{"id":5287,"date":"2024-09-16T15:19:02","date_gmt":"2024-09-16T20:19:02","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/starting-a-business\/how-to-open-a-coffee-shop.html"},"modified":"2025-06-24T12:54:00","modified_gmt":"2025-06-24T17:54:00","slug":"how-to-open-a-coffee-shop","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/how-to-open-a-coffee-shop.html","title":{"rendered":"How To Open a Coffee Shop"},"content":{"rendered":"\n<section data-testid=\"fl-simple-hero\"  class=\"fl-simple-hero\">\n    <div class=\"fl-simple-hero-container fl-container fl-flex fl-items-center\">\n                <div class=\"fl-simple-hero-title\" data-testid=\"fl-simple-hero-title\">How To Open a Coffee Shop<\/div>\n            <\/div>\n<\/section>\n    <div class=\"fl-container\">\n        <div class=\"updated-breadcrumb-list\">\n            <ol>\n                        <li>\n                <a href=\"https:\/\/www.findlaw.com\">FindLaw <\/a>\n                <span class=\"breadcrumb-separator\" aria-hidden=\"true\">\/<\/span>\n            <\/li>\n                                <li aria-current=\"page\">How To Open a Coffee Shop<\/li>\n            <\/ol>\n\n        <\/div>\n    <\/div>\n\n\n\n<div class=\"fl-sectionWithSidebar fl-container fl-flex fl-flex-wrap fl-gap30  wp-container-core-columns-is-layout-9d6595d7 fl-sectionWithSidebar fl-container fl-flex fl-flex-wrap fl-gap30\">\n<div class=\"fl-section-main fl-page-articles fl-section-main fl-section-main-full-width\"><h1 class=\"fl-no-margin-top\">How To Open a Coffee Shop<\/h1>\n\n\n<figure class=\"wp-block-image fl-no-margin\"><img decoding=\"async\" src=\"https://www.findlaw.com/static/c/images\/image\/upload\/ability-law\/wp-prod\/content-original-images-GettyImages-473909144.jpg\" alt=\"Barista making a drink at a coffee shop\"\/><\/figure>\n\n\n<section class=\"fl-gutenberg-byline\">\n    <div class=\"fl-gutenberg-byline-content\">\n                    By <a href=\"https:\/\/www.findlaw.com\/company\/our-team\/natalie-moritz\/\">Natalie Moritz<\/a> | Legally reviewed by <a\n                href=\"https:\/\/www.findlaw.com\/company\/our-team\/amber-sheppard-esq\/\">Amber Sheppard, Esq.<\/a>\n                | Last updated\n        <time>\n                            June 24, 2025\n                    <\/time>\n    <\/div>\n\n            <div class=\"fl-gutenberg-byline-editorial-note fl-text-sm\">\n            <p>Editorial Note: We earn a commission from affiliate partner links on FindLaw. Commissions do not affect the editorial integrity of our legal content.<\/p>\n\n        <\/div>\n    \n    <details class=\"fl-gutenberg-byline-toggle fl-gutenberg-byline-legally-reviewed\">\n        <summary>\n            <i class=\"fl-gutenberg-byline-icon\" aria-hidden=\"true\"><\/i>\n            Legally Reviewed\n        <\/summary>\n\n        <div class=\"fl-gutenberg-byline-toggle-content\">\n            <p><em>This article has been written and reviewed for legal accuracy, clarity, and style by <a href=\"https:\/\/www.findlaw.com\/company\/our-team.html\">FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with <a href=\"https:\/\/www.findlaw.com\/company\/company-history\/editorial-policy.html\">our editorial standards<\/a>.<\/em><\/p>\n\n        <\/div>\n    <\/details>\n\n    <details class=\"fl-gutenberg-byline-toggle fl-gutenberg-byline-fast-checked\">\n        <summary>\n            <i class=\"fl-gutenberg-byline-icon\" aria-hidden=\"true\"><\/i>\n            Fact-Checked\n        <\/summary>\n\n        <div class=\"fl-gutenberg-byline-toggle-content\">\n            <p><em>The last updated date refers to the last time this article was reviewed by FindLaw or one of our <a href=\"https:\/\/www.findlaw.com\/company\/our-team\/contributing-authors.html\">contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please <a href=\"https:\/\/lawyers.findlaw.com\/?fli=bylinelink\" target=\"_blank\" rel=\"noopener\">contact an attorney in your area<\/a>.<\/em><\/p>\n\n        <\/div>\n    <\/details>\n<\/section>\n\n\n<div class=\"fl-key-takeaways fl-mb30\" data-testid=\"fl-key-takeaways\">\n    <div class=\"fl-card-content\">\n        <div class=\"fl-card-body fl-card-bg-teal fl-flex fl-flex-column\">\n                            <h2 class=\"fl-card-title fl-h2 fl-no-margin\">Key Takeaways<\/h2>\n                        <p>There are several steps to opening a <span data-action=\"click-&gt;dropdown#toggle\" data-dropdown-menu-id-param=\"menu_report_term_26208852\" data-dropdown-placement-param=\"top\" data-dropdown-disable-toggle-aria-param=\"true\" data-term-id=\"26208852\">coffee shop<\/span>, such as determining the <span data-action=\"click-&gt;dropdown#toggle\" data-dropdown-menu-id-param=\"menu_report_term_26208869\" data-dropdown-placement-param=\"top\" data-dropdown-disable-toggle-aria-param=\"true\" data-term-id=\"26208869\">type of business<\/span> and corporate structure you want, developing a <span data-action=\"click-&gt;dropdown#toggle\" data-dropdown-menu-id-param=\"menu_report_term_26208853\" data-dropdown-placement-param=\"top\" data-dropdown-disable-toggle-aria-param=\"true\" data-term-id=\"26208853\">business plan<\/span> and <span data-action=\"click-&gt;dropdown#toggle\" data-dropdown-menu-id-param=\"menu_report_term_26208886\" data-dropdown-placement-param=\"top\" data-dropdown-disable-toggle-aria-param=\"true\" data-term-id=\"26208886\">marketing strategy<\/span>, and getting the necessary <span data-action=\"click-&gt;dropdown#toggle\" data-dropdown-menu-id-param=\"menu_report_term_26208880\" data-dropdown-placement-param=\"top\" data-dropdown-disable-toggle-aria-param=\"true\" data-term-id=\"26208880\">business licenses<\/span> and permits.<\/p>\n\n        <\/div>\n    <\/div>\n<\/div>\n\n\n<p><b><i>Form your LLC with confidence.