When opening a coffee shop, you will want something unique to help your coffee shop stand out from other coffee shops in the area. When thinking of how to stand out, selling alcohol may be something that you think of. There are many benefits to selling alcohol at a coffee shop, but there are some things to watch out for.
Yes, coffee shops can sell alcohol; however, obtaining and selling the alcohol will depend much on the state’s local liquor license laws and regulations.
It is important to look at the benefits and disadvantages of selling alcohol at your coffee shop. Selling alcohol at your coffee shop may increase your profits since you can be open longer hours, have more drinks to sell, and will help you stand out from other coffee shops in your area. However, you will also need to consider that if you sell alcohol at your coffee shop, you may have to pay a lot in licensing fees, have strict local and state laws that limit your employees and customers, and you may have to pay more in labor costs.
Benefits to Selling Both Coffee and Alcohol
There are several benefits to selling alcohol in your coffee shop. Some advantages to selling both coffee and alcohol at your coffee shop include:
- Extended Business Hours
- Double Up On Sales
- Serve Specialized Drinks
- Stand Out From Your Competition
Extended Business Hours
When your coffee shop also offers alcohol, you can extend your business hours. The more hours your business is open, the more potential you have to earn money.
You may have a morning where your coffee shop is full of people wanting to grab some coffee on their way to work. Then later in the evening, you may have your coffee shop may be busy with a rush of people wanting to grab an alcoholic drink.
Coffee shops are typically busier during the week, with people getting coffee on their way to work Mondays thru Fridays. Sometimes, coffee shops are not as busy on the weekends. By serving alcohol as well at your coffee shop, it will allow you to have a steady flow of customers on the weekends as well.
Double Up On Sales
With the potential of getting both a morning rush and an evening rush, it creates more opportunities for more profits.
If you have a loyal customer base, you may be able to get customers to return multiple times a day to your business as well. Your customers may come in for their morning coffee then come back for a second purchase later for an alcoholic beverage.
Loyal customers are great, especially for small businesses, since these customers are likely to positively talk about your business to their friends, family, and coworkers. This is excellent advertising for your business. Your loyal customers may even invite others to try your coffee shop with them, which may increase your customers over time and help you grow and expand your business.
Serve Specialized Drinks
Having specialty drinks is a great way to attract customers to your coffee shop. Typically people do not go to a coffee shop for a drink they could have just made in the coffee pot at home.
By selling alcohol and coffee in your coffee shop, it allows you to have unique drinks that other coffee shops and bars in your area cannot sell.
Stand Out From Your Competition
There is plenty of competition for your coffee shop between many local small coffee shops and large chain coffee shops. Finding a way to stand out from these other coffee shops will help you achieve more customers and increase your profits.
It offers something different from what your competitor coffee shops do by selling alcohol at your coffee shop. Typically large corporation coffee shops do not sell alcohol, so you may be able to win some customers to these businesses and have them become your loyal customers.
Disadvantages to Consider Before Selling Alcohol at Your Coffee Shop
Although selling alcohol at coffee shops works for some coffee shop owners, it does not work for all coffee shops. There are some hoops to jump through and some disadvantages to consider before selling alcohol at your coffee shop.
Some of the disadvantages to consider before moving ahead with selling alcohol at your coffee shop include:
- State Laws Limiting Your Sales
- High Costs of Alcohol Licenses
- Increased Labor Costs
- Laws Limiting Employees and Customers
- Can Be Difficult to Distinguish The Two Business
State Laws Limiting Your Sales
Every state has different requirements as far as selling alcohol. For example, some states do not allow for alcohol sales on Sundays or past a certain hour. Therefore, you may have limited hours you can sell alcohol, and even some days, you can not profit from alcohol sales.
It is possible to sell alcohol in a coffee shop in all 50 states since no state says you cannot. However, that does not mean that it is easy to do in every state.
Some states do not have many restrictions, and opening a coffee shop that sells alcohol is as easy as getting the appropriate liquor license. Other states, however, do not make it that easy and may limit your business hours and customers.
Before deciding to sell alcohol in your coffee shop, make sure you check with your local and state government and learn about all of the laws.
Check out information on starting a gaming cafe HERE.
