How to Open a Coffee Shop, 17 tips on starting a coffee shop business (2024 Checklist)

October 3, 2023 • 35 minutes

Kate Palanchuk
Kate Palanchuk
Content Marketer at Poster POS. Kate digs deep into the layers of new technologies and trends in the restaurant business to provide the best content for the blog readers.

The coffee market is growing around the world, with the industry booming in the USA most remarkably. In global comparison, most revenue is generated in the United States (US$11,000 m in 2023). While coffee chains like Starbucks remain hugely popular in the US, you can find more and more high-quality coffee roasters and shops emerging across the country, as the demand for specialty coffee grows higher. Annual US Coffee Championships add buzz to the industry as well.

In the latest 2023 National Coffee Data Trends Report, the National Coffee Association discovered that [65% of US consumers had drunk coffee in the past day]( Research/NCA Media Highlights Spring 2023.pdf), making it the most in-demand daily drink nationwide. No wonder — coffee is more popular, affordable, customizable, and close to the customers than ever.

Opening your dream coffee shop in a saturated market where the demands of the customers are only growing is not the easiest thing. So, we prepared this guide for you to help you figure out how to get your coffee shop startup up and running. In this post, we will tell you all the details on how to open a coffee shop the right way.

Steps to start a coffee shop

Let’s get things underway. We’ll further walk you through the whole process of opening your coffee shop in this post. At the end of the article, you'll find an estimate of a minimum startup budget for this type of business as well. We hope that our article will help you get your own location up and running.

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1.Conduct a market and competition analysis

Before rolling your sleeves up and getting down to starting a coffee shop from scratch, the best thing you can do is test out the waters. We are talking about conducting a market and competition analysis in the region where the cafe will be opened. Below are the steps that should help you prepare for starting a coffee shop from a well-informed position.

Get a complete picture of the coffee market in your area

Conduct thorough research of the coffee offerings in your area to understand if there is a need and a place for a new coffee shop. Investigate how tough the competition is and whether you will be able to keep up with it. Are there any big-name coffee chains or independent coffee shops in your area? Also, check if there is a physical location available for a coffee shop you have in mind.

Perform a thorough competitor analysis

This point is strongly correlated with the previous one. After you get an idea of a coffee bar business in your area, time to look closer at your potential competitors. Bear in mind that it is also important to study what coffee shops went out of business in your area and investigate the reasons behind it.

Define your business positioning

Define what place your coffee shop will take and how it will differentiate from the competition. Determining your niche in the saturated coffee business is of utmost importance for a smooth start. A strong brand representation creates a differentiation from both chain and independent coffee shops in the area.

Choose the right location

Search high and low until you find a location with the right size and feel for your concept, and if possible, with some of the equipment you need for your business. A perfect place should be centrally located so that it is easy to spot and access.

Target customer orientation is the first thing to consider when opening a coffee shop. Picking a highly visible busy spot is great, but you also want it to be a convenient place so that your visitors become regulars.

So, what are the main coffee shop requirements location-wise? We recommend considering the following criteria when starting a coffee shop:

  • Size is the first thing to consider when picking a location for your business. Based on whether your coffee shop concept requires a place for a truck, a drive-through, or a coffeehouse with both indoor and outdoor seating areas and a parking space, your location criteria will be different.

  • Accessibility. Make sure that your chosen place is easily accessible on foot or by car. Based on your concept, you might need either a parking space or a drive-through arrangement. There should be busy car and pedestrian traffic past your place.

  • Rent/purchase cost. Calculate the correlation between the cost of renting/purchasing premises and your expected income. Ideally, rent or mortgage should not exceed 15% of your monthly sales in the food industry.

  • Competitor location. While there is a fair chance your independent coffee shop might be able to compete with big chain coffee shops in the area right away, it could be way tougher to win over customers from a popular independent coffee shop next door.

All in all, a location you choose should fit your vision, help you stand out in the competition, and be convenient for your guests. This is the part where we can move on to discuss a business plan for opening a coffee shop.

