How To Start a Coffee Shop (2025)

If you’re looking into how to start a coffee shop, Canada is a great place to do so. It ranks fifth in the world in terms of highest coffee market revenues, with recent Coffee Association of Canada data revealing nearly three in four Canadians drink coffee in an average day. That’s more than any other beverage, including water and tea. There is also an appetite for espresso-based drinks, with 30% of Canadians reporting they had one the previous day. 

To tap into the potential of the market, you probably know it takes more than great beans and a trendy location. You need a plan. But what’s involved in setting up your own coffee shop? From writing up a business plan and acquiring funding to buying equipment and building a customer base, here’s everything you need to know about how to start a coffee shop.

Choose a coffee shop concept

So you’re wondering how to start a coffee shop? It all begins with a concept, which is the foundation of your business: It defines your brand identity, menu, atmosphere and target audience. As you develop your coffee shop concept, consider the following:

• Your shop’s aesthetic (modern, rustic, minimalist)
• Specialty drinks you want to offer (artisan espresso, nitro cold brew and flavoured lattes)
• Food offerings you’d like to provide (pastries, light bites, vegan options)

Since your concept could make customers choose you over competitors, consider your local market. Conduct thorough market research to understand your target demographic, be it students, professionals or families, and evaluate what kind of foot traffic they can provide you in your chosen coffee shop location. 

You’ll also want to choose a coffee shop business model based on your goals for the business, your funding capabilities and personal preference. Here are some options for how to start a coffee shop:

• Franchise: If you don’t mind giving up some creative control to join an established brand like Starbucks or Second Cup in exchange for built-in name recognition and support, this might be the way to go. 
• Standalone business: For full creative freedom to create your own unique coffee shop experience, develop your own independent café.
• Mobile coffee cart/truck: Enjoy lower startup costs with the ability to easily locate near special events, offices or high-foot-traffic areas.
• Hybrid café: Combine coffee with a second and complimentary type of business such as a bookstore, art gallery or chocolate shop to attract a specific crowd.
• Specialty coffee roastery: Grab coffee enthusiasts with a laser focus on premium, small-batch beans.

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Create a coffee shop business plan

In order to be successful when you start a coffee shop, you need to write a business plan that lays out your business objectives and the strategies you will use to start your coffee shop business. Key sections of a business plan include:

• Executive summary. Your executive summary should provide a top-line synopsis of your business — location, size and company ownership — as well as your coffee shop’s objectives (or mission statement) and how you plan to meet them.
• Industry overview. The coffee market continuously evolves due to shifts in consumer trends, so it’s important to conduct some industry research to ensure you understand your local market, coffee industry growth as a whole, the demand for specialty coffee in your planned location and the habits of your target customer. Your industry overview should also provide an assessment of key competitors in your market and what market gaps your shop could fill or emerging trends in coffee that your shop could take advantage of.
• Market analysis. The coffee shop game is changing, and so are the food and retail spaces that house them. To succeed, you’ll need a sound understanding of your market. Your market analysis should describe your target market, highlight their buying patterns, identify key factors that encourage (or limit) coffee consumption and address any gaps in the industry that your coffee shop can capitalize on. Organizing this will give you strong objectives out of the gate and give you something to refer back to as your business grows. 
• Competitive analysis. Your competitive analysis should hone in on your local environment and highlight any current competitors, along with potential competitors who might enter the market. Determine your competitors’ strengths and weaknesses to uncover opportunities that give your coffee shop a competitive advantage.
• Product line. Your product line includes the coffee products you intend to sell when you open a coffee shop. Here you can take into account your plan to procure your coffee beans, the vendors you want to use for additional materials, and the specific drinks and snacks you’ll prioritize at your coffee house.
• Sales strategy. Use insights from your market and competitive analyses to outline a strategy to promote your coffee products and your business as a whole. This section of your business plan may include traditional sales techniques and marketing tactics. It’s important to identify which sales data to track in order to determine whether your business is growing. Then, focus on revenue forecasting from your sales. Most forecasting should be done three years out so you can get a clear picture of your break-even point and profit potential. This can help you budget effectively when you start your coffee shop.
• Management plan. Managing your coffee shop is key to growing your business, so take the time to create a management summary. Clearly explain who owns the business, and whether it’s a sole proprietorship, partnership or corporation. With a corporation, include the percentage of ownership held by each shareholder, and the type of shares they own. Add a layout of your management team, personnel responsibilities and employee costs, such as wages, payroll and training. 
• Financial considerations. Now is the time to think about how to manage cash flow when opening a coffee shop. You need to define your costs and how to finance your business in order to determine your average profits. A monthly or annual cash flow analysis can be extremely helpful with this part of the business plan. 

