For many people, opening a cafe is a dream. However, it’s both a lifestyle and career choice. Like any hospitality-based business, cafes and coffee shops require a huge amount of work to open and ensure long-term profitability. Aside from work, you might ask yourself how much does it cost to open a cafe?
We’re a society that loves our coffee. According to Globe Newswire, “the global market for coffee shops is projected to reach $237.6 billion USD by 2025.” That’s a lot of revenue you should dip into.
If you get it right, your dream of running your own busy café will become a reality. More importantly, it will provide you with more opportunities than you thought possible in this fascinating, vibrant, and rewarding sector.
If you’re right at the start of your coffee shop journey, this guide is for you. Let’s dive in and talk about all things coffee shop start-up.
How Much Does It Cost to Open a Cafe: Coffee Shop Startup Costs
Let’s get down to business. If you’re wondering how much does it cost to open a cafe in the UK, well, it isn’t cheap. Coffee shop startup costs depend on your location and the requirements of the venue.
You can expect to pay anywhere between £20,000 and £100,000 in startup costs. That translates to about $25,000 to $128,000.
You’ll have to spend money on rent, refits, furniture, technology, staff, and stock. As well as all the other elements that go towards creating a great cafe experience.
Let’s break it down even further. Here are the most common costs you’ll need to take into account. Please note they are just estimates.
How Much Does It Cost to Open a Coffee Shop: The Lease
First things first, you can’t run a coffee shop without a building. This is the biggest expense if you’re wondering how much does it cost to open a coffee shop. However, the location and type of lease you opt for will determine how expensive it’ll be.
For example, in London, a leasehold café can be £100,000 to £500,000 ($128,000 to $635,000). In the rest of the UK, that drops to between £50,000 and £150,000 ($20,000 and $190,000).
Licensing, condition, and price of similar properties in the area will have an impact on the price you’ll pay.
How Much Does It Cost to Open a Cafe: Furnishings and Fittings
If the building you’re renting is shiny and new, most likely you can skip over new fittings. Furniture is always a necessity.
However, if you have to renovate you need to factor furnishings and fittings into your budget. You can really drive down the cost of this element. Particularly if you’re going for a mismatched chic look or vintage interior.
Account for this when you are figuring out how much does it cost to open a cafe. If you’re buying new fixtures and fittings, budget for a maximum of £3,000 ($3,800) for newer buildings. For total renovations, up to £10,000 ($12,700), especially if it’s just a shell.
How Much Does It Cost to Open a Cafe: Essential Technology
We live in a world dependent upon technology. This is an area that you should definitely invest in. When wondering how much does it cost to open a cafe, consider what you need technology-wise.
You’ll need a point of sale (POS) system to receive and manage payments at your cafe. There are some great options on the market now like Square, Clover, or Toast. With these systems, you can pay as little as £30 per month for the ability to take payments.
Cafes and wifi go hand in hand. So don’t forget your coffee shop Wi-Fi. If you’re curious why, it’s because you want to create an environment where your customers stay a while.
The longer they stay, the more likely they will buy more drinks and/or food. Wi-Fi not only offers an expected guest service, but it also provides you with plenty of marketing opportunities, too.
The longer they stay, the more likely they will buy more drinks and/or food. Wi-Fi not only offers an expected guest service, but it also provides you with plenty of marketing opportunities, too.
How Much Does It Cost to Open a Coffee Shop: Staffing and Payroll
Second to rent, staffing, and payroll will be a large overhead, but an essential one. Additionally, it’s an area you don’t want to skimp out on. Paying for good help that offers exceptional customer service yields a big return.
When wondering how much does it cost to open a coffee shop be sure to factor in staffing costs. The average hourly wage for baristas will be anywhere from £7 to £9 ($9 to $12) per hour. If you’re offering food, expect to pay around £20K ($25K) per year for a chef.
For example, a cafe with two baristas outside of London costs around £30,000 ($38,000) per year.
How Much Does It Cost to Open a Cafe: The Science of Stock
When running a cafe, paying out regularly for stock is a necessity. From coffee beans to milk, flour, and cooking oil, you’ll get through it rapidly.
It’s a good thing since it’s an indicator that you’re busy. However, don’t run out. In the first few weeks or months, it’s a game of trial and error.
To keep costs down, create and foster a great relationship with your supplier. So, shop around to see who offers bulk discounts and has great reviews. Look for a supplier that consistently has items in stock and delivers on time.
When wondering how much does it cost to open a cafe, budget for a maximum of £3,000 ($3,800). You have the ability to change that amount as time goes on depending on your revenue.
How Much Does It Cost to Open a Coffee Shop: Marketing
Marketing is another area to invest in when wondering how much does it cost to open a coffee shop. You’ll want to make everyone aware of your existence for your launch. The good news is that these days, you can make an awful lot of noise without spending a penny.
Let social media do your heavy lifting when it comes to marketing. The trick is in starting early with your efforts. Here are a few trending cafe marketing tips to get you started:
- Join local Facebook groups and post your journey.
- Use Instagram to share pictures of your launch progress and timeline.
- Start running competitions on social media for brand awareness (get people to share your content!)
- Use Instagram Reels to get more exposure to your local audience.
