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 exact 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 September 2020.
Coffee Shop Startup Costs
Consider this list of startup costs for starting a coffee shop – or expanding an existing business to serve coffee:
1. Rent and build-out costs for your chosen location. Rent should be 15 percent or less of projected sales.
2. Coffee Shop Equipment Costs. Your espresso machine and coffee grinders are the workhorse of your business, so invest in top-notch, reliable equipment.
If you plan to serve plain drip coffee, add a drip machine and airpots. To serve cold or frozen drinks, you’ll also need a refrigerator/freezer and blenders.
Since the quality of coffee depends on the quality of water, you will want to test your water and purchase water filtration if needed.
Note: Customers who sign up for our 7 Steps to Success coffee shop franchise alternative program can save time and money with our recommended equipment packages.
Never buy used equipment! Any money you save up front will dribble away over time in repair costs and downtime. If you can’t make drinks, your business grinds to a halt.
3. Coffee, milk, chocolate, syrups and other drink ingredients, plus pastries, muffins and other baked goods. These should be 40 percent or less of projected sales.
4. Professional fees for architects, attorneys, accountants and business consultants.
5. Payroll costs. These include wages, benefits, payroll taxes, worker’s compensation and costs of payroll processing. Payroll costs should be 35 percent or less of sales.
6. Principal and interest costs (if you plan to borrow money).
7. Income taxes (usually about 35 percent of operating profit).
8. Other expenses, including business insurance, supplies (napkins, stir sticks, porcelain cups, etc.), licenses and permits, office supplies, utilities, advertising, and repairs and maintenance.
9. Training. Unless you have previous experience running a coffee shop, you need to invest in comprehensive, hands-on training and ongoing support. When choosing a training package, consider:
- Ideally, training should take place at your new coffee shop, using your espresso machine, grinder, blender and other equipment – not at a remote classroom on random equipment.
- Having training come to you is often more economical, especially when you add in your travel expenses.
- You and all your team should train together, so you can deliver drinks of consistent quality.
- Training should take place over several days, leading up to your opening day.
- Your trainer should have extensive experience in coffee shop operations.
Hands-on training is one of the best investments you can make in opening a coffee shop. Over time, it can mean the difference between becoming a successful coffee shop owner and limping along or going out of business.
Expense Variables and Cash on Hand
No two coffee shop businesses are the same. Remember that costs vary depending on the region, state, city or rural area in which you operate. If you already own a suitable building or have a complementary business such as a bakery, your costs might be much lower.
Besides start-up costs, plan to have cash on hand to cover your operating expenses for the first six months.
The Guide to Opening and Running a Successful Coffee Shop
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 Business?
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 over 250 independent business owners how to open a coffee shop through our coffee shop franchise alternative program. We were honored to win the 2019 Golden Bean North America Small Franchise/Chain Champion and Roast Magazine’s 2016 Roaster of the Year award.
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!