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Capital Required to Open a Coffee Shop and the Calculations

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Capital Required to Open a Coffee Shop

The capital for opening a coffee shop business varies depending on the concept of the coffee shop you want to open. If you have to rent a place and buy coffee equipment, the capital needed is Rp. Twenty million to more than Rp. 200 million.

What if the capital is limited? You can open a simple coffee shop business. Money for a simple coffee shop starts from IDR 5 million without including space rent and operational costs, such as employee salaries, electricity, etc.

For more details, you can read this article to the end. This article will fully review the needs for opening a coffee shop and the capital calculation. Come on, read.

Needs You Must Prepare to Open a Coffee Shop Business

1. Business Location

The first thing to note is the place and location of the business. Choosing the right site will determine how quickly your coffee shop grows.

If you choose a crowded area, such as near a shopping center, campus, or on the side of a major road, the coffee shop has the potential to be visited by more customers.

But even in quieter areas, it still has the potential to be profitable as long as you can promote it properly.

2. Place of Business

You can rent or buy a place of business, depending on your budget. If you choose to rent, you must prepare the money to pay a deposit and several months of rent at the start. Venue rental fees vary depending on location.

The more strategic the location of the business, the more expensive the rental fee will be. On the other hand, if you want a cheaper place to rent, you can open a coffee shop in a quieter place, for example, in a residential area, on the outskirts of town, or in an area still beautiful with views of the hills.

Meanwhile, if you want to immediately buy a place of business because you are sure that the location is potentially busy, you must prepare more cash or buy it on credit.

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3. Tools and Equipment Required

Before calculating business capital, you must know the equipment and supplies needed.
Because the name is a coffee shop, you need equipment related to making and serving coffee, such as coffee machines, coffee grinders, freezers, glasses, cups, spoons, and other eating/drinking utensils.

Meanwhile, the equipment you must also prepare includes tables, chairs, menu lists, cashier tables, cashier applications to speed up the transaction process, storefronts for displaying food, and so on.

Tools and Equipment Required

4. Raw Materials

Raw materials are also necessary for a coffee shop business. The raw materials you must prepare include selected and good-quality coffee beans, milk, syrup, cream, etc. You can buy this raw material in specialized stores or distributors of coffee beans.

5. Facilities and Operations

At the beginning of planning, you also have to think about what facilities must be available at the coffee shop to make customers feel at home; then what about the operations?

Some necessary facilities, such as air conditioning (AC), WiFi, parking lots, and even toilets, must be available. Meanwhile, things that need to be calculated for coffee shop operations include employee salaries, electricity and water costs, internet subscriptions, and others.

How much does it cost to open a coffee shop?

Capital is the money needed to buy equipment, rent a place, pay employees, etc., and is an important factor that must exist at starting a business. To open a simple coffee shop business, here’s an example of the calculation.

How much does it cost to open a coffee shop?

Fixed Fees

Fixed costs must be paid monthly, not depending on the number of products or services sold. Fixed costs for opening a coffee shop business, for example:

Rent of business premises: IDR 10,000,000 per year or IDR 833,333 per month.
Electricity, water, and gas: IDR 1,000,000 per month.
Internet and telephone: IDR 500,000 per month.
Other operational costs (employee salaries, taxes, insurance, etc.): IDR 4,000,000 monthly.

Total fixed costs IDR 6,333,333,-

Variable Cost

Variable costs depend on the amount of product or service sold. Variable costs for opening a coffee shop business, for example:

Raw materials: IDR 3,000,000 per month.
Packaging: IDR 500,000 per month.
Shipping costs: IDR 1,000,000 per month.

Total variable costs: IDR 4,500,000,-

Purchase of Equipment and Supplies

Business equipment includes freezers/refrigerators, glasses, spoons, cups, blenders, grinders, milk steamers, milk jugs, coffee machines, etc. Then business equipment, room decorations, tables, and chairs.

Because you are just starting a coffee shop business, you can choose equipment that is economical first, for example:

Coffee machine, grinder, etc.: IDR 10,000,000
Glasses, cups, scales, plates, etc.: IDR 3,000,000
Room decoration/renovation: IDR 10,000,000
Four sets of tables and chairs @Rp200.000: Rp800.000,-
Cleaning equipment and CCTV: IDR 500,000
Cashier table: IDR 200,000
Cashier application: FREE if you use the iReap POS cashier application.
Receipt/cash drawer printer: IDR 1,000,000
Permit IDR 1,000,000

Total Tools and Equipment: IDR 26,500,000,- (one time payment in advance).

Total Capital Required to Open a Coffee Shop Business

The total capital needed to open a coffee shop business is as follows:

Fixed costs: IDR 6,333,333 per month
Variable fee: IDR 4,500,000 per month.
Supplies and equipment costs: IDR 26,500,000

Total capital: IDR 10,833,333,- which must be provided every month + IDR 26,500,000- for one-time payment at the start of the business.

You need at least Rp—37,000,000 in capital from the calculation above before opening a coffee shop.

What if you have minimal capital but want to open a coffee-related business? Yes, you can open a coffee shop at home.

How much is a simple coffee shop business capital?

The capital for a simple coffee shop business is between IDR 5 million and IDR 10 million, as long as you don’t need to rent a place of business or decorate a room. Apart from that, use the equipment at home, take advantage of the space at home for a place of business, and buy a simple coffee machine and coffee mill first.

An example of calculating a simple coffee shop business capital, for example:

Four sets of tables and chairs @Rp200.000: Rp800.000,-
Coffee maker and raw materials: IDR 3,000,000
Receipt printer: IDR 500,000 (provided you use the free cashier application iReap, you don’t have to pay a lot for the cash register).
Electricity, water, internet: IDR 500,000
Others: IDR 200,000

The total capital for a coffee shop business opened at home is IDR 5,000,000

The capital calculation above is only an estimate and an example. If you diligently shop around and compare prices, you may get all the coffee shop equipment and supplies much cheaper. In principle, no matter how much capital you have, don’t get in the way of wanting to have your own business.

If you already know what is needed to open a coffee shop and the capital calculation, find out more about how to start a business by reading this article: 9 Quick Ways to Start a Coffee Shop Business.

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