How much capital is needed to open a coffee shop?

Are you passionate about coffee and want to run your own coffee shop? Are you wondering how much capital it takes to open a coffee shop? This article will give you an overview of the costs of opening a coffee shop, from the cost of opening yourself to the cost of franchising a coffee model. Let's find out together!

I. Determining the size and model of the coffee shop

Opening a coffee shop is one of the business forms chosen by many people because of the popularity and potential of the coffee market in Vietnam. However, to open a successful coffee shop, you need to clearly define coffee shop scale and model suitable to their location, target customers, capital and business strategy. This is the core factor to determine “How much capital is needed to open a coffee shop”. 

The size of the cafe can be divided into 3 types: small, medium and large. Small scale usually has an area of ​​less than 50m2, the number of customers is small, does not need a lot of staff and equipment. Medium scale has an area of ​​50-100m2, the average number of customers, needs a full staff and equipment. Large scale with an area of ​​over 100m2, a large number of customers, requires many professional staff and equipment.

The coffee shop model can be divided into 2 types: self-opened and franchised. Self-opening is about branding, designing, menus and managing your own cafe. Franchising is when you use the brand, design, menu and management support of a company or individual that already has a good reputation in the market. Each type of coffee shop size and model will have its own advantages and disadvantages, you need to consider carefully before deciding.

II. Cost of opening your own coffee shop

If you choose to open your own coffee shop, you will have to invest in the following expenses:

1. Cost of renting premises

The cost of renting space is the biggest expense when opening a coffee shop. This cost will depend on the location, area, contract and rental period of the premises.

According to the statistic CBRE's statistics are reported by Lao Dong newspaper, the cost of renting a small to medium space for a coffee shop in big cities such as Hanoi, Ho Chi Minh City ranges from 15-50 million VND/month. In other provinces, this cost may be lower from 5-15 million VND/month.

You should choose a site with a convenient location for business, near populated areas, students, offices or tourist attractions. You should also pay attention to other factors such as traffic, security, infrastructure and competition.

2. Cost of construction and design of the cafe

The cost of building and designing a cafe is the next expense you need to pay attention to. This cost will depend on the size, style, materials and durability of the cafe.

According to estimates, construction and design costs Small coffee shops range from 50-100 million VND, medium coffee shops from 100-200 million VND and large coffee shops from 200-500 million VND. You should choose a coffee shop design that is beautiful, unique, trendy and suitable for your brand, goals and audience. You should also choose durable, safe and energy-saving materials for your coffee shop.

3. Infrastructure investment capital

Infrastructure investment capital is the cost including equipment, tools, furniture and decoration for the cafe. This cost will depend on the quantity, quality and features of the equipment, tools, furniture and decorations.

According to estimates, the investment capital for facilities for Small coffee shops range from 50-100 million VND, medium coffee shops from 100-200 million VND and large coffee shops from 200-500 million VND.

You should choose appliances, tools, furniture and decorations that are highly functional, easy to use, maintain and replace. You should also choose equipment, tools, furniture and decor that have a color, shape and size that harmonizes with the coffee shop space.

4. Cost of buying tools and materials for making coffee

The cost of buying tools and materials for making coffee is an expense related to the production and sale of the coffee shop. This cost will depend on the type, quantity and price of the coffee tools and ingredients.

It is estimated that the cost of buying tools and materials for making coffee for Small coffee shops range from 10-20 million VND/month, medium coffee shops from 20-40 million VND/month and large coffee shops from 40-80 million VND/month.

You should choose coffee making tools and materials of good quality, safe for health and environmentally friendly. You should also choose coffee tools and ingredients that have an appealing taste, smell, and color to your customers.

5. Other expenses

Cost of maintaining the cafe: is the cost to pay for electricity, water, internet, taxes, insurance, etc. This cost will depend on the area and consumption of the cafe. According to estimates, the cost of maintaining the cafe from 5-10 million VND/month.

Employee cost: is the cost to pay employees working at the cafe. The number of employees will depend on the size and model of the cafe. According to statistics, The average salary for a coffee shop employee is from 3-5 million VND/month.

Marketing expense: is the cost to promote the brand and products of the cafe. You can use Marketing channels such as Facebook, Instagram, Zalo, website ... or organize promotions, discounts... This cost will depend on your Marketing strategy. According to estimates, Marketing costs from 2-5 million VND/month.

III. Cost of franchising the coffee model 

If you do not want to open your own coffee shop but want to follow a reputable brand and existing customers, you can choose a coffee model franchise. 

Coffee franchising is a form where the owner will cooperate with the franchisor to use that famous coffee brand for his shop. The owner needs to spend a certain fee for the franchisor to complete a coffee shop including decoration, signs, tables and chairs, bar, electricity, water, business products... according to the brand's standards. Brand is available. You will be supported with the design of the cafe, staff training, material supply… But you will also have to follow the regulations and standards of the brand.

On the market today, there are many different coffee model franchise brands with different prices and conditions. Some well-known brands include: Milano Coffee, Trung Nguyen Legend, Gemini Coffee, Ong Bau, Napoli Coffee, Aha Coffee, Effoc Coffee, etc. Depending on the brand, you will have to pay a franchise fee ranging from a few hundred million to several billion dong.

Among the coffee model franchises, Milano Coffee is a name that has received the attention of many people. Milano Coffee is a coffee brand established in 2011 in Vietnam. Milano Coffee There are many different business models, in which G1 is a basic coffee model with an area of ​​30 - 70m2 and is chosen by many partners. 

Investment cost for franchise model Milano G1 of Milano Coffee from 190 million VND including (construction, design, setup, installation, training, cost of equipment, materials, supplies, advertising...). Franchise cost for the first 2 years is 5.5 million. In the process of cooperation, in order for business partners to be autonomous, Milano Coffee No fees for % of sales, profits and in-store operations. At that time, the franchisee has easy access to the brand's business form, as well as more comfortable investment and operating costs. 

Opening a coffee shop is an attractive and potential form of business. However, to open a successful coffee shop, you need a detailed plan and a thorough assessment of the investment costs. Hopefully the above article can answer the question: "How much capital is needed to open a coffee shop". You can choose to open a coffee shop in the form of self-build or franchise. Each form has its own advantages and disadvantages, you should consider carefully before making a decision. If you are interested in the coffee franchise model, you can consult Milano Coffee – a quality and prestigious coffee brand in Vietnam.

• Consulting hotline: 1900.63.68.73

• Sign up for a consultation: https://milanocoffee.com.vn/lien-he

• Direct consultation: 590/2 Phan Van Tri, Ward 7, Go Vap, Ho Chi Minh City. 

• Dealer Points MILANO COFFEE: www.daily.commilanocoffee.com.vn