How to Start a Coffee Shop in the Philippines: Costs and Considerations

How to start a coffee shop in the Philippines

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If you’re dreaming of opening a coffee shop in the Philippines, you’re probably asking yourself a lot of questions, like: “How much does it cost?”, “What things do I need to budget for?”, or “What factors should I consider?”  There’s no hard and fast answer on how much it costs to open a coffee shop – your costs will depend on the type of coffee shop you want to open, the costs of retail space in your community, and several other factors. 

Types of Coffee Shop Startup Costs: Terms You Need to Know

There are several terms associated with costs when starting a coffee shop that you should be aware of. Knowing these terms can help you figure out your coffee shop budget and ultimately determine your total costs.

  • Coffee Shop Startup Costs.
    These costs are exclusively associated with starting your business. Often, they include the costs for any security deposits, legal fees, equipment, administrative paperwork, etc.

  • Operational Costs.
    These are costs necessary to keep your coffee shop running day-to-day or month-to-month. They can be anything from your rent, payroll, cost of your coffee beans, etc. Your operational costs include two general categories – fixed and variable costs. 

    • Fixed Costs. Typically, fixed costs are costs that don’t change month to month. These costs can be your security payments, monthly rent, insurance premiums, etc.

    • Variable Costs. Variable costs can fluctuate depending on your hours of operation, sales volume, etc. These may include the amount of coffee beans, milk, sugar, cups and lids, etc. 

  • Consumable Costs. Consumable costs are costs that are regularly expended because they are used up. They could be anything from cups, lids, paper napkins, towels, etc. 

Coffee Shop Cost Analysis. Your coffee shop cost analysis should include your initial startup costs, materials used for building out your coffee shop, design and layout services, contract work, etc. It must include your operational costs too. Your cost analysis will help you determine how much money you need to take out as a bank loan, utilize personal investors, or pull out from your personal savings. 

Factors That Affect Coffee Shop Costs

The answer to the question, “How much does a coffee shop cost?”, always rests with the same first question: What type of coffee business are you planning to start? For instance, do you want to open a small coffee kiosk/coffee stand? A coffee shop with seating? A coffee shop with a bookstore? 

Would you like to open a coffee shop that operates in the city or in the suburbs? Are you franchising or starting a coffee shop from the ground up? So, let’s talk about those basic elements that make up the majority of the costs of a coffee shop. Generally, your coffee shop startup costs depends on several factors, including:

  • Your coffee shop concept
  • Location
  • Equipment
  • Coffee shop menu
  • Furniture and fixtures
  • Branding and marketing
  • Legal and administrative costs
  • Labor costs 
  • Other additional costs based on your location or personal situation

Together, these costs can add up quickly. Nevertheless, it’s important that you tally up all of these costs and create a working budget. Throughout the process, make sure to stay honest with yourself about the cost of each element. Remember, the more you know, the better you will be able to manage the costs associated with starting your coffee shop. 

Cost Breakdown: How Much Does It Cost a Coffee Shop in the Philippines? 

There is no fixed price for how much it costs to open a coffee shop. How much your coffee shop costs largely depends on the kind of setup you’re going to build. However, here’s a rough cost breakdown of how much it costs to start a coffee shop in the Philippines.

  • Small Cafe with No Kitchen
    • Location: Central Business District
    • Floor Area: 30 sq. m
    • Staff: 4 (depending on café hours)
    • Seats: 9
    • Food: Reheating Only
    • Capital Expense: PhP 50,000 (Business Permit), PhP 450,000 (Fit Out), PhP 450,000 (Equipment)
    • Operating Expense: Php 10,500 (Utilities), Php 101,250 (Supplies), Php 10,000 (Marketing Spend), Php 45,000 (Rent, assumed Php 1,500 per sq. m) Php 77,500 (Monthly Staff Cost; remuneration may vary)
  • Medium-Sized Café with Small Kitchen
    • Location: Central Business District
    • Floor Area: 50 sq. m
    • Staff: 10 (depending on café hours)
    • Seats: 18
    • Food: Small Kitchen
    • Capital Expense: PhP 50,000 (Business Permit), PhP 750,000 (Fit Out), PhP 750,000 (Equipment)
    • Operating Expense: Php 17,500 (Utilities), Php 198,450 (Supplies), Php 20,000 (Marketing Spend), Php 75,000 (Rent, assumed Php 1,500 per sq. m) Php 182,500 (Monthly Staff Cost; remuneration may vary)
  • Large Cafe with Full Kitchen
    • Location: Central Business District
    • Floor Area: 150 sq. m
    • Staff: 12 (depending on café hours)
    • Seats: 60
    • Food: Full Kitchen
    • Capital Expense: PhP 50,000 (Business Permit), PhP 2,250,000 (Fit Out), PhP 2,250,000 (Equipment)
    • Operating Expense: Php 52,500 (Utilities), Php 472,500 (Supplies), Php 30,000 (Marketing Spend), Php 225,000 (Rent, assumed Php 1,500 per sq. m) Php 217,500 (Monthly Staff Cost; remuneration may vary)

Things to Budget for When Opening a Coffee Shop 

What do you need to budget for when opening a coffee shop? 

  • Space.
    This includes the construction and design costs for turning it into a coffee shop, as well as the ongoing rent, maintenance, utilities, and insurance. 

  • Equipment.
    This includes coffee brewing equipment, an espresso machine, both coffee and espresso grinders, a refrigerator, cooking equipment, blenders, point of sale system (POS), etc.

  • Supplies.
    This includes drinks (i.e. coffee, teas, syrups, milk, etc.), food (any breakfast and lunch items that you want to offer), and supplies (i.e. stirrers, cups, napkins, etc.).

You also need to budget for licensing and legal fees, advertising costs, payroll costs, taxes, and money to cover cash flow. 

The Bottom Line

There’s no hard and fast answer on how much it costs to open a coffee shop. Generally, your coffee shop startup costs depends on several factors, including your coffee shop concept, location, equipment, menu, labor costs, and other additional costs. Every coffee shop is different, so costs will vary greatly. While some owners are willing to pay a fortune for interior design for their café, others may prefer to design and decorate it themselves. The final costs will change according to your own needs and desires. We hope our article will help you get started with your new coffee shop venture in the Philippines!

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