Start a Small Coffee Business With Less Money
Starting a coffee shop can be expensive. Some estimates of coffee shop startups can run into the tens of thousands of dollars and upwards to $250,000. These estimates can stop most coffee business dreamers in their tracks.
However, starting a coffee shop doesn’t necessarily have to be a pricey business to enter. We have seen enterprising people start their coffee businesses with relatively little funding. There are a variety of paths they've taken to reach of their goal.
(In our Complete Coffee Shop Startups Kit, we interview a couple of different owners and managers of low cost coffee shop startup business. They reveal some pretty interesting advice, tips, and recommendations.)
Before we go further, let’s get back to basics of serving coffee.
When we “boil it down”, starting a small coffee business can simply mean brewing a pot of coffee and serving it in a cup to anyone willing to pay for it. Thousands of smaller coffee entrepreneurs do this every day – every single day!
So, let’s start there.
- Brewing coffee.
- Serving it.
- Getting paid for it.
Now, of course, we can get as complicated as you want, but that's basically it.
You need just a few basic things: water, coffee, and some type of brewer. This is bare bones, but you already get the idea. Most likely we brew coffee every day at home, right in our kitchen.
What I want to do is remind you that starting a coffee shop business does not have to be complicated, expensive, or be some unattainable dream.
I want to emphasize that where you start, isn’t going to be where you end up. The important thing is just start… just start wherever you are. With the funds you have access to.
Of course, you want to be able to plan it out. Starting a business should not be taken lightly. It should be well-thought through. You should do your researching, planning, and write your business plan.
But there are two critical points that we should allow to sink in our thought-process:
- Starting a “coffee business” does not have to be complicated.
- Where or how we start our coffee business, is not going to be where we end up.
While you may want to be a little more sophisticated than serving coffee in Styrofoam cups brewed from a Mr. Coffee brewer. It really can be that simple. You can end up with a sophisticated coffee business in the end.
Remember, where you start is not where you will end up. But you do have to start somewhere! And most of us only have one choice: you gotta start with what we got.
Allowing ourselves to back up to “square one” will help to clear our mental slate and redefine what it means to start a small coffee business that works for us… right now… in the beginning…
The Virtues of Starting a Micro Coffee Business
Starting small will end up positioning ourselves to grow into the coffee business we’ve always dreamed we would have.
I will repeat this again: Where you start is not where you will end up. But you have to start!
So, for now, let us dream big, let us think big, but let's start small. In fact, let's just start! We all have to start somewhere.
Let's talk about the strategies of starting a coffee shop with limited funds. The following are some low cost coffee business ideas that might consider in your community:
Strategy 1: Piggy Back on an Existing Business
Many of the coffee businesses outlined below piggy back on existing businesses. Creating a symbiotic relationship where both businesses (your coffee business and another business) can help lower your barrier to entry as well as generate a much needed boost in customers and revenue for the other business involved as well.
Benefits to piggybacking on an existing business:
Lower rent – by utilizing existing open space that is not being used by a currently opened business, you can negotiate a lower rent, even possibly avoid a security deposit.
Tap into a built-in customer base – depending on the business and the location, you might have an automatic customer base that can guarantee you a particular flow of coffee drinking customers.
Lower overall costs – If an existing can reduce your overall startup costs and monthly operational costs (fixed and variable), then setting up your coffee business will certainly cost you less.
Here are some “piggy back” opportunities for a starting a coffee business:
A Coffee Business and a Used-Book Store
Today, many independent book stores are struggling in many cities. Adding a side coffee business can generate the caffeine-fueled jolt it needs to bring in more customers. Renting a small space within an existing business can be appealing to the used-bookstore owner.
- Find a used-book store in your area.
- Visit and see if the book store location is a right fit.
- If the location is right and your customer base can support your business, approach the book store with the idea of sharing/renting space.
- Have a coffee shop business plan ready.
A Coffee Cart and Independent Art Gallery
Having a catering-type coffee business that you can bring into an art gallery while the art gallery is having a show or exhibition can be profitable. This idea makes a lot of sense. Most visitors in an art gallery usually have the discretionary funds to spend on a cup of coffee while browsing.
In addition, while they may consider spending large sums of money on rotating artwork, they may feel compelled to buy something to soothe that buying itch – why not coffee? You may consider serving wine as well. Providing a delicious cup of coffee will also provide a greater more pleasurable experience for your customers.
- Make a list of independent galleries in your area.
- Visit them and see if the gallery already serves coffee or wine.
- Attend an event (or two).
- Talk with the owner – consider the various options of payment. Perhaps, you can have an “open coffee bar” in addition to your “wine bar” and charge your owner for the entire event.
- Create a business plan.