\u202f<a rel=\"sponsored noopener\" href=\"https:\/\/legalzoomcominc.pxf.io\/c\/4851649\/2115288\/26746?subId1=how-to-open-a-coffee-shop-and-stay-in-business-in-content\" target=\"_blank\">Our trusted partner LegalZoom has packages starting at $0 + filing fees.<\/a><\/i><\/b><\/p>\n\n\n<div class=\"tableOfContent\">\n    <div class=\"table-of-contents\">\n        <span role=\"heading\" aria-level=\"2\" class=\"table-of-contents__title\">Steps To Open a Coffee Shop<\/span>\n                <ul class=\"table-of-contents__list\">\n                        <li><a href=\"#Write\" title=\"1. Write a Coffee Shop Business Plan\">1. Write a Coffee Shop Business Plan<\/a><\/li>\n                        <li><a href=\"#Choose\" title=\"2. Choose Your Name and Business Structure\">2. Choose Your Name and Business Structure<\/a><\/li>\n                        <li><a href=\"#Set\" title=\"3. Set Up Bookkeeping, Payroll, and Taxation\">3. Set Up Bookkeeping, Payroll, and Taxation<\/a><\/li>\n                        <li><a href=\"#Obtain\" title=\"4. Obtain Business Licenses and Permits\">4. Obtain Business Licenses and Permits<\/a><\/li>\n                        <li><a href=\"#Hire\" title=\"5. Hire Baristas\">5. Hire Baristas<\/a><\/li>\n                        <li><a href=\"#Insurance\" title=\"6. Get Business Insurance\">6. Get Business Insurance<\/a><\/li>\n                        <li><a href=\"#Find\" title=\"7. Find Sources and Suppliers\">7. Find Sources and Suppliers<\/a><\/li>\n                    <\/ul>\n            <\/div>\n<\/div>\n\n\n<p>Running a successful coffee business is more than knowing how to brew a good cup of coffee or make a pumpkin spice latte. Follow FindLaw&#8217;s step-by-step guide to opening a coffee shop, including business formation, licensing, and legal considerations.<\/p>\n<p>Extensive planning goes into\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/first-steps.html\">creating a successful business<\/a>, with many business and legal decisions along the way.<\/p>\n<p>If you&#8217;re considering opening a coffee business, you already have many potential customers. That&#8217;s because\u00a0<a href=\"https:\/\/www.ncausa.org\/Newsroom\/More-Americans-Drink-Coffee-Each-Day-Than-Any-Other-Beverage-Bottled-Water-Back-in-Second-Place\" target=\"_blank\" rel=\"noopener\">66% of American adults drink coffee every day<\/a>.<\/p>\n<h2>Three Ways to Launch a Coffee Shop Business<\/h2>\n<p>There are three different ways to get into the retail coffee industry:<\/p>\n<ul>\n<li>Owning an independent coffee shop that you start from scratch<\/li>\n<li>Franchising a national brand<\/li>\n<li>Renting, buying, or taking over an already-existing coffee shop<\/li>\n<\/ul>\n<p>Each one of those\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness.html\">business models<\/a>\u00a0has different organizational and legal requirements.<\/p>\n<p>They also have much in common, including business licensing, food and beverage laws, local ordinances, and more. Several factors should influence your decision, including your business idea, risk appetite, funding, and marketing expertise.<\/p>\n<p>Each option has pros and cons. But your choice to open an independent shop, purchase a franchise, or buy an existing coffee shop should be the backbone of your\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/what-is-a-business-plan-.html\">business plan<\/a>.<\/p>\n<h2>Kinds of Coffee Shops<\/h2>\n<p>Decide what type of coffee shop you want to open. Here are a few types:<\/p>\n<p><b>Coffee Cart, Coffee Kiosk, or Coffee Truck<\/b>:\u00a0These are the easiest and least expensive coffee shops to open. Mobile coffee shops usually focus on a few types of coffee and packaged pastries. They can be successful in locations with heavy foot traffic, like train stations, festivals, farmers markets, and fairs.<\/p>\n<p><b>Roaster or Retailer<\/b>:\u00a0Roasters can set up a physical shop open to the public, sell beans to other coffee shops, sell to distributors, or sell directly to retail establishments like grocery stores. Commercial coffee roasting machines can be expensive. They also require space to roast, store, package, and ship the green and roasted beans.<\/p>\n<p><b>Drive-Thru Coffee Shop<\/b>:\u00a0These can be small, one-person shops in a parking lot or other high-traffic areas. They can be independent shops or franchises. These have lower upfront and operating costs because they don&#8217;t require as much physical space or staff.<\/p>\n<p><b>Retail Coffee Shop<\/b>: These often sell coffee-related items, which boosts their profits. Storefronts like these sell mugs, roasted coffee, grinders, coffee makers, and other coffee accessories and food items. These can work well inside a coffee shop. Because these don&#8217;t provide food service, they don&#8217;t need to meet legal requirements for serving prepared food or beverages.<\/p>\n<p><b>Coffee Pop-Up Shop<\/b>:\u00a0These are businesses that can \u201cpop up&#8221; anywhere for a limited time. They are often found at events, in vacant retail storefronts, or in other retailers or shops. These are a popular option for business owners who don&#8217;t want the commitment of running a full-time business. Pop-ups can keep it simple and stick to traditional coffee. They can also capitalize on seasonal trends or specialty coffee drinks.<\/p>\n<p><b>Coffee Bar<\/b>:\u00a0This can be a small business in a fixed location like a grocery store or mall\u2014sort of like a mobile business that isn&#8217;t mobile. These have low overhead, small staff, and limited kinds of coffee and pastries. Coffee bars are relatively inexpensive to get into and a good way to get a start in the industry. These also benefit from being in spaces with guaranteed foot traffic.<\/p>\n<p><b>Independent Coffee House<\/b>:\u00a0Most people think of a coffee house when considering opening a coffee business. These are privately owned and not franchised, with permanent storefronts. They often serve a large variety of coffee and other beverages, small bites, and baked goods.