Have you ever set your eyes and heart on opening a coffee shop and wondered how much it will cost to own one? We will answer your question. Typically, the cost of setting up a coffee shop ranges from $25,000 to $300,000. This cost greatly depends on the type, size and location of the coffee shop, business concept, and the cost of rent in your area. It is vital to devise a sound business strategy and this begins with having a comprehensive business plan. This helps you plan all the minute details that can make or break your coffee shop. It will also help you determine the financial projections for your business.
What are the costs to budget for?
Typically, they are:
- Rent, mortgage or construction cost.
- Equipment cost.
- Labor cost and training.
- Legal fees: licensing, permits, insurance, and taxes.
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How much does it cost to rent, mortgage, or construct a coffee shop?
The location of your coffee shop will determine its monthly/annual rental cost or purchasing price. Your rental costs are determined by square footage, and this helps in comparing cost differences of different locations. Note that your rent must be less than or equal to 15 percent of your projected sales and the other costs incurred in construction, design, and fittings inclusive.
What equipment do I need?
An espresso machine, espresso grinder, water filtration system, coffee brewer, and coffee grinder are the vital equipment you need to purchase. This equipment is the mainstay of your company, so it is advised that you buy top of the line, high quality equipment. Other equipment to consider are drip coffee maker, airpots and filters, scales, metal pitchers, refrigerators, toaster ovens, icemakers, display cases, storage racks, blenders, etc. You should not buy used equipment, because, over time, the money you think you saved, will be spent on repair and maintenance.
What is the cost of hiring and training?
The cost of hiring someone may include expenses for training, acquiring needed licenses, uniforms, and labor costs. If you don’t have prior knowledge or experience running a coffee shop, you will need to invest in comprehensive, practical training and constant support. Hiring an operational staff cost about $35,000, while professionals such as business consultants, architects, accountants, and attorneys costs $75 to $500 per hour.
What is the cost of licensing, permits, and insurance?
You will need different types of licensing for your business, as well as insurance. They include a business license (which range from $25 to $7,000), food service license (between $100 and $1,000), music license (between $250 and $500), building permit (about $100), building health permit (between $50 and $1,000), general liability insurance and other key policies ($500 to $1,200 per year).
Other costs to consider include: Operational cost, consumable supplies (porcelain cups, napkins, porcelain cups, and stir sticks, etc.), Marketing costs, utilities, office supplies, principal & interest costs (if you intend to borrow money), and repair and maintenance costs. Need help opening and funding a coffee shop business? Contact the business planning experts at QT Business Solutions to get started.