A Coffee Business and a Music Shop
These days, anyone can buy music online. But to those customers who want the experience of going to a music store, listening to music, discuss music with staff, they get something that they could never fully get online: a real-life experience.
The same is true for coffee. Anyone can brew coffee online (for pennies on the dollar!), but they go to coffee shops!
Offering a “full” sensory experience of coffee or related drinks can add to this music shop visit. Offering espresso-based coffee drinks at a music store can increase daily sales, offer a new revenue stream, but also propel visitors to stay longer. This isn't an original idea. We got this idea from an VHS Tape, LP Music Store who was looking to supplement their revenue with existing customers and bring in new customers.
- Visit local and independent music stores
- Determine if you like the space and if a coffee business would work at their businesses
- If so, spend a little time and determine if the area has enough traffic to sustain your business
- Approach the owner of the business and see if would be interested in subleasing a space
- Develop your coffee shop business plan
A Coffee Business and a Newspaper Stand
A magazine stand brings in customers who want to buy information “on the go”. Why not add a “coffee to go” with that newspaper or magazine?
As magazine and newspapers home subscriptions struggle to stay afloat, so do many retail newspaper and magazine stands. Adding the availability of your coffee business can increase sales, attract new customers, and provide a greater, fuller experience for existing customers. We got this idea from a newsstand here in Seattle, which has been in business from years.
- Visit local newspaper stands in your city.
- Traffic is essential. Consider the foot/vehicle traffic before moving forward.
- Consider the space involved and your needs to deliver coffee.
- Approach the owner and ask if he/she would be interested.
- Develop and write your coffee shop business plan!
A Coffee Business and a Flower Shop
Flower shops get slammed around the holidays or special days out of the year, like Valentine's Day, Mother's Day, and Easter. But then there are often lulls in each season.
Offering an independent flower shop yet another revenue stream that attracts customers throughout the entire year can increase their daily sales and pique greater interest in their “core flower business” and support your coffee business as well.
Being associated with a flower shop can provide you with a stream of customers, and perhaps assistance with their advertising campaigns, regular customers, etc.
- Visit local and independent flower shops in your area.
- Determine which ones will fit with your business concept.
- Look it they have the available space.
- Approach the owner and see if your concept will make a good fit.
- Develop and write your coffee business plan.
A Coffee Business and Hair Salon
Have you ever walked into a hair salon to see a half-dozen people staring blankly at a magazine waiting to get their hair done?
Why not offer a way to increase sales by selling customers coffee? Not only will you completely change the ambiance of hair salon, but you can gain access to a daily stream of people and customers who want coffee as they wait.
You will want to be able to serve the hair salon’s customers, but you will also want to attract passerby customers too.
- Consider looking at independent hair salons.
- If you find one you like, consider the traffic in the area.
- Review local zoning laws and health department regulations.
- Approach the owner and determine whether you and your business will make a good fit.
- Write a coffee shop business plan, and submit a business proposal.
A Coffee Business in an Existing Laundromat
If you have ever been to a laundromat, you’ll know why opening a coffee business near or inside one makes sense. People are dying of boredom, have cash, are willing to spend their waiting times drinking coffee.
Depending on the layout of the specific laundromat, you might be able to open up a small business in one of the corners of their existing facilities. Of course, check with the local zoning laws.
Additionally, positioning a coffee kiosk just outside the laundromat would be beneficial as well. If it is a particularly busy laundry location, setting up a coffee stand near or inside a laundry mat can give you a steady stream of customers throughout the day. Of course, you will want
- Review local zoning and health department regulations
- Visit local laundromat locations in your area
- Determine if the space and general location fits within your business concept
- Approach the owner and see if he/she would be interested in your business proposal
- Develop and write your coffee shop business plan.
A Coffee Business and Shared-Workspace
Shared work spaces are often wonderful places for people to work in today’s economy. Clients can work and hold meetings at shared workspaces.
A coffee business within a shared workspace can work as we have seen it done several times. The benefits are obvious to everyone involved – a shared workspace can offer their “tenants” coffee and generate greater income.
This symbiotic relationship can help your coffee business as well as make the work day appealing to people who use the workspace.
- Visit any shared workspaces in your city to “get a fee” for them.
- Determine if they have the space and customer base for your coffee business.
- See if they would be willing to have your coffee business set up there.
- Write a business plan and proposal and approach them.
A Coffee Business and Independent Boutique
There are many small and independent retail boutiques that offer clothing, art, crafts, and other products that are appealing to shoppers. Adding the availability of a coffee and espresso machine can improve their overall experience.
Depending on the traffic and location, a well-placed coffee business can do very well in such settings, improving sales for the boutique as well as generating a steady flow of happy shoppers to your coffee business.
