Do you live in the “land down under” and love your cup of Joe so much that you want to start a coffee shop? You have come to the right place!
Here are a few steps to open a coffee shop in Australia.
- Identify the right location.
- Choose a business structure.
- Apply for an Australia business number.
- Register domain name.
- Institute proper planning and licensing.
- Register the right taxes.
- Install equipment and hire employees.
Venturing into a new business is both exciting and terrifying. At the same time, it can come with mixed reactions and feelings. That is one reason I decided to prepare this specific guide to help you successfully open your very own coffee shop in Australia.
Set-up Steps
Identify the right location.
The first step that you need to begin is to identify the right location. Who are your customers and where are they located? These questions will help you identify a good location. It’s a good idea to scope out neighborhoods and their business laws to see what fits in with your budget and your business concept. The place should be easy to access. Decide whether to rent a space or to start from scratch and literally have your own place built from the ground up. You can also consider buying an existing business and franchising.
Choose a business structure.
Decide which type of business you want to run. There are four structures to choose from:
- Sole proprietorship: A type of business where you register individually and take full control of everything and you can hire a staff to help you.
- Partnership: A type of business where more than person runs a business together. This can be beneficial if you don’t have all the money or education to start on your own and have a friend or know of someone who knows the industry better than you do.
- Company: A commercial business with separate legal existence to all the shareholders.
- Trust: An entity that possesses property, income and other assets that benefits the third party.
Deciding a business structure has great impact on your level of control, level of personal liability, regulatory obligations, tax to be paid and health and safety required in the place. Take your time to sit down and compare the pros and cons and most importantly, the numbers and decide what fits best with your vision and your budget.
Apply for an Australian business number.
An Australian business number is a must have if you want to start and run any business down under. This is a unique 11 digit number that helps the government identify your business and should be one of the first things you get when you’re starting any type of business. After getting an Australian business name you will now be able to register your business name, make your business known to other entities to help you order goods and other services, claim taxes (goods and services tax) and avail credits.
Come up with a nice business name that is descriptive and unique to your business. The name will help you set up other things like logo, website URL or any other design. If you decide to change your name all these will also have to change so it’s prudent to take your time and decide on a perfect name. It’s also highly suggested to patent said name and any logos pertaining to your coffee shop Patenting your business name and logo designs will protect you from copyright infringement.
Register domain name.
This step is only possible after acquiring an Australia business number and business name. The domain name should be very unique and related to your business. This is a great way of creating your presence and letting people know more about your service. After deciding on the best domain to use, you need to check to be sure that the name has not been taken by anyone. Check here for free.
Along with domains, it’s highly suggested to open up social media accounts on all popular platforms for your shop. This will later turn into free marketing when others tag your shop in photos or use the geotag option as well. This is also something you should start early on before the shop is even open. Follow prominent, popular coffee shops and vendors in your area. You can also post a countdown to your grand opening to get people hyped up which can lead to a successful opening.
On the note of opening your store, it can be suggested to have a soft open. A soft open is not open to the public but the coffee community, your friends, staff and any social media influencers you think will help bring in customers.
Planning and licensing
To successfully run a legal coffee business in Australia, you need to get all the relevant licenses. If you’re planning to buy an existing coffee business, you can skip this step because the licenses will be provided to you.
You may need specific health and food safety certificates for you personally no matter what kind of shop you open or take over. The different kinds of licenses in this context include business license, employer identification number, food service license, certificate of occupancy, sign permit, resale permit, building health permit, seller’s permit and employee health permit. There could be more depending on your specific location. Once you have the exact location decided, research what you’ll need for that specific address.
Register the right taxes.
As a business owner in Australia, you must register for the relevant taxes to avoid any legal implications. Register for the relevant taxes before you start your coffee shop to be on the safer side. Some of the taxes to register may include goods and services tax (GST), pay as you go (PAYG) and fringe benefits tax (FBT). As a sole proprietor, you’ll have to use individual tax file numbers to process your business taxes.
Install equipment and hire employees.
After following all the legal procedures, you’re free to purchase and install all the necessary equipment. It’s suggested not to go with the cheapest equipment since in this industry if something like your espresso machine breaks down, not only will you lose money from replacing it or buying parts, but you’ll lose income from losing customers during the time it takes to get a replacement.
Hire competent employees with etiquette to help you run your coffee shop. Finally, develop a good marketing strategy and execute it to get more clients.
Benefits of Starting Your Own Coffee Shop in Australia
Chance to express your creativity
When you start something new or unique that you have not done before, you’ll have to be creative and create your unique environment. This will help you to have an inner reflection as you try new things like decorating your shop in your own style.
High profit margins
Australia is a great land for business opportunities. There are some past interesting stories of those who have earned a lot of money through investing in coffee. There are huge margins of profits.
Expansion
When you start your coffee shop in Australia, you’ll have great opportunities to spread across the country as your success increases.
You become your own boss.
As a manager of your own business, you’ll have freedom from the stress and pressures of being managed by someone or being limited in a way. When you open your coffee shop, you manage your time and set your schedule. No one dictates your salary, and the harder you work, the more profit you’ll glean.
Frequently Asked Questions
According to Crimson Cup – a booming chain of coffee shops – starting a coffee shop can cost anywhere from $80,000 to $250,000 (Grullon 2018). Variables to consider for overall startup costs include equipment costs, size of the location, and supplies needed to satisfy product offerings.
The following is a cost breakdown of startup costs based on the type of coffee shop you decide to open (Neugarten 2016):
● Sit-down coffee shops: $200,000 to $375,000
● Large drive-thru shops: $80,000 to $200,000
● Small kiosk: $25,000 to $75,000
● Franchise sit-down shop: Up to $673,700
To learn more on how to start your own coffee shop checkout my startup documents here
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!
Shawn
