Costs

Starting your own cafe business plan

Coffee shop set up costs

Set up costs can vary depending on the prospective size of your coffee shop.

Start up costs can be as low as £10-15,000 for a small boutique coffee shop with limited covers.  However, more typically on a small to medium size coffee shop of between 40 – 60 covers and a size of a coffee shop of 50 – 60 sqm then the costs might be between £30 – 35,000.

When it comes to the number of covers that can be accommodated in the coffee shop design and layout is often critical and by increasing the number of covers in the coffee shop by even 5-10 can make a massive difference in profitability and ultimate the sales value of the business.

Again all this will depend on the amount of alteration work required, the specification of the kitchen and the level of fit out.  On large city centre locations, fit out costs can easily run to several hundreds of thousands of pounds.

Typical costs for equipment :

  • £2,500 – £10,000 for espresso equipment
  • £1,000 – £2,500 for dishwashers
  • £1,000 – £2,000 for flooring
  • £500 – £2,000 for ceiling
  • £100 – £500 for painting
  • £500+ general building work
  • £500 – £3,000 for AC
  • £250 – £1,000 for crockery
  • £250 – £2,000 for a till
  • £500 – £1,500 for accountancy
  • £500 – £2,000 for solicitor
  • £500 – £1,500 for insurance
  • £1,000 – £3,000 for initial stock
  • £100 – £2,000 for signs and marketing

plus working capital, deposit, rent, rates, planning applications, change of use, professional advice etc etc

Don’t overspend on your coffee shop set up

When it comes to setting up any new business such as a coffee shop DON’T get caught out by spending money that you don’t need to.  There is a tendency when you start a business for the first time that you think you have to spend on all the most expensive equipment….just because you are a business.  This is often exacerbated when businesses go out a loan a large amount for the first time. Suddenly, you have a pot of £50,000 which is more money than most people have ever had at one time.  This can mean that you can afford the best equipment. A good salesman at an expresso machine supplier will always tell you why you should spend more.  The temptation is to then to blow cash like there is no tomorrow without asking the questions on is it good value for money and will you get a return on that level of outlay and investment.  Think of each bit of expenditure as capital investment that will allow you to make a return by selling more or at a higher price.

For instance if you spend £5000 on an expresso coffee machine then will then help you generate any more profits than spending a £1000 on a coffee machine?  Will you be able to sell any more coffee and will you be able to sell it for more?

Also when it comes to expensive bits of capital equipment like an expresso machine then another option to reduce your capital expenditure is try leasing the equipment.  This way if you haven’t got a huge amount of start up capital it will preserve you vital cash resources by funding the use of the capital equipment out of your daily cashflow with some expresso machines be leasable from £5 a day this will allow you to part fund your set up from your on going profits.

 

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