<\/p>\n<p>Many independent coffee houses encourage customers to stick around and enjoy their brew, with couches and comfy chairs, fireplaces, and free Wi-Fi. You will often find customers working on their laptops.<\/p>\n<p>Some of these coffee houses also serve as a community space, hosting music, meetings, and other events. This is a smart choice for any size city that can support the business, especially college towns. These may or may not include a drive-through.<\/p>\n<p><b>Caf\u00e9<\/b>:\u00a0A caf\u00e9 is a full-service restaurant with a coffee bar. Opening a caf\u00e9 will come with all the business and legal considerations of\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/how-to-open-a-restaurant-.html\">opening a restaurant<\/a>.<\/p>\n\n\n<div class=\"general-step-component\">\n    <div class=\"steps-container\">\n                    <div class=\"steps-container-item\">\n                <div class=\"category-overview category-overview-item-steps\">\n                    <div class=\"category-overview-heading category-overview-heading-steps\">\n                        <div class=\"category-overview-steps\">\n                            1\n                        <\/div>\n                        <h2 class=\"category-overview-steps-title\" id=\"Write\">Write a Coffee Shop Business Plan<\/h2>\n                    <\/div>\n                    <div class=\"category-overview-content-steps\">\n                        <p>No new business can go far without a thorough\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/creating-a-business-plan.html\" title=\"Creating a Business Plan\">business plan<\/a>. But don&#8217;t let that intimidate you. There are professionals who can write one for you or work with you one-on-one. There are also several online programs that can help you construct one.<\/p>\n<p>Business plans organize your efforts and show<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/equity-investors-your-business.html\" title=\"Equity Investors &amp; Your Business\">\u00a0potential investors\u00a0<\/a>why they should work with you. You will not get investors without a well-thought-out business plan.<\/p>\n<p>A good business plan usually includes the following sections:<\/p>\n<ul>\n<li>Executive summary<\/li>\n<li>Objectives and mission statement<\/li>\n<li>Keys to success<\/li>\n<li>Company summary<\/li>\n<li>Inventory needed<\/li>\n<li>Market and competition analysis<\/li>\n<li>Web plan<\/li>\n<li>Management summary<\/li>\n<li>Financial plan<\/li>\n<\/ul>\n<h3>Funding Your Business<\/h3>\n<p>You will need to know how you are going to fund your business. The most common financing method is\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/getting-a-loan-for-a-small-business.html\" title=\"Getting a Loan for a Small Business\">taking out a small business loan<\/a>\u00a0from a bank or credit union. If you&#8217;re unable to secure financing this way, you could be eligible for a loan from the\u00a0<a href=\"https:\/\/www.sba.gov\/\" title=\"SBA Homepage\" target=\"_blank\" rel=\"noopener\">Small Business Administration<\/a>\u00a0(SBA).<\/p>\n<p>If neither of the above lending channels works for your business, you can consider\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/what-is-equity-crowdfunding.html\" title=\"What Is Equity Crowdfunding?\">crowdfunding<\/a>, credit cards, or loans from family or friends.<\/p>\n<h3>Market Analysis and Marketing Strategy<\/h3>\n<p>You must perform a market analysis and outline a\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-operations\/the-basics-of-marketing-a-small-business.html\" title=\"10 Ways to Market Your Small Business\">marketing plan<\/a>\u00a0before opening your new coffee shop.<\/p>\n<p>Coffee is one of the world&#8217;s largest commodities. Fortunately, you only need to analyze the local coffee businesses that are directly competing with you. Check out every coffee business within five miles (including gas stations), and then discuss how you intend to compete with each of them in your business plan.<\/p>\n<p>Picking the<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-operations\/choosing-a-business-location-checklist.html\" title=\"Choosing a Business Location Checklist\">\u00a0right location<\/a>\u00a0for your coffee shop is crucial. Successful entrepreneurs perform a thorough location analysis. Besides just researching the competition in your area, you will want to scope out other factors, such as:<\/p>\n<ul>\n<li>Proximity to your primary customer base<\/li>\n<li>Demographics<\/li>\n<li>Zoning and permitting requirements<\/li>\n<li>Distance from suppliers<\/li>\n<\/ul>\n<p>You will then need to use that information in your\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-operations\/your-marketing-plan.html\" title=\"Your Marketing Plan\">marketing plan<\/a>. The marketing plan should target your intended customer base and include logos, flyers, social media, and your internet presence. Here are some quick ideas to drum up community excitement about your new coffee business:<\/p>\n<ul>\n<li>Create an app or loyalty rewards program<\/li>\n<li>Offer a referral program (there are options to manage these digitally)<\/li>\n<li>Pass out flyers at fairs and other community events<\/li>\n<li>Build anticipation for your opening day by hosting a grand opening event with prizes and discounts<\/li>\n<\/ul>\n<p>Laying this plan out ahead of time will help you budget and create metrics to help focus your\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-operations\/marketing-basics.html\" title=\"Marketing Basics\">marketing programs<\/a>.<\/p>\n<h3>Startup Costs and Budgeting<\/h3>\n<p>The startup costs for opening a coffee shop will vary widely based on the location and kind of shop you are opening. Rent in Manhattan, for example, might be many times the rent in a small Iowa city.