If you are looking to get into the coffee shop business, I have good news for you. There are several different options available to you if opening a coffee shop is in your plans. With many people choosing to have their coffee on the go, opening a drive-thru coffee kiosk may seem like an appealing option. This is especially true if it is not financially feasible for you to buy your brick-and-mortar coffee shop or buy into an existing coffee franchise. The question is, how much does it cost to open a drive-through coffee kiosk?
Drive-thru coffee kiosks can cost between $60,000 and $150,000 to start, per E-Imports. The cost to start a small coffee kiosk will cost anywhere between $25,000 to $75,000, according to Investopedia. These costs can be broken down into four categories. These categories include startup costs, fixed costs, variable costs, and ergonomics. The cost to start a large drive-through coffee shop is between $80,000 and $200,000.
The first step to determining if you can open a coffee shop of your own is to gain an understanding of the initial costs involved. These are called startup costs and include equipment such as espresso makers, which can cost upwards of $20,000. Startup costs can include anything that you need to start your coffee kiosks, such as coffee grinders and point-of-sale systems.
Startup costs are broken into two categories, which are pre-opening startup costs and host opening startup costs. A few of the items included in pre-opening startup costs are a business plan, research expenses, borrowing costs, and expenses for technology. Some of your post-opening startup costs will include employee expenses, advertising, and business promotion. A good rule of thumb to follow in advertising and marketing is that it should be approximately 7% of your total operating expenses.
These costs make up the majority of monthly expenses for any for-profit company. Your rent or mortgage is one example of a fixed cost and should not exceed 15% of your sales and staff costs, including salaries, payroll taxes, and benefits. Fixed costs are calculated by subtracting the variable cost per unit times the number of units produced from the total production costs.
Fixed costs are usually the most predictable of your operating expenses because they are constant. They are not dependent on the level of goods or services produced by the business. Fixed costs are also recurring expenses. Another example of a fixed cost for your drive-thru coffee kiosk is your interest expenses. As these expenses do not fluctuate, the best way to control fixed costs is to either move or seek lower-priced vendors.
Variable costs should be equal to the products or services that a business produces. For your drive-thru coffee kiosk, it depends on how many cups of call that you sell and how much milk, sugar, syrup, creamer, and other supplies you use to make the coffee. Because they fluctuate from month to month, variable costs are the most unpredictable of your expenses.
Variable costs are the sum of marginal cost over all units produced and change as the amount of goods or services a business produces changes. A few other examples of variable costs in your drive-thru coffee kiosk include sales commissions, direct labor costs, the cost of raw materials used in production, and utility costs. Perhaps the best news regarding variable costs is that they can be controlled rather easily.
Most coffee shops need to sell large amounts of low-priced items to cover their costs and make a profit. Ergonomics makes sure that your employees are as efficient and productive as possible by ensuring that the layout of the coffee kiosk allows employees to work quickly and efficiently, getting customers in and out as quickly as possible. As a drive-thru kiosk owner, you are going to have to plan the layout of your kiosk to be as ergonomically efficient as possible for your employees.
The definition of ergonomics is the study of people’s efficiency in their working environment. Because the layout of every coffee shop is different, each shop or kiosk will have its own unique needs to ensure that the employees are being productive and working efficiently. One of the desk tips I can give you regarding ergonomics is to plan like your kiosk is going to be extremely busy. That way, you are prepared when it is busy.
Learn more start up costs HERE.
With a startup cost of between $80,000 and $200,000, opening a large drive-thru coffee shop can be a more economically feasible investment than opening a brick-and-mortar coffee shop or buying into a large coffee franchise. Opening a small coffee kiosk is even more economically sound, with startup costs ranging from $25,000 to $75,000. Of course, several factors go into determining the cost of opening a coffee shop. You have to factor in your startup costs, your fixed cost; your variable cost; and the ergonomics of your business to get a working total of how much it will cost you to start that drive-through kiosk you have wanted to start. Coffee shops are proven to be sound Investments, so all that’s left for you to do is to get started.
Frequently Asked Questions
While there are different costs associated with opening coffee shops, the most expensive type of coffee shop to open is the license, brand name coffee shop. These coffee shops are the most well-known of all coffee shops throughout the world. For example, a Dunkin Doughnuts franchise starts at $97,500 and goes all up to $1.7 million or more.
In any business, you will often hear the term profit margin. The profit margin is indicative of how well a business is performing by comparing profits to sales. You can calculate your profit margin by dividing your net income by your revenue and then multiplying the total by one hundred to get a percentage rate.
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!