A coffee cart business is a type of mobile coffee service that operates from a cart or a small mobile unit. It involves serving coffee and other related beverages, such as tea and hot chocolate, to customers in various locations.
Coffee carts are commonly found in busy areas like city streets, parks, office complexes, college campuses, and event venues. The coffee cart itself is a compact and portable setup that includes all the necessary equipment and supplies for preparing and serving coffee.
It usually consists of an espresso machine, coffee grinder, hot water dispenser, milk frother, storage compartments for coffee beans and other ingredients, as well as an area for cups, lids, and condiments. Coffee cart businesses offer a convenient and on-the-go option for people to satisfy their coffee cravings without having to visit a traditional café or coffee shop.
They often provide a range of coffee options, including espresso-based drinks like lattes, cappuccinos, and Americanos, as well as brewed coffee and specialty beverages.
The coffee cart business belongs to the mobile food and beverage industry and available data shows that the 2022 market size is predicted to be around $205.8 billion dollars, growing steadily at 3.5 percent for the next 5 years. By 2027, the market is projected to reach $244.40 billion dollars.
Steps on How to Start a Coffee Cart Business
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Conduct Market Research
To conduct market research for a coffee cart business, first define the target market, then study consumer demands and preferences, then analyze the competition, and last evaluate market trends and prospects.
To get insights into customer behavior and market demand, it is important to collect data from multiple sources, such as surveys, interviews, internet reviews, and industry reports. To design a good business plan, the study should concentrate on elements such as pricing, location, recipe, services, and marketing tactics.
a. Who is the Target Market for Coffee Cart Business?
The target market for a coffee cart business can vary depending on the location, positioning, and unique offerings of the business. Here are some common target markets for coffee cart businesses:
- Commuters and Professionals
- Students
- Event Attendees
- Health-conscious Consumers
- Tourists and Visitors
- Employees of Business Parks and Industrial Areas.
b. Is Coffee Cart Business a Profitable Business?
Yes, the coffee cart business is a profitable business. Available data shows that the 2022 market size for coffee is predicted to be around $205.8 billion dollars, growing steadily at 3.5 percent for the next 5 years. By 2027, the market is projected to reach $244.40 billion dollars.
c. Are There Existing Niches in the Industry?
No, there are no existing niches when it comes to the coffee cart business because the coffee cart business is a niche idea in the mobile food services or mobile food and beverage industry.
d. Who are the Major Competitors?
- Stumptown Coffee Roasters
- Blue Bottle Coffee
- La Colombe Coffee Roasters
- Intelligentsia Coffee
- Philz Coffee
- Four Barrel Coffee
- Sightglass Coffee
- Equator Coffees
- Ritual Coffee Roasters
- Counter Culture Coffee
- Madcap Coffee Company
- Colectivo Coffee
- Boxcar Coffee Roasters
- Joe Coffee Company
- Cartel Coffee Lab
- Olympia Coffee Roasting Co.
- Verve Coffee Roasters
- Handsome Coffee Roasters
- Revelator Coffee Company
- Ceremony Coffee Roasters.
e. Are There County or State Regulations or Zoning Laws for Coffee Cart Businesses?
Yes, there are county and state regulations and zoning laws that apply to coffee cart businesses in the United States. The specific requirements and regulations can vary depending on the location of the business and the governing jurisdiction.
In general, coffee cart businesses are subject to health and safety regulations that require them to obtain a permit or license from the local health department. These regulations may cover areas such as food handling, sanitation, and equipment safety.
Zoning laws may also apply to coffee cart businesses, especially if they operate in public spaces such as parks or sidewalks.
Some cities may require vendors to obtain a permit or license to operate in these areas and may limit the number of vendors in a given location. Additionally, vendors may be required to comply with noise ordinances or other regulations that affect their operations.
f. Is There a Franchise for Coffee Cart Business?
