If you’re dreaming of opening a coffee shop, the two questions you’re probably asking yourself are: How much does it cost to open a coffee shop? Do I need a coffee shop business plan?
There’s no hard and fast answer on how much it costs to start a coffee shop. Your costs will depend upon the type of coffee shop you want to open, the costs of retail space in your community and many other variables.
Here are some ranges for the costs of opening various types of coffee businesses:
- Coffee kiosk/Coffee stand: $60,000 to $100,000
- Mobile coffee food truck: $50,000 to $100,000
- Coffee shop with seating: $80,000 to $250,000
- Coffee shop with seating and drive-thru: $80,000 to $275,000
(Costs are current as of September 2016.)
If you already own a suitable building or have a complementary business such as a bakery, your costs might be much lower. If you want to add a brew bar to your coffee shop, add about $5,500 to $20,000 to your initial costs. In addition to start-up costs, you should have cash on hand to cover all of your operating expenses for the first six months.
Here is a brief list of costs to consider when opening a coffee shop, and 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.
You’ll find a more detailed explanation of how to calculate coffee shop start-up costs plus a comprehensive 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 Seven Steps to Success in the Specialty Coffee Industry as their guide to opening a successful coffee shop. (Don’t just take our word for it – read some success stories.)
Do you have more 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 the 2016 Roast Magazine 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!