How much do I need to open a Coffee Shop in the Philippines?

Business
Photo by Jazmin Quaynor on Unsplash
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Photo by Jazmin Quaynor on Unsplash

How does it feel to be free of the 9-5 workday grind? If you don’t try, you’ll never know for sure. 

It’s Hard. Yes, It’s hard! Especially when we’re talking about business and a large sum of money is at stake. Unfortunately, not everyone can just pull out a stack of cash and start a business. Money is unquestionably an object for many of us. You know you want to accomplish it, but you’re not sure how or even whether you can. We’ll look at a real-life cost breakdown of starting a coffee shop in the Philippines to assist you to start on your own.

Photo by Tyler Nix on Unsplash

If you wish to open a coffee shop in the Philippines, there are at least three options.

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1. Franchise

If you want to franchise, there are a variety of well-known coffee companies to choose from.

For example:

  • The Coffee Bean & Tea Leaf
  • Bo’s Coffee
  • Tim Hortons
  • UCC
  • Figaro Coffee

Because franchise deployment is often simple and low-stress, many first-time entrepreneurs are urged to franchise. Furthermore, the business strategy is already in place. However, the price ranges from 6 to 12 million pesos, a significant expenditure with no guarantee of a positive return on investment. More crucially, the concept and innovation have minimal adaptability.

2. Purchasing a Coffee Shop that Already Exists

You’d be shocked to know that there are businessmen who buy existing and profitable coffee shops. It’s the safer and less difficult option. There are several compelling reasons to do so, the most compelling of which being the opportunity to supply speciality and high-quality coffee. But, it’s difficult to discover a highly profitable business for sale. Furthermore, you’ll be tied by the existing branding, vision, and design, and remodeling will almost certainly cost more than starting your own.

3. Building Your Own Brand

Future café owners will be able to create something completely unique, including branding, atmosphere, business model, food menu, and everything else. Starting your own coffee shop allows you complete control over the business model, brand, design, and culture, among other things. You can be innovative, market on a specific concept, and focus on delivering outstanding coffee because there is no pre-existing branding to deal with. Of course, all of these will take time and effort to implement, especially for businessmen with little or no experience in the food and beverage industry.

How much capital do you need to open a coffee shop in the Philippines?

Breakdown of costs:

Let’s be clear about one thing: opening your own coffee shop will cost you money. Be prepared to spend a significant amount of money. Without further hesitation, here’s a general estimate of how much it costs to open a coffee shop in the Philippines.

Small Cafe with No Kitchen

  1. Specifications
    • Location – central business district
    • Food – reheating only
    • Staff* – 4
    • Floor Area – 30 sq m
    • Seats – 9
      • *variable depending on cafe hours
  2. Capital Expenditure
    • Business Permit – PhP 50,000
    • Fit Out – PhP 450,000
    • Equipment – PhP 450,000
  3. Operating expense
    • Rent* – PhP 45,000
    • Monthly Staff Cost** – PhP 77,500
    • Marketing Spend – PhP 10,000
    • Utilities – PhP 10,500
    • Supplies – PhP 101,250
      • assumed PhP 1,500 per sq m
      • remuneration may vary
  4. Revenue
    • Monthly Revenue* – PhP 337,500
      • *assumptions
        • 90 cups per day
        • PhP 150 average spend with food
        • PhP 13,500 daily revenue

Net Income Before Taxes – PhP 93,250

Return on investment (ROI) – 10 months

Medium-sized Cafe with Small Kitchen

  1. Specifications
    • Location – central business district
    • Food – small kitchen
    • Staff* – 10
    • Floor Area – 50 sq m
    • Seats – 18
      • *variable depending on cafe hours
  2. Capital Expenditure
    • Business Permit – PhP 50,000
    • Fit Out – PhP 750,000
    • Equipment – PhP 750,000
  3. Operating expense
    • Rent* – PhP 75,000
    • Monthly Staff Cost** – PhP 182,500
    • Marketing Spend – PhP 20,000
    • Utilities – PhP 17,500
    • Supplies – PhP 198,450
      • assumed PhP 1,500 per sq m
      • remuneration may vary
  4. Revenue
    • Monthly Revenue* – PhP 661,500
      • *assumptions
        • 126 cups per day
        • PhP 210 average spend with food
        • PhP 26,460 daily revenue

Net Income Before Taxes – PhP 168,050

Return on investment (ROI) – 9 months

Large Cafe with Full Kitchen

  1. Specifications
    • Location – central business district
    • Food – full kitchen
    • Staff* – 12
    • Floor Area – 150 sq m
    • Seats – 60
      • *variable depending on cafe hours
  2. Capital Expenditure
    • Business Permit – PhP 50,000
    • Fit Out – PhP 2,250,000
    • Equipment – PhP 2,250,000
  3. Operating expense
    • Rent* – PhP 225,000
    • Monthly Staff Cost** – PhP 217,500
    • Marketing Spend – PhP 30,000
    • Utilities – PhP 52,500
    • Supplies – PhP 472,500
      • assumed PhP 1,500 per sq m
      • remuneration may vary
  4. Revenue
    • Monthly Revenue* – PhP 1,575,000
      • *assumptions
        • 210 cups per day
        • PhP 300 average spend with food
        • PhP 63,000 daily revenue

Net Income Before Taxes – PhP 577,500

Return on investment (ROI) – 8 months

The above figures can be overwhelming and discouraging, owing to their origins in a larger-scale original coffee brand breakdown. If you want to start a smaller coffee shop, you can do so for a lot less money. Still, a few million pesos is not insignificant. For many of us, that sum is already enough to cover our entire lifetime savings. There are several methods for determining the initial cost. You are not restricted to applying for a business loan. To obtain financial backing, you can form a partnership with another businessman or pitch to an investor. You can obviously fund the entire thing out of your own pocket.

It’s the café of your dreams. You’ll undoubtedly find a way.

Of course, applying for a business loan at a bank is always a possibility.

Ready to Start Your Coffee Shop?

Are you ready to open your coffee shop now that you know how much it takes to establish a coffee business in the Philippines?

Disclaimer

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