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2. Make a business plan for opening a coffee shop

Put together all your goals, creative vision, expected costs, and potential risks to get a good idea of the road that lies ahead. If you plan on opening a coffee shop, you are most probably in love with coffee for life. Now, you must create a business plan to help your customers fall in love with your coffee.

Building an exceptional business plan is homework you need to do before starting a coffee business. The more time, consideration, and effort you put into your business plan, the better prepared you will be for launching and navigating your business. You can go different ways here — on your own or with help. Many industry leaders share their road to success. You can even find some coffee shop business plan templates online.

When done right, a business plan is a thorough manual on how to get your business up, running, and racing through the competition. This is what a café business plan structure looks like:

  • Executive summary

  • Business description

  • Business management team

  • Marketing analysis

  • Marketing plan

  • Financial plan

Alternatively, you can turn to the help of a business analyst to assist you in the coffee shop business plan stage.

3. Create your own coffee shop concept

A really cool spot should offer not only great drinks and food — its overall concept should be absolutely amazing! When starting a coffee shop and looking for coffee business ideas, strive to give your visitors a comfortable and unique atmosphere, and they will quickly fall in love with your bookstore or cat cafe.

We’re not talking only about the design here. It matters, but it is also important to pay attention to the overall image of your business, and the way your personnel communicates with visitors.

Answering the following questions can help you build a concept for your startup.

  • What is your target demographic? The answer will influence everything in your coffee shop concept, from staff and menu to furniture.

  • What are customers in your area willing to pay? There are dozens of coffee shop concept ideas you could go for. Yet, you have to pace your dreams and see how they correlate with the amount of money your target audience is willing to spend on a coffee shop experience.

  • Will you offer a sit-down service? You need to decide if your coffee shop will be a takeaway or a sit-down one.

  • Do you want to offer food? If you choose to offer food besides coffee, you need to study your food competition in the area as well.

Every detail should follow the general concept to create a feeling of completeness, and if you manage to achieve this goal, your visitors will definitely come back and recommend your coffee shop to their friends. Get some inspiration by checking the latest coffee shop trends.

4. Create the logo and signage for your coffee shop

Logo and signboard are the «face» of your business, so it is extremely important to make a wise choice. Obviously, your coffee shop name, logo, and signage should complement each other. To get a really cool signboard and logo all at once, hire a professional designer, or go to a design studio.

If you don’t have a lot of ideas about how everything should look, ask them to provide you with several options so you will be able to choose exactly the logo and signboard that will hit the spot.

Below are some of the basic rules to follow when working on a coffee place title and logo:

  • Don’t copycat. It’s better to be a raw version of yourself than copy someone perfectly.

  • Short and sharp is the way to go. A name you come up with will be your website and social media, so be easy to remember and find.

  • Different, but comprehensible. Find a name and a logo for it that stands out, and brings out emotions but isn’t hard to read or figure out.

  • Avoid cliches. Check out examples of coffee shop names that maybe should be reconsidered.

  • Stay away from hyphens (and other punctuation marks). Leave the punctuation marks to strong passwords rather than your business name unless you want to confuse your customers.

  • Check if it’s free. Before settling on a business name or a logo, make sure no one else has it copyrighted. You’d be surprised how many entrepreneurs across the world get the same ideas and then fight over who was first.

  • Make sure it looks good (on everything you might need to brand).

Taking the time and effort it takes to create a well-thought-out business logo and title saves you from spending money on rebranding later.

5. Register your coffee shop business

What licenses do you need to open a coffee shop? As we already mentioned, running a coffee shop you will have to deal with some paperwork. The need for a certain document depends on the state you are in, but some of them are a must regardless of your geographical location. And even in this case, a given license can have its peculiarities depending on the state you’re in. Let’s take a look at the list of permits most coffee shops across the country need:

  • Business license

  • Employer identification number

  • Certificate of occupancy (building permit)

  • Retail food service license

  • Food handler’s permit

  • Building health permit

  • Sign permit

  • Insurance (General Liability Insurance/Business property insurance/Commercial auto coverage insurance)

  • Liquor license (if you plan to serve alcohol)

  • Public performance license (if you plan to host any events)

  • Live entertainment license (if you plan to host any events)

In addition to that, you might need some other licenses or regulations based on the city or state you live in. We don’t know your exact location, so we suggest you just check the rules of your state and then get all the essential licenses.