Obtain licences and permits for your coffee shop

After your coffee shop business plan is in order, it’s now time to consider the regulatory parameters you need to be aware of on the journey towards how to start a coffee shop. Regulatory requirements will vary depending on your municipality and province or territory. BizPal can help you research the exact permits and licences you need based on your industry and location, but here are compliance obligations you’ll typically need to meet: 

• Register your business provincially or federally if you decide to open a federal corporation, which lets you operate – and protects your name – across Canada. Your business structure informs that process, whether you go with a sole proprietorship, partnership or a provincial/federal corporation. Explore how to register a business in Ontario as an example. Once that’s done, you’ll also need to register for a business number (BN) with the CRA, which is required for payroll and GST/HST. 
• Register for a GST/HST account with the CRA if you expect your revenues to exceed $30,000 in a single quarter or over four consecutive quarters. Find out more about the thresholds on the CRA website. 
• Obtain a business licence from your city or municipality. 
• Obtain a food premises permit from your local public health unit, which involves steps like scheduling a pre-opening health inspection. 
• Get your Food Handler Certification. The rules vary depending on the province or territory, but you often need at least one staff member with a Food Handler Certificate working on the premises to stay compliant. Here are the requirements by province. 
• A patio licence if you’re going to offer outdoor seating. You’ll need to get your municipality’s permission and your layout will have to comply with certain rules if you’re setting up on a sidewalk, for example. You may also need additional liability insurance.  
• To install a sign on the outside of your coffee shop, you’ll need to consult your city or town’s by-laws and submit an application. In Toronto, for example, you’ll have to apply for a First Party sign permit, which means that the signage identifies a business located on the premises. In Quebec, you’ll have to abide by language laws. 

You should also consider insurance coverage to protect you from unforeseen accidents at your coffee shop. Here are a few types of insurance to look into:

• Commercial general liability (CGL) insurance will cover the costs of a claim or lawsuit if a customer is injured on your property, and also tends to include product liability coverage in the event a customer becomes ill due to consumption of your food or coffee. While it isn’t technically mandatory, most landlords require that you have it before signing a lease. 
• Commercial property insurance covers the costs of repairing or replacing your business property if it gets damaged or lost in the event of a fire, theft or vandalism. Coverage depends on your exact policy, but you can often include specialized coverage, such as insuring equipment like espresso machines or protecting your food inventory if a power outage causes spoilage.
• Workers’ compensation is mandatory when you have employees. It protects both your business and your employees in the event one of your staff gets hurt while working, covering both medical expenses and lost wages. You must register with your province or territory. Find the contact information of your provincial or territorial board/commission to learn more. 

Create a coffee shop menu

A well-crafted coffee shop menu balances variety and quality, ensuring your customers find their favourite drinks and snacks while discovering new options. Here are key categories to consider when designing your coffee shop menu.

Beverage selection

• Espresso drinks, such as classic lattes, cappuccinos and mochas, along with flavoured options (vanilla, caramel, hazelnut). Offer alternative milk choices (oat, almond, soy) for customization.
• Cold coffee, including cold brew, iced lattes and nitro coffee for a smooth, creamy texture. Offer seasonal iced specialties, like pumpkin spice or peppermint mocha, to boost sales.
• Decaf options, like decaf espresso or drip coffee, for those who prefer to avoid caffeine.
• Teas and specialty drinks like hot and iced teas (black, green, herbal) as well as non-coffee alternatives like matcha lattes, hot chocolate and chai.

