Opening up a business in the food industry is difficult. It tends to come with low profit margins and high risks for closures within the first year. But coffee shops are the exceptions to this.
Coffee shops come with high profit margins. The wholesale ingredients for this type of business (like coffee beans) are not very expensive, especially when you compare the costs of ingredients to the final products. It costs less than a dollar’s worth of ingredients to make a basic cup of coffee. In comparison, the average cup of coffee costs almost $5 now. That’s a big profit margin per cup, which means a big opportunity for financial success.
A high profit margin isn’t the only benefit that you could reap from this business. There are plenty of other benefits that come with coffee shops.
Large Customer Base
A lot of Americans drink coffee. A survey by Statista Consumer Insights found that almost 80% of coffee-drinking respondents admitted that they drank two or more cups of coffee per day. When it came to buying coffee to-go from a coffee shop, 20% of respondents admitted to drinking a to-go cup of coffee daily, while almost 25% admitted to getting to-go coffee several times a week.
Unless you decide to serve up a very niche type of coffee, you know that your business has the potential to attract a large and loyal customerbase. People will definitely walk through its front doors.
No Need for Full Kitchens
Unlike traditional restaurants, coffee shops don’t have to be in buildings with full-scale kitchens. A coffee shop will only need equipment for preparing coffee, storing food (refrigerators) and potentially reheating pre-made food (panini press, toaster oven, etc.).
Since you don’t need to rent a space with a full kitchen, you can choose just about any space to run your business, as long as it has electrical connections. This can drastically reduce your costs for your location, your equipment, your utilities and your permits, which puts money back into your pockets.
Working in Small Spaces
You don’t have to cater to sit-down customers. You can cater to customers that want to grab their caffeinated beverages and run. Which means you don’t have to find an enormous space to operate your shop.
For instance, you can build yourself a coffee shop out of a single shipping container. A standard shipping container ranges from 20ft long to 40ft long, which will give you plenty of space to create a functional barista bar. Install a large window so that customers can line up outside and order their drinks. Their completed drink can be handed out of the pick-up window. Then they can grab it and be on their way.
How can you start a shipping container café? You can start by going to boxhub.com and browsing your options for containers near you. You’ll be able to pick between different container sizes, heights and grades. Once you’ve made your pick, you can purchase it and have it delivered to your desired location, where you can renovate it into the café of your dreams.
Other Profit Opportunities
Your shop can do more than sell hot cups of coffee. You can easily diversify your offerings so that you increase your profits and boost your customer base.
These are just some products and services you can add to your café:
- Selling bags of whole coffee beans and coffee grounds for those who want to brew their coffee at home.
- Selling coffee-related items like filters, French presses, coffee pots and travel mugs.
- Catering for corporate meetings and other events.
- Delivering takeout orders to customers through food delivery apps.
- Depending on the size of your shop, renting it out as a venue for events.
So, what are you waiting for? Get started on your plans to make a coffee shop. You can reap all of these benefits and then some if you do. Just wait and see.
Also read: 9 Tips for Aspiring Entrepreneurs
