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How Much Does it Cost to Open a Coffee Shop ?

coffee shop as a business

If you want a great business idea that will increase your monthly income and even bring in big profits without a huge initial investment, you should think about opening a coffee shop.

But how much will a coffee shop set you back ? There are many aspects to take into consideration, regarding the initial investment, among which the most important are the renting cost of the location, monthly costs for utilities, the furniture price and any other additional costs that are necessary in order to offer your services.

If you don`t think everything through and hurry into opening your coffee place, you risk spending a lot of money on a business that will make you close to nothing in monthly payments or even go into bankrupcy, so be sure to figure everything out before making this investment.

Location

One of the most important aspects, that will probably drive in the most customers, is the building you choose to rent for your coffee place. If it’s possible, opt for a a location where pedestrian traffic is big.

Be prepaired to have money for at least two months worth of rent, just to be safe, even if you do expect to do well from the beginning. Don’t spend more than 15% of your total sales on the rent, if you want to make a nice profit at the end of the month.

Based on the location, you will find a varied price range for your rent, which can be anywhere from $1,500 and up to $2,000 or even more. Of course you will spend more on rent for a coffee shop near the center of the city, but that doesn`t necessarily mean you`ll get a bad deal. Usually the center of any city is full of people, which means more clients for you. If you have limited funds, go for something cheaper, but still take into consideration that people need to pass by your coffee shop if you want a nice client stream.

Cost of Furniture and Machines for Your Coffee Shop

You shouldn`t open your coffeeshop before getting all the necessary machines and furniture, to be sure you can attend all of your clients needs.

Be sure to make a list with everything you need before getting anything, and set up a budget to make sure you won’t overspend. Among the must have furniture and machies are tables, sofas, armchairs, bean bags or chairs, gourmet drip coffee brewers, espresso and coffee grinders, a refrigerator, blenders, a new type of espresso machine and similar items.

Make a projected cost of this investment around 40% of your total sales, to ensure a profitable business, which will probably mean around $15,000, because you can`t start a great coffee shop without quality machines and comfortable and nice looking furniture.

You can always go for some second hand or lower quality machines, if your budget get’s in the way of prima quality ones, but be sure to check them thoroughly before spending your money on used machines, and don`t spend more than $7,000 on everything if you go for second-hand items.

Utilities

Although it will be a smaller part of your initial investment, don’t forget to take into account utilities, because you will surely need electricity, running water, lightening and other utilities.

Expect to spend more on utilities than for a normal house because you’ll use them more, but you shouldn`t spend more than 35% of your total sales on utility bills.

Along with monthly utilities, you’ll also spend money on monthly maintenance of your coffee shop and everything inside it. This means that you will probably spend around $3,000 – $6,000 on these, so be sure to add this to your monthly budget to avoid bankrupcy.

Services You Providemachines and furniture for your coffee shop

Add to the final cost of running a coffee shop the price of the services you will provide for customers.

You will probably want to add baked goods along with the coffee, goods like biscuits, butter croissants, muffins, cookies, etc, and you will surely need all ingredients to make coffee and caffeine drinks.

You will end up paying around $4,000/month on these, which isn’t that much considering your other expenses, but it isn’t something you should neglect.

Aim to get these from wholesale retailers, and you will lower your final monthly expenses with 20-30% – which means just $2,800 – $3,200/month.

Should the average working Joe open a coffee shop ?

If you aren’t the type of person that enjoys working for others, being a follower, and you really think you have what it takes to run a place of your own, then go for it. Be sure you have at least a part of the money you’ll need and don`t get the full investment from the bank, so you feel like you are working for yourself and not for the bank.

Have a plan and a budget and be sure you stick to it. Don`t spend anything until you have everything sorted out.

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