6. Financing your coffee shop

Starting a new business isn’t cheap, even if it’s a small one. When it comes to coffee shop funding, you can explore different options like your own budget, family and friends' budget, loans, business angels, etc. Each of the choices has its pros and cons. But the main question is how to calculate what amount of money will your coffee shop need if you haven’t started operating it yet. Let’s get right into it.

How to create a budget for a coffee shop? To estimate the expenses of your coffee shop and its total budget, you need to consider its main expense items:

  • Premises and utilities. The numbers will be different based on whether you rent or purchase the premises, what repair work needs to be done, and if there is any maintenance of the outdoor space.

  • Equipment and products. You can purchase brand-new coffeehouse equipment, find cheaper secondhand options, or even rent the equipment you need. As for the products, the price will differ based on the brands and suppliers you work with.

  • Furniture and design depend on the coffee shop setup ideas you have. Whether you want to go minimalist or all big and fancy, figures will differ.

  • Marketing of your coffee shop should be strong enough to attract the target audience and help you turn random visitors into devoted regulars. Whether you do it on your own, hire a freelancer, or seek help from a marketing agency, the check will be different.

  • Payroll is another expense item to consider carefully. Happy employees get a competitive salary.

Once you have finished calculating your coffee shop investments, it’s time to determine a pricing strategy for a coffee shop. First of all, study not only the trends and prices in the area where you open your business but the paying capacity of your target audience as well. Regulars keep independent coffee shops running, so you want to make sure they can afford their regular cup.

As a rule, coffee shops go for one of the following strategies:

  • Dynamic pricing

  • Portion pricing

  • Bundle pricing

Once your coffee shop prices are set, keep a close eye on your POS to see how well those prices are working for your business. Don’t be afraid to adjust prices when needed.

7. Choose the right space

When deciding how to start a coffee shop business it is essential to check your options for obtaining premises: rent or purchase of own premises. Each option has its pros and cons.

If you choose to rent, it would be a safer and cheaper option for a startup. You can change the location at some point too. However, rental agreements can be tricky and you should be well aware of what your rights about the premises are, how you can terminate the agreement if you need to, and also avoid unexpected rent increases.

If you choose to buy the premises for your coffee shop, you would have more freedom about the property than you would renting it. Your coffee shop's monthly expenses would not include rent. You would be sure that a landlord wouldn’t kick you out for a more profitable offer when the time of your rental agreement ends. However, buying premises is quite a risky start for a startup. It keeps you glued to a certain location and requires a large investment in the very beginning.

What to check before renting or buying the premises for setting up a coffee shop? It’s always a good idea to look for a place that’s been occupied by a similar business. In this case, chances are, it has the necessary equipment and meets the building health permit requirements (still check if it does before committing). Check if there’s enough space in the kitchen, and inspect the plumbing and the quality of the tap water. Inspect electricity and gas. If there are any outdoor premises you can use, inquire if you could build a terrace or a patio there.

8. Designing your coffee shop for optimal customer experience

A clean, stylish, and fresh-looking coffee shop draws the attention of the customers, just like good coffee. Most visitors go to coffee shops to catch up with friends in a relaxing and calm environment, work, read, unwind from the stress of their workday, or study.

The exterior design of the café serves as a showcase of your business. Before doing anything, check if any community or location restrictions apply. The sign, windows, doors, and outdoor seating should all broadcast the atmosphere you have inside.

As for interior design, there are a lot of things to take care of once you’ve settled with the aesthetic.

Everything from furniture, counter, lighting, and equipment to color palette and music should come together in harmony. And, it should be convenient for the customers and the employees to use the space.