<\/p>\n<p>You will have fixed costs that you will want to include in your business plan. These include:<\/p>\n<ul>\n<li>Coffee-making equipment<\/li>\n<li>Rent<\/li>\n<li>Build-out and renovations<\/li>\n<li>Furniture<\/li>\n<li>Technology costs, like computers, handheld registers, and a POS (point of sale) system<\/li>\n<li>Licensing fees (if any)<\/li>\n<li>Expenses for lawyers and accountants<\/li>\n<li>Initial expenses for food, beverages, and refrigeration<\/li>\n<li>Initial advertising and other marketing expenses<\/li>\n<li>Operating expenses for the first few months<\/li>\n<\/ul>\n<p>Most coffee shop owners will tell you to buy the best new equipment you can afford. Coffee shop equipment includes espresso machines, coffee grinders, drip brewers, and more. Make a thorough list, check reviews, and compare prices. Talk to other coffee shop owners and get recommendations if you can.<\/p>\n<p>Set a budget and stick to it. A part of your initial analysis should include<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/evaluating-your-new-small-business-idea.html\" title=\"Evaluating Your New Small Business Idea\">\u00a0projected income<\/a>, which will require a foot and vehicle traffic analysis.<\/p>\n<p>Your rent should be no more than 15% of your projected income. Your largest expense will be drink and food ingredients, which should not exceed 40% of your income. Payroll costs should be about 30%. The rest should be profit.<\/p>\n\n                    <\/div>\n                <\/div>\n            <\/div>\n                    <div class=\"steps-container-item\">\n                <div class=\"category-overview category-overview-item-steps\">\n                    <div class=\"category-overview-heading category-overview-heading-steps\">\n                        <div class=\"category-overview-steps\">\n                            2\n                        <\/div>\n                        <h2 class=\"category-overview-steps-title\" id=\"Choose\">Choose Your Name and Business Structure<\/h2>\n                    <\/div>\n                    <div class=\"category-overview-content-steps\">\n                        <h3>Choose a Business Structure<\/h3>\n<p>A coffee shop will require a definite business structure or formal legal organization. Your business plan must include whether you want to be classified as a:<\/p>\n<ul>\n<li><a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/how-to-set-up-a-sole-proprietorship.html\" title=\"How To Set Up a Sole Proprietorship\">Sole proprietorship<\/a><\/li>\n<li><a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/limited-liability-corporation-faq.html\" title=\"Limited Liability Company FAQ\">Limited liability corporation (LLC)<\/a><\/li>\n<li><a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/what-is-a-corporation-.html\" title=\"What Is a Corporation?\">Corporation<\/a><\/li>\n<li><a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/types-of-partnerships.html\" title=\"Types of Partnerships\">Partnership<\/a><\/li>\n<\/ul>\n<p>Many coffee shops form as LLCs for the<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/benefits-and-drawbacks-of-different-types-of-business-entities.html\" title=\"Benefits and Drawbacks of Different Types of Business Entities\">\u00a0personal liability protection<\/a>\u00a0they offer.<\/p>\n<p>You may be able to set up your own company using simple forms provided by your state&#8217;s secretary of state. But, it can be helpful to\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-lawyer-resources\/when-do-i-need-a-business-lawyer-for-my-small-business.html\" title=\"When Do I Need a Business Lawyer for My Small Business?\">consult with an attorney<\/a>\u00a0if you&#8217;re setting up an <a href=\"https:\/\/legalzoomcominc.pxf.io\/c\/4851649\/2115288\/26746?subId1=how-to-open-a-coffee-shop&#038;auto-aff-llc\" class=\"diy-biz-affiliate\" rel=\"sponsored noopener\" data-cta=\"Biz Auto LZ - LATL Txt\" data-cta-url=\"legalzoom.com\" target=\"_blank\">LLC<\/a> or corporation. An experienced small business lawyer will ensure your business meets all legal requirements.<\/p>\n<h3>Choose and Trademark a Business Name<\/h3>\n<p>After you have picked out a name that sets you apart, you want to go through the process to\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/intellectual-property\/trademarks.html\" title=\"Trademarks\">trademark your name<\/a>\u00a0and logo. This will protect it so nobody in the coffee shop industry can claim your business name. Hiring an\u00a0<a href=\"https:\/\/lawyers.findlaw.com\/intellectual-property-law\/?fli=dcta\" title=\"Find an Intellectual Property &amp; Copyright Lawyer Near You\" target=\"_blank\" rel=\"noopener\">intellectual property attorney<\/a>\u00a0to help can be beneficial.<\/p>\n\n                    <\/div>\n                <\/div>\n            <\/div>\n                    <div class=\"steps-container-item\">\n                <div class=\"category-overview category-overview-item-steps\">\n                    <div class=\"category-overview-heading category-overview-heading-steps\">\n                        <div class=\"category-overview-steps\">\n                            3\n                        <\/div>\n                        <h2 class=\"category-overview-steps-title\" id=\"Set\">Set Up Bookkeeping, Payroll, and Taxation<\/h2>\n                    <\/div>\n                    <div class=\"category-overview-content-steps\">\n                        <p>You will also need to establish what&nbsp;<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-finances\/the-basics-of-accounting-for-small-businesses.html\" title=\"The Basics of Accounting for Small Businesses\">bookkeeping<\/a>&nbsp;method you want to use. An outside bookkeeper is an option if you lack accounting or bookkeeping experience. This should be one of your first decisions\u2014you want to&nbsp;<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-finances\/the-importance-of-cash-management.html\" title=\"The Importance of Cash Management\">track your cash flow<\/a>&nbsp;as soon as you open.