How to Start a Coffee Shop
Coffee shop economics come down to two things: a small average ticket, and a peak compressed into roughly ninety minutes. Revenue is close to transactions multiplied by a number you cannot move much, so how many people you serve between eight and half past nine matters more than almost any other decision. That makes footfall, and therefore the site, close to irreversible. Independent cafes are generally quoted at 28–35% of revenue on labour and 25–35% on cost of goods, though those are trade conventions rather than survey data.
Figures verified July 2026
The site decision is the business
Unlike a restaurant, you cannot draw people across town for a flat white. You are selling to whoever already walks past, so count them. Sit outside a prospective unit at eight in the morning on a weekday and actually count, then do it again on a Saturday. A cheap unit on the wrong side of a commuter flow is not cheap.
Work out what your bar can physically do
Count how many drinks one barista can make in an hour on your chosen machine, multiply by the length of your peak, and you have a hard ceiling on morning revenue. If break-even needs more than that, you need a second machine, a second person, or a different site. Run it through the break-even calculator and check the assumptions against the coffee shop benchmarks.
Spend on the machine and the grinder
This is the one place not to economise. An underpowered machine caps your peak permanently, and a poor grinder undermines everything downstream of it. Furniture, signage and fit-out can all be done cheaply and upgraded later; throughput capacity cannot be retrofitted on a Tuesday morning when there are nine people waiting.
Registration, hygiene and seating
Food business registration and a food safety management system as standard. If you are changing the use of the unit or adding outdoor seating, that is usually a separate planning conversation. Ask your local authority what applies before you sign.
Roster for a peak that will not flex
A cafe needs someone on bar whether four people or forty arrive, and the rush is too short to schedule cleverly around. That near-fixed floor is why cafe labour percentages swing so hard with volume. Work out the real cost using the labour cost percentage calculator and the current rates on our labour costs pages, and get the rota down with the employee schedule maker.
Decide what happens when the line reaches the door
On a good morning it will. The commuters who glance at your queue and keep walking never appear in your till data, which makes it both the largest hole in your takings and the one you cannot see. Order-ahead, a second till, or letting people wait somewhere other than in the line are all worth planning before you need them.
Open, then watch the clock
For the first fortnight, record sales by half hour rather than by day. The shape of that curve tells you your real peak, your real staffing need and whether your site assumptions were right, and it will differ from what you expected.
What to budget for
We haven't put figures against these, because the honest range is too wide to be useful and nobody publishes a dependable average. What we can do is make sure nothing on the list catches you out.
| Cost | Worth knowing |
|---|---|
| Lease deposit and rent | Footfall costs money; the good sites are not cheap. |
| Espresso machine and grinder | The line that caps your peak. Do not economise here. |
| Fit-out and counter build | Counter layout decides how fast two people can work. |
| Refrigeration and food prep equipment | Scales with how much food you plan to serve. |
| Furniture and fittings | Easy place to start cheap and upgrade later. |
| Opening stock | Beans, milk, food, cups, lids, packaging. |
| EPOS and payments | Speed at the till is part of your throughput. |
| Licences, registration and professional fees | Plus planning if use or seating changes. |
| Insurance | Public and employer liability, contents. |
| Working capital | Trade builds slowly while people form a habit around you. |
Where this usually goes wrong
Choosing a site on rent rather than footfall
A quiet street at eight in the morning stays quiet. Counting people before you sign is unglamorous, and no other hour of research comes close to paying for itself as well.
Under-buying the machine
An underpowered setup puts a permanent ceiling on your best hour. Every subsequent decision is constrained by it, and replacing it later costs more than buying properly once.
Treating food as an afterthought
With a small average ticket, attachment is where the margin is. A cafe selling only drinks is working considerably harder for the same money.
Accepting the queue as a good sign
A line out the door looks like success and is partly a measure of the customers you are turning away. The ones who keep walking are invisible in your data and real in your takings.
What to do about the waiting
For a cafe, throughput is not an efficiency metric, it is the business model. Revenue is transactions times a ticket you cannot move much, so the only real lever is how many transactions you complete while people are physically there to buy.
Most operators treat a queue as pure cost and try to shorten it. It is also the one stretch of time when a customer is holding a phone specifically because of you, which makes it the cheapest attention you will ever get. Sorting out queue management software that clears a morning rush before you open handles both sides: people stop drifting off, and the screen they are watching can carry an offer. There is more on that idea in monetising customer wait times and upselling while customers wait.
Run your own numbers
Free tools you'll want on day one
Once you're trading, compare your numbers against the published benchmarks for this kind of business, and check what staff cost where you are on our labour costs pages. Everything sits together under industry cost benchmarks.
Turn the eight-fifteen queue into a channel
Customers order, step outside and watch the tracker for their name. That screen is where you put the pastry offer, the loyalty card or the new roast. They get a buzz when it is ready, so your peak is bounded by what the bar can produce rather than by anyone’s patience.
Frequently asked questions
How much does it cost to open a coffee shop?
The machine, the grinder, the counter build and the lease deposit account for most of it, and the range is wide depending on the state of the unit. No credible source publishes a dependable average, so build your own figure from the budget lines above.
Are coffee shops profitable?
They can be, on volume rather than margin per cup. Trade sources quote independent cafes at 28–35% of revenue on labour and 25–35% on cost of goods, though nobody surveys the sector properly. Attachment rate and peak throughput move profitability more than pricing does.
What is the most important decision when opening a coffee shop?
The site, because you are selling to people already walking past rather than drawing them in. Count footfall at your actual trading times before signing anything.
How many customers does a coffee shop need per day?
Work it out rather than guessing: your fixed costs divided by contribution per transaction gives the number, and the break-even calculator will do it. Then check that figure against what one barista can physically produce during your peak.
Should a new coffee shop serve food?
Almost always. The marginal labour cost of adding food to an order already in progress is close to nothing, and with a small drinks ticket, attachment is where the margin lives.
Starting something else
- How to Start a RestaurantProve the numbers, then find the site. Most people do it the other way round.
- How to Start a Takeaway or Takeout BusinessCheaper to open than a restaurant, and the channel mix decides whether it works.
- How to Start a Food TruckNo rent, but pitch fees, commissary hire and a revenue line that swings hard.
This guide covers general practice and isn't legal, financial or licensing advice. Requirements differ by country and by local authority, so confirm anything to do with permits, planning or employment law with yours before you commit money to it.