How to start your coffee cart (and some important questions to ask yourself).
So you’re trying to start your own coffee cart or you are in the early stages of already starting to open one?
Just to preface, I also just started but I have learned so much from this journey that I would love to share my own experience to help others with the struggles that I went and currently face when becoming a food industry entrepreneur.
Here was my first mistake, I might have jumped too quickly. I say this as I never went to school regarding how to operate or start a business to begin with and there are some key things one must do before they start sinking money into something that could cost them an arm and a leg. You should do some market research and find out who your target audience is for the specific product you would like to sell, in this case, it is coffee. Do a quick search query on how many shops are in your area or how many coffee catering companies operate near you. Is there some serious competition?
That can play a major role in how successful you are in this particular venture. Another important question to ask is what is your unique selling proposition? In essence, what makes your product special and why would someone want to buy your product, coffee is everywhere so what will you do to make yours sell above the rest? I did this by blending in my cultural background and infusing my coffee concoctions with Chinese-specific flavors, that through my research, had not been done in my area.
Another item to consider is your budget, what can you afford to invest in your own business? Can you shoulder the expensive costs of equipment, supplies, and ingredients? Calculate and forecast how much earning potential you may have by coming up with a mock write-up of a menu and pricing of the items you want to sell. For this, I will start with a hypothetical scenario as if you are already operating:
1 coffee per 2 minutes = 30 coffees per hour
Open 5 hrs per pop-up
You have pop-ups 2 days per week
Max Capacity Daily Calculation = 30 coffees x 5 hours =150 coffees daily x 2 days = 300 coffees per week
Daily Calculation for Year 1
Average drink cost: $6.50 x 150 people served = $975
Weekly Calculation = $975 daily sales x 2 days =$1950 x 52 weeks =$101,400 annual sales then divide by 12 months to get your initial monthly sales projection based on the assumptions above.
Monthly Projection = $101,400 annual /12 months= $8450 per month
Remember these are just assumptions that you ACTUALLY sell 1 drink every 2 minutes but in reality that doesn’t happen. Just take note that you can change these if you feel that you can be more or less conservative. This will give you a good basis to see what your earning potential could be and what it can’t be because if you are not booking 2 events per week or not selling 300 coffees a week then your numbers will severely underperform from what was forecasted.
This is also just the tip of the iceberg and underneath it also lie subjects regarding LLC paperwork if that is the route you want to go, license fees to operate in the specific state of residence, and the most dreaded topic of all: public health permits.
In another post I will delve a bit deeper into those 3 items to further prepare you for potentially opening your very own coffee cart!
