February 23, 2024
Lauren Platero

Cost to Open a Coffee Shop: The 8 Coffee Shop Startup Costs

The cost to open a coffee shop is a financial estimate that one must know prior to bringing their business plans to life. Once you finish mapping out your action plans, acquiring ample funding is vital before you can move forward with any other steps. But once you do, opening the doors to your brand-new coffee shop will be right around the corner. Then, you’ll be able to combat all the restaurant expenses associated with cafes and coffee houses as the business generates revenue.

But what exactly are the expenses that a coffee shop owner will incur? As you continue on reading the remainder of this article, you’re going to discover eight of the most popular startup costs that one must allocate funds for when launching a coffee shop. It’s also important to bear in mind that many of these costs will appear on a monthly basis. But first, let’s get a general idea of the overall cost of opening a coffee shop.

Cost to Open a Coffee Shop

When learning how to start a coffee shop from the ground up, you’ll quickly discover the many expenses it will rack up. That’s why so many entrepreneurs seek funding opportunities. In fact, it might not be possible for the majority of the world’s best coffee shops to exist without loan firms and investors.

So, how much does it cost to open a coffee shop in 2024? There are so many answers to this question scattered across the web, but we're going to break it down for you in the simplest terms.  Once you add up all the working parts of a cafe, the cost to open a coffee shop can start at approximately $100,000 and potentially surpass $500,000. Let’s say you find a brick and mortar business that sits within a strip mall. The cost to open a coffee shop in this kind of location might result in paying a price at the lower end of the spectrum.

However, if you wish to open a drive thru coffee shop, anticipate investing a significantly higher sum of money into the entity. Not only are structures with a drive-thru a hot commodity in our quick-paced society, but you might have to construct it from scratch. In this case, the cost to open a coffee shop can reach seven digit figures.

But what about the coffee shop startup costs that you will incur regardless of the physical structure? We’ll cover those in detail throughout the following section!

8 Coffee Shop Startup Costs

After you discover how to start a coffee company, it’s time to organize an expense sheet. This step will feel similar to when you were first learning how to start a coffee shop business plan, as you will also need to project revenue. After all, it’s quite risky to make investments without an idea of the funds you’ll be generating for the business.

The whole point of joining the market of local coffee shops is to operate a profitable venture. By learning as much as possible about the cost to open a coffee shop, you’ll be able to avoid your financial metrics being in the red. So how much to start a coffee shop and keep it afloat? Wisely invest in the following eight components:

1. Rent

The first investment you'll make when launching your coffee shop business is the location. It's important to choose a facility that's suitable for dine-in and drive-thru service. Cover all your bases by keeping the following qualities in mind when shopping for a rental:

  • A busy area near schools and businesses
  • A structure that's alongside a main road
  • Easy accessibility from the road
  • A business with a drive-thru already present
  • A structure that's visible from a main road
  • A facility that comes with appliances and seating

Let's face it--rent isn't cheap for personal use, let alone commercial use. As of February 2024, the real estate ecosystem is still a seller's market. So, expect to pay thousands per month in rent. Depending on the location, entertaining the idea of building a coffee shop from the ground up (literally) may be a smart move.

2. Monthly Utilities

Some of your heftiest recurring expenses will be utility bills. However, you can’t open your doors to the public without utilizing such resources. As in any real estate property, the utility expenses will comprise the following:

  • Gas
  • Water
  • Electricity
  • Wi-Fi

Typically, the monthly utility bills for a small coffee shop can cost somewhere around $1,000. But for spaces, usually those that are over 4,000 square feet, utility expenses can be four or five times this amount.

3. Coffee Shop Technology

Innovative tech solutions carry the potential to streamline restaurant operations and maximize profits. Not only can tech allow coffee shop owners to do more with less, but they can create a more appealing customer experience. The best tech solutions to invest in include:

When it comes to technology, you can really get what you pay for. However, it doesn't have to take up a large portion of your budget. But to be safe, you should allocate around $5,000 a month for tech subscriptions, fees, maintenance, hardware replacements, and so on.

4. Food and Beverage Inventory

As an aspiring coffee shop owner, you likely know that certain food items pair perfectly with a cup of Joe. With this in mind, there are countless reasons why you should offer both caffe food and drinks. More specifically, keep your kitchen stocked with the following items:

Opt for a wholesale directory like BlueCart to purchase wholesale coffee beans from the best coffee roasters on the market. You can also use this kind of inventory management platform for all your other products–even paper goods! Purchasing food ingredients and coffee beans wholesale will save you a gigantic amount of money over time. However, these expenses can total anywhere from $20,000 to $100,000. But like most expenses, this cost will be dependent on the style and cuisine of your coffee shop. Will it serve ethnic food? Will it lean slightly more upscale? These are the kind of factors that can lead to a pricier food and beverage bill.

5. Labor Expenses

The team that you employ will make up the core of your coffee shop’s operations. That’s quite understandable since payroll and staff training will take up a large portion of your expenses. The staff members that work in a coffee shop typically include the following roles:

  • Baristas
  • A pastry chef
  • Managers
  • Maintenance workers

In most areas, roles like baristas and maintenance members will make minimum wage. However, roles like the chefs and managers may make more. Ensure that you’re keeping up with local labor force trends to accurately anticipate employment costs.

