Small Cafe Start Up Costs – How much does it cost to open a coffee shop in 2023? September 26, 2023 (Published: May 19, 2023)
If you’re thinking about opening a coffee shop, the first question you might ask is, “How much does it cost to open a coffee shop?” Another is, “How can I calculate the cost of opening a coffee shop for business in my local community?”
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Small Cafe Start Up Costs
We got the answer! Our team of coffee shop startup consultants have taught over 300 entrepreneurs in over 30 states, many with no coffee shop experience, how to open a coffee shop. Many have been successful coffee shop owners for 20 years and more!
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Read on to learn how to determine your startup costs for a strong coffee shop business plan that will lead to a successful business.
The average cost of starting your coffee business depends on your location, the type of coffee shop you want to open, the cost of commercial real estate in your community, and other variables.
With that in mind, here’s a price range for opening or expanding an existing coffee shop:
Your startup costs may be in this range, but you won’t know until you calculate your startup costs for a unique store. Let’s get started!
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*Based on independent research of independent coffee shops that have opened and used 7 Steps to Success as of April 2023. »
Starting a coffee shop can be a lucrative and exciting venture, but it’s important to consider all costs before opening your doors.
From renting or buying equipment and supplies to hiring and training baristas, there are many costs involved. Read on to find out how much your coffee shop should cost.
Finding the right coffee shop location can make or break your business, which directly affects the number of customers your coffee shop attracts.
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Choosing the right location will help establish your cafe as a destination for locals and tourists alike, leading to increased brand awareness and loyalty.
A prime location in a busy and popular area helps boost diving and foot traffic. A convenient location helps retain regular customers as it makes it easy for them to stop by for their favorite drinks and snacks.
What is the best location for an independent coffee shop? For the most part, these businesses have to stay off the road with the morning traffic.
As a rule of thumb, rent or mortgages should only cover 15 percent of monthly sales for your startup business. For example, a place with $21,000 in monthly sales would mean a maximum rent of $3,150.
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You also need to consider construction and equipment costs, which are amortized over time. Remember, the more square footage, the higher your construction costs.
It is a good idea to hire an architect or contractor to build. These professionals can estimate the cost of plumbing, electrical, heating and air conditioning systems. They can help in negotiations to determine if the landlord will finance the repair costs.
Once you’ve found potential locations, it’s time to run some numbers. Calculating projected sales eliminates useless options.
In a good location, you can expect 1.5 percent of drivers to stop at the store.
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You can expect about five percent of walkers to arrive. So, if 10,000 cars and 500 pedestrians pass by every morning, 175 are expected to arrive.
For this blog post, we’ll use $4 per purchase as a conservative estimate. (Actually, this figure varies by market.) Daily sales are $700, with monthly sales averaging $21,000.
We recommend purchasing new, top-of-the-line equipment for your coffee shop. Don’t want to cut costs by buying cheap or used equipment. Instead, invest in high-quality, reliable coffee shop equipment.
Your espresso machine and coffee grinders are your business. If they don’t work, you’re out of a job until it’s fixed.
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Although better quality equipment may cost more, it will pay off in the long run with less downtime and better quality drinks.
If you plan to serve regular drip coffee, add a drip coffee maker and air pots. You will need a refrigerator, ice machine and blenders to serve cold or frozen coffee drinks.
Since coffee quality is related to water quality, you’ll want to test your water and get water filtration if necessary.
Buy the best one you can find, learn how to use it, and strictly follow recommended maintenance schedules.
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Customers who subscribe to 7 Steps to Success can save time and money with the equipment packages offered.
Your savings in repair costs and downtime will be reduced upfront. If you can’t make drinks, your business will fail!
Ingredients like fresh roasted coffee beans, milk and syrup are the biggest expenses. In the scenario above, they would be 40 percent of sales, or $8,400 per month.
Don’t count the ingredients! Using high quality ingredients is the only way to attract and retain specialty coffee customers.
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If you have no experience running a coffee shop, you should invest in comprehensive, hands-on training and ongoing support.
In our experience, taking a multi-day class, downloading an online coffee shop starter kit, or watching a video on YouTube or Instagram isn’t enough!
With an espresso machine, grinder, blender, and other equipment, there’s no room for exercise in your coffee shop. Plus, training is more cost-effective for you, especially when you include travel costs.
Opening a coffee shop is one of the best investments. Over time, this can mean the difference between a successful coffee shop and going out of business.
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At Crimson Cup, we believe training is so important that we include it in every contract we make with new coffee shop owners. Once one of our customers opens shop, they can benefit from additional training at the Crimson Cup Innovation Lab, SCA’s premier certified training campus in Columbus, Ohio.
In our scenario, if you decide to work at the store, you will earn no more than $6,300 including your salary.
Rent, beverages, and labor costs can account for 85 percent of the cost of a basic coffee shop. That leaves 15 percent to cover other expenses, including:
After doing your homework, add up all the estimated costs. It is best if you have cash on hand to cover initial construction and maintenance costs for the first six months. So, you have to open your own coffee shop!
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No two coffee shops are alike. Keep in mind that startup costs depend on your location—the region, state, city, or province where you work.
If you own a suitable building or have a side business such as a bakery, your costs can be greatly reduced.
In addition to start-up costs, plan to have cash on hand to cover your operating costs for the first six months after opening.
There are as many ways to finance coffee shop opening costs as coffee shops! The most common ones current 7 Level Coffee Shop customers have told us are:
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3. Business loans from banks backed by the US Small Business Administration. (Bonus: Learn how to rock your banker when you apply.)
You can find detailed information on how to start a coffee shop in the guide to starting a coffee shop by Greg Ubert, founder and president of Crimson Cup.
Hundreds of independent business owners across the country are using this book as the foundation for a profitable coffee shop. An average of 20 new stores open each year through our 7-step program!
Read their success stories. Check out the latest news on coffee shop openings and anniversaries.
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Our experienced coffee shop startup team is here! Call us at 1-888-800-9224 or fill out this form and we’ll get back to you within one business day.
Coffee Coffee + Community | Independent Coffee Shops | Coffee Shop Management | Crimson Cup news because there are 33.2 million small businesses in the United States and they are growing fast. In short, we cannot eliminate new business concepts quickly. But how do you find the right business idea?
Overall, this article covers 15 of the most successful small business ideas and in-depth details on how to get started.
So, if you go through all the ideas and choose one, you can make a good profit.
How Much Does It Cost To Open A Coffee Shop
Jack Ma, the founder of Alibaba Group, said that a leader must be a visionary and have more vision than an employee.
Actually, a small business is the planning, execution and management of a small idea in a specific area. Where to start, you can start by dedicating your ideas to the business.
You don’t need to open or rent a space to launch your business ideas – you can do it yourself
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