Pro tip: start designing your coffee shop interior around your kitchen and equipment. This way, you won’t have to cut down on equipment or make your employees jammed in a lumbered space.

Depending on how much space you have, you might need less or more decor. The main thing to remember here is you don’t want to make your customers feel crammed.

9. Choose the equipment for the coffee shop

As we already said, the easiest way to get the equipment is to rent a place that already has it. But if not, you will have to choose one of the following ways:

  • Buying New Equipment. It can cost a lot, but you can try to save some money. Don’t buy the equipment from the first producer — explore the market and the prices first. Then, if you buy a lot, you can try to get at least a tiny discount.

  • Buying used equipment. Obviously, it will cost less than the brand-new one. However, you will have to check the equipment wear. If the equipment is already at the last stage of its life cycle, it is better to spend more money than buy reliable equipment. Or you can choose the next option.

  • Renting equipment. Sometimes you can rent certain items for your coffee shop, especially if you need them only for a given period.

  • Getting equipment for free. Yes, it is possible but you will have to apply your diplomacy skills and be pretty lucky. This trick can work with foodstuffs suppliers — if you sign a long-term contract with them, they can provide you with, for instance, their branded refrigerators.

Now that we made it clear how you can get equipment for your coffee shop, let’s take a look at what exactly you will need. The main equipment for a coffee place includes:

  • Automatic drip coffee makers

  • Coffee brewers

  • Espresso machines

  • Industrial coffee grinders

  • Industrial blenders

  • Refrigerator

If you plan to serve food alongside beverages, you’ll need:

  • Ovens and toasters Mixing equipment

  • Heavy-duty microwave oven

Precise coffee shop equipment cost will depend on your location, business scale, brands, and purchase/rent terms. There are a million other items needed to start a coffee shop, that are not exactly equipment, but definitely inventory. We’re talking about all the reusable and disposable dishes and cutlery, storage containers, detergents, aprons and gloves, uniforms, napkins, and so on. We recommend you calculate the initial purchase cost as well as monthly expenses on the inventory carefully.

10. Install a POS system

Installing a POS (Point of Sale) system is one of the most valuable recommendations on how to open a coffee shop. This is a computerized system that allows you to track sales, cash flow, food inventory, etc. It optimizes the working processes and allows you to avoid a lot of problems and expedite the work of your personnel.

Usually, the coffee shop POS system consists of a screen, a cash drawer, and a credit card reader. Receipt printer, handheld POS system and barcode scanner are optional. But the structure of the system is not the only thing you should know about it — there are enough POS systems on the market, so you will have to make a choice. Remember, a really good cafe POS system must have the following features:

  • Providing a detailed sales report which includes information regarding what exactly you sold, the percentage of sales, and so on.

  • Client acquisition and management which will help to communicate with your customers and increase their loyalty.

  • Employee management for tracking their working hours.

  • Inventory management for ordering new products without any problems and predicting your future costs.

  • Impeccable security for keeping all the data safe from hackers.

  • Seamless integration with any software so you can always connect to your business.

Many vendors offer business owners to try management software for free to give them an opportunity to test it before purchase. Opening a coffee shop is a great idea, and now you know how to deal with it the right way. Just follow our guide and be creative!

11. Find professional service staff

To find reliable personnel, start developing portraits of your future staff. What do they look like? What qualities do they need? Then, create a catchy job description and publish it on job portals and social networks. Don’t forget to prepare for interviewing your potential employees — think about the questions you want to ask them.

Remember that hiring the right people will be one of your biggest challenges. And as much effort you'll have to put into retaining your employees. That is why it's important to develop a nice motivation system with bonuses, extra days off, lunches on the house, and so on. Besides, you will have to combine friendliness with more or less strict control.

Below you can find a sample list of staff a café usually needs with the main skills a person doing the job needs. The number of people doing the same job depends on the scale of your coffee shop and customer turnover.

  • Barista

  • Manager

  • Accountant

  • Cleaning worker

When looking for people to fill the positions, keep in mind your customer service standards and the atmosphere of your coffee shop.

