Coffee shop businesses can be a great way to make money. You do have to take the right steps during the setup process to ensure that you are creating a business that will turn a good profit, but coffee shops are easy to start and maintain. If you get your coffee shop off on the right foot, you can make a great living off of your store! Before you start though, you need to look at the cost for opening a coffee shop in Texas.
Knowing more about how much it costs to open a coffee shop in Texas can make a big difference in your choice to take on this project. Many people think that you need a lot more money to start this kind of business than you really do. Keep reading, and you might find out that you can easily afford to start the coffee shop business that you have always wanted to own!
Different Kinds of Shops and The Cost for Opening a Coffee Shop in Texas
One of the reasons that a coffee shop is a great idea for a business is that you can pick and choose from a bunch of different business models. This can make the cost for opening a coffee shop in Texas vary.
The kind of coffee shop location can greatly impact the startup costs that you will face. You might have your heart set on a big, brick-and-mortar shop location, but you can work up to this from a more humble start when you are planning out a coffee shop business.
There are some considerations related to coffee shop ownership that can vary from county to county. Things like licensing, advertising costs, and more can be tacked onto these basic estimates. We will talk about some of these potential costs later on, but let’s start out with the basic estimated costs to start each kind of coffee shop.
1. Mobile Coffee Cart
The advantage of the mobile coffee cart is that you can try out various selling locations across your city or county before settling on a more permanent location to operate from. Some mobile coffee carts only go to events that are being hosted in the area, while others might rotate between a few different locations throughout the week. As more and more food stand locations crop up across the country, you could potentially park your mobile cart at one of these spots and enjoy sharing with customers who might have wandered in to try the other carts near you.
This kind of coffee shop will cost about $12,000-$25,000 to open. There are various permits and licenses that you will likely have to get to operate this kind of cart, but you will be able to save a lot of money compared to a brick-and-mortar location.
2. Fixed Coffee Kiosk
Everyone knows how these coffee shop locations work. They are typically dropped in the middle of a parking lot that gets a lot of traffic, and they are like small coffee shacks that offer the same services as a brick-and-mortar store. These shops are very familiar in the coffee stand industry as they are the backbone of giants in the industry like Dutch Bros.
This kind of coffee shop could be quite affordable to open up or fairly expensive. The purchase of the kiosk/shop building itself can be the most expensive part of the process of opening this kind of store. If you can get into a stand that is already built and ready for use, you will save some money. Opening this kind of coffee shop will cost about $25,000-$100,000.
3. Coffee Truck
While this might sound like a coffee cart, this is actually a more mobile kind of coffee store. You will be able to drive this stand around to various locations without the need to use a towing vehicle to park the cart when it is ready to be used. The coffee truck or van can be driven as one complete unit to any location where you want to sell your wares.
Coffee trucks can be more expensive due to the fact that they drive themselves, and you will need to factor in things like car insurance for this kind of stand. However, you can be very mobile with this kind of setup, and you will get a lot of notice when you show up with this kind of coffee shop at an event. The coffee truck will typically cost you about $50,000-$125,000 to get started.
4. Drive-Thru Shack or Trailer
Rather like the kiosk, the drive-through coffee stand can be a great way to get started in the coffee shop business. This is a great format to select if you are looking to capture traffic from a major street or thoroughfare. Being visible to the street is really important here, and you will need to make sure that you are going to be allowed to advertise in a very visible way so that people driving by know that your shop exists.
This kind of coffee shop will cost about $300,000-$575,000 without consideration for buying or leasing the property in question. You might be able to just rent the location from a landlord, but in a lot of cases, you need to actually own the property that this kind of shop is located on.
5. Brick and Mortar Store
For everyone who has ever dreamed of giving Starbucks a run for its money, you will need to start a brick-and-mortar store. These shops can be placed anywhere that you know will get good traffic and visibility. You might end up getting access to a shop located in a strip mall, or maybe there is a shopping center that has a side space for rent where you can add your shop.
