Starting a coffee shop involves a myriad of costs. The total amount you’ll spend can vary greatly based on the size, location, concept, and your personal business decisions. Explore the different coffee shop startup costs to anticipate – along with tips for saving on your initial investment.
Coffee Shop Startup Cost Breakdown: What to Expect
The amount of money you invest in your coffee shop isn’t a definitive number someone can give you. However, there are certain costs you can absolutely expect during the process of opening your business.
- Location and lease: Where you choose to open your coffee shop will greatly impact the rent costs you’ll pay. Your location should have good visibility, accessibility, and heavy foot traffic. Should you want to have a drive-thru as part of your business, you’ll need to be sure there’s enough space to safely add one.
- Build-out and renovations: This includes altering the interior layout, installing necessary plumbing and electrical systems, adding decor, and making any structural changes to fit the desired design and operational needs of your coffee shop.
- Equipment: Your coffee shop will need a considerable amount of equipment to get started – especially if you’re planning to offer more than just coffee beverages. Your equipment needs will consist of an espresso machine, coffee grinder, drip coffee maker, kettle (for tea), blender (for smoothies), alternative coffee brewers (French press, pour-over stands), refrigerator and freezer, dishwasher, and POS system to start. If you plan to offer food items, you may also need an oven and toaster.
- Initial inventory: Starting inventory for your coffee shop will include coffee beans, tea, cocoa, milk and creamers along with plant-based alternatives, syrups and flavorings, sweeteners, bottled beverages, disposable coffee cups, lids, straws, and napkins, cleaning supplies, and possibly retail items.
- Furniture and decor: Should you want your coffee shop to have places for people to sit and chat, work, or just relax, you’ll need tables, chairs, couches and armchairs, bar stools, and maybe some outdoor seating. You’ll also want to decorate your space to create a warm and inviting atmosphere for customers.
- Licenses and permits: To own any business, you’ll need a license. You’ll also likely need to acquire a certificate of occupancy, health department permit, and food handler’s permit. Be sure to consult with local authorities or a legal professional to ensure you have all the necessary licenses and permits for your specific location and business model. Requirements can vary depending on your state or city.
- Operating capital: It’s unlikely your business will hit profitability right when you open. It may not even make break-even in the very beginning. It’s important to have funds saved up to cover your operating expenses while you ramp up your business.
- Marketing and advertising: Let people know you’re in business! Make sure to offer grand opening promotions and loyalty or rewards programs. Let customers know of new menu items through signage and social media advertising. You may want to consider offering a referral program as well to help grow your customer base.
- Insurance policy: To protect yourself and your employees, you’ll need to have general liability insurance and workers compensation insurance in the amount required by law according to the state you open your business in.
- Payroll: At the start, you may choose to operate your coffee shop on your own. However, as your business grows, you’ll likely want to hire staff to keep operations smooth. Even if you only want to hire one or two other people to work in the coffee shop with you, you’ll need to account for their wages.
Keep in mind this is just a general coffee shop startup cost breakdown. Depending on your individual situation, you may have other miscellaneous expenses such as a security system or WiFi network.
How Franchising Can Help with Coffee Shop Startup Costs
Joining a franchise can help you better understand the potential small coffee shop startup costs you’ll have to invest to get your business operational. A franchise brand has already gone through the trial-and-error of starting and running a business. When you choose to partner with their brand, they can pass their industry knowledge to you.
A reputable franchise should be able to tell you upfront what the estimated startup costs are. These figures are usually presented in a range and can be found in the brand’s franchise disclosure document (FDD). Item 7 of the FDD will provide you with an itemized list of expenses so you can see exactly where your money is going.
Other ways franchise systems can help you with your small coffee shop startup costs include:
- Funding: Banks are often more willing to loan to those who have been accepted by franchise brands. Since a franchise does quite a bit of vetting to ensure their franchisees are a good fit, banks tend to be more forthcoming with capital. Plus, franchisees are utilizing a proven business model, which also helps put lenders at ease. Check with your franchisor to see if they can recommend preferred lenders.
- Inventory and equipment costs: Franchisors typically have established partnerships with certain suppliers. Since the entire franchise system is purchasing items from that particular vendor, franchisees typically are able to get their supplies at a discounted rate, saving money during the startup process.
- Training and support: A reputable franchise system will provide a comprehensive training and support program to help you avoid any costly pitfalls or challenges. Having someone guide you through the process of owning a business can keep you from making expensive mistakes.
Franchise with Scooter’s Coffee®
We’re a specialty coffee brand that’s been serving high-quality, high-margin coffee beverages through a fast and efficient drive-thru since 1998. We originally got our start in Bellevue, NE, but have grown to have over 700 locations nationwide – with ample room to keep expanding.
At Scooter’s Coffee, our coffee kiosk startup costs are estimated to range between $797,000 and $1,341,500, which includes our $40,000 franchise fee.
If you’re interested in learning more about our coffee franchise opportunity and potential , be sure to contact us today. One of our development representatives will be in touch with you soon.