<\/p>\n<p>You want to be tight and precise with your payroll records, always&nbsp;<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-taxes\/payroll-taxes-introduction.html\" title=\"Payroll Taxes: Introduction\">paying your employees and taxes&nbsp;<\/a>on time and in full. Many businesses have failed because they didn&#8217;t pay enough attention to this critical area.<\/p>\n<p>Retail sales taxes on coffee vary from state to state, as do taxes on baked goods or any other items you may sell. Use this&nbsp;<a href=\"https:\/\/www.findlaw.com\/state\/tax-laws\/consumer-taxes.html\" title=\"State Consumer Tax Laws\">state-by-state list<\/a>&nbsp;of sales and other consumer taxes to find the specifics for your business&#8217;s state.<\/p>\n<p>You will need to obtain an&nbsp;<a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/apply-for-an-employer-identification-number-ein-online\" title=\"Apply for an EIN Online\" target=\"_blank\" rel=\"noopener\">Employer Identification Number<\/a>&nbsp;(EIN). The EIN is similar to a social security number but for businesses. It&#8217;s essential for things like paying taxes and opening business bank accounts.<\/p>\n\n                    <\/div>\n                <\/div>\n            <\/div>\n                    <div class=\"steps-container-item\">\n                <div class=\"category-overview category-overview-item-steps\">\n                    <div class=\"category-overview-heading category-overview-heading-steps\">\n                        <div class=\"category-overview-steps\">\n                            4\n                        <\/div>\n                        <h2 class=\"category-overview-steps-title\" id=\"Obtain\">Obtain Business Licenses and Permits<\/h2>\n                    <\/div>\n                    <div class=\"category-overview-content-steps\">\n                        <h3>Business Licenses<\/h3>\n<p>You will need to obtain a&nbsp;<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/business-licenses-and-permits.html\" title=\"Business Licenses and Permits\">business license<\/a>&nbsp;to open up your shop. These can vary by location and business type. Here is a state-by-state chart of the licensing requirements for&nbsp;<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/state-guide-obtaining-licenses-permits.html\" title=\"State Guide: Obtaining Licenses &amp; Permits\">starting a business<\/a>&nbsp;in each jurisdiction.<\/p>\n<p>Keep in mind that you may need&nbsp;<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/state-and-local-small-business-licenses-for-start-ups.html\" title=\"State and Local Small Business Licenses for Start-Ups\">different licenses<\/a>&nbsp;for selling your baked goods versus selling coffee or for selling brewed coffee versus bagged coffee. This is another area where a consultation with a lawyer would be helpful.<\/p>\n<h3>Food Business and Health Regulations<\/h3>\n<p>Most coffee shops also sell baked goods, sandwiches, and other snacks. Even if you don&#8217;t consider it one, a coffee shop is technically a food business. Because of that, you want to be familiar with the&nbsp;<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/legal-limitations-to-consider-when-starting-a-business.html\" title=\"Legal Limitations To Consider When Starting a Business\">laws and regulations for a food business<\/a>. These include federal, state, and local laws and rules regarding:<\/p>\n<ul>\n<li>Food handling and storage<\/li>\n<li>Employment<\/li>\n<li>Real estate<\/li>\n<li>Advertising<\/li>\n<\/ul>\n<p>Your local health department is the best source for understanding and complying with these rules. Contact your local department and tell them your plans. Find out who will be the contact person for your business and set up a personal meeting with them.<\/p>\n<p>At that meeting, say you want to cooperate with the health department fully, ask what you can do to ensure that happens, and ask for guidance on food licensing and inspections. Proactively fostering a positive working relationship can help you get the necessary information while creating goodwill.<\/p>\n<h3>Fire Safety Inspections<\/h3>\n<p>You will only be able to open your business with the fire department signing off on the&nbsp;<a href=\"https:\/\/www.findlaw.com\/employment\/workplace-safety.html\" title=\"Workplace Safety\">safety of the building<\/a>. Treat this as another opportunity to build positive working relationships. Your local department may also have specific regulations for a drive-thru coffee shop.<\/p>\n\n                    <\/div>\n                <\/div>\n            <\/div>\n                    <div class=\"steps-container-item\">\n                <div class=\"category-overview category-overview-item-steps\">\n                    <div class=\"category-overview-heading category-overview-heading-steps\">\n                        <div class=\"category-overview-steps\">\n                            5\n                        <\/div>\n                        <h2 class=\"category-overview-steps-title\" id=\"Hire\">Hire Baristas<\/h2>\n                    <\/div>\n                    <div class=\"category-overview-content-steps\">\n                        <p>You will need to hire baristas for your coffee business. There are numerous laws that you must follow when hiring restaurant workers. Who you hire is up to you, but you must conform to&nbsp;<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/employment-law-and-human-resources\/frequently-asked-questions-regarding-hiring-laws.html\" title=\"Hiring Laws: Frequently Asked Questions\">specific laws and regulations&nbsp;<\/a>during this process.