Food selection

• Pastries, including fresh croissants, muffins, scones and cookies pair perfectly with coffee. Consider gluten-free or vegan options to cater to dietary preferences.
• Sandwiches and savoury items offer grab-and-go convenience for customers on their way to work or on a quick lunch break. Options you can offer include paninis, avocado toast or breakfast wraps.
• Yogurt and granola pots offer a healthy, easy-to-serve choice for those wanting a lighter snack.

Obtain funding for your coffee shop

One of the biggest things to consider when thinking about how to start a coffee shop is funding. The costs of opening a coffee shop can be a major barrier to entry for some aspiring owners. However, even if you don’t have funds of your own, you may be able to take advantage of a variety of business loans: 

• Bank loans are a traditional route, where you borrow money from a financial institution and pay it back over time with interest. 
• Square Loans offers another option outside a traditional bank, where you can obtain a loan based on the type, volume and frequency of payments you take with Square. Repayment is based on a fixed percentage of your daily sales, with no hidden fees and the ability to set up automatic payments deducted from your Square sales.
• A business line of credit offers a flexible financing option where you can borrow funds up to a predetermined limit, repay and reuse the credit as needed, typically with interest only on the amount you withdraw.
• Crowdfunding for your business allows you to raise capital by collecting small contributions from a large number of people, typically via online platforms.

How much does it cost to open a coffee shop?

Startup costs for a coffee shop can vary depending on your location, rent and the concept you choose. According to Businesses for Sale, it can cost between $150,000 and $200,000 to start a coffee shop in Canada. While coffee shops typically cost less to start than full-service restaurants, it’s important to budget for the costs associated with starting a coffee shop, such as equipment, permits, staffing and other expenses.

Here are some cost factors to consider when evaluating how to start a coffee shop:

• Coffee shop equipment: From espresso machines to condiment organizers, there are a lot of options to consider when it comes to coffee shop equipment. Beyond a reliable espresso machine, you’ll need things like drip coffee brewers, blenders, a reach-in freezer, an ice machine and a dishwasher. Purchasing equipment is an upfront investment, but it pays off in the long run, as being able to craft a variety of high-quality beverages is the bread and butter of your business.
• Location: The location of your coffee shop is crucial and depends on whether you plan to operate a coffee kiosk, coffee truck, coffee shop with seating or a drive-thru. Cost factors of location include the building deposit, monthly rent and utilities. Look for a location with high foot traffic, from densely populated neighbourhoods to commercial spaces near office buildings, university campuses and parks. Work with a commercial real estate agent to secure a good deal. In Canada, the landlord foots the bill for the agent’s commission, so it won’t cost you more but you’ll get expert advice while hunting for the perfect spot. 
• Utilities: Utility costs for a coffee shop are generally lower than those of full-service restaurants. Your expenses will depend on factors like the size of your space, how many espresso machines or refrigerators you run and your local electricity and water rates. 
• Interior design and furniture: The design of your coffee shop could be a significant expense without some advanced planning. Determine the kind of environment you want to cultivate before you start buying anything, and be strategic about where you spend money, prioritizing items like coffee mugs and seating, for example.  
• Marketing: Promoting your coffee shop costs money, too. You may want to invest in a soft opening that showcases your coffee and creates hype, or you may want to launch a social media campaign to reach new customers. The optimal coffee shop marketing plan includes  developing a clear brand identity, the production of branded merchandise as well as ongoing social media campaigns and paid ads. How much it costs depends on your target customers and how big you want to go when launching and promoting your brand. On average, Canadian small businesses spend $30,000 a year on marketing, but tools like Square Marketing, which starts at $20 a month, can help you significantly save on marketing costs by making it easy to grow your subscriber list and send email campaigns that get customers excited to visit your coffee shop.    
• Technology: Technology is a key investment for modern coffee shops. At a minimum, you’ll need a reliable POS system to process payments and track sales. Look for a coffee shop POS system like Square, which is designed with your needs in mind and comes with a suite of tools and integrations, from loyalty program software to online ordering tools.
• Staffing and management: You might think that paying baristas and servers at your coffee shop is simple, but there’s more that goes into the cost of labour. Aside from wages, you have to consider training costs, benefits, insurance and technology that can help you with things like employee management and shift scheduling. You should budget about 20–28% of total sales for paying your staff. 
• Permits and licences: To open a coffee shop, you may need a business licence, food service permit, public health unit approval and signage permit at a minimum. Be sure to research local requirements. 
• Ingredients: Since they operate with smaller menus, coffee shops tend to carry lower inventory costs than restaurants. You’ll need milk and milk alternatives, syrups and sweeteners and options like tea and hot chocolate for non-coffee drinkers. You could work with a local supplier to sell pre-made sandwiches and baked goods, or source the ingredients to make your own. But your biggest expense will be coffee beans. Between extreme weather affecting crops globally and tariffs, the price of coffee is on the rise. Building relationships with suppliers is your best bet to secure quality products and manage costs as market conditions fluctuate. 

