How much does it take to start a cafe?

How much capital does it take to start a small cafe?

• Answer:

  Just going off what I spent on the smaller cafes that I built in Australia, I would say that you would need about AUD$50,000 to cover a basic 35 square meters (380 square feet) do-it-yourself espresso bar without a huge investment in a kitchen and this doesn't include the money that you will need to cover the losses that the cafe will make until it breaks-even. One like this ... I know it may sound like a lot of capital for just a small cafe but there are many hidden and intangible costs that are associated with starting a cafe business that aren't always obvious to the newbie. Now, not all of the following capital expenditure items (CAPEX) will be applicable, but this list gives you an idea of the number of areas that you may need to fund to get the business open.But remember that you will need more capital that what is required to get you open. As mentioned previously, you will also need 'working capital' to fund the inevitable losses that the cafe will make until it breaks-even. Allow for at least 3-6 months of losses ... and that's a good cafe.CAPEX ChecklistReal Estate Construction of premises Remodelling premise’s layout Decorating premises Architectural fees Plant & Equipment Computer Equipment Machinery Vehicles Furniture & fittings Installation of equipment Location/Administration Lease deposits Rent in advance Licenses & Permits Deposit (electricity,gas,water) Business structure costs Legal fees - lease and business agreements Accounting fees Prepaid Insurance Pre-opening staff training Intellectual Property Business Name registration Logo design Trademark fees Patent attorney costs Research & Development Market Research Customer development Prototype development Materials & publications Business planning Opening Inventory Merchandise Packaging supplies Office/cleaning supplies Marketing Opening advertising Printing & Stationary Web Development Signage Pre-opening travel expenses Entertainment expense Other (optional) Project management/Consultants Contingencies Owners drawings during planning/fittout