What's Brewing: How to Start a Coffee Shop Business in the Philippines

Can’t function without a caffeine shot? Does your house resemble a coffee shop with all the coffee beans and equipment you own? Do you dream of becoming a barista and coffee shop owner?

If you answered yes, then why aren’t you running your own coffee shop yet?

Yes, it’s easier said than done. It’s a major undertaking that requires a lot of planning, resources, and money. But if you’re seriously considering it, read on to learn how to start a coffee shop business in the Philippines.  

Why a Coffee Shop is a Good Business 

The Philippines is a country of coffee lovers. Walk around the metro and you'll immediately see either a popular franchise or a homegrown cafe. In fact, according to finance agency Fitch Solutions, each Filipino is estimated to drink 3.78 kilograms of coffee every year by 2025.^[1]

For coffee lovers, any day is a good day for coffee. The rainy season is perfect for hot coffee, while summer is the peak season for iced coffee. In short, coffee will always be in demand—and in style! 

Moreover, depending on the type or size of coffee shop you plan to have, it’s also an affordable business idea. There are many coffee shop business options depending on your business capital, so you can easily and quickly get yours running. 

How to Start a Coffee Shop Business in the Philippines in 7 Steps

Here are the things you should do and prepare for:

Step 1: Start with a Business Plan 

As with any business endeavor, creating a solid business plan is the first and most important step. If you want to know how to start a coffee business, gather all your objectives, ideas, sales and marketing strategies, and projections in one well-thought-out business plan. Check out this coffee shop business plan sample in the Philippines.^[2] 

Your business plan should also include your business structure. What type of business is a coffee shop, you ask? The answer will depend on the scale of your coffee shop business.

In the Philippines, coffee shops fall under the service industry, the largest business sector. The most common organization types for a coffee shop are sole proprietorship, partnership, and corporation.^[3]

• Sole proprietorship - Most basic organization type in the Philippines where a business is established by just one person (the sole proprietor); all assets and liabilities are also the assets and liabilities of the sole proprietor
• Partnership - Involves two or more people who contribute assets and divide profits among them 
• Corporation - Comprised of a maximum of 15 individuals acting as a single entity; can be non-stock or stock corporations
• Cooperative - Individuals who come together to achieve social or economic goals

Once you decide on the business structure, consider the tax and legal implications of your small coffee shop business plan in the Philippines, especially if you plan to franchise or start your own corporation. 

The next step is to create a financial plan for your coffee shop in the Philippines. Think about how you'll fund your coffee shop business. Look into options should you need outside capital for expansion down the road.

👉 How Much Capital do I Need to Start a Small Coffee Shop in the Philippines?

Your coffee shop cost breakdown in the Philippines depends on the type of shop.^[4] For example, if you plan to franchise a known coffee shop brand, your coffee shop capital can range from ₱6 million to ₱12 million. 

What about the budget for a small coffee shop in the Philippines? If you want to open a small 30-sqm shop without a kitchen in a bustling district, prepare roughly ₱950,000 for the fit-out, equipment, and business permit; and approximately ₱245,000 for monthly operational expenses (rent, utilities, supplies, marketing, monthly staff cost, etc.).

A medium-sized coffee shop with a small kitchen (approximately 50 sqm that can seat 18 people and employ 10 staff) can require a capital of ₱1.5 million. Coffee shop monthly expenses in the Philippines will cost approximately ₱493,000.

Planning to open a large coffee shop (150 sqm) with a full kitchen (12 staff and up to 60 seats)? Startup costs for a coffee shop in the Philippines might cost ₱4.5 million. Meanwhile, monthly operating expenses will cost around ₱997,500. 