12. Create the menu

A coffee shop menu is one of the most important things to determine before the coffee shop opening. Both the content and the menu design influence the results of your business endeavor a lot.

The design and content of the menu should be well-aligned with your brand strategy, fit the vibe and the setting of your location. The menu should fit your target audience well. What’s more, its offering should make you stand out in the competition among the rest of the coffee shops in the area.

Here are some more precise tips for coffee shop menu creation you might want to use:

  • Start menu creation from this question: what does my target customer want? Do thorough customer research before the doors of your coffee shop open.

  • Don’t try to fit everything at once. Adding a wide range of beverages and foods to your menu can be confusing for first-time customers and make getting all the coffee shop licenses and permits harder.

  • Readability over creativity. Sure thing, a menu should reflect the vibe of your coffee shop. Yet, make sure it is simple to read and accessible to everyone. Speaking of accessibility, consider having different menu options to fit the needs of different customers and make it easier for them to see what you offer (board, paper, QR code, website menu).

  • Be open to change. It’s normal to change your menu based on the preferences of your customers, seasonal demand, or changes in trends. An effective POS system with deep analytics will help you adjust your menu in the best way.

It wouldn’t harm to get a second opinion before your menu is up there for the customers. You could get some ideas from a fellow food business owner, a representative of your target audience, a business analyst, etc.

13. Find suppliers

Explore the market, find suitable suppliers, and always reserve the right to work with several suppliers, just in case. Look for local suppliers. Do you know a person who makes amazing homemade cakes and cookies? Then why not work with them? Besides, offering homemade food can become your special feature and attract more visitors. So, how do you pick a supplier that works best for your business?

Below are the main criteria for choosing a reliable supplier for your coffee shop:

  • Product quality. If your customers don’t like and memorize the cup of coffee they get the first time, you won’t see them again. The competition is too high.

  • Product quantity is another factor to consider. You might find a dream supplier, who only works with large businesses, or a local small one, who can’t meet the daily needs of your coffee shops. Know your needs and choose based on them.

  • Customer orientation of the supplier is important too. Business is all about effective communication and respect.

  • Price range differs drastically when it comes to coffee shop business. Find a balance between what you are willing to pay and what your target audience considers perfect.

Modern customers choose to buy from businesses that care about sustainability and environmental change. When you support local businesses you do what’s best for the community and the environment. Independent coffee shops emphasize working with fair trade coffee suppliers as well.

When you choose the supplier that fits your business values and needs, make sure you do not simply sign a contract, but build a relationship. They might provide you with some valuable insights about the industry changes and demand fluctuations, acting as your coffee shop consultant.

14. Sourcing coffee and ingredients

What do you want to sell to your customers? This might seem self-evident, but with greater competition and rising expectations for coffee shops, the range of products you offer is becoming increasingly important!

Try to keep a good variety of beans and blends, of different strengths, origins, and flavor accents, and make sure that your staff knows the difference between each type of coffee. Consider whether you want to prepare novelty coffee recipes such as frappes or cold-brewed coffees!

How to source high-quality coffee beans and other ingredients?

  • Start the search from the nearest places. Coffee doesn’t enjoy traveling much, and long shipments and storage time can influence the taste negatively.

  • Study what products your thriving competitors offer and where they get it from.

  • Note that relying fully on specialty coffee is tricky since it might have a limited and seasonal supply. Check the constant availability and volume of the coffee you need.

  • Check the reviews of other buyers.

  • Visit coffee events in your area. Nowadays, coffee championships are extremely popular across the country.

  • When searching for food and beverage addition suppliers, start with the local ones. Check their product quality, reputation, and terms of cooperation.

What product parameters should you focus on (coffee and other products)?

  • Quality over anything else. As we already mentioned a lot in this post, coffee shop industry competition is fierce, so any attempt to save money on quality will not be excused by the customers.

  • Availability of the products on a regular basis. You don’t want to get your visitors hooked on a coffee that isn’t available next week or on a pastry your talented can’t bake full time.