Create a coffee shop pricing strategy

Choosing the right pricing strategy is crucial. Your pricing must attract customers while also ensuring profitability. A coffee shop pricing strategy is the approach you take to determine how much to charge for different beverages and products. 

There are different ways to calculate the sweet spot between covering your costs, boosting profits and meeting customer expectations, and the best one depends on your unique business and needs. Here are some of the most popular pricing strategies used by coffee shops to help you find the right one for you. 

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How to set a pricing strategy for a café

Once you understand your customer insights and data, you can determine the right pricing strategy for your coffee shop:

• Decide what you’ll offer on your menu, taking competitors, demographics and the value your café offers into account. 
• Calculate food costs. For each item you plan to offer, make a list of their ingredients and the prices of those ingredients. Figure out how much it costs to make each item on your menu by adding up the cost of the ingredients. 
• Understand that different menu items may require different cost approaches since pricing coffee drinks often differs from non-caffeinated beverages or food items.
• Consider your other café-related costs. These include all fixed and variable costs to determine your overheads, such as rent, utilities, payroll and marketing. To determine your break-even point, calculate how much revenue you need to generate each day, week or month to cover your expenses. This will tell you the minimum price you’ll need to set for each item on your menu. 

Popular pricing strategies used by Coffee Shops

Here are some common pricing methods:

• Food–cost percentage pricing calculates the price of your coffee based on the cost of the ingredients used to make it. Simply add up the cost of all the ingredients used to make a cup of coffee, then multiply it by your desired markup percentage.
• Markup (or factor) pricing involves adding a certain amount or percentage to the cost of your coffee. For example, if the cost of a cup of coffee is $1.00, and you want to have a 50% markup, the price would be $1.00 plus 50 cents, so $1.50.
• Cost plus pricing takes into account all the costs associated with running your coffee shop, including rent, utilities, labour costs and ingredients, and adds a certain percentage to cover these costs. It’s a simple way to determine a baseline for every item you sell, since you can apply this percentage markup to any beverage or snack. But it doesn’t take into account factors like how much a customer is willing to pay or how much your competition is charging, which can impact your ability to maximize profits. 
• Gross–profit–margin pricing involves setting your prices based on the gross profit margin you aim to achieve. You essentially divide the cost of the coffee (or other menu item) by one, minus the desired gross profit margin percentage. So, if selling a cup of coffee costs you $2 and you want a 50% gross profit margin, then you would divide the cost of the coffee by 1 and add 50%, for a sales price of $3.
• Dynamic pricing adapts your prices to the demand at different times. For example, you might  charge full price for specialty drinks like lattes during the morning rush, but implement a special price between 4 and 6 p.m. when the demand is lower to attract customers and encourage them to spend. 

Factors to consider

There are a few factors that you need to think about when it comes to determining your café pricing:

• Markups: Pricing markups can be quite modest in the coffee shop industry. Industry estimates say you typically need 25% to 30% to turn a profit. However, not all your products will have the same markup or margin percentage. It’s vital to price each product individually to ensure that you make a profit to grow your café.
• Customer demographics: Your pricing strategy should factor in customer demographics. Will you cater to office workers, or is your customer likely to be a college student? Different demographics will have different expectations and price sensitivities.
• Competitors’ strategies: Pay attention to your competitors’ pricing strategies. The key is to stay competitive without pricing yourself out of the market. Try using a competitor analysis tool to find the right balance.

