2 Risk-Free Ways to Start a Coffee Shop Business on a Budget

Are you looking to leave the daily grind for something you are passionate about?

The Internet has enabled us to start online businesses with close to ZERO funds and it’s amazing, but there are plenty of Millennials who are craving something different – a lifestyle business that doesn’t require sitting at the computer for 8+h a day.

Many of us actually want to run a business where we can interact with people and be part of the local community.

These businesses are florists, bookstores, eco-friendly coffee shops, clothing boutiques, etc.

Over the past 5 years, the coffee shop industry has grown rapidly in the UK.

Our lives are now intertwined with coffee shops: 

➤ We spend quality time with our loved ones in coffee shops

➤ We read books in coffee shops

➤ We use coffee shops for meetings and job interviews

➤ We work from coffee shops

Coffee has become a daily necessity, a simple life pleasure we are not willing to compromise on – and we are paying up to £3.50 for it every day.

As such, the UK coffee shop industry is worth £10.1 billion, and it grew by 7.9 % during 2018. It is set to be worth £13 billion by 2022.

Brits drink an incredible 95 million cups of coffee a day and it is estimated that coffee shops will outnumber UK pubs by 2030 ?

It’s the best time to be a ‘coffeeholic’ and turn your passion into a profitable business.

The only problem with brick-and-mortar businesses is that they are expensive to set up.

In today’s culture of on-demand convenience and economic uncertainty, many new entrepreneurs shy away from brick-and-mortar businesses and are looking for more flexible and cost-effective start-up options.

So, without further ado, below are 2 flexible and cost-effective ways you can start a coffee shop without breaking a bank:

1. Start a mobile coffee shop

This is probably the safest option to start with.

The mobile coffee business is more manageable and affordable to start with.

It is a great way to enter the retail coffee industry on a smaller scale.

You will not be tied to a location or a lease, and it will allow you to test your concept at your own pace.

And the best thing – if the location is wrong, you can just move 😉

Benefits of mobile coffee shop

There are so many advantages of mobile coffee shops, let’s look into the top 3 …

#1 Low start-up costs

Starting a mobile coffee shop is on average 3 times cheaper than a brick-and-mortar business.

A former professional rugby player Tom Allen started his mobile coffee business with £15,000, which included buying a used vehicle, registering a new company, buying hardware for businesses like a (point of sale) systems to accept payments and equipment, as well as installing plumbing and electrical wiring, licenses and business insurance.

Quote a lot for not too much money, huh?

Well, Mr Allen is now turning over £800,000 a year at 70 % gross profit at his mobile coffee shop franchise Flying Bean Café.

Google it.

Franchising is when an existing business owner (franchisor) sells the rights for a third party (franchisee) to trade under its name. You can look for existing franchise opportunities at Franchise Direct– a database of different franchise brands in every industry.

#2 Choose your own hours

Another massive benefit of a mobile coffee shop is choosing your own hours.

The mobile business allows you to create a job or career that suits your schedule and lifestyle.

This leads to a healthier work-life balance and ensures you don’t have to miss out on any important family events.

Whether it’s going from location to location and serving different types of customers at a variety of events and gatherings or simply working whenever you feel like or making money during various times of the year, the world is your oyster.

#3 Location-independence

Having a mobile coffee business allows you to travel straight to customers (or rather a crowd of customers).

Want to check out a local festival? Take your coffee truck.

Want to work at a local marathon race? Take your coffee truck.

Engaging with the public at a variety of locations can be very interesting. Attending events, festivals and feeling like you are part of the community can really be appealing and novel.

A mobile coffee business can bring this new kind of excitement and energy and into your professional life, that you may currently miss.

2. Piggyback on an existing business

If the mobile business is not your thing and you want to run a location-based business, then another option to keep the costs down is to piggyback on existing complementary business.

That means setting up your coffee business where your customers already hang out, like bookstores, galleries, co-working spaces, newsagents, etc as opposed to hiring new premises altogether.

This is where you creating a symbiotic relationship where both businesses (your coffee business and another business) can help lower the barrier to entry as well as generate a much-needed boost in revenue for both businesses.

Benefits of piggybacking on an existing business

Piggybacking on an existing business has several advantages, for example:

#1 Lower rent

By utilizing existing open space that is not being used by a currently opened business, you can negotiate a lower rent, and possibly avoid a security deposit.

#2 Tap into an existing customer base

Depending on the business and the location, you might have an automatic customer base that can guarantee you a particular flow of coffee-drinking customers.

#3 Lower overhead costs

If an existing business can reduce your overall monthly operational costs (fixed and variable), then setting up your coffee business with someone else will certainly be a great advantage.

Summary: Grow your coffee shop at your own pace

Starting a coffee business can be overwhelming. A full-fledged café with several staff members and a full menu, operating 6 to 7 days a week can be a lot of pressure for someone who has never done it before?

The mobile coffee shop business allows you to grow at your own comfortable speed, which is very important if this is your first experience with entrepreneurship.

You control how much you can handle – how much time, money, and effort you want to put into your business.

You have total control.

And isn’t that what running a business should be 😏