To deal with the expected daily expenses of running a coffee shop, get a credit card. Compare your options and apply via Moneymax:

Credit Card	Perks for Business Owners
UnionBank Rewards Credit Card	1 point per ₱30 spend 3x points for shopping locally and abroad
UnionBank Lazada Credit Card	₱6 Lazada Wallet Credits per ₱200 spend at Lazada ₱1 Lazada Credit per ₱200 spend at other merchants ₱50 monthly shipping vouchers at Lazada ₱500 discount vouchers for 5 Lazada Sales all year round Priority access to Lazada Sales Discounts from selected Lazada merchants
Metrobank Platinum Mastercard®	1 rewards point for every ₱20 spend eCommerce purchase protection of up to US$200 0% installment at partner merchants
HSBC Red Mastercard	1 point for every ₱20 spend 4x points on shopping, online, and overseas transactions

👉 How Much Money Does a Coffee Shop Make?

The income per day of a coffee shop in the Philippines depends on the type of coffee shop you're operating, how many cups of coffee you sell, where your coffee shop is located, your price points, your operation costs, and many other factors. The expected daily sales of a coffee shop in the Philippines can range anywhere from ₱13,500 to ₱63,000.

A coffee shop business is definitely a sizable investment. But if you want to start small, you can always put up your own coffee shop on wheels or a pop-up coffee shop in your unused garage or garden. It costs significantly less—it’s definitely a unique and cost-effective way to own a coffee shop. 

Step 2: Decide on What Type of Coffee Shop You Want to Open

What type of establishment do you want to open? If you're looking for coffee shop business ideas, look into these recommendations:

☕ Pop-Up and Mobile Coffee Shops

These are the cheapest coffee shops you can start with. Plus, they offer the most flexibility. Simply set up in busy and profitable locations such as events, festivals, trains, bus stations, or anywhere there’s high foot traffic. 

☕ Coffee Bar/Cart/Kiosk

These shops focus on selling brewed coffee and usually offer muffins, cookies, and cake slices to go with the coffee. Limited seating is available.

You can usually find them in high-traffic locations such as malls and public transportation hubs and stations. They're also potentially very profitable, even with just a small investment. 

☕ Coffee Shop

These shops sell coffee drinks and sometimes light fare meals for coffee pairings. They're designed as social hubs to make customers stay longer to talk, work, and hang out. A coffee shop works great both in busy cities and outside the metro.  

☕ Drive-Thru Coffee Shop

The best locations for drive-thru coffee shops are on busy commuter roads. 

☕ Cafe

Cafes sell coffee drinks and offer breakfast, lunch, and dinner menus. These shops are similar to full-service restaurants, so they cost more to operate.

☕ Coffee Shop Franchise

Popular coffee shop businesses such as Tim Horton’s, UCC, or Coffee Bean and Tea Leaf already have an established business model. You won't have to go through the hassle of coming up with a name for your coffee shop and deciding on its products and services.  

Step 3: Determine Where You’re Going to Put Up Your Coffee Shop

Remember: location is key. Consider these things: 

• The size of your coffee shop - Your coffee shop should have enough space where the barista/s can prepare the drinks efficiently and where customers can enjoy their coffee. Nice and comfy seats are also a must.  
• Accessibility - Anyone should be able to go to your coffee shop. Your coffee shop should also be easy to find for food delivery riders.  A parking space and a bike rack are nice-to-haves. 
• Rent - This will take up a huge portion of your operation costs, so make sure to pick the best location that suits your budget. 

Step 4: Choose a Coffee Shop Theme

Notice the prevalence of aesthetically pleasing coffee shops in the country? Even non-coffee lovers go out of their way to visit and grab a cup—and maybe take a few photos and videos for Instagram and TikTok.  

👉 What are the Benefits of a Themed Coffee Shop?

With a theme-based coffee shop, you can easily establish your coffee shop’s brand and image, especially if you have a unique theme. 

These days, you must give customers the complete experience―interior design, ambiance, menu, music, free Wi-Fi, and customer service, to name a few. These perks encourage people to try what your coffee shop has to offer.

You can also easily make renovations or additions because you just need to work along the lines of your coffee shop’s theme. No need to spend a lot of time on research and experimentation. You already know what’s going to work with your theme. 