Choose a coffee shop location

The location of your coffee shop can make or break your business, and there are specific factors that determine the best location for your coffee shop. Aside from costs, consider foot traffic, your target market and your competitors, and ask these questions:

• Who is your target customer and what are the demographics of the area?
• What kind of neighbouring businesses are around, including competitors and complementary businesses?
• How accessible is the location by car, public transit or foot, and what is the parking situation?
• What does the building infrastructure look like and does it support your needs?
• What are the terms of the lease?

Learn more about how to choose the best location for opening a coffee shop. 

Design a coffee shop layout

An efficient coffee shop layout benefits both customers and staff, ensuring smooth operations and a welcoming atmosphere. Elements like seating, equipment placement and workflow design all play key roles. A well-thought-out layout starts with understanding the basics of creating a coffee shop floor plan, then adapting it to your shop’s unique concept and customer needs.

Front of house layout

The front of house (FOH) shapes the customer experience, so it should balance comfort and functionality: 

• Offer varied seating, such as cozy sofas for relaxed guests and tables for remote workers or groups to cater to different preferences. 
• Make sure your colours, lighting and décor align with your brand and target demographic. A modern minimalist look may appeal to young professionals, while warm, rustic tones could attract a more casual crowd. 
• Keep pathways clear to avoid congestion, especially near the counter where lines form.

Back of house layout

The back of house (BOH) must maximize efficiency, especially during peak hours when space is tight: 

• Organize workstations logically. Place the espresso machine near grinders and milk fridges to streamline drink preparation, for example. 
• Use technology, like POS systems and kitchen display screens, to speed up orders and reduce errors. 
• Store frequently used items, like mugs, syrups and pastries, within easy reach. 
• Ensure there’s enough room for staff to move safely. 

Order equipment for your coffee shop

Stocking your coffee shop with the right equipment is key to running smoothly from day one. While every shop is different, most will need a mix of brewing tools, storage solutions and front of house essentials. A well-prepared equipment list ensures your team can work efficiently and deliver the best customer experience. 

Here are some critical pieces of equipment you’ll require:

Coffee and beverage equipment

Your espresso machine is the backbone of your business, so pick a reliable one. You’ll also need grinders, automatic coffee brewers to make large batches of drip coffee and pour-over brewers for customers looking for a richer cup. A hot water dispenser is a must for tea, and you’ll want a blender for frozen drinks. You’ll also need energy-efficient refrigerators and freezers to stock milk, cream and other perishables. Espresso machines produce steam, so you might want to invest in a proper ventilation system to keep baristas and customers comfortable. 

Barista tools

Equip your baristas with the tools they need to expertly craft personalized drinks, from espresso tampers to portion scales, frothing pitchers and thermometers. Accessories like measuring cups and spoons and syrup pumps keep workflows efficient. 

Coffee shop accessories

Glassware like coffee mugs, tea cups and espresso cups are part of your brand. Pick some that match your café’s aesthetic and make customers want to post photos on social media. You’ll also need things like milk or cream jugs and sugar pourers. Don’t forget accessories like serving trays and display cases if you sell treats. 

Coffee shop ingredients

From espresso to single-origin, and from light to dark roasts and decaf, you’ll need a wide variety of coffee beans. Add high-quality tea bags or loose-leaf teas, and maybe even matcha — Canadian sellers using Square have seen a 114% year-over-year increase in the number of matcha orders, according to Square’s Spring Restaurant Report. Offering hot chocolate as a coffee alternative is also a good idea. Don’t forget staples like milk and milk alternatives like almond, oat and coconut milk, as well as flavoured syrups and other sweeteners.  

Disposables

An independent coffee shop can go through hundreds of to-go cups of coffee a day. You’ll need plenty of disposable cups for hot and cold drinks, but you can also offer small incentives to customers who bring reusable ones to support sustainability. You’ll also need cup lids, sleeves and carriers, straws and to-go packaging for food items.

Choose a Coffee Shop POS

The right coffee shop POS software provides numerous benefits to your café. By streamlining your sales process and providing customer insights, a full-solution POS system helps increase revenue. Plus, with integrated loyalty programs, discounts and marketing promotions, you can encourage customers to return and become regular members of your coffee shop community. 

Operational efficiency is another significant benefit of the right POS software solution. You can manage your inventory, track sales and generate business reporting all in one place. Storing all your data in one POS solution can reduce errors, automate processes and increase overall operational efficiency.

