When you pass by a busy coffee shop, you probably see a calm and relaxing environment with customers enjoying their coffee and snacks. But you never really know what’s going on behind the scenes! Every business has secrets only the insiders know. So if you're looking to start your own coffee business, one question you might have on your mind is, “how much does a coffee shop make?”
In 2021, there are about 24,000 coffee shops creating $12 billion in annual sales in the United States. And the number of Americans drinking coffee daily just keeps growing. According to the National Coffee Association (yes, there IS an association for everything!), in 2020 62% of adults in the United States drink coffee every day. Based on this documented American obsession with coffee, it seems you can make quite a bit of income from a coffee shop. To find out how much coffee shop owners make, we’ll start with three questions.
Question #1: How’s the traffic to the nearest coffee shop?
Of course, the first step in your research should be asking how’s the traffic to the nearest coffee shop at peak times. The typical busy coffee shop will consistently see quite a bit of foot traffic throughout the week. But they tend to make the most money between Mondays and Thursdays.
Question #2: How much does a coffee shop make?
Coffee shops process an average of 87 transactions on Fridays making the end of the workweek the busiest time for sales. Customers are more willing to spend on Sundays, though, with an average purchase of $12.68 per person.
A 2018 study by Reuters tells us that the average coffee shop makes $879 over 79 transactions. Of course, that amount depends on a number of factors.
For clarity, there's a huge difference between the average café revenue and how much profit you walk away with. Revenue is the total income from the business. Profit is the revenue minus expenses. So while you might be generating quite a bit of money right away, because of start-up expenses you may not see a profit for several months.
A delay in profit is expected in every business and shouldn’t discourage you if a coffee shop is your dream business. You can’t be passive, though. As a business owner, you have to be constantly on the lookout for ways to increase profit.
Question #3: How do you increase business profit?
When you start your business, you may want to spend as little as possible so you can increase your profit. But starving your business isn’t the answer! We have seven suggestions for how you can increase the average café revenue for your coffee shop.
Boost #1: Your investment in the coffee shop
You shouldn’t be wasteful, but you do need to invest generously in your coffee business. Your goal is to present an excellent experience to every customer. A reputation for high quality products and services means an increase in the number of customers. In turn, you’ll see a higher income for your business.
Think about your customer for a second. They walk into your coffee to order an espresso, but your espresso machine is super slow. They spend more time than they usually would wait, and now they’re annoyed. That customer’s review could end up driving traffic to the nearest coffee shop. They probably won’t refer more people or even stop by as frequently because, let’s face it, who wants to spend extra minutes waiting for their espresso? So, even with the greater start-up expense, the coffee shop that invests in equipment will end up with more profits.
Boost #2: A busy location in a good area
When considering the location of your coffee shop, you must put an emphasis on location. You probably wouldn’t want to open a café shop at a location where there’s lax security, low population, little available parking and no accessibility.
How many customers does a coffee shop have per day? Estimating this value can be difficult. But with location visibility, high pedestrian traffic and plenty of available parking, you’re likely to have a solid number of customers per day.
Boost #3: High-quality food and beverages
Let’s be honest, if your coffee is trash, you won’t have many customers no matter how fancy your coffee shop is. You can’t serve poor—or even regular—quality coffee and expect to thrive. For customers to choose you over the competition, your coffee has to be the crème de la crème (no pun intended). The significance of serving high-quality food and beverages is that even if your product is more expensive, your customers know they’re getting the best.
Boost # 4: Excellent customer service
If your baristas are curt or rude, you won’t be in the coffee shop business for too long. Never overlook the importance of good customer service. Your business’ customer service quality can either make or break your business regardless of how popular or how much effort you’ve put into the business.
Boost #5: Generous open and close times
When do people drink the most coffee? Coffee statistics in 2021 show that many people drink their coffee with breakfast, others between meals and few at other times of the day. So basically Americans drink coffee all day long! Your coffee shop has to open early to meet the morning demand and stay open late to serve the night owls. If you open too late, close too early or have irregular hours, you’ll be missing out on an easy way to grow your profits.
Boost #6: Marketing services
Spread the word. Create a website. Use social media to your advantage. Encourage customers to leave online reviews. Offer loyalty cards. Increasing repeat customers, encouraging referrals and generating new business is the goal of a solid marketing plan. With that in mind, do keep an eye on your analytics and monthly return on investment, but there’s almost no bad ideas in marketing!
Boost #7: A welcoming ambience
The most successful coffee shops have a cozy and relaxing atmosphere where customers socialize with old friends, make new acquaintances, focus on work, plan out their day or just scroll Instagram for a few hours. An ideal coffee shop setting is always clean, allows for natural lighting, offers comfortable furniture and displays welcoming decor.
In the end, there isn’t just one answer to how much does a coffee shop make. The average café revenue for a busy coffee shop depends on many different factors that you’ll need to manage.