How to start a cafe business in the Philippines?
As the Philippines economy is continuously changing…
You may be thinking about starting a cafe business.
Certain businesses such as cafes and coffee shops are getting so popular across the Philippines!
This leads to the main question: How to start a cafe business in the Philippines?
Throughout this article, we will be looking at…
1. How much capital to start a small coffee shop in the Philippines.
2. The expected income of a coffee shop.
3. Other frequently asked questions.
Before we begin, we will be using the words cafe and coffee interchangeably throughout today’s article.
Table of Contents
How To Start A Cafe Business In The Philippines In 7 Steps
So how do you start a cafe business in the Philippines?
In this section, we have broken down the process of setting up a coffee shop in the Philippines into seven easily readable sections.
Each section can be slightly adjusted.
Nonetheless, each step covers important areas when beginning a coffee business.
1. Decide If You Will Franchise Your Café Business Or Go, Solo
One of the first decisions you will make when you start to look into how to start a cafe business in the Philippines is whether you will franchise your business or go solo.
This covers the pros and cons of franchising, which may benefit you.
I have attached this full article above for your reference.
If you are looking to franchise a coffee shop…
There are a few different options.
Here is a list of available companies that are currently open to franchising coffee shops in the Philippines.
- Barako Frappe
- Bialetti Caffe Philippines
- Caffe La tea
- Coffee Bean
- Coffee Break
- Figaro Coffee
- Mocha Blends Café
- Seattle Best coffee
- Star Frappe
- U3 Coffee
When looking at franchising coffee shops in the Philippines (or cafés)…
The most important thing is the overall costs.
Will a franchising business be worth your time financially speaking?
Many of the franchising coffee shops and franchising cafes in the Philippines have several options.
This can include small coffee bars, kiosks, or larger coffee stores.
Business terms and capital required will depend on these two factors.
We have included the franchising coffee shop’s cost in the relevant hyperlinks above for your convenience.
If you have the a good-sized amount of capital to start a coffee shop in the Philippines.
And you don’t feel 100% confident.
Then, you may benefit from the business support.
In that case…
Franchising is often a more appropriate decision.
On the other hand.
If you feel comfortable with the business and/or your capital is low.
You may see better results in starting a coffee shop business in the Philippines independently.
In other words – Going solo.
2. Legal Register Your Coffee Shop Business In The Philippines
We have added this as the second step as it’s always an important area to focus on when starting any new business in the Philippines.
Nonetheless, if you are unsure of any parts of the business, it may be worth postponing registration until you are ready to open your business officially.
- Barangay Registration
- Business permit & Mayor’s permit
- Department of Trade and Industry registration
- Register your business in the Bureau of Internal Revenue (BIR)
We always recommend seeking legal advice at this stage.
(As we always do in every business).
Apart from registering a coffee shop business in the Philippines, is there anything else you need to know?
There are specific laws regarding foods and drinks to protect the welfare and wellbeing of the public.
This includes sanitary preparation and the health and safety of food.
I’ve attached information on the reference above.
If you are thinking about starting an Internet cafe business in the Philippines.
It would be wise to study SBN 908.
When researching how to open a coffee, cafe, and internet cafe business in the Philippines…
We found that different areas have their own rules and processes.
For example, check out the guide for internet cafe regulations by the city government of Baguio.
We recommend visiting your local government office to see any requirements that are needed for this type of business.
3. Choose Your Café / Coffee Store Location
The following part of how to start a cafe business in the Philippines is choosing your location and theme.
Before we look at the location for your new coffee business in the Philippines.
We must first look at your original plan, which includes the type of coffee or cafe business you intend to open.
If you plan to start a small coffee kiosk business in the Philippines…
You will most likely find suitable locations near malls or call centers.
If you are opening up a larger establishment, then you may benefit from choosing a location downtown that is highly accessible to your customers.
The location is one of the most critical factors.
It’s not the only factor, however, but it can impact business growth and impact the overall financial earnings of a cafe business.
