Starting a Coffee Shop in the Philippines: Required Capital and Tips to Success
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With millions of coffee drinkers in the Philippines saying they need coffee to kick-start their day, it’s no wonder that you’re considering starting a coffee shop. People love their coffee! In theory, starting a coffee shop sounds like a great idea, but it’s no small investment. According to statistics, the cost of opening a coffee shop ranges from Php 6 to 12 million. Also, aside from the financial load, there are many other considerations to be made before pursuing this business venture.
- Is there a suitable location available?
- What equipment do I need?
- What about licensing and permits?
Consider this article to be a comprehensive resource compilation and checklist to better inform your coffee shop planning should you decide to pursue this business venture.
Starting a Coffee Business in the Philippines: 3 Ways to Do It
Want to start your coffee shop in the Philippines? You have at least 3 ways to go about it.
If you don’t want to build your coffee shop from scratch, you can choose to franchise – there are numerous established brands out there you can consider. Popular brands like Bo’s Coffee, Seattle’s Best Coffee, Coffee Bean & Tea Leaf, and the like are all open for franchising. Many first-time entrepreneurs choose to franchise because the business model is already established, and deployment is typically easy and low-stress. However, the cost can range anywhere from 6 to 12 million pesos, which is a sizable investment. For instance, a Bo’s Coffee Franchise costs around Php 1 million!
- Buy an existing coffee shop.
You’d be surprised, but there are entrepreneurs who actually buy established, well-performing coffee shops. And who can blame them? It’s a much easier, safer route. There are numerous reasons why you’d want to do this, one of them is the opportunity to deliver good-quality, specialty coffee. However, it’s difficult to find a profitable business that’s for sale. What’s more, you’ll be bound to the existing branding, design, and vision and remodeling it will likely be even more expensive than simply starting your own shop.
- Build your own from the ground-up.
This option allows you to build something that’s truly your own – from the business model, branding, culture, menu, and everything else. Starting your own coffee shop gives you the freedom and flexibility to do whatever you want. Of course, it’s worth noting that building your own coffee shop from the ground-up can be time consuming and difficult to execute, particularly for entrepreneurs without much experience in the food and beverage industry. Also, depending on the size and scope of your business operations, starting your own coffee shop can be quite costly.
How to Start a Coffee Shop Business: 7 Key Tips for Success
No matter which method you choose – whether you’re looking to franchise, buy an existing business, or if you’re building your own coffee shop from the ground – here are 7 tips to help you.
- Research the coffee business.
Opening a coffee shop takes a big investment – both in time and money. It’s important that you spend time understanding what it takes to run a successful café. This means doing some research – you can look for useful articles online, or better yet, talk to coffee business veterans and learn from their experience. You should also visit other coffee shops to get an insight into what you want your business to be like.
- Create a business plan.
The process of writing a business plan helps you to really understand your business vision, your local market, and it allows you to get a grip on the numbers you need to make your business successful. A business plan will guide you through each stage of developing and managing your coffee shop, and will serve as a road map for how to run, structure, and grow your business.
Your business plan should include:
- A summary: What your business stands for, your mission and vision, and your business goals.
- A local market analysis: Who are your competitors? Who are your target customers?
- Financial projections: Cash flow, projected profit and loss, etc.
- Your team: What is your role in the business? Who do you need to hire?
- A marketing plan: How will you define your brand? How will you market your business?
There’s a lot to consider, but taking time to carefully plan for each aspect of your business will help set you up for success.
- Choose a location.
Location is crucial to the overall success of your business. Before making a decision, make sure to spend some time in the areas that you’re considering. Is there enough foot traffic in the area to sustain your coffee shop? How much parking space is available? Is the location visible enough? Are you near lots of other coffee shops? Also, if you’re going to be hands-on in running your coffee shop, pick an area you enjoy spending time in – after all, you’re going to be spending lots of time there.
- Find good, reliable suppliers.
Finding good, reliable suppliers is essential for your business success. Depending on the type of coffee shop you’re building, the major suppliers are usually coffee, milk, bread, and groceries. You’ll also need cups (porcelain and paper), syrups, coffee stirrers, napkins, teapots… the list goes on. Start by listing all of the supplies you need – be as detailed as you can. From there, you can start looking for suppliers until you find ones that match your business requirements and needs.
- Create a menu to complement your coffee shop.
Your menu is the core ‘ingredient’ of your business. So, make sure that your menu expresses your vision and the ‘theme’ of your coffee shop. Everything needs to be considered – from coffee and food options, to design, to product descriptions and images, and pricing. Think about a signature drink or dish and how that might shape the style of your menu. As much as possible, keep it simple – one of the most common mistakes coffee shop owners make is trying to please everyone. If you’ve got too many items on your menu, there may be items that are hardly ever ordered, so just focus on no more than 10-12 options that your customers will surely enjoy. Also, your menu has to be profitable – calculate the ingredient costs and margin of each item.
- Hire the right people.
You can’t run your coffee shop alone – you’ll need to hire a few people, such as baristas, bakers, and cashiers (to start with). Also, remember that hiring the right people doesn’t always mean choosing experienced staff. While hiring someone with experience is important, remember that skills can be learned but attitude… not so much. If you want to develop a great team culture, make sure to hire people who are the best fit for your business.
The Bottom Line
Starting a coffee shop sounds like a great idea, but it’s no small investment – it can cost anywhere from Php 6 to 12 million! Also, the cost varies depending on whether you want to franchise, buy an existing business, or if you’re building your own coffee shop from the ground-up. Aside from the financial aspect, there are also other things you need to consider to build a successful coffee shop. You need to choose the best location, find the right suppliers, build a delicious menu, and hire the right people – just to name a few. If you dream of starting your own coffee shop, consider these tips to better inform your coffee shop planning. Good luck!
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FREQUENTLY ASKED QUESTIONS
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