The True Cost of Opening a Coffee Shop

Anyone who flirts with the idea of entrepreneurship knows that running a successful business is more than just a concept. From planning and development to strategy and operations, several start-up costs come with launching a new business. Before getting into the caffeine business, understand the true cost of opening a coffee shop. 

There are three basic costs to be aware of when opening a coffee shop. One-time startup costs are exactly as they sound, one-time expenses incurred while getting things set up. Fixed costs refer to regularly occurring payments, and variable costs fluctuate based on business demand. 

The Shop Itself (And Renovations)

Finding the ideal space to set up shop depends on the location and size of the shop, and the real estate available in the chosen area. There are some initial costs to keep in mind when finding and developing the space: 

  • Rental costs: whether renting or buying space, expect to pay some form of deposit and remember that the more desirable or sought-after the neighborhood, the higher the monthly rent or payment for space. 
  • Utilities: a coffee shop will need to have the gas, electricity, and water turned on while getting the shop ready for opening. 
  • Renovation costs: turning an empty commercial space into a coffee shop with character will likely mean purchasing new light fixtures, cabinets, decor, coolers, freezers, and refrigerated display cases. 

If choosing to purchase a space, chances are financing will be necessary. Bay Mountain Capital has extensive expertise with hard money loans in Texas. As a direct lender offering loans and securing investments for residential and commercial properties, Bay Mountain Capital takes a streamlined approach to investments. Clients can always expect competitive rates and a quick closing turnaround time. 

All Your Proper Permits

Operating a coffee shop requires permits to serve food, play music, hire employees and more. The first permit to obtain is the Business License and Employee ID Number (EIN). Next is a Certificate of Occupancy and a Food Service License. If alcohol will be served in the coffee shop a liquor license will also be needed. Bear in mind that each permit comes with an application cost that varies by state. 

Sophisticated Equipment

The equipment needs of a coffee shop are standard when it comes to daily operation. Brewing equipment, a water filtration system, commercial coffee grinder, and drip coffee maker, and espresso machine are the absolute basics. The biggest initial challenge of buying equipment is determining what is needed and how much to purchase. Keep costs in check by shopping brands and choosing the most practical equipment for the overall vision. 

A coffee shop will need sufficient initial inventory and supplies like coffee beans, teas, cups, lids, straws, stirrers, napkins, packets of sugar and sugar substitutes, spices, and milk. To open for business and earn the first dollar, a Point of Sale (POS) system and financial software need to be acquired. POS software can come at a monthly cost while the hardware is a one-time payment. Shop around to find the most practical transaction technology for business needs. 

Branding And Marketing

Branding and marketing are important startup costs. Without investing in marketing the business and raising brand awareness, there will be no clientele or income. Keep these branding and marketing basics in mind when fleshing out overall startup costs: logo design, exterior signage, interior signage, website development and setup, and business cards. 

Intelligent marketing campaigns that communicate the right message are what attract new customers. Demand Local is a leader in digital advertising solutions, applying the technique of geofencing marketing to increase clients’ brand awareness. 

Geofencing is a technique that draws virtual boundaries around a physical location and specifically targets customers within the perimeter of that location. Customers within the marketing bubble will immediately start to receive relevant and contextual ads that pique interest and direct them toward the business. 

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