You’re looking to start your own specialty coffee business, but have decided that an independent roasting company is not quite your cup of , well, coffee. Another opportunity to consider is a coffee cart or kiosk. This type of coffee business, while a new trend in the early 2000’s, has now been established as a viable, even profitable option for a small businessperson. In this, our part 3 of a 3 part series on opening your own coffee business, we’ll look at coffee carts and kiosks as a business venture for the entrepreneur.
Cart or Kiosk?
The decision to place your investment and effort in a cart or kiosk will depend on several factors.
- The amount of capital you have to invest
- The location or locations you plan to do business in
- The availability of water and electricity
- The amount of space available
- The types of drinks and/or food you plan to sell
The overhead for running a cart or kiosk business is ½ to 1/10 the amount of a standard coffee shop with a daily take anywhere from $500 – $5000 per day depending on location and volume of business.
The Coffee Cart
The initial investment in a coffee cart is less than with a kiosk. A bare-bones cart can be found for around $5,000, and a fully-loaded cart can run from $13,000 – $20,000. The benefits of the cart are manifold.
The main selling points of the carts are flexibility and portability. As the man once said, “Location, location, location!” A coffee cart can thrive anywhere there is foot traffic. Hospital or hotel lobbies, train stations or airports, colleges and universities, office buildings or industrial parks, beaches and boardwalks, and special events such as concerts, festivals or wedding receptions. A motivated business person can be in an industrial park during the week and at a neighborhood soccer park on the weekends. The possibilities are truly endless.
You’ll need to choose a space where your cart can be accessible to electricity, and there are plenty of cart designs that don’t require hard-plumbed water. Size is a factor, as you need to be able to get your cart in and out of the space daily to be cleaned.This sometimes requires navigating elevators or narrow passageways. Make sure you investigate your locations before committing.
We recommend you negotiate a set monthly fee for lease or rent and not a percentage of your profits for the best business deal. Be wary of setting up shop in an area that depends solely on another business to draw customers to the location. If that business fails, you may too. Still, this is where mobility is in your favor, and you probably won’t have much down time before you can find another venue.
Coffee carts have to meet health and safety standards and are inspected regularly, so make sure you know what the requirements are in your city and state before going into business. Reliable equipment is also another key to success with a coffee cart. If you’re expecting to run 200-300 customers per day past your cart, you need to invest in quality equipment that can stand up to that level of use on a daily basis. There’s nothing worse than having a line of customers and no way to fill their orders. A back-up espresso machine is recommended.
The Coffee Kiosk
A kiosk is a more permanent structure than a coffee cart. You roll it in, set it up, attach the plumbing and electricity and you’re good to go. A kiosk gives you more counter and refrigeration space, allowing you to expand beyond the typical espresso bar model into additional menu items such as smoothies , pastries or sandwiches. A more varied menu gives you the opportunity to cater to non-coffee drinkers as well, thus increasing potential for profit..
Location is key with a kiosk as well. Shopping malls, hotel lobbies, hospital or school cafeterias, office buildings and other locations where foot traffic is high are tailor made for your kiosk business. Again we recommend you pay a set fee for space rental and avoid splitting profits with your landlord for the most favorable business arrangement.
Your initial investment is higher with a kiosk. You can expect to spend $15,000 – $80,000 , but you can do very well in the $35k-$45k range. Again, it’s important to remember that your overhead is still going to be approximately half of what it would be for a coffee shop. If you can get situated in a high foot traffic location, you can expect upwards to 300-400 customers per day bringing in anywhere from $1,000 to $5,000 daily. More, if you’re in a busy shopping mall during the Christmas season.
Coffee Kiosks are also subject to health and safety requirements and must be inspected regularly. Make sure you know what permits and inspections are necessary to get your business up and running. Each city and state has specific requirement, so do your homework before you get started.
As you can see, either one of these specialty coffee business options has the potential to be immensely profitable. With the right combination of location, quality product (i.e, a great cup of coffee), cleanliness and professionalism you can have a thriving and successful coffee cart or kiosk business.
Source material: The Tea and Coffee Trade Journal
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