Americans can’t get enough coffee. So it’s no surprise that the size of the coffee shop market in the United States is a whopping $47.5 billion. With figures like these, you might be interested in getting into the coffee shop industry yourself. But what if you don’t have any money to do so?
You can successfully launch a coffee shop with no money by using alternative fundraising methods like crowdsourcing and assistance from families and friends. You can also save money on advertising by offering to provide coffee at local events for a discounted rate.
But launching your own business can be a complicated process That’s why we’ve put together the following article. It offers a step-by-step look at what you need to do to accomplish your goal of starting a coffee shop without any money.
1.Save on Flyers by Using Vistaprint
One of the most important things to do when launching a new business is getting the word out about it. There are lots of different ways to do this. But one of the most popular is to post flyers around your community.
However, purchasing flyers from a traditional printing shop can be very expensive. A better strategy may be to use an online service like Vistaprint. By doing so, you can save a lot of money on your fliers and still get the word out about your new coffee shop.
It’s worth mentioning, Vistaprint regularly offers big discounts on its printing services. So you may want to try and wait until one of these is active before buying. Doing so could save you even more money.
2.Take Advantage of Local Events
Every event needs refreshments. And most organizers will be more than happy to purchase those refreshments at a discount if you’re offering them at one. This is something you might consider doing during the early stages of your business to get the word out.
You can bring coffee, pastries, and whatever else that you offer to events. Then, you have a few options. You could give away drip coffee for free if you really want to win the favor of your local community. Or you could sell your items at a discount if you prefer that.
The key is that you want to get people trying your coffee and food. Because if you have high-quality stuff, then they’re going to want to try it again. Even if you lose a little money upfront doing this, the increase to your customer base will more than makeup for that in time.
Doing this can also help you save money on your overall advertising costs. You may be able to get the new customers that you’re looking for without having to spend a ton on TV ads or internet marketing to do so.
3.Save on Equipment By Buying it Used
You need a lot of equipment to open up a coffee shop. For example, most new coffee shops will need to have at least the following items:
- Commercial blenders
- Commercial espresso machine(s)
- Industrial-sized grinders
- Refrigeration systems
- Pumps and containers
- Toasters, ovens, and other cooking equipment
- Freezers
Purchasing all of this when you’re trying to start a coffee shop with no money can feel overwhelming. But you don’t have to buy all of it new. Instead, try looking for used versions of what you need.
You may be able to find some of it on a local marketplace website such as Craigslist. Or, if not, consider looking on eBay. There’s a great chance that you’ll find what you need there for cheap.
4.Get Creative While Looking for Funding
There are lots of ways to get funding when starting a new business. You can look for SBA loans, business lines of credit, or even a business term loan.
However, none of these may be exactly right for you. In fact, these types of loans can be difficult to get if you don’t have a thriving business already or your personal credit isn’t the best. That doesn’t mean you should give up on your dream. Instead, you may just need to get creative with how you look for funding.
One option is to try crowdsourcing your coffee shop through a website like Kickstarter. You can offer rewards for people who donate, such as free coffee for a month. Then, share the Kickstarter link on social media and try to get it trending in your community.
Another option that may work is to reach out to family and friends. Some may be able to come aboard as early investors in your new coffee shop. Even if they aren’t able to offer you a lot of funding, they could still help you buy some of the equipment that you need to get up and running.
Figure Out Exactly How Much You Need
As you look into your funding options, it’s important to have a good sense of exactly how much money you need to raise. The answer to this will vary based on what your coffee shop is going to look like.
For example, you can start a drive-thru coffee stand business for as little as $10,000. Similarly, espresso catering businesses can be started for as little as $4,500. You may want to consider beginning your business this way to save on startup costs. Then, as you grow, you can open up retail locations and expand however you want.
Alternatively, you may be committed to opening up a retail coffee shop with seating right away. In that case, you should expect to pay between $40,000 and $200,000 for a small coffee shop with seating. A large coffee shop with seating can cost between $75,000 and $350,000 to open up.
5.Create a Lean Business Plan
At this stage in the process, it’s a good idea to create a business plan. This will be a guiding document that will detail exactly how you’re going to turn your vision for a coffee shop into a reality. It’s a useful document to show your financiers and to have on-hand when you need to figure out what’s next.
A successful business plan will include the following information:
- Your financial projections
- An overview of your company and your prioritization strategy
- A breakdown of your leadership structure
- A description of the services you’ll provide
- Your analysis of the coffee shop industry and where you fit in it
6.Identify Your Target Market and Competition
As you work on your business plan, you’ll find that it’s important to have a strong understanding of your target market and the competition. Knowing each of these pieces of information will help you structure the work that you do to maximize your chances of success.