When looking for the best POS system for your coffee shop, there are several factors to consider.

Coffee Shop POS must-haves

• Hardware features and integration capabilities: Ensuring integration between any current software or hardware is essential, so choose hardware that is reliable and simple to integrate with your other business needs. Square point of sale software offers a range of compatible hardware, such as Square Register, Square Stand, Square Handheld and Square Terminal. You’ll also want to ensure that software integrations make the POS easy to use with platforms and systems you may already have in place. This will give you a central hub to manage your business from, whether you’re tracking real-time inventory, looking at sales data to make decisions or filing tax returns. Not only will you save time, but you’ll also have the right foundation to scale without friction. 
• User-friendly features for baristas: To create a smooth experience for your customers, your staff will need to use the POS system successfully. Pay attention to how user-friendly the software and hardware are. Is the checkout functionality easy for your staff to use? Can you train your staff quickly on how to edit your item library or how to operate the POS during rush hour or when customers place complex orders? This can save you and your employees time during training and increase productivity.
• Streamlined operations: Efficient operations and inventory management are crucial to the success of your coffee shop. Features such as advanced analytics and insights, stock alerts and downloadable sales reports help create an efficient sales system with the necessary data to see which products are your biggest sellers. If you have back of house food or kitchen production, a kitchen display system helps streamline ordering, reduce errors in the kitchen and improve overall back-of-house efficiency. 
• Customer loyalty and rewards: Loyalty programs are an excellent way to create repeat customers and increase sales. Look for a POS system that can support a loyalty program, such as Square Loyalty, and can sell and accept gift cards or discounts.
• Effective staff management: A POS system that includes time tracking for employee shifts is essential for effective employee management. Automating repetitive tasks saves time and helps you track employee hours, create schedules and prep payroll.
• Effective inventory management: This allows you to track products sold and materials used. Look for software that lets you set stock alerts when inventory gets low as a way to manage your inventory effectively.
• Aesthetically pleasing and simple design: Coffee shops tend to be quaint or modern, with the counter being the customer’s focus. Cords and bulky systems can turn off customers, so look for a compact POS system that blends in with your decor.

Payment features to look for

Guests expect a swift, personal experience when they walk through your doors. Long lines due to an inefficient payment system can taint a customer’s perception and result in the loss of business. Investing in a reliable POS to process payments is a big part of how to run a coffee shop efficiently.

Your point-of-sale system should be integrated with a payments processor, and you should make sure that it can take any form of payment — magnetic stripe, EMV or mobile payments, such as Apple Pay.

To ensure that your coffee POS software improves the payment processes in your coffee shop, look for:

• Payment simplicity. Find a system that accepts various types of payment methods, such as contactless, credit cards and online ordering or order-ahead features. Ensure that the payment processor is secure, reliable and offers reasonable transaction fees. Remember that payment processing fees can add up quickly, so consider any fees or costs associated with the POS system. These include monthly fees, card processing fees and any transaction fees. While some fees may be inevitable, choose a system that provides the right value for the cost.
• A built-in tipping system that’s easy for customers to use. With tipping built into your POS, customers are presented with a screen that suggests a tip amount, which allows them to add a tip with just one tap.
• Data capabilities to collect insight on what’s being sold. With data analytics integrated into your POS, you can see which menu items are popular and gain sales insights that help you improve your business strategy. Learn more ways analytics can help you grow your business.

Hire baristas for your coffee shop

Building a skilled and reliable team is essential for your coffee shop’s success. Experienced baristas bring speed, consistency and expertise, but these qualities come with higher wages. Junior baristas, on the other hand, can be trained to match your shop’s standards and culture, often at a lower cost. A mix of both ensures efficiency and allows for mentorship within your team.

When hiring, prioritize passion for coffee, customer service skills,and adaptability. Don’t forget to follow proper hiring practices, including clear job descriptions and compliance with labour laws, to build a strong foundation for your business.

For example, Alberta employers have to pay most employees overtime pay when working more than eight hours in a day or 44 hours in a week. In British Columbia, there are rules to protect workers under 16 — youth workers aged 14 and 15 are able to do work defined as ‘light work’ with permission from a parent or guardian. And Ontario labour laws include several provisions around scheduling, such as the ‘three-hour rule’ for on-call employees, which requires employers to pay workers a minimum of three hours of work if they’re called in.

