Over the past decade, the coffee shop industry is increasing rapidly. The coffee shop is treated as a third place outside of work and home to relax. The coffee shop business is one of the best ways to turn your love for coffee into a profit-making retail business.
Though seemingly coffee shop business looks easy, it is not practically so. The coffee shop is similar to the restaurant business. You need a lot of dedication and creative planning to make it successful. More so, when you are trying to start with low or no money. However, if are ready to put in hard work, it is possible to make a profitable coffee business. Here below find a stepwise guide on starting a coffee shop business with no or with a low budget.
Why Open a Coffee Shop?
The coffee shop business is not just about coffee; it is an atmosphere where people gather, here are a few reasons why running a coffee shop could be the best business idea:
- Steady Demand: One of the most popular drinks in the world, coffee, ensures that the customer base is steady.
- Social Connection: It is a space where socializing, working, or even resting can happen and, thus makes this place dear to the community.
- High Profit Margin: Its cost in terms of ingredients is relatively low as compared to selling, which ensures high profit margins in coffee shops.
- Scalable: It would easily scale from a pop-up to a kiosk and then a full café.
- Creative Expression: Your menu, shop design, and branding are your canvases.
- Diversified sources of income: You can sell snacks, pastries, merchandise, or host events to increase income beyond the sale of coffee.
14 Steps to Start a Coffee Shop Business with a Low Budget
1. Research the Local Market
Take some time off and go for market research. Gather as much information as possible for a better understanding of the taste and demand of the customers in the locality. Getting traction in a competitive business like the coffee shop is vital. You will also need to have a clear understanding of how to get customers initially and a plan for keeping them returning and referring you to their friends.
2. Start with a Clear Vision
You must first clear your mind on what you want.
- Do you want your coffee shop to be a place for bookworms or an ultra-modern place for young professionals?
- What do you want that will make it different from all the other places? Maybe sustainability, specialty coffee, or just a unique experience for customers?
- Record your ideas and plans. A clear vision is what will keep you moving forward during the tough times to come.
3. Learn Inside and Out of the Coffee Business
You do not need capital to begin to learn. Learning about the coffee business is essential.
- Work at a coffee shop: Start by working part-time at your local café to gain experience, and learn about customer service, brew techniques, and inventory management.
- Read and research: watch videos, read books, listen to podcasts about running a coffee business.
- Network: Attend coffee expos, join online forums, and connect with baristas and coffee shop owners to learn from their experiences.
4. Leverage Your Skills and Resources
You have skills and resources even if you don’t have money. Use your strengths. If your thing is working through social media or graphic designing, use such talent to build the marketing strategy of that coffee shop. Seek help where it is convenient and available because surely, even amongst friends, are people proficient with carpentry work, accounting stuff, etc.
5. Start Small: Consider a Pop-Up Coffee Shop
You don’t need a full-scale café to start. A pop-up coffee shop is an excellent way to get started with little or no money.
- Set up at events or markets: Many farmers’ markets and community events offer affordable spots for small businesses.
- Partner with existing businesses: Ask a local bookstore, coworking space, or boutique if you can set up a coffee stand in their space.
Pop-ups are a low-cost way to test your concept and build a customer base.
6. Create a Coffee Shop Business Plan
The first and most serious step that you will need to take is crafting a business plan. The coffee shop is a high-volume and low-transaction business. Crafting the right plan can only move your business toward success. Define your marketing strategy and how you will compete with other coffee shops in the locality. Determine your business objective and calculate an expected revenue return.
Developing a detailed business plan will also help you in arranging seed capital. Figure out your establishment cost with the interior and equipment. Calculate the working capital cost of raw material, manpower, and miscellaneous expenses.
7. Name Your Coffee Shop
If you look around near your locality or online, one thing is for sure, you will find all successful coffee shops have an attractive name. A catchy and unique name for your coffee shop is a must. Check this article to learn more about how to go about naming a business.
Related: Catchy Coffee Shop Name Ideas
8. Seek Low-Cost Equipment Options
Buying expensive coffee equipment isn’t necessary when starting.
- Buy used equipment: Check out second-hand stores, online marketplaces, or auctions for affordable coffee machines and grinders.
- Rent equipment: Many suppliers offer rental options that allow you to pay in installments.
- Start small: Invest in a basic French press or pour-over setup instead of high-end espresso machines.
