Start Up Costs for a Cafe Business

Start Up Coast

The startup costs for a cafe can vary greatly depending on whether you’re buying an established business or setting up a small little coffee shop.

Here are some of the major costs of opening a cafe:

  1. Company Setup – Incorporation, Licenses, Legal, Finance and Tax Fees
  2. Business Acquisition – Purchase of existing business (if buying a business)
  3. Franchising Costs -Franchise fees and startup costs (if franchising)
  4. Property Acquisition – If buying the business premises
  5. Property Rental Deposit – If leasing the business premises
  6. First Month Rental – Be prepared to pay the first month’s rental in advance
  7. Utilities Deposit – A deposit is often required when opening an account with the utility companies
  8. Outlet Renovation – The interior design, renovation and decorating costs will vary according to the plans
  9. Furniture & Fittings – Furnishing the café will be a large part of the start up costs
  10. Kitchen & Bar Equipment – Another major cost to bear in mind
  11. Point of Sale & Service Equipment -Don’t save on these essentials
  12. Marketing & Branding Items – Cups, Uniforms, Menus, Namecards, Flyers, Napkins, Coasters, etc
  13. Food & Beverage Stock Items – A key cost that will depend on the menu items and inventory size
  14. Minimum 2 months Working Capital – As cash to rollover and cover wages and essential expenses in the first few months

The main factors that will significantly affect the total capital required are:

  • The Premises – Buying vs Leasing
  • Equipment – Buying New vs Used
  • Working Capital – Budgeting for 3 or 6 months
  • Rental – The Size & Location of the Cafe

A Step-by-Step Guide to Opening a Cafe

Step-by-step

From business plan and design concept to staff recruitment and confirming your menu pricing, here’s a 25 step guide on how to open a cafe or small restaurant.

While we’ve tried to cover most of key areas when starting up a cafe, there are likely to be topics that havn’t been included in this guide.

Please feel free to share ideas, suggestions and requests for us to cover any of the points in more detail or ask about things that are not listed, by making a comment below.

  1. Concept: Confirm the Concept
  2. Business Plan: Write the Business Plan
  3. Financial Projections: Do a detailed Financial Projection
  4. Profitability: Make sure the Business can Make Money
  5. Funding: Find the Capital Required to Startup the Venture
  6. Location: Look for an Ideal Location for your Business Premises
  7. Rental: Sign a Lease to Rent a Retail Property or Buy it if you can Afford
  8. Renovation: Renovate the Space you’ve rented for the Café to suit your Design Style
  9. Equipment: Purchase all food and beverage equipment for the Kitchen, Bar and other areas
  10. Decorations: Buy Furniture, Fittings and Fixtures to decorate and furnish the café
  11. Coffee Machines: Invest in good coffee making machines that can cater to your café’s size
  12. Signboard: Design an attractive Signboard and place it in a prominent place that’s visible
  13. Branding: Get custom printed menus, napkins, paper bags and drinks coasters with the café’s logo on them
  14. POS: Install a Point of Sale system or some sort of manual way to track and record daily sales
  15. Cash Register: Buy a Cash Register to keep all the money received and make sure there’s a daily float available
  16. Notice Boards: Put up an internal Special’s board with the main menu items so that it’s easy for takeout customers to order
  17. Flyers: Design promotional flyers featuring special offers and an attached discount voucher
  18. Team: Hire and Train the Service staff, Baristas, Kitchen helpers and Café Managers
  19. Uniforms: Get impressive uniforms, aprons, and other accessories for the staff to wear
  20. Supplies: Get all the stocks and supplies necessary to operate the cafe
  21. Tasting: Hold a Food and Beverage tasting session with the team to verify your product quality
  22. Menu: Refine your menu items, their pricing, recipes, ingredients and costs
  23. Licenses: Make sure you have all the required business licenses and health & safety approvals
  24. Bank Account: Open a bank account to deposit daily earnings and pay suppliers for goods supplied
  25. Open: Open your café and start doing business