Your target market is the people that you think will frequent your coffee shop the most. It’s who you’re trying to appeal to with your offerings.
For example, if you open a drive-thru coffee shop, your target market might be people who are on their way to work and don’t have much time. But if you open a coffee shop with seating, you might try to offer a relaxing environment for people who are looking to spend some time there.
Understanding the competition is important too. You need to figure out who you’re going to be competing with for the same target market. Once you know that, you can tailor your offerings to make them stand out from other shops in your area that are in the same niche.
7.Decide Whether You’ll Franchise
One choice that you’ll need to make is whether you want to start an independent coffee shop or become part of an existing franchise. An independent shop will give you complete freedom over how you run your business. But a franchise may make it easier for you to get new customers and get started.
There’s no right or wrong answer here. But if you’re interested in becoming part of a franchise, you’ll want to look into these options:
- Dunkin’
- Tim Hortons
- The Coffee Bean and Tea Leaf
- Starbucks
- Dunn Brothers Coffee
8.Get the Right Licenses
You’ll need to get a few licenses before you can begin serving customers in your coffee shop. The exact list of licenses can vary based on your municipality. But you should expect to have to apply for the following at a minimum:
- Retail food establishment license
- Business license
- Retail sales tax license
- Employer identification number
- Liability licenses
9.Sign Up for Insurance
Insurance is another thing that you need before opening your doors to the public. Getting it will protect you from the financial ramifications that would arise if something went wrong. Here’s what you’ll want to get:
- Commercial property insurance
- Workers’ compensation
- Equipment insurance
- Spoilage insurance
- Commercial general liability insurance
- Commercial auto insurance (only if you plan on doing deliveries)
10.Find the Right Software and Systems
Coffee shops also need a variety of software and systems to run optimally. Here’s a look at what you’ll need and some of the most popular options in each category.
Scheduling Software
You don’t necessarily have to have this. But using scheduling software can make your life a lot easier. It will automate a lot of work that you would otherwise have to do manually. This will free you up to focus on the other important aspects of your business. Here are some options:
- ConnectTeam
- ZoomShift
- Humanity
- Deputy
- ScheduleAnywhere
Credit Card Processing
You also need to be able to process your customers’ credit and debit card payments. Here are some software options that will enable you to do that:
- Square
- FattMerchant
- Payline Data
- Payment Depot
- Stripe
Accounting Software
Accounting software is another tool that will automate a lot of tough work that you would otherwise have to do on your own. Here are some options:
- QuickBooks Online
- Sage 50
- Kashoo
- Xero
- SlickPie
11.Hire Your Team
You’re finally ready to hire your first team of employees. You’ll want to focus on applicants that have previous experience in the coffee industry. Hiring these types of workers will reduce the amount of time that you need to spend on training them considerably.
You can look for employees in a variety of places, including Craigslist, Monster.com, and Indeed, among others.
12.Build a Website
You may also want to build a website for your coffee shop. Doing so is a great way to market your business to a larger audience. It will also give interested customers a place to go if they want to learn more about you.
When building a website, you should focus on making it as easy to use as possible. That means adding a simple navigation bar and making the website mobile-optimized, among other things.
It’s Worth It to Start a Coffee Shop
You can absolutely start a coffee shop with no money by following the steps laid out in this article. But doing this won’t be a good idea for everyone. You need to figure out whether it’s going to actually be worth it for you before proceeding.
What you should keep in mind is that a small to medium-sized coffee shop can generate between $60,000 and $160,000 in annual income for the owner. That’s not a guarantee. But if you’re successful, then you should make an annual salary that’s somewhere in this range.
If this salary range is more than you’re currently making, then opening up a coffee shop could absolutely be worth doing. If it’s not, then you may want to look for another option.
Keep in mind, new businesses aren’t always profitable right away. You may need to wait a few years before you’re making this kind of income.
Additionally, you need to consider the upfront expenses that you’ll incur while opening up your shop. You may have loan payments to make for the first few years of operation. These can eat into your profits and reduce the amount that you make during the early stages of your coffee shop.
Ruben has been doing online marketing for the last 4 years. Prior to that, he spent 15 years managing different brick-and-mortar businesses, in the home improvement and logistics industries. Overall, he has 20 years of business experience under his belt. Recently, he added SEO, affiliate marketing, and link building to his business skills.