How Much It Costs To Open A Coffee Shop Business | Cafe Restaurant

How Much It Costs To Open A Coffee Shop Business | Cafe Restaurant

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how much does it cost to open up a coffee shop fifty thousand a hundred thousand well if that's what you're wondering then you must keep watching towards the end because i'm breaking down how much does it cost to open up a coffee shop so make sure you guys keep watching hello friends my name is wilson your friend in helping you build a thriving small business and a profitable food business now before i dive into all the details in building a coffee shop and the cost breakdown please go ahead and smash the like button because that's really going to be able to help me bring this video to more people like yourself it's going to help me out a ton and as a thank you for doing that here's a picture of a nice puppy so if you're watching this video you must have a high interest in opening up your coffee shop one day and that's exactly one of my dreams too is to open up a coffee shop like many other people and yes i went out there created it and sold it after five years now today i'm going to be sharing with you this fast growing food and beverage concept and by 2025 it's estimated to hit more than 237 billion dollars so the biggest question that people ask is how much does it cost wilson to open up a coffee shop well if you're looking into creating a coffee shop with seating it can range anywhere from fifty thousand dollars to all the way up to 350.000 dollars if you're thinking about just a coffee stand a kiosk perhaps fifty thousand to a hundred and twenty five thousand dollars or if you're thinking about having a food truck it could go from fifty thousand dollars to all the way to two hundred thousand dollars now you might be wondering why is there such a big gap wilson fifty thousand to three hundred thousand dollars is a big gap and the reason why is because depending on your concept your location and the type of coffee shop that you're building it varies a lot now what i'm going to be providing you throughout this whole entire video is the elements that you should consider when opening up your coffee shop this is not like a take this and run with it kind of deal you have to do your own analysis you have to put your own character into this plan so that way you can accurately predict how much does it cost to create your own coffee shop now before i break down all the costs and opening up your coffee shop i'd love to thank hatch the sponsor of this video so what is hatch hatch is a business checking account that is specifically designed for small business owners like you and i what i love about them is that they have no nsf fees so that means you don't get dinged for random reason and on top of that you also get five percent cash back on different types of rewards like cash restaurants hotels car rentals and the beauty about this is that they also have perks with companies that i love like yelp like square up to five hundred dollars in free yelp credits and five thousand dollars in free square processing credits and i've actually reached out to them so then that way they can give you guys my followers some special deal and you're getting it free for a whole year for you guys to sign up check it out in the link below now let's dive right in the first component that you need to account for the cost is your business plan this is something that a lot of people talk about it might sound cliche but it definitely isn't because a business plan allows you to see the map to see where you're going not only allows you to see that but also your partners your vendors and your banks that are going to be loaning you the money so that's the reason why creating a business plan allows you to account for all the different costs and throughout this entire video we're going to be accounting all these things into your business plan and if you want to check out how to create a proper business plan definitely check out this video right here now that we have the foundation your business plan where you plug in all your costs where you account for everything the second component to understand your cost for your coffee shop is your location location location location location accounts for a big part of your cost now when it comes to location there are four variables that you must account for for the price of your location first up the foot traffic if you're having your location in a high density high foot traffic area for example downtown core the rent is going to be substantially higher than having your location at a nearby neighborhood community because that area has less foot traffic second variable when it comes to the cost of your location is the size when it comes to size it really comes back down to the concept that you have it in mind are you thinking about having a grab and go kind of experience or are you going to have a sit-down environment where people can come and hang out and chill typically speaking i would recommend opening up a 800 to 1200 square feet location relatively big in size because at the end of the day when people come to a coffee shop they're looking for a place to hang out not necessarily grab and go because grabbing gold coffee they might as well make it from their home and that's the reason why you must account for a higher budget for 800 to 1200 square feet location as a bonus tip i would highly recommend you to find a broker when finding your location because they have all the average cost per square foot at different locations and for different square footages third variable when it comes to the cost of your location is the renovations when it comes to renovations there are two types of renovations that you can lease first is a complete blank slate oftentimes it is a new development now the landlord bought it and now they're just renting it out to you complete blank slate and all you have to do go in is there's nothing in there that means you build your own washroom that means you build your own lighting your own electrical your