Earn More MoneyNovember 23, 2020January 3, 2021

How Much Money Can You Earn From A Coffee Shop?

Local and small businesses are everywhere. However, some communities mainly consist of small businesses. These smaller communities are most likely smaller in nature. However, there is a good chance that you live near one, at least within a few hour’s distances. Large bustling cities such as Toronto typically consist of larger, more corporate businesses and franchises. In terms of coffee, you’ll most likely find brands such as Starbucks, Tim Hortons, and Second Cup.

These companies are staples within communities that have a large number of businesses. However, will smaller coffee shops do well when competing with large chain brands? In my opinion, yes. As a matter of fact, opening a smaller coffee shop can be extremely lucrative. However, there are a few factors that you need to consider when opening up a coffee shop. Of course, if you open up a coffee shop right across the street from a Starbucks, you might see less success than if you were to place yourself somewhere else. With that being said, we will go into what a coffee shop is, how much it’ll cost you to open one and exactly how lucrative they can be.

What Is A Coffee Shop?

A coffee shop, quite obviously, is a place that sells coffee. However, when we speak on what a coffee shop is, I want to talk about something slightly different from Starbucks. While they are a place that sells coffee, Starbucks is known for its season and a large assortment of drinks. Such as the Pumpkin Spice Latte and Strawberry Acai Lemonade. If this is your aspiration, that’s fine. However, many small coffee shops focus on strictly coffee. They’ll have extra drinks, snacks, and food. However, they’ll be known for their coffee and sometimes aesthetic. To put it simply, you’ll be specializing in the coffee you’re selling.

Your drinks are where your main revenue comes from. Therefore, you need to put your resources into making a coffee that tastes great and is affordable. One thing many places such as Starbucks are notorious for is having expensive drinks. Furthermore, their food can be expensive as well. Having affordable, tasting coffee with stellar customer service will ensure repeat customers. This is basically all you need to know about what exactly a coffee shop is. If you have never been a small, locally-owned coffee shop, a quick google search will show you the nearest one. Supporting these small businesses is always a plus-side.

Are Coffee Shops Expensive?

Opening up a coffee shop can be expensive. However, if you know how to save money and lower your expenses, you can increase your profit margin. This will in turn increase your profits and you’ll take home more money. Many of your costs will come from the initial investment. For example, some of the large initial costs will include your coffee machines, water filtration systems, roasters, teas, coffees, cups, straws, etc. Some of these purchases, such as the coffee machine, can cost tens of thousands of dollars. This amount will depend on the size and quality of the machine.

However, most of your costs will come from monthly expenses. You may have heard me say this before in a previous article, but most companies will see that their bulk expense is ongoing payments. This includes rent, supplies, POS, and financial systems. This does mean that you won’t have additional overhead.

As you can see, opening up a coffee shop can be quite expensive. This cost can vary on a bunch of factors. Keep in mind when looking at the figures above, they’re in USD. Therefore, if you’re reading this in and are from a different country, the cost will most likely be different. However, if you’re looking to open up a coffee shop like the ones listed above, that should give you a general understanding of how much it may cost.

Furthermore, like any restaurant that has people dining in, you will need certain licensing. These licenses can be for alcohol and music. The last thing you want to to do any of these things without al license. Doing this can open you up to the risk of being both fined and having your business shut down. This will hurt your pockets and any credibility you may have if you’re looking to rebuild. Therefore, with any business, make sure you go through the proper channels to make it as legit as possible.

Can You Make A Living Off A Coffee Shop?

As a coffee shop owner, you have a few ways to make money. Of course, the main source of your income will be selling coffee. However, the amount of money you earn can be boosted and hindered by a few factors. First, like a coffee shop, you’ll have snacks and other drinks. These snacks include but are not limited to chocolates, muffins, donuts, lattes, mochaccino, etc. These items may not seem like much. However, you have to account for the amount of traffic, expenses, and sales you’ll have. Of course, the amount you earn will depend on your markup.

Therefore, how much would you make as a coffee shop owner? The amount depends on how much you’re willing to take home. If you’re highly successful and don’t have an extremely large staff, you can afford to give yourself a slightly larger take. However, many people who start off their businesses operate at a loss. This can be quite devastating. However, many people earn enough to not significantly go into debt and have a living wage. Of course, you will still be paying yourself.

One thing that you should probably take a look into is social media. The more your business is promoted, the higher chance people will come, even if you don’t serve the best coffee. For example, have you ever been to a restaurant because you saw it on social media? Only to find out that the food is mediocre? I definitely have. I’m not saying that your coffee shop is going to be mediocre. You should strive to provide the best service and product possible. However, it just goes to show that even if you don’t provide the best product, marketing and advertising will get you extremely far.

Above is a snippet from smallbusiness.chron.com. They took the liberty of outlining some of the ways that you can increase your earnings. However, at the bottom of the snippet, they go on to say that a medium-sized coffee shop owner can take away up to $160,000. This is an incredible amount to be earning and can help you save enough to invest or start other endeavors. As you’d expect, the smaller the establishment, the less you’ll most likely earn. However, this may be a benefit to many because smaller business means fewer expenses. Furthermore, fewer expenses can be a great way to reduce the number of headaches you’ll inevitably get from running ab business.

Regardless of how you choose to run your business, owning and operating something that you can call your own is always an amazing feeling. Just remember, before starting any business, have a game plan ready so that you can follow the necessary steps towards your success.

Shameed Chris Khan

Shameed is just a man on a mission to help those around him gain financial success. Obsessed with writing about all things finance, this GTA native is constantly learning and sharing his experiences with others.