High Costs of Alcohol Licenses
You will be required to get a liquor license in order to sell alcohol at your coffee shop, which will be an added expense to your business. A liquor license can cost anywhere from $12,000 to $14,000, depending on the state you are applying for the liquor license in.
Even to just sell wine and beer, you are required to have a state license to sell wine and beer. The licensing fees for these are a little cheaper but will still cost you $3000 to $4000.
Increase Labor Costs
You will have more hours you can have your business open which is great for the potential of sales. However, you still have to pay to staff these hours. If you end up not being busy, then you will be paying for staff but not making your money back in coffee sales or alcohol sales.
Laws Limiting Employees and Customers
There are also various laws regarding age limits to who can serve alcohol. Some states require that someone must be 21 years of age in order to serve alcohol. This will limit who you can hire.
Not only will those who can work for your coffee shop possibly be impacted, but some states have laws of who can enter a business that serves alcohol. Some states do not let minors in if alcohol is severed. Other states may consider your coffee shop to be classified as a bar which may also restrict minors.
This would mean that not only would you possibly lose customers in the evening, but if a busy mom wanted to stop in and grab a cup of coffee while she had her kids, she would not be able to do so. Therefore you may lose sales depending on your local and state laws regarding allowing children inside places that serve alcohol.
Can Be Difficult to Distinguish the Two Businesses
If your dream is to open a coffee shop, but your business is making more money and having better luck selling alcohol, this may be disappointing. If your alcohol sales are doing better than your coffee shop sales then, you may have to cater more to your alcohol customers and may have to make changes so that your coffee shop has more of a bar-like atmosphere for customers.
Selling Alcohol at Your Coffee Shop
Yes, you can sell alcohol at coffee shops but, it is important to look at the benefits and disadvantages of doing so before going in this direction for selling alcohol in your coffee shop. It may be a great way to stand out and increase your profits, but you also have to pay up to $14000 to get a liquor license in some states. You will have to decide if the profits from selling alcohol make up for this high price tag.
Frequently Asked Questions
Coffee shops can be very profitable businesses and can make you a lot of money. Coffee shop owners make approximately $60,000 to $160,000 per year.
In order to open your own coffee shop, it will cost anywhere from $20,000 to $673,700. The wide range of costs is due to the number of types of coffee shops that you could open. A small coffee shop in a mall will be much cheaper than opening a large franchise coffee shop in a big building in a large city.
The location and size of the coffee shop play a huge role in how much your initial costs to open a coffee shop will be. This price also does not include the cost for liquor licensing or equipment and supplies needed to serve both alcohol and coffee in your coffee shop business.
Please note: This blog post is for educational purposes only and does not constitute legal advice. Please consult a legal expert to address your specific needs.
Hi! I’m Shawn Chun
My adventure in coffee began when I first launched my first coffee shop back in the early 2000s. I had to figure out so many things on my own and to make it worse within 2 years of opening two large corporate coffee chains moved in just blocks away from me!
As I saw smaller and even some larger coffee shops in the neighborhood slowly lose customers to these giant coffee chains and slowly close up shop, I knew that I had to start getting creative…or go out of business.
I (like you may be) knew the coffee industry well. I could make the best latte art around and the foam on my caps was the fluffiest you have ever seen. I even had the best state-of-the-art 2 group digital Nuova Simonelli machine money could buy. But I knew that these things alone would not be enough to lure customers away from the name brand established coffee shops.
Eventually, through lots of trial and error as well as perseverance and creativity I did find a way to not only survive but also thrive in the coffee/espresso industry even while those corporate coffee chains stayed put. During those years I learned to adapt and always faced new challenges. It was not always easy, however, in the end, I was the sole survivor independent coffee shop within a 10-mile radius of my location. Just two corporate coffee chains and I were left after that year. All told the corporate coffee chains took down over 15 small independent coffee shops and kiosks and I was the last one standing and thriving.
Along the years I meet others with the same passion for coffee and I quickly learned that it is not only “how good a barista is” that makes a coffee shop successful, but the business side of coffee as well.
Hence why I started this website you are on now. To provide the tools and resources for up and coming coffee shop owners to gain that vital insight and knowledge on how to start a coffee shop successfully.
Stick around, browse through my helpful blog and resources and enjoy your stay! With lots of LATTE LOVE!