Yes, there are franchise opportunities for the coffee cart business and some of them are;
- The Coffee Bean & Tea Leaf
- Dunkin’ Donuts
- Biggby Coffee
- Scooter’s Coffee
- Maui Wowi Hawaiian Coffees & Smoothies
- Ziggi’s Coffee
- Dunn Brothers Coffee
- Bad Ass Coffee
- Woody’s Mobile Coffee Cart
g. What Do You Need to Start a Coffee Cart Business?
- A Feasibility Report
- Business and Marketing Plans
- Business Licenses and Permits
- Restaurant Facility
- Insurance
- EIN (Employer Identification Number)/Federal Tax ID Number.
- A Corporate Bank Account
- Employees
- Commercial Kitchen
- Ingredients and Serving Materials
- Carts
- Finance
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Choose a Memorable Business Name
When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable. Some of the catchy business name ideas suitable for a coffee cart business are;
Creative Coffee Cart Business Name ideas
- Fresh Cup® Coffee Cart, LLC
- Er Malone® Coffee Company, LLC
- We Move™ Coffee Cart, Inc.
- Richard Edison© Coffee Cart, Inc.
- Camel Back® Coffee Cart, LLC
- Theo Leonard® Coffee Cart, Inc.
- Frank Morgan® Coffee Cart, Inc.
- Andrew Norman® Mobile Coffee Company
- Grace and Mercy® Coffee Cart, Inc.
- Zoe Adolphus® Mobile Coffee Company
- Golden Cup™ Coffee Cart, LLC
- Donald Diezel® Coffee Cart, Inc.
- Go Round® Coffee Cart, Inc.
- Street Grind® Coffee Cart, LLC
- Abel Brothers® Coffee Cart, Inc.
- Carson Brownsville® Coffee Cart, Inc.
- Round Rock© Mobile Coffee, LLC
- McKinney Brothers® Coffee Cart, Inc.
- John Frisco® Coffee Cart, Inc.
- Mercy Lubbock® Mobile Coffee Company.
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Register Your Business
a. What Type of Business Structure is Best for Coffee Cart Business?
The best business structure for a coffee cart business depends on several factors, such as the size of the business, the number of owners, the level of personal liability the owners are willing to take on, and the tax implications of the different business structures. However, we usually recommend a limited liability company.
An LLC is a hybrid business structure that offers the flexibility of a partnership while providing limited liability protection for its owners. An LLC can have one or more owners, and the owners are not personally liable for the business’s debts or liabilities. This type of business structure is often used for small to medium-sized businesses.
b. Steps to Form an LLC
- Choose a Name for Your LLC.
- File Articles of Organization.
- Choose a registered agent.
- Decide on member vs. manager management.
- Create an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports.
c. What Type of License is Needed to Open a Coffee Cart Business?
- General Business License
- Zonal Permits
- Signage Permit
- Proof of ownership, proper identification, and vehicle license
- Proof of district-issued food manager identification card
- Food purchase record storage and record keeping
- Depot, commissary, or service support facility meets vending unit operation needs
- Copy of license for the service support facility and/or a recent inspection report.
d. What Type of Certification is Needed to Start a Coffee Cart Business?
You don’t need any certifications to start a coffee cart business.
e. What Documents are Needed to Open a Coffee Cart Business?
- Business License
- Food service permit
- Health Department inspection certificate
- Insurance
- Vendor permit
- Sales tax permit
- Business plan
f. Do You Need a Trademark, Copyright, or Patent?
Whether a coffee cart business needs a trademark, copyright, or patent depends on the specific circumstances of the business.
A trademark protects a business’s brand name, logo, and other identifying features. If a coffee cart business has a distinctive name, logo, or other branding elements, it may benefit from registering a trademark with the United States Patent and Trademark Office (USPTO) to protect its brand identity.
A coffee cart business may create original content, such as recipes or marketing materials, that could be protected by copyright. However, it is important to note that copyright protection does not extend to the underlying recipe or method of making coffee carts.
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Cost Analysis and Budgeting
a. How Much Does It Cost to Start a Coffee Cart Business?