- Visit several independent boutiques.
- Like the other businesses, determine whether any of them would make a good fit.
- Check with local zoning and health laws.
- Approach the owners and see if they would be willing to look at a business proposal.
- Make sure you have a coffee business plan ready too.
Strategy 2: Farmer’s Markets
Sometimes dipping your toes in a coffee business makes better sense. First, it gives you the opportunity to see if “starting a full-time coffee business” is what you really want to do (this could also include a coffee roasting business).
One of the low cost and low barrier ways to set up your own coffee business with little money is through your local farmer markets.
Whether you are an amateur coffee roaster and wish to dip your hand in serving coffee from other coffee roasters or you want to be a multi-roaster retailer, starting a small coffee business selling coffee and offering a steamy cup of java on weekend mornings at your local farmer’s markets can be an appealing and low cost way to start a small coffee business.
There are local farmer's markets everywhere which are looking for quality small coffee businesses.
If this is appealing for you consider:
- Look up farmers markets in your community (you might have several).
- Determine what kind of coffee business you will want to start (Stand, Mobile coffee business, etc.)
- Visit the “farmer's markets” website and get on their list of vendors and requirements.
- Get the needed coffee equipment (depends on the venue for the farmers market).
- Create a coffee business plan.
- Start selling coffee!
Mobile Event Coffee Selling
There is a huge uptick in interest and growth in the mobile coffee business. Many organizations and events want to offer coffee to their customers.
Whether you're interested attending concerts, festivals, or other events – selling coffee in a mobile unit can be profitable.
- Decide on your mobile unit concept.
- Prepare and write your coffee business plan.
- Get your coffee shop equipment.
- Develop your marketing.
- Apply to various festivals.
Strategy 3: Start an Online Coffee Business
One of the lowest barriers to start a small coffee business is to open up your coffee shop online. Starting an online coffee shop or online coffee business can be an excellent way to get started in the retail coffee sphere.
The obvious benefits is that starting your online coffee business can give you time to develop your branding, your coffee expertise, as well as your customer base.
If money is a huge barrier for you in starting your coffee business, an online coffee business can open the door wide-open for you to get started with a small but modest investment.
We’ve written extensively on starting an online coffee business here.
Strategy 4: Start a Mobile Coffee Shop
Starting a mobile coffee cart or coffee truck is a low-cost way of breaking into the retail coffee industry.
There are some costs, such as the cost of the truck or cart and coffee equipment. Additionally, you will have to spend money on retrofitting the equipment.
However, starting a coffee truck or a mobile coffee cart can significant reduce your costs when compared to opening up a full-fledged coffee bar, but as we just mentioned, it can still cost you money. So if you are thinking about starting a mobile coffee shop, you will still have to do your research and planning.
Despite it being a small coffee business, you should consider knowing all you can about the retail coffee industry. Your research and planning will help you to avoid big, monetary mistakes. And reduce your startup costs overall.
Strategy 5: Start a Coffee Drive-Thru Stand
Starting a coffee drive-thru stand is an excellent way to reduce your costs. Depending on the type of coffee stand it is you may also be able to move into a location that is right for you (and your customers).
A coffee drive-thru stand can also be significant in costs, but like a mobile coffee truck, can be considerably less than a full-fledged coffee shop or coffee bar. This is in large part due to the potential build-out, monthly lease, insurance premiums, and less equipment.
We've spent a lot of time and effort here at Coffee Shop Startups, discussing how to start a drive-thru stand. In fact, collectively, we offer more information for free on our blog, then most other company's charge you for.
What You Need For Each Of These Ideas:
- You need to create a coffee shop business plan
- You need to have a budget established before moving forward
- Consider local business zoning laws
- You should consider the amount of foot or vehicular traffic at each location
- Working with independent businesses might be better
- Use your creativity!
- Research, Learn, and Plan (The more you know the less you will spend!)
Do You Have a “Low Cost” Coffee Business Idea?
Let Us Know!
Are you currently thinking about starting a small or micro coffee business? Are you unsure about your small coffee business concept? Send us an email. We're always glad to offer or lend our opinion about any potential coffee business idea! Just send us an email.
Every business not matter how big or small requires planning, a well-though business plan, and research. We are proud to offer you an incredible resource to help get your business planning off the ground.
Our Complete Coffee Shop Startup Kit really delivers incredible information that any aspiring coffee shop business owner should have before starting their business. With hours of “one-on-one” streaming interviews, you'll hear directly from other coffee shop business owners and business experts on how they would start their business, what mistakes they made, and what they would do over again.
Along with 15 hours of streaming audio, it also comes with an easy-to-use business plan template. It's a resource, that will help you learn how to launch and run your coffee shop business from day one.
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