For more guidance, explore our resources on hiring employees effectively.

Advertise your coffee shop

To attract customers and build buzz, leverage social media platforms like Instagram and Facebook to highlight your specialty drinks, promotions and behind-the-scenes moments. Engaging visuals and local hashtags can boost visibility. Create and optimize your Google Business Profile to appear in local searches, display key details (hours, location and contact information) and encourage customer reviews.

For a strategic, long-term approach, develop a coffee shop marketing plan to align promotions, events and digital outreach with your business goals. Consistent branding and community engagement will help your shop stand out.

Host a coffee shop soft opening

A soft opening is a great way to test operations, drive anticipation and build excitement before your official launch. Invite local businesses, influencers and non-competing owners to experience your shop, offering exclusive discounts or free samples to encourage engagement.

This low-pressure event allows you to refine service, gather feedback and create word-of-mouth marketing. Promote it on social media and through community connections to maximize reach, setting the stage for a successful grand opening.

Reach your customers

The feeling of opening a coffee shop is truly rewarding. But now the daily grind begins. When you’re figuring out how to start a coffee shop, you might prioritize managing employees and optimizing the ordering process. But one of your most important day-to-day jobs is to make sure that customers come through your doors again, and again and again — and that they don’t go to your competitor down the street. So developing a customer retention strategy is crucial.

To stay connected with your customers and develop a relationship with them, you should invest in a customer engagement tool — or customer relationship manager (CRM) — that allows you to reach your customers and understand their behaviours. CRM software for your coffee shop might include:

• An email marketing tool that allows you to send campaigns to keep your customers informed about what’s happening in your shop, whether it’s a promotion or an event. Sending personalized messages to loyal customers, such as birthday emails or holiday notes, actually generates higher engagement and greater redemption rates on average than one-off email campaigns.
• A customer loyalty program that incentivizes customers to spend and gain repeat business. Eighty-three percent of restaurant leaders with a loyalty program said it’s successful in driving increased order size and 81% of Canadian consumers are likely to engage with one, according to the 2025 Square Future of Restaurants report.
• Feedback software that is integrated into your POS allows customers to tell you about their experience at your shop. Feedback software provides one-on-one communication with your customer, so you can get a direct response about a particular service. You can use positive feedback to motivate employees and constructive criticism to tweak business processes.

After you’ve developed a business plan, identified costs and a location, and are getting your coffee shop up and running, the next step is to make sure you’re getting the most out of your business. Learn more about the tips and tricks for strategically running a successful business.

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How to start a coffee shop FAQs

How much does it cost to start a coffee shop in Canada?

The cost to open a coffee shop in Canada typically ranges from $150,000 to $200,000, according to Businesses for Sale. It all depends on size, location and equipment. A small kiosk may cost less, while a full-service café with seating and high-end espresso machines requires a larger investment.

What do I need to buy to start a coffee shop? 

To start a coffee shop, you’ll need to invest in coffee and beverage equipment like espresso machines, coffee grinders and coffee brewers, as well as anything you need to make specialty drinks like pour-over coffee or cold brew. Keep in mind that espresso machines need to be cleaned and maintained regularly and require special cleaning solutions and accessories. 

You’ll have to equip baristas with tools like portion scales and syrup pumps, and you’ll also need kitchen and storage essentials like refrigerators, freezers and shelving. To-go essentials such as disposable cups, lids, sleeves, straws and stirrers are key. 

Finally, don’t forget to get a reliable coffee shop POS system that creates a smooth checkout experience for customers and streamlined operations for your team. 

How much do coffee shop owners make? 

Many independent coffee shops see net margins of 15 to 25%, according to TFI. Profitability depends on factors like foot traffic, pricing, operational efficiency and local competition.

Are coffee shops profitable? 

Yes, a successful coffee shop can be profitable, but the margins can be thin. According to Statistics Canada, limited-service eating places like coffee shops had an operating margin of 3.1% in 2023. Profitability depends on factors like foot traffic, pricing, operational efficiency and local competition.