  • Sustainability is another factor that matters to customers and should matter to you as a modern business owner as well. Going local, supporting fair trade suppliers, and opting for greener products and options pays off in the long run.

  • Price is the final line here. Calculate carefully so that you can afford to work with suppliers that meet your values and needs while still running a profitable business.

Make sure to stay stocked with snacks and desserts that go well with your coffee, milk alternatives, a few teas, and maybe even some sandwiches!

15. Marketing your coffee shop

There are a lot of ways to get in touch with your target audience, you only have to create portraits of your clients and define the channels for getting in touch with them. To create a strong brand for your coffee shop, answer the following five questions for your business: who are we? What do we do? How do we do it? For whom do we do it? Why are we doing it? Set a clear picture of your brand and its values that you want to communicate to your audience.

Digital marketing

Digital marketing strategies for coffee shops vary on the business size, location, and concept. Yet, all use online platforms. Most coffee shops use the following marketing channels for promotion:

  • Social media. When used the right way, social media is a potent and cost-effective marketing channel for a coffee shop. At the current stage of social media, users prefer short-form and visual content. Platforms like Instagram, Facebook, and TikTok are great places for coffee shop owners to reach out to their target audience.

  • Email newsletters can be of use as you introduce and implement your loyalty program, seasonal offerings, or events. Avoid spamming your subscribers at all costs.

  • Guest Wi-Fi. Many coffee drinkers come to a coffee place to work on their laptops. Grant your guests internet access in exchange for their contact information, such as email. You can use it later for your email campaign.

Building a community

One more thing to keep in mind is the importance of local partnerships. No one can promote your business better among the local community than its members. If you manage to build trustful and friendly partnerships with other local businesses, community engagement is bound to follow. Word-of-mouth marketing is the most effective form of marketing for a small local community you can hope for.

Implement a loyalty program

Here is one more tip on how to run a coffee shop efficiently — make up a special loyalty program for your visitors. It will motivate them to come back again and again, and this is exactly what you need, right?

16. Grand opening

After all the researching, planning, hiring, stocking, and licensing are done, it’s time to take that leap of faith and open the doors of your coffee shop. It’s a big event indeed — and the one you should devotedly prepare for.

You only make a first impression once, so it’s a good idea to hold something like a rehearsal opening. This way you will be able to check whether your equipment and POS system are working as they should be and whether the staff knows its responsibilities and performs well.

Here’s our checklist for a successful grand opening of a new coffee shop:

  • Set the date several weeks ahead

  • Set a budget for your opening (decorations, marketing and advertising campaign, promotional beverages and foods)

  • Train your staff

  • Establish your online presence before the opening

  • Hold a marketing and ad campaign to notify the community about your opening

  • Prepare something special for the opening day (based on your coffee concept, it could be a local band, a workshop for kids, a boardgame competition for the seniors etc.)

After the opening day is behind you, work to keep customer engagement high. Maintaining customer engagement and delivering consistent quality is even more important, than holding a grand opening. You could motivate your customers to come to visit you again by holding special promotions for a week or so, giving out discount flyers on the opening day, and so on.

17. Scaling and growth

Now that your place is up and running, there’s another question in front of you: how to make a coffee shop successful beyond the opening day?

To make it in the long run, you’ll need to expand or scale your business at some point. Adapting to changes is a constant challenge small business owners face in the industry as well.

You are ready to scale if your demand is high, your brand has high recognition, your budget allows it and you have enough staff to transfer to the new location. Finding a new location for the expansion of your business is like starting all over in some way. It could turn out that the demand, demographics, and trends in a new location differ drastically from the ones you are used to. So, before you decide to expand, do thorough research on every aspect, as if you are starting from scratch.

Now, let’s talk about changes. Managing a coffee shop is never a boring task and the job is never done. You should always keep a weather eye open for market trends, observe customer behavior, and know what your competition is doing. One of the aspects that influences a coffee shop business is probably technology. After all, robots can make coffee now! The main point here is that you should never feel too comfortable in your ways that you miss the new IT thing in the coffee industry. When possible, visit popular coffee events with your staff, represent your brand there, and get inspired to be the coffee shop of the future.

