How to Calculate Start Up Costs for a Coffee Shop

Starting your own coffee shop business offers an exciting prospect for earning money, meeting local people and indulging your love of coffee. Before you embark on such a journey, you should write a business plan and calculate the starting costs. You don't want to get in over your head before you even begin.

Instructions

1. Get in touch with local health authorities about obtaining the appropriate licenses. Find out what fees you need to pay before you start your coffee business. Licenses that you may need to obtain include a food seller's license, a sales tax license, a liquor license and a license for live entertainment, depending on where you're located. Confer with local utility providers to find out whether they require deposits for your coffee business.

2. Decide on a location for your new coffee business and how much money you need to outfit it according to local codes. Consider carefully, as a coffee shop's location can make or break the business. If you start in a prime location, you may pay a premium in rent. But if you save on rent by opening in a less desirable location, you may not get enough customers.

3. Determine what equipment and supplies you must purchase in order to start your coffee business. You need to buy machines to brew your coffee and make whatever food items you intend to offer. You also need furniture and coffee, paper and plastic products and foodstuffs. Price shop to find a wholesaler.

4. Contact an insurance agency about covering your coffee business. Possible insurance needs include personal and business liability.

5. Calculate initial advertising costs for your coffee business. You can rely on word of mouth or invest in professional advertising. Starting costs vary depending on how you advertise your new coffee business.

6. Consider whether you must hire employees. If so, determine how much help you need to start your coffee business and how much you must pay employees.

7. Add all of your costs together. You may need to obtain a loan to begin your coffee shop, so make sure to write a full business plan.