The relatively steep price of your average high street coffee drink is a common complaint for coffee addicts the world over, with many people assuming that the owners are bringing in huge profits due to disparity between the cost of the ingredients and the price of the end product. But have you ever thought about what kind of costs come along with opening a coffee shop? It’s more than just the cost of the coffee and the milk that you need to consider.
Coffee shop set up costs
All businesses have fairly substantial set up costs, especially where food and drink is involved. Here is just a short list of some of the start-up costs that come along with opening your own coffee shop:
- Coffee equipment costs – those specialist espresso machines, grinders, and filter coffee makers can be a very expensive initial cost.
- Furniture – not just tables and chairs, but the coffee counter itself, plus any specialist kitchen furniture.
- Crockery – you’re going to need to order a lot of cups to begin with!
- Dishwashers – you also need to think about how you’re going to keep those cups clean.
- Decorating costs – nobody wants to drink their beverage in a drab and tired looking shop, it really needs to make an impression.
- Money handling equipment – tills, card machines, and a safe are all absolutely essential to run a coffee shop business.
Once all of the initial costs are paid for there are also the standard running costs to consider:
- Business tax and insurance – it may not be fun but everyone needs to pay it!
- Staff wages and training – someone has to make all those flat whites after all.
- Recycling – how are you going to dispose of all of those used paper cups, and have you thought about how to dispose of the coffee grounds?
- Rent – busy high street locations come with a premium price tag.
- Marketing/advertising – especially important for new businesses, you need to make sure everyone knows about you if you want to cover those start-up costs.
Image credit: OpenLearn. Just an example of how the cost of a cup can be broken down. These are all variables.
It’s only after all of those other costs are paid for that you can even start to think about the stock:
- Coffee beans – where do you get this from, and is it Fairtrade? You need to know your coffee well, as coffee lovers will ask you about it.
- Milk – which milks are you going to stock? Everyone has whole and skimmed, but what about soy, oat, and coconut milk?
- Disposable cups – have you factored these into the cost of your cup of coffee?
- Food – are you going to sell food/snacks? This can be a great way to bring in more revenue but you need to think about how you’re going to store it.
As you can probably tell, coffee shop businesses don’t make quite as much money from each drink as most people would like to think. Small businesses in particular need to be very clever about cost saving to make sure they’re able to turn over a respectable amount of profit. Here are some suggestions on things you could consider doing to save some money and drive up your margins:
- Use a smart espresso machine like the WMF espresso to save money on staff training costs and increase efficiency.
- Encourage customers to use reusable cups to keep the costs of disposables down. (read more about the impact of disposable cup in our last blog here)
- Get through the queues quicker but optimising work stations (read more on increasing coffee shop efficiency here)
- Look at clever ways of recycling coffee grounds, such as offering them to customers for free for things like compost or recycling with bio-bean.
The WMF espresso is the perfect solution for any coffee shop looking to increase their profit and also maximise the quality of their coffee. It detects the portafilter automatically, controls the brewing time and tamps with 100 % consistency. Everything you need for a perfect espresso.
Download a brochure to see the whole range.