How to Start a
Coffee or Tea Business
We’ve been helping caterers start up for over 25 years, and have the answers…
Coffee has attracted many people into the Mobile Catering Business – it’s easy, clean and offers great profit margins
About the business
In essence, a Mobile Coffee / Tea business consists of a vehicle fitted with a coffee machine and other ancillary equipment, selling products similar to static coffee shops. If you were thinking of opening a coffee shop but don’t want or can’t afford the set up costs, then a good alternative could be a Mobile Coffee Business.
It has certainly attracted many start-ups in the last few years, and in all sorts of vehicles! Transit style vans, Piaggio three wheelers, vintage VW campers, electric carts, golf buggies and almost every other type of vehicle imaginable – in fact, it seems the more unusual the vehicle, the more appealing it is.
The Main Advantages of a Coffee / Tea Business:
1) Low Start Up Costs
You can start a mobile coffee / tea business for very little. Ready to go packages can be bought for as little as £7500 for a no strings attached Piaggio conversion, and can range to over £30,000 for a full blown supported franchise with a long, solid track record.
2) Coffee is a growing trend
The coffee business is growing, and rapidly. There are many coffee connoisseurs who will no longer accept a cup of drab, powdered instant, and want high quality coffee. This is only going to continue.
3) Great Profit Margins
Coffee and tea offer incredible gross profit margins of up to 95% which is what has attracted the big companies to expand at such a rapid rate. Very few other products even come close, meaning that you have the potential to make a lot of money.
4) A Year Round product
Some products are very seasonal, but coffee is no longer one of them. Yes, you won’t sell as many on hot days, but let’s be honest, they are few and far between.
Many people operate a mobile coffee / tea business to fit around their lifestyle, choosing only the odd show or event. For others they choose to do it as a career; it is these that tend to operate a daily round or a on regular pitch in a town centre or retail park. The great thing is that it can be run part time, on evenings outside a club or weekends at various events around the country. It’s very flexible.
The Main Disadvantages of a Coffee / Tea Business:
The expansion of the ‘proper’ coffee market has been impressive, but has also been matched by the growing number of coffee outlets where customers can get their daily cup of joe. While more people might be spending more money on coffee, there is also a lot more competition for that business. Your product will either have to be competitively priced, of a higher quality or have better service. Service will be key to the success of your business.
2) Limited Trading Hours
The vast majority of coffee / tea sales take place in the morning and this will be when you make most of your money. You will have to start early as many of your customers will want a coffee or tea on their way into work or shortly after they have started.
3) Licensing Issues
You may well need a street trading licence, and you will need to check with all of the local boroughs in which you would like to work as rules may differ across boroughs.
4) Skill Required
It takes skill to make a nice cup of coffee, and we’re not just talking about a pretty pattern on the top. To make good coffee you will need to research how to make a good cup and get practicing. Your level of skill and understanding of your business may well determine whether your business is successful.
5) Competition at Events
Many other businesses will offer hot drinks at events, and you have to ask yourself will someone want to queue up twice, once for breakfast and again for a coffee to go with it. While you may have the sole coffee concession, you may find that the burger van next to you is selling cups of instant coffee or generic teabags at half the price you are. Many customers will not queue twice, and as such will pay the food provider for an arguably inferior product. You need to bear this in mind when working out how much to tender to work at events.
6) Brand Loyalty
Many coffee customers go to a preferred outlet for their coffee. This is great when you have lots of repeat customers who will come to you every day or two, however, it can make it harder to break into the industry initially.
If it hasn’t got the CE label, don’t buy it – no matter what anyone might say. You will not get a Gas Safety certificate for it, and therefore will be operating illegally.
Event Organisers will want to see your Gas Safety certificate and you won’t be able to trade without it. Even if you find work at small private functions, you could have some real problems with insurance companies if you ever need to make a claim, let alone with the law if you are prosecuted.
Where To Trade
Where you trade is obviously critical to the success of your business. There are a variety of different options that you can choose from, you might even operate from a variety of different locations. Below are some ideas as to where, and you can find more information in our Get Profitable section.
How to Succeed
In order to succeed we think you need to do / have the following things:
Do lots and lots of research
Research, research, research. You need to find out as much information as you can before you start, to know what to expect. What to sell, where to sell, how to sell it! This site should help you with lots of your research, but you might also want to consider buying The Complete Guide to Profitable Catering – it takes a lot of the information on this site and goes into more detail. You might also want to speak to some experts face to face. For more information > Click here
Have a Support System in place
Where are you going to get answers to the many questions that you have? Where are you going to get the reassurance that you are doing the right thing or the confidence to change if things aren’t going to plan? You might know someone else who has done it and therefore you can tap them up for information.
By being a member of NCASS you can call us with any questions or queries that you might have.
Have lots of Determination
There’s no doubting that in order to succeed in this industry you need to have a lot of determination to keep on going when the going gets tough. It’s not an easy trade, especially in the depths of winter when you have to go out and trade in the cold weather but you’d rather be at home or in an office in the warm. That’s the main difference between those who last 1 season and those that last 20.