<\/p>\n<p>The first and most important rule in hiring staff is to ensure those you hire are who they say they are. You will need to have proper identification on file. You want to do a&nbsp;<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/employment-law-and-human-resources\/performing-an-employee-background-check.html\" title=\"Performing an Employee Background Check\">background check on every employee<\/a>.<\/p>\n<p>Every hire must also be&nbsp;<a href=\"https:\/\/www.findlaw.com\/immigration\/visas\/working-in-the-u-s-.html\" title=\"Working in the U.S.\">legally eligible to work in the United States<\/a>. You will need the proper paperwork to prove this.<\/p>\n<p>You also may need to train your employees on food safety and ensure they have all proper certifications.<\/p>\n<p>When training your employees, it helps to have a<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/employment-law-and-human-resources\/writing-effective-job-descriptions.html\" title=\"Writing Legal and Effective Job Descriptions\">&nbsp;written job description<\/a>&nbsp;and a comprehensive training program. Properly trained employees typically have a higher retention rate and are more focused on customer satisfaction.<\/p>\n<h3>Onboarding and Taxation<\/h3>\n<p><a href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-taxes\/penalties-for-violating-federal-employment-tax-rules.html\" title=\"Penalties for Violating Federal Employment Tax Rules\">Employment taxation<\/a>&nbsp;is a complex topic best left to experts. Once you&nbsp;<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/employment-law-and-human-resources\/what-to-do-when-you-hire-an-employee-for-the-first-time.html\" title=\"Hiring Your First Employee\">hire an employee<\/a>, you must fill out various federal, state, and local tax forms. It&#8217;s worth the extra cost to hire someone to do this.<\/p>\n<h3>Labor Unions<\/h3>\n<p>Unless you are in a union-heavy location like New York City, it&#8217;s unlikely that you will be interacting with&nbsp;<a href=\"https:\/\/www.findlaw.com\/employment\/wages-and-benefits\/what-is-a-labor-union.html\" title=\"What Is a Labor Union?\">labor unions<\/a>&nbsp;in a small, local coffee shop. A franchise might also be unionized. If your workers are unionized, they&#8217;re probably&nbsp;<a href=\"https:\/\/www.ufcw.org\/\" title=\"UFCW Homepage\" target=\"_blank\" rel=\"noopener\">United Food and Commercial Worker&#8217;s Union<\/a>&nbsp;(UFCW) members.<\/p>\n<p>Unless you have a background in union negotiation, don&#8217;t try this alone. You can hire a professional negotiator or a&nbsp;<a href=\"https:\/\/lawyers.findlaw.com\/labor-law\/?fli=dcta\" title=\"Find a Local Labor Attorney\" target=\"_blank\" rel=\"noopener\">labor lawyer&nbsp;<\/a>to help. If you are a franchisee, the franchisor will handle this.<\/p>\n\n                    <\/div>\n                <\/div>\n            <\/div>\n                    <div class=\"steps-container-item\">\n                <div class=\"category-overview category-overview-item-steps\">\n                    <div class=\"category-overview-heading category-overview-heading-steps\">\n                        <div class=\"category-overview-steps\">\n                            6\n                        <\/div>\n                        <h2 class=\"category-overview-steps-title\" id=\"Insurance\">Get Business Insurance<\/h2>\n                    <\/div>\n                    <div class=\"category-overview-content-steps\">\n                        <p>You will need&nbsp;<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/what-is-business-insurance-.html?fli=latl_biz_howto:diy_biz_ins:txt\">business liability insurance&nbsp;<\/a>for a coffee shop operation. This will cover personal liability for issues like:<\/p>\n<ul>\n<li>Customer slip-and-fall accidents<\/li>\n<li>Smoke damage<\/li>\n<li>Weather damage from lightning, hail, or other inclement weather<\/li>\n<li>Natural disasters, like an earthquake or hurricane<\/li>\n<li>Employee theft<\/li>\n<\/ul>\n<p>If you&#8217;re a franchisee, the franchisor will have&nbsp;<a href=\"https:\/\/www.findlaw.com\/consumer\/insurance\/business-insurance.html\" title=\"Business Insurance\">insurance&nbsp;<\/a>for you to purchase, or it may be a part of the franchise agreement. If you&#8217;re a private owner, you will need to buy your own from an insurance company.<\/p>\n\n                    <\/div>\n                <\/div>\n            <\/div>\n                    <div class=\"steps-container-item\">\n                <div class=\"category-overview category-overview-item-steps\">\n                    <div class=\"category-overview-heading category-overview-heading-steps\">\n                        <div class=\"category-overview-steps\">\n                            7\n                        <\/div>\n                        <h2 class=\"category-overview-steps-title\" id=\"Find\">Find Sources and Suppliers<\/h2>\n                    <\/div>\n                    <div class=\"category-overview-content-steps\">\n                        <h3>Suppliers<\/h3>\n<p>Determining where you will get your equipment, coffee, and food may seem simple. But there may be legal hurdles to these essential acts for opening your coffee shop.<\/p>\n<p>You want to check the licensing of any local food provider. You will take on any liability if the&nbsp;<a href=\"https:\/\/www.findlaw.com\/injury\/product-liability\/food-poisoning-and-food-safety-resources.html\" title=\"Food Poisoning and Food Safety Resources\">food injures someone<\/a>.<\/p>\n<p>Ensure you have the proper contracts with the coffee supplier, whether you are roasting yourself (which is unlikely) or buying from a roaster or wholesale supplier. You should have a written requirements contract to receive supplies whenever you need them. This eliminates having to store excess inventory you will not use immediately. This will be one of your most important contracts.