According to recent statistics, three in four Australians (75%) enjoy at least one cup of coffee per day. It is, therefore, confidence to assume that the coffee market is super worthwhile. If the question asked, “Is Coffee Van A Good Business Investment?”
The answer would be, “Yes, it is.” Coffee vans can be very profitable because coffee is the second most valuable commodity globally and the most cultivating restaurant industry. Indeed, Concession Nation estimates that a coffee van earns between $6K and $15K for coffee selling alone each month.
Now, let’s discuss the benefits and the costs involved in operating a coffee van.
The Benefits of Running A Coffee Van
Cheap Option For A Coffee Shop
A coffee van is a great alternative option for a coffee shop. It is much less expensive than a franchise or sit-down coffee shop.
You don’t have to operate in the same place every day. You can discover diverse locations to get the best business practice. Also, you don’t need complicated leasing agreements. If one thing doesn’t work, you can move on. Thank you, next!
Studies confirm that small businesses spend nearly 5% to 8% of their incomes on advertisements to build brand awareness and grab the market share. Fortunately, coffee vans are like mobile billboards. So you get free advertisement and brand exposure whenever you drive your van down the road.
The Cost of A Coffee Van Startup
Many aspects will affect the initial investment of a coffee van. However, an average cost for a coffee van would be between $25K and $80K, including:
Coffee Equipment And Supplies
First thing first, you need a good coffee machine. It can cost around $4K to $10K. But, most importantly, it’s coffee that is the raw material to thrive or sink your business. So, you should always invest in high-quality beans. But then, you will also need milk, sugar, water, paper cups, lids, and caps as the essential supplies.
Van Alteration And Renovations
Current statistics express that coffee van owners have to spend $20k to $30k for alteration and renovation.
Fuel And Parking Fee
Fuel costs can differ depending on how far you drive and where you want to locate your shop. Likewise, dense-traffic areas tend to have higher parking fees than those in the suburbs. In a busy city, your fuel and parking fee generally costs up to $1,200 monthly.
Legal Requirements And License
To run a coffee van, you need to register the van and apply for a business license. In the United States, legal fees are typically between $500 and $2,000 to license mobile food trucks and shops.
Point-Of-Sale (POS) System
You should invest in a reliable POS system to accept payments and control receipts, taxes, and other financial transactions. Some systems may require a monthly subscription fee on top of an initial setup fee. They usually range from $300 to $900.
Payroll expense for employees is pretty huge. They include wages, taxes, benefits, and other compensations. Usually, your payroll costs should stay up to 35% of your total revenue only.
Now, as you can see, many scenarios can affect a coffee van’s destiny. Therefore, before you leap, do more research and be ready. Make sure to have a concrete business plan with all compulsory resources to optimize your coffee van investment success.