👉 Top Coffee Shop Themes in the Philippines

Let your personal tastes come into play when choosing a theme for your coffee shop. When you’re setting up a coffee shop, consider some of these popular themes: 

Rustic

A rustic-style coffee shop is perfect if you’re a fan of old-school decor, plants, wood, and bricks. Use classic pieces and comfortable furniture to evoke a kind of speakeasy, boutique-style vibe in a coffee shop setting. 

Industrial

This is a popular and sought-after theme these days. If you dig exposed ceiling beams, bricks, and pipes and warm lighting with modern elements, an industrial-style coffee shop is best. 

Boho Chic

This is your best bet if you want something fun and vibrant. Fortunately, it’s easy to achieve with just a few well-curated rugs, crochet curtains, fairy lights, and wooden furniture. 

Indoor Garden

Entice all plant-loving Pinoys to come out and get some coffee at your indoor garden-themed coffee shop. 

Pop Culture-Themed

Consider a book, music, movie, or TV-inspired cafe to target its legions of fans, just like the BTS fan who opened a BTS-themed cafe^[5] in Tomas Morato, Quezon City. Or attract Taylor Swift's loyal fanbase by launching a cafe inspired by the artist, like Wiltlover Cafe.

Step 5: Register Your Coffee Shop Business

If you don’t have a business registration, you can’t legally operate. Make sure to secure the proper coffee shop licenses and permits in the Philippines, such as the following:

• Barangay registration 
• Business permit (also known as Mayor’s Permit)
• DTI registration 
• BIR registration 

Step 6: Buy Your Coffee Equipment and Supplies 

Don't forget the most important thing—the coffee itself! Find suppliers who will provide you with consistent high-quality coffee and ingredients. Moreover, purchase good quality and reliable coffee equipment. 

If you’re franchising a coffee shop, you don’t have to worry because these will all be provided. But if you’re starting your coffee shop from scratch, you’ll have to do your own research, sourcing, and testing to find the right products at the best prices.

You can opt to buy second-hand coffee equipment as well. Check Facebook and Carousell for online sellers offering them at discounted prices. Rent coffee equipment if you don’t want to make an outright purchase yet. 

Here’s a basic list of equipment you’ll need for your coffee shop: 

• Automatic drip coffee maker
• Espresso machine 
• Industrial coffee grinder and blender 
• Oven toaster
• Refrigerator 
• Freezer

Step 7: Recalculate Your Figures

Once you start operating, recalculate the figures in your financial plan. This will help you make more accurate potential future projections. You can now see which aspects of your business operations need adjustments. 

Here are some of the things you’ll need to take a look at: 

• Projections for the next three years 
• Marketing and advertising expenses 
• Space and coffee equipment maintenance 
• Utilities and rental cost
• Prices of supplies and coffee equipment 
• Takeout/delivery costs 
• Franchise fee (if a franchise coffee shop)
• Break-even point
• Profit reinvestment plan

Related reading:

• 32 Food Franchise Businesses You Can Start Under ₱1 Million
• Why You Should Open a Bakery: Tips to Get Your Business Off the Ground

Final Thoughts

Nowadays, a successful coffee shop needs more than just a good cup of coffee. A lot of people consider coffee shops as places where they can relax, work, catch up with friends, or enjoy a solo date. 

Now that you know how to start a coffee shop business in the Philippines, you’re one step closer to turning your dream into reality. Whether it’s a small business or a big retail franchise, the type of coffee shop you choose will determine your startup costs and profits.

At the end of the day, your skills, knowledge, and passion will spell your coffee shop business success! 

Sources:

• ^[1] Filipino coffee drinkers to pump Southeast Asia's caffeine rush by 2025 (Philstar, 2021)
• [2] A business plan for "Kopinoy" (Roy Benjamin Pulumbarit, Academia.edu)
• ^[3] What type of business entity is right for me? (DTI Negosyo Center)
• ^[4] How Much Does It Cost to Start a Coffee Business in the Philippines? (Bean & Barley, 2021)
• ^[5] LOOK: This BTS-themed cafe in Tomas Morato is back and bigger than ever (L!fe The Philippine Star, 2022)