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How Much Does It Cost to Start a Coffee Business in the Philippines?

Updated: Feb 10


What is it like to break free from the 9-5 grind? Well, here’s the thing: you can’t really know for sure if you don’t try. But here’s the other thing: it’s one thing to say it, and another thing to do it.


In short, it’s hard. Especially when we’re talking business, when there’s a lot of money involved. Sadly, not everyone can just whip out a wad of cash and get into business. For many of us, money is most definitely an object.You know that you want to do it, but you don’t know how, or if you even can do it.


On this post, we’re looking at a real-life cost breakdown of starting a coffee business in the Philippines to help you get started with your own.


3 Ways to Start a Coffee Business in the Philippines


If you want to start your coffee shop in the Philippines, you have at least three ways to go about it.


First, you can franchise. There’s a whole breadth of established coffee brands should your heart desire to franchise. Popular brands such as Starbucks, The Coffee Bean & Tea Leaf, Tim Hortons’, UCC, and the like are all open for franchising. Many first-time entrepreneurs are encouraged to franchise because deployment is typically easy and low-stress. Plus, the business model is already established. However, the cost is anywhere from 6 to 12 million pesos, a sizable investment that has no guarantees ROI-wise. More importantly, there’s little flexibility on the concept and innovation.


Second, and perhaps the least popular in our list, is buying an existing coffee shop. You’d be surprised that there are entrepreneurs who actually buy established and well-performing coffee shops. Who can blame them? It’s the safer, much easier route. There are a handful of great reasons why you’d want to do this, chief among them is the opportunity to deliver specialty and good-quality coffee. However, it’s hard to find a very profitable business that is out for sale. What’s more, you’ll be bound to the existing branding, vision, and design and remodeling it will likely come out to be even more expensive than simply starting your own.


Finally, there’s the option of building a coffee brand from the ground-up. This offers aspiring café-preneurs to build something truly their own—from branding, culture, business model, food menu, and everything else.  Starting your own coffee shop gives you free hand and flexibility on business model, brand, design, language, and more. Because there’s no pre-existing branding to deal with, you’re free to be original, market on a specific concept, and place good focus on delivering great coffee. Of course, it’s worth noting that all these will be time-consuming and difficult to execute, especially for entrepreneurs without much experience in the food and beverage experience.


On this post, we’ll be using the third option as example. How much money is required for you to build a coffee shop in the Philippines?


Cost Breakdown: Starting a Coffee Business in the Philippines


Let’s get one thing straight: creating your own coffee shop will set you back money-wise. Be prepared to shell out a considerable sum. Without any further ado, here’s our rough cost breakdown of how much it costs to start a coffee business in the Philippines.


Small Cafe with No Kitchen


Specifications

Location - central business district

Food - reheating only

Staff* - 4

Floor Area - 30 sq m

Seats - 9

*variable depending on cafe hours


CapEx

Business Permit - PhP 50,000

Fit Out - PhP 450,000

Equipment - PhP 450,000


OpEx

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


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

ROI - 10 months


Medium-sized Cafe with Small Kitchen


Specifications

Location - central business district

Food - small kitchen

Staff* - 10

Floor Area - 50 sq m

Seats - 18

*variable depending on cafe hours


CapEx

Business Permit - PhP 50,000

Fit Out - PhP 750,000

Equipment - PhP 750,000


OpEx

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


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

ROI - 9 months


Large Cafe with Full Kitchen


Specifications

Location - central business district

Food - full kitchen

Staff* - 12

Floor Area - 150 sq m

Seats - 60

*variable depending on cafe hours


CapEx

Business Permit - PhP 50,000

Fit Out - PhP 2,250,000

Equipment - PhP 2,250,000


OpEx

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


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

ROI - 8 months


The above numbers can feel overwhelming and discouraging, largely because it came from a bigger-scale original coffee brand breakdown. If you wish to build a smaller coffee business, you may do so, and it will cost you far less.


Still, a few million pesosare nothing to scoff at. For many of us, that amount can already make up for one entire lifetime savings.  There are several ways to come up with that initial cost. Your options are not limited to applying for a business loan. You can partner up with another entrepreneur or pitch to an investor to get financial backing. You can obviously finance the whole thing right out of your pocket.


Bottomline: It’s your dream coffee shop. Surely, you’ll find a way.


Of course, there’s always the option to apply for a business loan in the bank.


Over to You—Ready to Start Your Coffee Shop?


Now that you know how much starting a coffee business in the Philippines costs, are you ready to start your coffee shop?


When you are, we urge you to take a free 30-minute consultation with one of our coffee business experts. In the call, you’ll get access to high-level insights on building a business in the coffee industry.  Book a session with us HERE and let's get to work.


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