Whether you choose to go it alone or partner with a franchise, opening a coffee shop is a significant undertaking. Any prospective coffee shop owner will need to have a strong understanding of the industry and the journey ahead if they want to set themselves up for success.
Having a good idea of the potential costs involved will help you decide whether opening a coffee shop is right for you and whether you’d be better suited to an independent or a coffee franchise.
The Average Cost to Open a Coffee Shop?
There is no one-size-fits-all when it comes to running a coffee shop, so the expected costs can vary quite a bit. Exact costs will also depend on location, size, product offerings, required equipment, and the design style of the store, among other operational and utility considerations.
According to the British Business Bank, the startup costs for an independent coffee shop business can range from around £20,000 to £100,000. However, smaller stores like popup kiosks or vans may run much cheaper and some larger stores may exceed the upper end of the range.
What Do Coffee Shop Startup Costs Include?
The startup cost will typically cover everything you need to get a functional store up and running, such as:
- Leasing the premises
- Licences
- Accountancy/financial support
- Fitting out the space with furniture and other interior design elements
- Investing in essential equipment, from coffee machines and commercial kitchen appliances to tills and store security measures
- Initial stock and any other supplies
- Initial marketing efforts to promote your new store
- Working capital
It can also be useful to plan for a contingency budget to cover any unexpected costs before you’re ready to open your doors.
Ongoing Coffee Shop Expenses
Beyond the startup costs, you’ll also need to consider overheads and ongoing costs that’ll ensure the smooth, everyday workings of your store. This will likely include things like:
- Rent or mortgage for the premises
- Insurance and taxes
- Utility bills
- Staff wages
- Replenishment of stock and supplies
- Marketing and advertising for ongoing promotion
The Cost of a Coffee Shop Franchise
Opting for a franchise rather than an independent coffee store can offer numerous benefits; primarily, that working with an established brand provides built-in customer loyalty and access to valuable industry expertise.
The costs involved in a franchise are slightly different to those for an independent business. This is because, in addition to the standard startup expenses, you will also pay a franchise fee and ongoing royalties for the ability to operate under the brand’s name. The cost of this will depend on your particular franchise agreement.
While franchising may require you to pay higher initial costs, the scope for success is much broader. Plus, with the backing of a recognisable brand, your venture faces fewer risks, making for a sounder investment!
For a single store Esquires Coffee franchise, the total investment (including franchise fee, startup costs and required working capital) is generally around £250,000 to £300,000.
How to Start a Coffee Shop
If you think you can meet the financial requirements for opening a coffee shop, whether independently or with a franchise, one of the first places to start is by building a comprehensive business plan.
A coffee shop business plan ensures you can break down the expected costs for your particular store, providing a detailed idea of where your money needs to go.
Writing a business plan also ensures you can learn more about your customer base and the current market as well as identifying areas of weakness. The stronger your business plan, the easier and more successful opening your coffee shop will be.
Taking the Next Step With Esquires Coffee
Franchising offers a wealth of opportunities and provides a fantastic way to enter the coffee shop market one step ahead of the competition.
If you have a passion for delicious, ethical coffee and want to put your entrepreneurial skills to good use, an Esquires franchise may be the perfect fit. We’ve helped countless franchisees find success over the years and are currently interested in establishing more stores throughout the UK.
Apply for an Esquires franchise below to begin your coffee shop journey.