The estimated cost to start a coffee cart business can range from $5,000 to $20,000 or more, depending on the location and other factors. It is important to carefully research the costs and create a realistic budget before starting the business to ensure that you have adequate funding to get started.
b. What are the Costs Involved in Starting a Coffee Cart Business?
- Business registration fee: $750
- Cart or trailer: $2,000 – $10,000
- Equipment (grill, cooler, utensils, etc.): $1,000 – $3,000
- Initial inventory (coffees, milk, sugar, cups, stirrers, etc.): $200 – $3,000
- Permits and licenses: $500 – $2,000
- Insurance: $500 -$1,000
- Marketing and branding (logo design, website, social media): $500-$2,000.
c. What Factors Determine the Cost of Opening a Coffee Cart Business?
- The location of the business
- The cost of the cart, cooler, utensils, and other equipment and the quality, brand, and size of the equipment.
- The cost of initial inventory, including coffees, milk, sugar, cups, stirrers, and other supplies
- The cost of obtaining permits and licenses required to operate the business
- The cost of insurance and amount of coverage needed.
- The cost of marketing and branding efforts, such as logo design, website development, and social media marketing
- The cost of labor.
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
No, you do not need to build a facility for a coffee cart business. A coffee cart business is typically a mobile food service operation that can be operated from a cart or trailer. The cart or trailer is equipped with the necessary equipment and supplies to prepare and sell coffee.
Coffee cart businesses are designed to be highly portable, which means that they can be moved to different locations to serve customers, they do not require a permanent facility or building.
e. What are the Ongoing Expenses of a Coffee Cart Business?
- Food and beverage supplies such as coffee, milk, sugar, cups, stirrers, and packaging materials.
- Gas
- Utility bills (internet subscriptions, phone bills, signage, and software renewal fees et al)
- Salaries of employees
- Cart maintenance
- Insurance
- Marketing costs
f. What is the Average Salary of your Staff?
- Chief Operating Officer (Owner) – $58,000 Per Year
- Manager – $40,000 Per Year
- Baristas – $36,500 Per Year
- Attendants – $35,100 Per Year
- Cleaners -$28,000 Per Year
g. How Do You Get Funding to Start a Coffee Cart Business?
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank/banks
- Pitching your business idea and applying for business grants and seed funding from the government, donor organizations, and angel investors
- Source for soft loans from your family members and friends.
a. Executive Summary
John Frisco® Coffee Cart, LLC is a new coffee cart business based in New York City, New York that aims to provide delicious and affordable coffees to customers in the local area. The business will operate from a mobile cart that will be situated at high-traffic locations around the city, including popular tourist destinations, parks, and event venues.
We are committed to using only the finest coffee beans sourced from reputable suppliers. Our skilled baristas are trained to prepare coffee beverages with precision and consistency, ensuring that every cup delivers an exceptional taste experience.
We prioritize quality in every aspect of our business, from ingredients to equipment and customer service. We believe in fostering strong relationships with our customers. We aim to create a welcoming and friendly atmosphere, providing personalized service and engaging with our patrons.
By understanding their preferences and needs, we can tailor our offerings and create a loyal customer base. Our commitment to sustainability is reflected in our practices and choices. We prioritize eco-friendly packaging and strive to reduce waste through recycling and composting initiatives.
b. Products and Service
- Coffee
- Baking pastries, cookies, and cakes such as sandwiches, quiches, pizzas, toast, muffins, et al.
c. Mission Statement
At John Frisco® Coffee Cart, LLC, our mission is to provide an exceptional coffee experience on the go. We are dedicated to delivering high-quality, handcrafted coffee beverages to our customers while fostering a welcoming and engaging atmosphere.
Through our mobile coffee cart business, we aim to fuel their day and enhance their moments with our passion for coffee, excellence in service, and commitment to sustainability.