own underground piping and all that and oftentimes you can actually negotiate with your landlord to give you a leasehold improvement oftentimes it comes into tens of thousands of dollars that they give you as a subsidy because they're highly incentivized to do so after they rent it to you for let's say three years five years they get to keep the renovations that are in the building and that's the reason why they would want to give you some kind of subsidies that's the first type the second type of places that you can lease are the ones that are existing units that were already out there that means the washrooms already built the electrical is already all up everything is already done you go in and all you have to do is apply lipstick service what does lipstick service mean that means new painting new decor and as a new first time owner i highly highly recommend you guys to go down this route and it is more common for people to go down this route as well because at the end of the day it just save a lot more money however a lot of people why they choose their first route to redo everything is because they have the budget to do so because they have a vision in mind that they want to build out completely from scratch and a lot of times when people are building up coffee shops it's either for a really big passion project which is why they would choose the first one or for them to actually treat this as a cash cow and that's the reason why i highly recommend if you're watching this and if you want to build this as a profit generator go with route number two and last variable that you must consider when choosing a location is whether there are any miscellaneous costs for example if your location is inside a strata unit or in a mall location oftentimes they're going to ask you for a portion of your revenue and sometimes it might not be worth it even though they have high traffic so definitely something you would want to consider and some other strata units they have some crazy amount of fees that they charge whether it is your garbage disposal whether it is your utilities whether it is your gas or water so definitely check out the details because oftentimes the devils are in the details and if you want to learn more about how to figure out your lease terms and the things you should look out for when signing a lease then definitely check out this video we dive deep into how you can check out your own lease and negotiate a really good term the third type of expense you must account for when starting your coffee shop are your equipment yes equipment is going to be a big chunk of your initial investment now equipment is no joke especially your coffee brewing machine it can run you anywhere from 3 000 all the way up to hundreds of thousand dollars depending on how professional you want your equipment to be and how sophisticated you want to be now why is there such a big discrepancy when it comes to brewing machines well it depends on the functionality that you would want for example if you're looking for something that is quick like mcdonald's or panera bed then you can have those one press button machines that spits out great quality coffee but also allows you to reduce your time the people spend on it and it just makes the whole thing super robust now if you want to be a little bit more sophisticated you can have the semi-automatic machines which allows you to have more control on the beans and how you brew them now this type of machine is definitely going to set you back even more and on top of that if you want machines that have a bigger yield that means you can create more coffee and more volume all at once more heads then that again would set you back even more and in addition to coffee brewing machines and if you're really serious about your coffee a lot of people would consider roasting their own beans as well so you would need your own roaster that could easily set you back another 25 000 now aside from the brewing equipment which is definitely one of the most expensive items you're also going to need these equipment as well dishwasher blenders display cases toaster ovens freezers under counter coolers refrigerators stand-up coolers ice machine storage racks coffee beans milk and alternatives syrups spices like cinnamon nutmeg cocoa powder sugar paper cups containers clear classic cups napkins stirrers straws and lids and if you're offering other types of food as well then you would want to consider baked goods bottled water juices and all that jazz now i know this is a really big list and it might scare some of you away but at the end of the day i'm bringing this to your attention and you expose you to the types of equipment that you might need you don't necessarily need all of these equipment so you can actually just account for the things that you may need that you would want for your own concept so then that way you can accurately predict the cost to open up your coffee shop and as a bonus tip for you guys you don't need to create all the items for your coffee shop and i'll give you an example of why when we first opened up our ice cream shop we really wanted to create waffles yet we didn't have the capacity to create waffles so what did we do we went and approached our bakery that was next door for them to provide us with their bakery and waffles so that is something that you can mirror is to have other people other people who are creating things that you can sell consign at your shop to increase your revenue without you doing an additional work now when it comes to saving on equipment there are a few areas that you should definitely look at first up is look for auction sites i'll look for auction sites of other coffee shops that just went bankrupt that just went out of business and you can actually be able to get their equipment at a big discount so definitely check out auction sites and on top of that check out second hand website second hand websites specifically the ones that focuses on selling secondhand items because oftentimes when you buy second-hand items from them they have a year to two years warranty