6. Coffee Shop Equipment

You’ll need a whole lot more than just a coffee pot to run your shop! Not only are there a ton of different coffee brewing methods, but there are numerous coffee accessories. When furnishing your coffee shop, line your counters with the following equipment:

  • Percolators
  • French presses
  • Pour over glasses
  • Espresso machines
  • Milk frothing tools
  • Cold brew coffee machines
  • Coffee and creamer dispensers
  • Standard kitchen appliances
  • All-in-one specialty coffee machines
  • Traditional coffee pots for dine-in customers

It’s important to invest in high-end equipment for a brand new coffee shop. The first reason is that doing so will give you, the business owner, peace of mind that there won’t be malfunctions on the job. After all, mishaps while trying to serve customers can hinder operations, which you absolutely want to avoid. But even more important than that, you’ll save money over time by not having to constantly replace various devices and appliances. Depending on the shop’s size, the number of coffee styles you’ll serve, and whether or not you’ll offer food, equipment can cost anywhere from $20,000 to $50,000.

7. Coffee Shop Marketing Efforts

Once your coffee shop is nearing its launch date, you should begin investing both time and money into marketing efforts. Unsure of where to begin? The following tools and tactics should be part of your budget:

  • Social media ads
  • Google ads
  • Billboards
  • Radio ads
  • Email marketing software
  • SMS marketing software

The amount of money that you invest in marketing strategies is totally up to you. Some food service establishments only invest a couple of hundred dollars every month in paid ad campaigns. Meanwhile, others spend thousands of dollars per month by working with a marketing agency. Consider your competition, the resources that are currently at your disposal, and make your decisions from there.

8. Decor and Furnishings

The way in which you decorate the coffee shop can vary in cost tremendously. No matter how you go about setting up the space, just ensure that it has a warm and inviting atmosphere. Cozy environments and coffee trends go hand in hand. So, keep that in mind when shopping for the following items:

  • Wall art
  • Menu boards
  • Comfy chairs
  • Tables
  • Couches
  • Decorative lamps
  • Carpets
  • Light fixtures
  • Outdoor signs with the logo
  • Coffee mugs and other types of glassware

You can purchase items from home good retailers, get decor custom-made, or take on DIY projects as a hobby. The decor and furniture you need will also depend on whether you offer in-house seating. Depending on which route you choose, decorating and furnishing your coffee shop can range from several hundred dollars to tens of thousands of dollars.

Frequently Asked Questions About the Cost to Open a Coffee Shop

Every component that makes up the total cost to open a coffee shop has a purpose. You cannot have one without the other, so it’s vital that you stay atop of your budget and see where there could be improvements. Maybe you can reduce the labor cost while improving the quality of your ingredients. Or, perhaps you can use energy-saving appliances to reduce utility costs and invest more in cozy decor. No matter how you configure your coffee shop budget, it’s your responsibility to make sure that the brand remains profitable.

But in order to accomplish this feat, you must have a 360-degree understanding of the cost to open a coffee shop and its many variables. To help you out a bit further, we crafted a brief selection of frequently asked questions about the topic. Check it out below for additional insight!

Is the Cost to Open a Coffee Shop Extremely High?

Yes, the cost to open a coffee shop in 2024 is extremely high. In fact, many entrepreneurs need to obtain third-party funding in order to bring their business ideas to life. On average, the cost to open a coffee shop can range anywhere from $100,000 to over $500,000.

What Are the Standard Coffee Shop Startup Costs?

The standard costs one will incur when opening a coffee shop include:

  • Rent
  • Utilities
  • Staffing costs
  • Licenses and permits
  • Equipment and appliances
  • Food and beverage inventory
  • Indoor and outdoor decor and furnishings
  • Marketing and advertising expenses
  • Restaurant technology fees

How Can You Open a Coffee Shop With No Money?

If you don’t have a personal savings account with well over six figures stashed away, the idea of opening a coffee shop might seem impossible. However, there are resources that can help you fund your business. From small business loans to partnering with investors, you have several options. As with all business decisions, always talk to a financial advisor to gain insight on your specific venture.

What Kind of Expenses Are Involved In Opening a Coffee Shop?

The kinds of expenses that are involved in opening a coffee shop are those that let the business function legally and serve customers. The first set of costs are for things like rent, utilities, and permits. Then, you have expenses that will let the business sell menu items and serve its customers, like equipment, furnishings, and inventory.

What Is the Most Expensive Part of Opening a Coffee Shop?

Rent and payroll are the two most expensive components of opening and operating a coffee shop. In fact, these two costs alone can take up around 85 percent of all your expenses during the early stages of running your cafe. As you can probably imagine, this just goes to show how closely you need to monitor all your expenses.

Outweigh the Coffee Shop Costs With a Profitable Menu

Once you budget the entire cost to open a coffee shop, it’ll finally be time to execute your plans. Despite coffee contributing to fairly inexpensive menu items, operations can be quite costly. Keep a close eye on where your money is going, the amount of funds that sales are bringing in, and make financial decisions accordingly. Every coffee house will be different, so the long-term success rate of your coffee business relies on the act of tailoring any insights you find to your specific business model.