<\/p>\n<h3>Going to the Source for Your Coffee Beans<\/h3>\n<p>You may be a coffee shop owner who wants to go to South America or Africa and pick your coffee beans. Or you want to buy directly from the farmers. Taking on these tasks can be complicated, and it can help to hire an experienced attorney to help.<\/p>\n<p>If you decide to import coffee beans directly from their places of origin, you will need to know the&nbsp;<a href=\"https:\/\/corporate.findlaw.com\/litigation-disputes\/u-s-import-requirements.html#:~:text=Entry%20of%20Goods&amp;text=To%20legally%20enter%20the%20U.S.,and%20release%20of%20the%20goods.\" title=\"Entry of Goods\" target=\"_blank\" rel=\"noopener\">U.S. regulations for importing coffee<\/a>. You will also need to know the&nbsp;<a href=\"https:\/\/corporate.findlaw.com\/law-library\/opportunities-in-importing-and-exporting.html\" title=\"Opportunities In Importing and Exporting\" target=\"_blank\" rel=\"noopener\">export regulations<\/a>&nbsp;for the source country. For example, there are no U.S. import duties on green coffee (unroasted beans from Coffea fruits), but there are duties on roasted coffee. A&nbsp;<a href=\"https:\/\/www.trade.gov\/customs-brokers-and-freight-forwarders\" title=\"Customs Brokers and Freight Forwarders\" target=\"_blank\" rel=\"noopener\">licensed customs broker<\/a>&nbsp;or an experienced coffee supplier can help you.<\/p>\n<p>Alternatively, some coffee shops buy their beans wholesale from a coffee roaster. Depending on your location, there may be local options. Partnering with a local roaster can be a great way to build a mutually beneficial business relationship.<\/p>\n\n                    <\/div>\n                <\/div>\n            <\/div>\n            <\/div>\n<\/div>\n\n\n\n<h2>Franchising<\/h2>\n<p>A\u00a0<a href=\"https:\/\/corporate.findlaw.com\/business-operations\/what-is-franchising.html\" target=\"_blank\" rel=\"noopener\">franchise<\/a>\u00a0is a business that is granted the right or license to market a company&#8217;s goods or services in a particular territory. The primary business is the franchisor. The local business with that right or license is the franchisee. For instance, if you franchised a Dunkin&#8217; Donuts store, Dunkin&#8217; Donuts would be the franchisor, and you would be the franchisee.<\/p>\n<p><a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/buying-a-franchise-overview.html\">Franchising a national brand<\/a>\u00a0gives you immediate name recognition. But the franchisor generally puts many business limitations on the franchisee. Some common examples of coffee franchisors include:<\/p>\n<ul>\n<li>Dunkin&#8217; Donuts<\/li>\n<li>Tim Horton&#8217;s<\/li>\n<li>The Coffee Bean &amp; Tea Leaf<\/li>\n<li>Scooters<\/li>\n<li>Maui Wowi<\/li>\n<\/ul>\n<p>Your state or region of the U.S. may also have more centralized, local coffee franchise options.<\/p>\n<p>The two most important limitations of operating a franchise are the limits placed on your creativity and your ability to run the business as you see fit. But it gives you a good shot at a successful business.<\/p>\n<p>Franchisors lock franchisees into a\u00a0<a href=\"https:\/\/corporate.findlaw.com\/business-operations\/an-introduction-to-franchise-law.html\" target=\"_blank\" rel=\"noopener\">franchise agreement<\/a>, a contract where the franchiser controls every aspect of the business. This agreement typically includes:<\/p>\n<ul>\n<li>What equipment to purchase<\/li>\n<li>What products to sell<\/li>\n<li>What kinds of coffee you can offer<\/li>\n<li>Where you can locate<\/li>\n<li>Much more<\/li>\n<\/ul>\n<p>If you want security and support,\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/what-is-a-business-franchise.html\">a franchise may be the way to go<\/a>. But if you want control and creativity, you would be more satisfied running an independent coffee shop.<\/p>\n<p>Some national coffee businesses (most notably Starbucks) do not franchise. These businesses license to an owner for a fee (Starbucks&#8217; license fees can range from a little over $300,000 to $700,000 or more).<\/p>\n<p>Business licensing differs from franchising in that it grants rights to use\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/intellectual-property.html\">intellectual property<\/a>\u00a0(logos, recipes, branding, and more) in exchange for royalties or fees. Starbucks inside Target or Barnes and Noble stores are examples of business licensing.<\/p>\n<h2>Renting, Buying, or Taking Over an Existing Business<\/h2>\n<p>Entering into a contract to buy, lease, or take over someone else&#8217;s existing coffee shop business splits the difference between franchising and starting a shop from scratch.<\/p>\n<p>Taking over a business from a friend on a handshake deal can cause significant legal headaches. To avoid this, strongly consider putting every part of the agreement in writing as a\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-contracts-forms\/common-business-contracts.html\">legal contract<\/a>. You can write the contract with various clauses containing the agreement&#8217;s parts.<\/p>\n<p>When<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-contracts-forms\/how-to-write-a-business-contract.html\">\u00a0writing the contract<\/a>, be mindful of state contract laws that will determine what kinds of clauses you can and can&#8217;t enforce, and for how long. You also want to determine the value of the business, which can include:<\/p>\n<ul>\n<li>The shop&#8217;s &#8220;goodwill,&#8221; or the value of the equipment and whatever stock is being transferred<\/li>\n<li>The value of the shop going forward<\/li>\n<li>Whether you will retain any current managers or employees<\/li>\n<\/ul>\n<p>Finally, you may need to reach a separate agreement with the shop&#8217;s landlord because the\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-operations\/commercial-lease-agreement-overview.html\">lease may not transfer with the business<\/a>.