Vision Statement
Our vision is to be the preferred choice for mobile coffee services. We strive to create a community of coffee lovers who appreciate the art of a perfectly brewed cup, and who value the connection and joy that coffee brings. By continuously innovating and expanding our reach, we envision John Frisco® Coffee Cart, LLC as a trusted brand that redefines the coffee cart experience and positively impacts the communities we serve.
d. Goals and Objectives
The goals and objectives of a coffee cart business are to offer a convenient and on-the-go coffee experience, catering to the busy lifestyles of commuters, professionals, students, and event attendees.
e. Organizational Structure
- Chief Operating Officer (Owner)
- Manager
- Baristas
- Attendants
- Cleaners
Marketing Plan
a. SWOT Analysis
Strength:
- Low startup costs compared to opening a brick-and-mortar coffee shop.
- High mobility and flexibility, allow the business to move to locations with high customer traffic.
- Ability to serve customers quickly and efficiently, leading to high customer satisfaction.
- Easy to manage and operate with a small team.
- Ability to quickly adjust the menu and prices based on customer preferences.
Weakness:
- Limited menu options compared to a full-service coffee shop, which may result in lower repeat customers.
- Weather-dependent business, with sales potentially affected by rain or extreme temperatures.
- Limited capacity for coffee preparation and storage on the cart, which may limit the menu options and sales volume.
- Heavy competition from other food vendors, including other coffee carts and food trucks.
Opportunities:
- Ability to expand the business by securing regular locations at popular events, festivals, and fairs.
- Potential to collaborate with other food vendors or event organizers to increase exposure and sales.
- Opportunity to introduce new menu items and specialty coffees to attract new customers.
- Possibility to partner with local businesses or organizations to provide catering services.
Threat:
- Changes in health and safety regulations, which may require expensive upgrades to the cart and equipment.
- Fluctuations in coffee and ingredient costs, which may affect profit margins.
- Competition from nearby coffee shops and food vendors, including those offering similar menu items.
- Economic downturns or shifts in consumer behavior that may result in lower sales.
b. How Do Coffee Cart Businesses Make Money?
Coffee cart businesses make money by selling coffee and baking pastries, cookies, and cakes.
c. Payment Options
- Credit or Debit Card
- Cash
- Electronic Payment Systems such as PayPal or Venmo
- Checks
- Bank Transfers.
d. Sales & Advertising Strategies
- Utilize the coffee cart as a mobile billboard to advertise the business. Park the carts in high-traffic areas, such as busy streets, parks, and outdoor events, to maximize visibility and attract customers.
- Use social media platforms, such as Instagram, Facebook, and Twitter, to promote the business, engage with customers, and showcase new menu items and promotions.
- Collaborate with local businesses, such as facility managers, and concert venues, to offer coffee as a complimentary beverage option. This will increase brand exposure and generate additional revenue.
- Offer catering services for private events, such as weddings, corporate events, and birthday parties. This will increase brand exposure and generate additional revenue streams.
- Set up an online ordering system and delivery services to reach a wider customer base. Partner with food delivery apps, such as Grubhub and Uber Eats, to increase brand visibility and attract new customers.
- Implement a loyalty program to incentivize repeat customers and generate customer loyalty. Offer discounts, free coffee, or exclusive promotions to reward frequent customers.
- Collect customer email addresses and send out regular newsletters and promotions to keep customers engaged and informed about new menu items and special deals.
- Set up a referral program to incentivize customers to refer friends and family to the business.
- Offer discounts or free coffees to customers who refer new business.
Financial Projection
a. How Much Should You Charge for Your Product/Service?
On average, a basic cup of brewed coffee typically ranges from $1.50 to $3.50. However, it is important to note that the prices can be higher for specialty coffee drinks such as lattes, cappuccinos, or espresso-based beverages, which often involve additional ingredients and more intricate preparation. These specialty drinks can range from $3.50 to $6 or more, depending on the size, complexity, and location.
b. How Much Profit Do Coffee Cart Business Owners Make a Year?
According to industry estimates, a small to medium-sized coffee cart business can generate a profit margin of around 20-30% on average, which can translate to anywhere from $50,000 to $150,000 or more in net profit per year, depending on the volume of sales and expenses.
