Coffee Industry, written by Crimson Cup founder Greg Ubert.
Hundreds of independent coffee shops across the USA have used this book and our 7 Steps to Success coffee franchise alternative program as their guide to how to open a successful coffee shop. (Don’t just take our word for it – read some success stories.)
Have Questions About How to Start a Coffee Shop?
We’re here to help! Give us a call at 888-800-9224 or fill out this form, and we’ll get right back to you.
Since 1991, Crimson Cup Coffee & Tea has hand-roasted great-tasting specialty coffee in Columbus, Ohio. We’ve also taught more than 250 independent business owners how to open a coffee shop through our coffee shop franchise alternative program. We were honored to be selected as Roast Magazine’s 2016 Roaster of the Year.
Want to learn more about our wholesale coffee roasting programs for specialty grocers, colleges and universities and restaurants and food service operators? Give us a call at 888-800-9224 or fill out this form, and we’ll get right back to you!