9. Crowdfund Your Coffee Shop
If you have a strong idea and a supportive community, crowdfunding can be a game-changer.
- Start a campaign on platforms like Kickstarter or GoFundMe.
- In exchange for donations, offer free coffee, merchandise, or special memberships once your shop is open.
- Share your passion for coffee and your vision to connect with potential supporters.
10. Collaborate with Suppliers
Coffee suppliers can be your best allies.
- Find a supplier willing to partner with you: Some coffee roasters offer equipment and training in exchange for long-term contracts
- Negotiate deals by discussing payment terms, discounts, or bulk order benefits to reduce costs.
11. Bootstrap and Save
Every penny counts when starting with no money.
- Start at home: If possible, begin selling coffee from your kitchen and offer delivery or pickup.
- Reinvest earnings: Use the money you make to slowly upgrade your equipment and expand your offerings.
- Don’t spend on things you don’t need: Only invest in what’s necessary for your coffee shop to function.
12. Small Investments or Loans
If you need extra capital, explore small investments.
- Microloans: Find small business loans that are made for startups.
- Friends and family: take a small loan from trusted individuals or seek investments from close relatives
- Partnerships: find an individual with your vision, who can provide the financial input.
13. Create Unique Products
It is important to select the right products apart from the coffee that you will be going to offer. You will need to promote multiple products from your coffee shop. Normally you can keep cakes, cookies, muffins, burgers, energy drinks, ice cream, etc. It is advisable to cover the necessary categories but with limited and strategic offers. Concentrate on pre-make food and leave the custom-made coffee.
A successful coffee shop gets a 40% weekly sale from only coffee. Another 60% comes from products other than coffee. Determine the flavors, sizes, and types of food that you will be selling from your coffee shop. Remember, every item you add to the menu list, creates many multiples of management efforts. Fix pricing. Always be careful about the quality of the food that you are offering.
14. Market Your Coffee Shop Without Spending Money
Marketing doesn’t have to cost a fortune.
- Target takeaway customers: Concentrate on takeaway customers. Remember that takeaway customers pay the same price as the sit-down customer, but without raising any of the occupancy costs.
- Social media: Create engaging content on Instagram, Facebook, and TikTok. Share your journey, coffee tips, and customer stories.
- Word of mouth: Encourage friends and family to spread the word.
- Collaborations: Partner with local influencers or bloggers to promote your coffee shop.
Frequently Asked Questions
What are the Best Coffee Shop Business Ideas to Start?
If you have a retail space in a good location and sufficient funds to invest, consider starting a brick-and-mortar coffee shop. However, if you are low on funds, there are several ways you can make money from the coffee-selling business.
Some of them are the following:
- Start a coffee shop on a food truck
- Open a roadside mobile coffee shop
- Establish a drive-through coffee shop
- Start an Online Coffee Shop
What are the Types of Equipment Required to Start a Coffee Shop?
The list of equipment for your coffee shop will largely depend on the type of coffee shop you are going to open. Here we list down some of the basic must-have equipment to start a coffee shop.
- An Espresso Machine
- Drip Coffee Makers
- Coffee Grinder
- Milk and Water
- Blenders
- Ovens and Toasters
- Refrigerators and Freezers
- Shelving
- Containers
- Storage
Opening a coffee shop from scratch without saying is hard work. Running a profitable coffee shop is much harder than that. The only true passion for coffee can make this business a successful one.
Can I start a coffee shop with no money at all?
Yes, it’s possible to start small by leveraging free resources, seeking partnerships, or crowdfunding. You can start with pop-ups or home-based setups before scaling up.
How much does it cost to start a coffee shop in India or the US?
The cost varies depending on the size and location. A small coffee cart or kiosk might cost $5,000–$20,000, while a full-scale café can range from $50,000–$250,000.
Can I run a coffee shop from home?
Yes, many people start by selling coffee from their kitchens or creating a delivery-only coffee business. This is a great way to save on costs initially.
How long does it take for a coffee shop to become profitable?
It depends on factors like location, marketing, and customer retention. Most coffee shops take 6–12 months to break even and start generating profits.
Editorial Team at 99BusinessIdeas is a team of experts led by Rupak Chakrabarty with over 25 years of experience in starting and running small businesses. Started in 2010, 99BusinessIdeas is now one of the largest free small business resources in the industry.