because at the end of the day when you buy second-hand equipment you face a really big risk of the item not knowing whether it works after a day after two days after a week or whatnot and these items and these machineries are your money maker so you definitely do not want to risk having your money maker breakdown in the middle of service that's reason why buy from either auctioneers or buy from reputable secondhand locations that actually do this as a living so then that way they can give you the warranty and in addition if you don't have the cash flow to actually buy your equipment outright there are oftentimes leasing companies out there that allows you to lease the equipment over a long period of time either a year two years three years five years term the fourth cost that you should definitely account for is your pos your financial software now depending on your features that you need and how fancy you wanna be it can cost you anywhere from hundreds to five thousand dollars just to have your point of sale machine but you're definitely in luck because there are other softwares that are a little bit more lightweight that are perfect for smaller cafes smaller businesses like square and i personally use square for all my different locations it is such a user-friendly interface and on top of that it is really easy for me to train my staff to use this software and something that i love about them is because they don't charge no monthly fee nor is there a setup fee you only pay a small processing fee when there is a transaction and if you are thinking about opening up a coffee shop and if you're looking for a good solid pos system then i highly recommend you guys check out square definitely check them out in the link in the description below by using my link below i do get a small commission fee but it is at no extra cost for you it helps me support this channel so that way i can feed jason to create more of these videos just for you the fifth component when it comes to the cost of your coffee shop is the interior and your exterior aesthetics i'm talking about specifically the decor inside your coffee shop and also the packaging of your product people actually choose to go to a location that is aesthetically nice that looks really really beautiful over taste taste becomes secondary so depending on the feel the ambience and the atmosphere that you want to create for your coffee shop it might mean that you need to spend a lot of money on nice furniture on wall murals on the whole experience and that's something that you definitely need to account for for us at 720 suites when we created our ice cream shop we actually spent thousands of dollars to hire designer to hire someone to actually go and create wall murals inside our coffee shop our ice cream shop so that way people can come in take instagram pictures and to post it online this tactic alone made us become viral in vancouver now aside from the ambience and also that the core of your coffee shop you must pay attention to the packaging of your coffee now if you're thinking about coffee what can you do with a coffee cup yes there's actually a lot of things you can do with a coffee cup and that is what's going to set you apart from the thousands of different coffee shops that are in your city as an example when we're selling ice cream we really focus on the experience that we want to bring to our customers and that's reason why we actually spent months and created these autocad designs to create the perfect experience just for our customers having smoke coming out of ice cream that completely elevated our product and allowed us to actually achieve a lot of success within our city the beauty about spending the time and effort in packaging your cup is that it brings a whole new element of status to your brand because at the end of the day when you're holding a starbucks cup it gives you a different feeling and that's the reason why people are willing to pay three four bucks just for a cup of coffee because the green logo it gives you a status upgrade and on top of that this all branding stuff really plays into different brands as well aside from starbucks there are multiple different brands that when you look at their cup it gives you a certain feeling it is something that is distinguishable and something that stands out from the crowd just by you as a consumer holding the cup it gives you a completely different status just like blue bottle now if you're having trouble finding design and inspiration for your coffee definitely a place that i highly recommend you guys to check out to get inspiration is pinterest pinterest is where i get a lot of my different ideas and also of course instagram allows you to find out all these trendy different places guys stop the video right now because this is something that is super super important for this note when it comes to interior and exterior design oftentimes we create things that are nice but we must know that we're creating this whole experience for our target market so before you go and spend thousands of dollars with a designer must understand who is it that you're trying to serve who is your target market because that's going to dictate your interior design that's also going to dictate your packaging the sixth consideration for the cost for your coffee shop is your insurance and your licenses every city has their own different permits licenses and insurance policies so definitely something that for you to look out for and these expenses definitely stack up so you must be aware of these things and guys random mishap does happen and even though when you're operating your coffee shop you require your insurance definitely you should check it with your insurance broker because if someone comes in they slip they can actually sue you if someone comes in eat something bad and they get into the hospital they can sue you there's a lot of things that can go wrong that allows you to get sued and other different things that might happen are potentially fires break-ins earthquakes natural disasters these are all things that you should