The costs for opening a coffee shop in Texas will be higher when you choose a brick and mortar store. The main considerations here will be whether or not this location is the right place to start a new business and whether or not the space in question can be used for a restaurant.
Once you have picked out the perfect place for your brick-and-mortar store, you will need about $350,000-$625,000 to be able to fund it. Remember that you might need to do extensive remodeling for these kinds of locations, which can make costs stack up really fast. Remodeling cannot usually be ignored either, as many brick-and-mortar locations were not made with a coffee shop in mind. Since you will not be able to open your store without making these changes per city and county codes and per the health department’s code, you will need to commit to these expenses for sure.
What Other Costs Should I be Prepared for?
There are many costs that are associated with opening a business in any state. One of the first things that you should pay for when you are contemplating opening up a business is an analysis of the market in your area. You might think that you have picked out the perfect place near your home for your coffee shop, but maybe you are not aware of the coffee stand that is just around the corner or a business trend for increased rents in your area that is going to drive up the cost of operations.
Having someone draw up an objective market analysis for the area where you are thinking of opening up a store can save you from making the mistake of opening your shop in the wrong location for success. These kinds of analyses often go hand in hand with the creation of a full business plan. You will need a business plan with a market analysis to submit to the state for your business license in some cases as well. If you do not feel that you can take care of this work for your future coffee shop business, you will need to reach out to someone to take care of the work for you. The cost for this part of your shop plans can vary significantly depending on whether or not a lawyer does the work for you.
After you have a business plan and you know that you will be able to make a go of it in the location that you have in mind, you need to find out how much you will need to spend to get your business license in your part of Texas. There are sometimes county permits that you will need to pay for as well, so be sure that you look into this potential cost too.
Business licenses cost anywhere from fifteen dollars to a few hundred dollars in the state of Texas. The complexity of the business type will impact the filing cost, so you should prepare to spend more and be pleasantly surprised if you end up saving a few dollars on the final business license cost. If you have to pay for zoning surveys and other kinds of unexpected documentation before you can open up your shop, you could end up forking over many thousands of dollars to the state.
Zoning permits and various health permits will be required for your shop to operate legally as well. Texas charges different permitting fees for food-handling businesses based on the amount of money that they intend to sell during a calendar year. When you are starting out, you will pay $258, but once you are selling more than $50,000 each year, the cost of your food handling permits will go up. There are also fees for renewals and changes to your business if you convert to a kiosk from a mobile cart or change from a kiosk to a brick-and-mortar location.
Advertising and Branding
One of the other often-overlooked costs related to opening up a coffee shop is the cost of advertising and creating a branding identity for your store. You can take care of a lot of this work yourself if you have some skill in branding and marketing, but many people would rather hand over this work to a skilled marketing team. Looking into the costs associated with having help with your marketing is a good idea since this will save you a lot of time and get you the best results for your ad budget.
Branding can be done in a variety of ways, but you might want to offer gear such as jackets, sweatshirts, and coffee mugs that use your brand colors and your logo. Many people also have someone design a custom logo for their shop. All of these different branding items can add up cost-wise, but they are important ways that you can ensure that your business will stand out from the crowd.
Your ad budget and branding costs can vary widely depending upon lots of factors, but you should at least set aside a few thousand dollars for these items when you are starting out. Over time, you might need to spend more or less, depending upon the visibility of your store and how quickly it gathers a loyal following of repeat customers.
Texas Can be a Great Place to Open a Coffee Shop
Opening a coffee shop in Texas can be a great way to start a business that is easy to expand and that will be simple to get funded and open for business. Always make sure that you take the time to have someone do a complete business analysis for the area that you are thinking of opening your store and be realistic about the budget that you feel comfortable working with. You might want to have a brick-and-mortar store, but your budget might not allow you to start with this kind of location. Being practical about what you can afford can make a big difference in your experience starting your business.
Knowing the costs for opening a coffee shop in Texas can be a big benefit to your business planning process. Since you might need to take out loans, look for funding from family members, or save up some money to be able to get started with your business, you will be much more likely to meet these goals with a solid budget in mind.