- Create your Facebook business page and begin building its audience.
- Make sure you are using the right hashtags to get in front of your local audience.
- If you want to go big with pay-per-click (PPC) advertising, budget no more than £1,000 during those early days.
You can definitely enlist the help of an advertising agency but give social media a try. Especially if your marketing budget is low or non-existent. However, these coffee shop marketing ideas should help you get your business going.
How Much Does It Cost to Open a Cafe: Insurance and Licences
There’s no way to get around it, you have to budget for insurance and licensing. Be sure to factor this into your budget as you determine how much does it cost to open a cafe. You’ll need the following before you can open up:
- Employers liability insurance.
- Public liability insurance.
- Gas and electrical safety certificates.
- Food hygiene certificate.
Check out the government’s license finder to understand exactly what your cafe will need to meet laws and regulations.
How Much Does It Cost to Open a Cafe: Delivery Service Costs
Online delivery is gaining significant prominence in the café industry. In fact, it’s so important that you’ll often be lagging behind the competition if you don’t offer it. Luckily, it’s one of the easier hospitality businesses to start up and doesn’t need to cost you a fortune. That’s good news when wondering how much does it cost to open a cafe.
DoorDash or Deliveroo are food delivery companies that allow you to have a wider reach to customers. The best part, there aren’t very many additional costs associated with them.
How Much Does It Cost to Open a Bookstore Cafe?
Looking for a way to stand out from the run-of-the-mill coffee shop? Just add books. Combining books and coffee is a great way to build your business. Besides, people love to sit with a drink and immerse themselves in their favorite books.
Wondering how much does it cost to open a bookstore cafe? Well, take your cafe start-up costs and add the cost of books.
Aside from determining how many books to invest in, you also need shelving and displays. At the low end, expect to pay £24 ($30) per shelf. You can start with a rotating collection of books and then add more as revenue builds.
Alternatively, offer a book swap shelf or lending library. Patrons can donate their read, used books. In exchange, you can sell them for a small amount. This swap shelf is a great way to add a “bookstore” to your cafe with little to no cost.
How Can I Lower the Cost of Opening a Coffee Shop?
Especially if you are just starting out, try to be more conservative when it comes to spending. The first few months are trial and error where you will learn how to adjust. Sometimes you can increase your spending and other times you need to pull back a bit. Here are some smart things you can do to avoid overspending during those early days:
- Stay on budget. Only spend on the stuff you absolutely need to get going. To fight temptation, make a list in advance and do not deviate from it. This is an important strategy as you ponder how much does it cost to open a cafe.
- Buy second-hand furniture. Make it part of your interior design style and take advantage of the lower costs.
- Lease your equipment while you get going. Espresso machines can cost as little as £5 ($6) per day leased, versus up to £10,000 ($13,000) purchased.
- As a rule of thumb, aim to keep your staff bill at less than 35% of turnover. Payroll is always a killer.
- Learn how to market your café. You’ll save big time on consultancy fees and take control of your café’s destiny.
5 Things to Consider When Opening Coffee Shops
Once you figure out how much does it cost to open a cafe, think about other considerations. It takes more than money to open and run a coffee shop. Here are five things to think about:
- It will take time. If your cafe becomes successful overnight, you’ve been very lucky. Don’t count on instant success. Like most things, it takes time, persistence, and acceptance that you’re going to hit a few roadblocks along the way.
- It’ll take more than coffee to keep them coming back. Modern cafe customers want more than great coffee (although that’s very important, of course). From the Wi-Fi to the type of seating you choose, it all adds to the experience. That’s what will keep people coming back for more.
- Know your numbers. If you take away anything after reading this and doing your own research, it’s all about the numbers. Make sure to plan for the numbers you’ll need to start up and sustain your cafe.
- Don’t do it on your own. Sure, you’ll gain strength from your café’s plan and your desire to see it through. But, there’s nothing like bringing someone else in for moral support. Whether it’s a business partner, friend, or loved one, get them involved. Run your ideas, fears, and frustrations by them. Besides, two heads are better than one.
- Focus on happiness - not millions. There are very few millionaire cafe owners. Most are in it for the love of the industry and the desire to make a difference in their community. Go into it focusing on the latter, and you’ll be happy. That’s far more important than the constant pursuit of fortune.
Is Opening a Cafe a Good Idea?
Opening a cafe isn’t for everyone. It takes careful thought and consideration. Just like determining how much does it cost to start a coffee shop, do your research.
Is it something you’ve decided to do on a whim? Or maybe you like the ambiance of your? Whatever the reason, make sure you research the realities thoroughly.
People often jump into opening a cafe without knowing what the experience will be like. While that’s like any big venture, it pays to get real-world experience in this sector before taking the plunge. If you can, try working a few days at a local coffee shop. Or at least have a meeting with the owner to quiz them about their experience.
The more you know the better off you are.
Final Food for Thought on How Much Does It Cost to Open a Cafe
If you’re wondering how much does it cost to open a cafe, it varies depending on a number of factors. This includes the size of the cafe, the location, the type of equipment, and the menu.
Opening a cafe is a big undertaking, but it can be a very rewarding business. With careful planning and execution, you can open a successful coffee shop. One that will be profitable for years to come.
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