be aware of when creating your coffee shop the seventh cost that you must account for when opening up your coffee shop is staffing staffing is definitely one of the biggest costs when opening up a coffee shop something that you should definitely budget for and oftentimes staffing labor is considered as a prime cost specifically in this item your labor should not account for more than 30 to 40 percent of your costs in comparison to your revenue and the beauty about opening up a coffee shop is that the talent required for you to actually create this product it's much less than a fine dining location and that's the reason why your labor should not be as much as the other type of food concepts and in most cases you only need two staff at one time in your cafe you can cross train them allowing them to be a barista and also handling cash at once so then that way you can have that kind of overlap so you can actually account for the peak hours and also for the down times to save on your labor costs and for this to work guys you must have a good team have a good culture have good training and hire the right people so then that way they can operate your coffee shop at the leanest possibility and if you're thinking about how do i hire great talent definitely check out this video where we cover how you can hire great talent hey guys if you've watched this video until this point you must be getting a ton of value and if you're getting value help me out smash like button so then that way i can continue to pay for the bills to continue to pay for jason so he can edit more of these videos just for you now let's dive right back in the last cost that you should definitely account for when opening up your coffee shop is your marketing cost a lot of people do not budget for their marketing costs i do not know why but this is something that you must account for people think that you just open the doors and people come through that is not the case you must figure out an account for your marketing costs so when it comes to marketing that means you can hire an agency to do the marketing for you or you can do this in-house if you're hiring an agency i highly recommend you guys to hire one with good track record that knows what they're doing or if you want to keep it lean you want to keep your costs low then i would recommend you guys doing this in-house and we have a ton of video showing you how to you market in-house definitely check out our playlist right here so if you're doing your own in-house marketing there's a few channels that you must make sure that you do upkeep first up are the review sites like yo you must check them out you must reply to them on a consistent manner second instagram and facebook even though facebook i highly recommend not to do this anymore i feel like it's obsolete i feel like it's already out of date instagram is definitely a platform where you want to pay majority of your attention to make sure you guys engage with your people make sure you guys push out good content show people behind the scenes show them your true character next up google my business google my business is something that is super underrated but along the same lines as reviews sites people definitely google your place when they want to try out your place or not and a lot of times people don't pay attention to it they don't update their google my business listing definitely if you're a small business go and claim your google my business and update it with the most up-to-date information then there is your website definitely go make sure you update your website make sure all the relevant information is on there your contact info your address your menu pictures these are key items that other people don't put in a lot of websites don't have that you must have that right before default right in the dead center so then that way people can find you they see exactly what you're serving and lastly you guys must have good pr public relations if you guys have news people reaching out to you you must reply to them if you have media reaching out to you or if you have the capability to you reaching out to the media then definitely establish those great relationships now i know i mentioned a lot of different channels that you can actually and should market on and pay attention to i highly recommend you guys if you're doing it in-house hire an intern if you're not familiar with these channels hiring an intern entry-level intern that does digital marketing for you and put this and show them this video show them these are the channels that you would want to pay attention to and they would be able to do the job for you and typically speaking a digital marketing intern can cost you anywhere from 15 to 20 an hour now depending on where you live this might be a little bit more a little bit less and if you're wanting to account for this specific cost i would say anywhere from a thousand dollars to twelve hundred dollars a month is a good amount to account for this cost not breaking the bank but also allowing you to actually invest money into these different types of platform so there you go friends the cost of opening up a coffee shop i've talked about all the costs but know for one thing if you want to create a successful cafe there's other fundamentals that you must be aware of such as aligning identifying your customer avatar so then that way you know exactly who it is that you're serving next is to be able to connect with them on a deep psychological level so then that way they'll always choose you over your competitors and lastly a lot of marketing tactics that is working in the digital age right now and if this sounds anything of this is interesting to you then definitely attend the free master class in the link below because these are the things that we cover in the free master class for you so definitely sign up there i'll see you guys in the master class and i hope you enjoyed this video sure you guys subscribe along the journey and smash like button i will see you guys real soon

2021-07-02 12:53

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