When starting a coffee shop, it is very important to stick to the budget, especially when the budget gets tighter. In this article, you will get ideas on how to start your coffee shop within the confines of that budget.
The best way to start a coffee shop on a budget is to start small, create a unique atmosphere, and engage your community. Starting a small coffee stand, or better yet, a coffee truck, with a small team and an atmosphere that makes customers keep coming back creates steady revenue to help the shop grow.
When operating your business, there are going to be multiple, unavoidable expenses. These include permits you need to have a business, a food service license, and a food handler’s permit. The costs of these licenses and permits vary depending on the state you are based in and the time you are receiving them. It is in your best interest to find out the cost of these expenses based on where the coffee shop will be and build what else is needed around these costs.
To help expand your budget, take advantage of websites like Gofundme, where people can support a cause, business, or product they believe in. Encourage friends and family, and people in your surrounding area to help get your business off the ground. If this is something you truly believe in, it will show through and expand the possibilities of your coffee shop.
It costs anywhere from $30,000 to $60,000 to create a coffee stand or truck. In comparison, a sit-in and drive-thru coffee shop costs about $60,00 to $150,000 to start. If you choose to go the route of a coffee stand, the cost of the land it stands on could be lower. It would also be ideal to find land with heavy traffic for higher revenue. If you start a coffee truck, you’ll get more opportunities to interact with the community and travel to multiple places with heavy traffic.
Another option for starting small is to start a kiosk. Create a stand that sits on a school campus or in a community center. This will lower the cost of starting up the shop, and it will start your brand on the right foot.
Starting small also means that the team to help run this shop will be small. If the shop is going to be a stand or a truck, a team made up of no more than 10 members would be needed, as there may only be 2 to 3 members needed per shift. This keeps the cost of payroll lower, along with shorter business hours.
Most coffee shops get their highest revenue in the morning when everyone comes before they go to work. Though there is the rush of those that come home after work, there is less of a chance that the sales will outweigh the labor costs. Keeping business hours earlier in the morning, ending before 2 p.m. will save labor costs, while also making the business known to the community.
It is also best to stick with the basics of flavorings and coffee drinks when trying to save money. The many flavors of coffee syrups may not be needed when first starting the business. Espresso and coffee drinks with an assortment of teas along as they are high quality will satisfy your customers. When customers come to a new coffee shop, they want to feel confident in what they are getting, but this doesn’t mean you can’t offer a new experience to them.
It doesn’t cost much money to have fun with your shop! Give the store some personality with a theme or fun names for your coffee drinks. Provide an experience that the customers cannot get elsewhere, and they will want to come back again. If you start a coffee truck, find the personality of the truck in the fact that it is mobile, or if you start a kiosk, incorporate features from the surrounding community.
Be unique with advertising as well. Creating social media accounts for the coffee shop is completely free, and when you post for your friends online to see, you have free advertising. If there is room in the budget, you can pay to have your ad on social media sites. It is possible to advertise on Facebook using your own budget, and the advertisement is shown to the audience you select accordingly. Be creative with the advertising, and have it match the theme or highlight a unique drink. The goal is to show the viewer that the shop offers something they cannot get at other, commercial coffee shops.
Be sure to advertise in the months before the coffee shop opens, and create anticipation to those in the surrounding area. Along with taking advantage of social media, you can also easily go with word of mouth, and stark talking about it around your community. Create simple flyers to hand out and to place in local businesses, or small, limited-time coupons to get customers visiting within the first week of opening. Becoming known is key to getting started and there are many cost-efficient ways to do just that.
Create a Community
Even with a small team to run your coffee shop, you can – and should – still create a positive work environment for your employees. Have them help create the shop unique with their drink ideas and play music that they and the customers will like. This family-like community of employees will show through to the customers. If these employees love their job they will talk about it to their friends and post about it on their social media. These actions do not put a heavy dent into the budget and will help the coffee shop flourish.
Have the coffee shop show it’s pride in the community it is in. Get an understanding of the neighborhood it is in, and know what the people are looking for. Have more stock of the flavors and drinks they have the most interest in, as you do not want to hold too much stock of what they will not buy. The customers will appreciate being recognized by the company and continue to support the business.
You can also team up with local businesses around the town you are based in. Before the launch of the coffee shop, get to know the local business owners, and ask them if they will start to talk about the coffee shop around town. If you are able to get a team, or have coffee beans ready to sell, partner with the business to give out samples. The coffee shop could also participate in the event the local businesses and shops are holding, giving out coffee for a discounted price.
You wouldn’t have to stock much besides the coffee and cream itself as it is a short-term stand, and it helps get sales higher. This may also be a time to hand out coupons to your shop, while in the future you hand out advertisements to the local shops you partnered with.
Do Your Research and Have Patience
It will take time to receive the permits and licenses needed to get the coffee shop up and running, and the paperwork that goes along with obtaining these necessities will be time-consuming as well. When starting your coffee shop business, it is vital to keep these things in mind but to also be aware of the valued pay-off. There will be aspects of fun while creating an enjoyable environment for the team members of the store, and when the store begins to have its own regular customers.
When the store begins to grow, you’ll have the chance to expand the menu, if desired. Take requests from your customers and team members into account and get more flavors to create more fun drink names. There may also be a chance to upgrade to higher quality equipment in the shop and have longer store hours.
Get an idea for the length of this process from those already in the community with a business. Do your research and talk to those who have started a small business, coffee shop or otherwise, and see how their company started off. Getting a first-hand account from those in the area where you are starting your shop will give you a better idea of what to expect and much more confidence.
Frequently Asked Questions
Be unique, but have a consistent color scheme or theme for your shop. When first starting off, it is advised to not start off with the shop with branded aprons or cups, but to save money with the plain ones. Put effort into becoming known through relationships, rather than through the logo alone.
As mentioned earlier, a common website used for crowdfunding is gofundme.com. There is also a way to use Facebook to start a fundraiser for your project and invite your friends to contribute. Kickstarter is another crowdfunding website that you might use. There is also the Small Business Administration, where you can find mentors to help form your business and be sure you are starting on the right foot.
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!