<\/p>\n<h2>Legal Details Make a Difference<\/h2>\n<p>Opening a successful coffee shop can be incredibly rewarding but is a huge undertaking. Attention to detail is key. It can help you prosper as a business owner in this popular industry.<\/p>\n<p>You can get\u00a0<a href=\"https:\/\/lawyers.findlaw.com\/business-commercial-law\/?fli=dcta\" target=\"_blank\" rel=\"noopener\">experienced local legal help<\/a>\u00a0to ensure you do all you can to run a successful business. A small business attorney will ensure your business plan is in line with your area&#8217;s legal requirements. This can free up time and energy for you to focus on other aspects of your new business.<\/p>\n<p>If you are ready to create your company, you can let our\u00a0<a rel=\"sponsored noopener\" href=\"https:\/\/legalzoomcominc.pxf.io\/c\/4851649\/2115288\/26746?subId1=how-to-open-a-coffee-shop-and-stay-in-business-custom-content\" target=\"_blank\">trusted partner LegalZoom<\/a>\u00a0handle your business formation filing for $99 plus filing fees.<\/p>\n\n\n<div class=\"was-this-helpful\">\n    <div\n            class=\"was-this-helpful__question-container\"\n            aria-labelledby=\"was-this-helpful__question\"\n            role=\"group\"\n    >\n        <span\n                id=\"was-this-helpful__question\"\n                class=\"was-this-helpful__question fl-text-lg-bold\"\n        >Was this helpful?<\/span>\n        <button\n                class=\"was-this-helpful__button fl-text-sm\"\n                aria-label=\"Yes\"\n                value=\"yes\"\n        >\n            <span class=\"was-this-helpful__button-text fl-text-bold\">Yes<\/span>\n            <i class=\"was-this-helpful__button-icon\">\n                <svg width=\"22\" height=\"22\" viewBox=\"0 0 22 22\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\">\n                    <g id=\"thumbs-up\" clip-path=\"url(#clip0_604_3418)\">\n                        <path id=\"Vector\"\n                              d=\"M6 21H3C2.46957 21 1.96086 20.7893 1.58579 20.4142C1.21071 20.0391 1 19.5304 1 19V12C1 11.4696 1.21071 10.9609 1.58579 10.5858C1.96086 10.2107 2.46957 10 3 10H6M13 8V4C13 3.20435 12.6839 2.44129 12.1213 1.87868C11.5587 1.31607 10.7956 1 10 1L6 10V21H17.28C17.7623 21.0055 18.2304 20.8364 18.5979 20.524C18.9654 20.2116 19.2077 19.7769 19.28 19.3L20.66 10.3C20.7035 10.0134 20.6842 9.72068 20.6033 9.44225C20.5225 9.16382 20.3821 8.90629 20.1919 8.68751C20.0016 8.46873 19.7661 8.29393 19.5016 8.17522C19.2371 8.0565 18.9499 7.99672 18.66 8H13Z\"\n                              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class=\"fl-radio-button-field-label fl-text-sm was-this-helpful__radio-label\"\n                                for=\"was-this-helpful__radio-button--complicated\"\n                        >Too complicated \/ too many steps<\/label>\n                    <\/div>\n                    <div class=\"fl-radio-button-field fl-flex was-this-helpful__feedback-form-title\">\n                        <input\n                                id=\"was-this-helpful__radio-button--dated\"\n                                class=\"fl-radio-button-field-input\"\n                                type=\"radio\"\n                                name=\"negative-feedback\"\n                                value=\"Out of date\"\n                        >\n                        <label\n                                class=\"fl-radio-button-field-label fl-text-sm was-this-helpful__radio-label\"\n                                for=\"was-this-helpful__radio-button--dated\"\n                        >Out of date<\/label>\n                    <\/div>\n                    <div class=\"fl-radio-button-field fl-flex was-this-helpful__feedback-form-title\">\n                        <input\n                                id=\"was-this-helpful__radio-button--negative-other\"\n                                class=\"fl-radio-button-field-input\"\n                                type=\"radio\"\n                                name=\"negative-feedback\"\n                                value=\"Other\"\n                        >\n                        <label\n                                class=\"fl-radio-button-field-label fl-text-sm was-this-helpful__radio-label\"\n                                for=\"was-this-helpful__radio-button--negative-other\"\n                        >Other<\/label>\n                    <\/div>\n                <\/fieldset>\n            <\/div>\n            <div class=\"was-this-helpful__form-buttons-container\">\n                <button\n                    class=\"was-this-helpful__feedback-button was-this-helpful__feedback-button--positive at-feedback-submit fl-button secondary\"\n                    type=\"submit\"\n                >\n                    <span class=\"fl-button-content\">Submit<\/span>\n                    <i\n                        class=\"fa fa-angle-right medium\"\n                        aria-hidden=\"true\"\n                    ><\/i>\n                <\/button>\n                <button\n                    class=\"was-this-helpful__feedback-button was-this-helpful__feedback-button--cancel fl-button primary disabled\"\n                    type=\"reset\"\n                >\n                    <span class=\"fl-button-content\">Cancel<\/span>\n                    <i\n                        class=\"fa fa-times-circle medium\"\n                        aria-hidden=\"true\"\n                    ><\/i>\n                <\/button>\n            <\/div>\n        <\/form>\n    <\/div>\n    <div 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