You are thinking of opening up a cafe since it’s such a lucrative business. You can picture the establishment already. You can see your happy customers thanking you for great coffee, but there’s one thing weighing you down a bit: the cost. There is a lot to consider when figuring out how much it’ll cost to open up a cafe, but the following tips may help.
Why Is It Difficult To Figure Out?
Why is it so hard to answer, “how much does it cost to open a cafe shop?” The answer is because there’s a lot to figure out, like the lease cost, interior design costs, renovation costs, kitchen costs, furniture costs, payroll, inventory costs, and so much more.
It should also be pointed out that where you live, plan to do business, the competition near you, and the quality of items you’re willing to invest in are going to affect how much all this will cost. Keep this in mind as you try to get an estimate.
Costs To Think About
The best way to figure out an estimate is to go through what you will need at the beginning, like the following:
The first thing to consider is where you are going to open up your cafe. Some folks lease a location in a heavily populated area, such as business centers, malls, or in a tourist attraction.
These locations are not only expensive but are expected to do well right away. You are taking a big chance, especially if you are just starting. It should also be pointed out that a costly location is going to force you to price your menu items higher, and that might hurt you.
Space is rented on a cost-per-square-foot basis, so you have to think about your location in those terms. In a big place like New York City, you can expect to pay somewhere between $10 to $4,000 per square foot, which should give you an idea of what you should expect.
Stay within your budget, and remember that a profitable company’s occupancy costs shouldn’t be more than 6 to 10 percent of the company’s total gross sales. If your occupancy costs are higher, then you are betting against your cafe.
Calculate how much you are expecting to make, and be sure you stay within budget when renting. Keep in mind that landlords will likely ask for more than they expect, so even if you are hearing a high rent cost, keep negotiating to see if you can get closer to what you need.
When it comes to the interior, some folks focus too much on decoration when that should be the last thing on your mind. What you want to focus on is ensuring that your design makes operation easier. Do your best to design something that is appealing but can be built quickly so that you can open your cafe. Don’t forget that you are going to have to pay rent soon, so your profits need to start rolling in.
Outfitting a small cafe, the kind of space that can hold no more than 50 seats, could end up costing between $200,000 to $400,000. Those who want to spend a lot less may want to consider renting a place that already operated as a cafe or restaurant. This could end up saving you some money since all you have to do is renovate or maybe make some repairs like installing new toilet partitions, etc.
If you are going to purchase an espresso machine, then you may need anywhere between $1,000 to $6,000 to get one. You’ll need anywhere between $500 to $800 to purchase your espresso grinder. The coffee maker itself can end up costing $500 if you are looking for more affordable options, but it could be up to $2,000. The refrigerating system can cost $4,000 or up to $6,000, which is probably going to be one of your biggest expenses.
Those are just some expenses to get your cafe ready, but you are also going to have to deal with office expenses. Office equipment can cost between $400 and $1,500, not to mention how much your point of sale system is going to cost you, which may be around $500.
These are some major upfront costs, but there are others like the cost of employing a small number of folks, which may cost you $4,000 for your back-of-house employees per month. Your front-of-house employees may cost you $11,000 to employ each month.
You should expect to pay around $66000 to open a small cafe, but keep in mind that this number is just an estimate. There are a lot of unknowns regarding your cafe that could change that number.