However, it is important to keep in mind that profitability can also be affected by factors such as seasonality, market demand, and business growth strategies.
c. What Factors Determine the Amount of Profit to Be Made?
- The capacity of the coffee cart business
- The location of the coffee cart business
- The management style of the coffee cart business
- The business approach of the coffee cart business
- The advertising and marketing strategies adopted by the coffee cart business.
- The number of years the coffee cart business is in business
d. What is the Profit Margin of a Coffee Cart Business?
A small to medium-sized coffee cart business can expect to have a profit margin of around 20-30% on average. This means that for every dollar in revenue generated, the business can expect to earn 20-30 cents in profit.
e. What is the Sales Forecast?
Below is the sales forecast for a Coffee Cart business. It is based on the location of the business and other factors as it relates to such startups in the United States;
- First Fiscal Year: $260,000
- Second Fiscal Year: $320,000
- Third Fiscal Year: $480,000
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Set Up your Shop/Office
a. How Do You Choose a Perfect Location for Coffee Cart Business?
- The demography of the location
- The demand for coffee in the location
- The purchasing power of businesses and residents of the location
- Accessibility of the location
- The number of coffee cart businesses, and coffee shops or retail outlets that serve coffee in the location
- The local laws and regulations in the community/state
- Traffic, parking, and security et al
b. What State and City are Best to Open a Coffee Cart Business?
- New York City, New York
- Las Vegas, Nevada
- Los Angeles, California
- Silver Spring, Maryland
- Rowland Heights, California
- Portland, Oregon
- Chicago, Illinois
- Boston, Massachusetts
- Atlanta, Georgia
- Dallas, Texas
c. What Equipment is Needed to Operate a Coffee Cart Business?
- Coffee Grinder
- Espresso Machine
- Hot Water Dispenser
- Milk Frother
- Coffee Brewer
- Refrigeration Unit
- Cash Register or Point of Sale (POS) System
- Display Cases and Storage
- Utensils and Serving Tools (coffee cups, lids, sleeves, stirrers, napkins, and any additional utensils or tools required for serving and preparing beverages).
- Water Filtration System
- Cleaning supplies such as brushes, towels, detergents, and sanitizers.
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Hire Employees
Whether or not to hire employees for a new coffee cart business depends on various factors such as the scale of the business, the owner’s skills and availability, and the level of demand.
If the business is small-scale and the owner has the necessary skills and time to manage all aspects of the business, it may not be necessary to hire employees. However, as the business grows and demand increases, it may become difficult for the owner to manage everything alone.
In such cases, it can be beneficial to hire employees to help with tasks such as coffee preparation, cleaning, customer service, and administrative tasks. Hiring employees can also help to increase productivity, improve customer service, and allow for the business to scale up and meet demand.
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Launch the Business Proper
Organizing a launch party when opening a coffee cart business can be a great way to generate buzz and excitement around the new business. A launch party can help to attract potential customers, create a positive first impression, and build brand awareness in and around the location.
a. What Makes a Coffee Cart Business Successful?
- Choose a good location, and a good menu to launch the business
- Hire only competent, hardworking, and trustworthy staff
- Throw an open house grand party before officially opening the coffee cart business
- Be deliberate with your marketing sales approach
- Encourage the use of word of mouth to promote your coffee cart business
- Leverage all available online and offline platforms to promote your coffee cart business
b. What Happens During a Typical Day at a Coffee Cart Business?
- The business is open for the day’s work
- The coffee carts and equipment are cleaned and ready for business
- Coffee beans and other snacks are prepared
- The cart moves from one location to another
- Customer requests are taken, and they are attended to
- Marketing/website upkeep
- Supply ordering
- Administrative duties
- The carts are returned to base and the business is closed for the day.
c. What Skills and Experience Do You Need to Build a Coffee Cart Business?
- Good coffee-making skills
- Customer services skills
- Interpersonal skill
- Good Accounting and bookkeeping skills
- Business management skills
- Work experience in the mobile food services or mobile food and beverage industry
- Experience in managing people
- Experience in business administration
- Experience in handling relevant software.