How much does it cost to open a coffee shop?

To create a financial plan, it is essential to calculate how much money you need to start your own coffee shop. Obviously, we can’t tell you the exact cost, since we have no idea what your plans are. Instead, we will give you the basic knowledge of how to calculate the expenses on your own.

Here are the things you should include in your calculation:

  • Paperwork. You will have to get licenses: an employer identification number, a certificate of occupancy, a food service license, a sign permit, and some other documents.

  • Purchase of foodstuffs. These expenses highly depend on your menu. For instance, you will spend much more apart from coffee if you also plan to serve alcoholic beverages.

  • Staff salaries. That’s an obvious thing — there are not too many people who will agree to volunteer. In the U.S., baristas are paid on average about $18-20,000 a year while managers work for no less than $30-40,000 a year.

  • Rental of premises. This cost depends on the size of the premise and its location.

  • Procurement of equipment. Fortunately, you can avoid this component if you rent a premise that is already equipped. Otherwise, you will have to purchase all the essential equipment and, probably, also pay for its installation. Espresso machines can cost from $5,000 to $20,000, coffee brewers from $500 to $2,500, and espresso grinders can also cost from $500 to $2,000. The expenses also depend on your menu. For example, if you offer not only coffee and cakes, but also cook meals, you will need extra refrigerators, ovens, and powerful ventilation systems.

  • Advertising. You will have to spend a part of your budget on promoting your coffee shop. If you don’t do this, you won’t attract as many visitors as you want.

The minimum budget you need to start a coffee shop with seating is around $80,000, while the maximum limit depends only on your ambitions and purposes. A coffee kiosk may cost less — you will have to spend around $60,000 at a minimum.

Opening your own café or going franchise?

When wondering how to become a coffee shop owner, you need to determine whether you want a franchise or an independent one. There is no universally correct answer here. Different concepts work better for different locations, based on the location, coffee culture, demand, budget, and ambitions of the business owner.

Opening your own business and a franchise business is quite different, and each option has its pros and cons. Let’s take a look at the key ones so the difference is clear.

Independent coffee shop pros:

  • Total freedom in the wilderness. Full control and freedom to explore and experiment.

  • No royalties.

  • You create your success with your hands.

  • You call the shots. When the business is yours, you get to make the decisions.

Independent coffee shop cons:

  • Massive preparation and research before business launch.

  • Alone in the competition. Can you handle it?

  • Learning through trial and error.

  • High hopes and high risks. You learn how to run a coffee business at the cost of it.

Franchise coffee shop pros:

  • Brand awareness is there from the start.

  • A time-proven system, structure, and best practices you get with the franchise.

  • Verified suppliers. When you buy a franchise, it dictates what suppliers you get your supplies from.

  • Lover risk compared to independent coffee shops.

Franchise coffee shop cons:

  • Budget. To buy a franchise coffee shop business, you need to have a large starting capital you are willing to invest.

  • Franchise fee is another financial burden coffee owners of such businesses bear.

  • Shared responsibility. Even if you do your best in your coffee shop, some other location or brand might mess things up and throw a shade on you.

  • Limits. You have only as much control over your business as the franchise agreement grants you.

  • Selling options are limited.

As you can see, doing business by opening a small independent coffee shop vs. going franchise each has its benefits and drawbacks. The choice is up to you, so make a well-calculated one.


In this post, we’ve covered 17 tips on opening a coffee shop business. We hope that our article helped you answer the question — how to open a coffee shop. Like in any business, it all starts with research and planning, continues with finding a perfect place and a perfect team, engaging the customers, and keeping up the good work to make your business a profitable one. We’ve covered the main seventeen aspects of launching a coffee shop for you, so we hope the road ahead is way more clear now.

We also wish you all the best as you get started on your journey! The coffee shop business is not an easy one, but it’s definitely challenging, exciting, and full-flavored!

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