Baikely
TL;DR
- Format decides everything: kiosk, counter-service café or sit-down café. Rent, staff and equipment follow from it.
- Drinks pay, food leaks: coffee carries high margins; the pastry case is where new cafés lose money to waste.
- Rent and labor are the big two: your location and your staffing plan matter more than your espresso machine.
- Measure from day one: sales by hour, and leftovers per food item per day.
How do you start a coffee shop?
Pick your format, find a location whose rent your sales can cover, set up your menu with costed prices, then plan equipment, staff and suppliers around it. The format comes first because it decides almost every cost that follows.
Step 1: Choose your format
| Format | Typical setup | Watch out for |
|---|---|---|
| Kiosk or cart | Small footprint, drinks-led, minimal food | Weather, foot traffic, limited menu |
| Counter-service café | Order at the counter, some seating, pastries | Pastry waste, rush-hour staffing |
| Sit-down café | Table service or long stays, larger menu | Higher rent per sale, slower table turns |
| Drive-through | Car-based, speed-focused | Site availability, peak-hour throughput |
Step 2: Check permits and rules
Requirements depend on where you are. Typical items: business registration, a food service permit and health inspection, food handler certification, signage and zoning approval, and sometimes a seating permit. Start with your city's business and health departments.
Step 3: Find the right location
Location decides both your sales and your biggest fixed cost. Count foot traffic at the hours you plan to open. Note nearby offices, schools and transit. Then work out how many drinks a day the rent requires before you sign. Our coffee shop business plan guide shows the break-even calculation.
Step 4: Build and cost your menu
Keep it short. Cost every drink: beans per dose, milk, cup, lid. Our guide to coffee shop profit margins has a worked latte example.
For food, decide: bake in-house or buy from a wholesale bakery?
- Buy wholesale: no baking staff or ovens, but a lower margin per item and a daily ordering decision.
- Bake in-house: better margin, but labor, equipment and skill.
Either way, the food side needs a quantity decision every day, and that is where most new cafés lose money.
Step 5: Equipment and suppliers
Espresso machine, grinders, brewers, refrigeration, a display case, dishwashing, and a point of sale. Choose the coffee roaster and the pastry supplier early; both shape your menu and margins. If you are still choosing a till, see the best POS systems for coffee shops.
Step 6: Hire and schedule
Your sales will not be flat across the day. Most cafés have a morning rush, a quieter middle and a smaller afternoon bump. Schedule staff to the hourly pattern, not to opening hours.
Step 7: Open and measure
From the first day, track:
- Sales by hour, to schedule staff.
- Leftovers per food item at close, and sell-out times, to fix your daily food orders.
How Baikely helps a new café
Baikely connects to your point of sale and suggests how many of each pastry and food item to order or bake for each day of the week, from your own sales. It records sell-outs and leftovers, so the food side of the menu earns its place.
Frequently asked questions
How much money do you need to open a coffee shop?
It varies enormously with location and format: a cart and a sit-down café are different investments. Build your number from real quotes for rent, build-out and equipment rather than national averages.
Is owning a coffee shop profitable?
It can be, but net margins in published estimates vary widely. Rent, labor and food waste decide where your shop lands, which is why measuring them from day one matters.
Should a new coffee shop sell food?
Usually yes, because food raises the average ticket. Start with a small range, order conservatively by weekday, and expand only what sells out consistently.