4. Select Your Café Design And/Or Coffee Theme
The theme is also another part that ties in with the location.
If you are in a tourist area.
A unique idea may work very well.
But if you are in a non-tourist area.
You will most likely target locals.
Therefore, your cafe business or coffee store needs to bring customers back again and again.
Remember the 80/20 law.
20% of your customers bring in 80% of sales.
So it’s wise not to go over the top with your theme.
But instead, focus on what will bring your ideal customer back again and again.
A great example of this is in Manila.
Close to the airport is a coffee shop that is zoo-themed.
The staff wore zookeeper outfits, and there were lots of animals all across the café.
This was a fantastic experience, but it would not be my new regular coffee shop as I go to coffee stores to work.
So it’s essential to have a balance.
Often coffee stores do very well when there is a balance between the location and the theme.
5. Purchase Your Café Equipment & Supply
When starting a cafe business in the Philippines, your equipment is a focus point.
If you have chosen to franchise a coffee business in the Philippines, equipment and supplies often have been taken care of to a certain degree.
This may be covered in your overall financial investment.
(Rules change depending on the chain of coffee stores you are working with).
If you are starting a coffee business in the Philippines on your own…
You will need to find your equipment and supplies yourself.
Suppose you are trying to save capital.
(Which is always a wise decision when starting a new business).
In that case…
You may be able to purchase second-hand equipment from coffee stores or even on Facebook!
Another option to reduce the costs is purchasing equipment in countries such as China.
Still, import tax and delivery must be taken into account.
There are also several Facebook pages of companies advertising the rental of coffee equipment in the Philippines.
6. Recalculate Financial Figures And Projection
This is perhaps one of the essential areas of any business.
This has made our number 6th spot on how to start a cafe business in the Philippines because the decisions you will make on the five steps above will determine your financial figures and potential projections for the future.
Doing a rough guide of your finances is crucial before making any solid decisions.
One of my biggest mistakes is starting a business without careful calculation.
Here is a stupid mistake I made when I started one of my businesses in 2022…..
I purchased all the equipment and supplies but ran out of money :(.
Thus I recommend doing this before and after opening your business.
In other words, business owners must make a rough projection of costs when starting a new business.
Still, as more information is gathered, the costs and profit from a coffee shop business in the Philippines become clearer.
At this stage, you may need to adjust some aspects of your business.
So what do you need to include, and how much does it cost to open a coffee shop in the Philippines?
Towards the end of this article…
We have gone through how much it costs to open a coffee shop in the Philippines.
So we will leave this question for the time being and focus on the original question…
What do you need to include in the costs and prices?
Here are a few things to consider if you haven’t already added these to your café / coffee business plan.
- 12, 24, And 36 Months Projections
- Advertisement And Marketing Costs
- Break-Even Point
- Cleaning And Maintenance Fee Of Equipment And Property
- Coffee Equipment And Supply Price
- Customer Reward Program And Financial Implications
- Delivery/Takeaway Supply Costs
- Emergency Funds And Exit Strategies
- Franchisee Free
- Internet And Wi-Fi Costs
- List Of Total Cost And Price Of The Product Including Profit Margin
- Profit Reinvestment Plan
- Rental Costs
- Tax And Employees Benefits
You may wish to consider a few different areas depending on the size and idea of your coffee store.
Additionally, many franchising companies will already have the majority of this information, which makes your life much easier if this is your business decision.
7. Stop, Start And Continue.
At the beginning stages of starting a business in the Philippines…
Many different opportunities and challenges await.
If you have a robust business plan and have taken all the appropriate steps, you stand a much higher chance of succeeding when opening a coffee business in the Philippines.
Nonetheless, at this stage, it’s all about stop, start and continue.
The first stages stop.
For example, you have a small coffee kiosk, and after you have started your coffee business, you notice that you are spending 5000 pesos a month on marketing that is not bringing in any new customers.
This is an example of business behavior that may need to stop (or change) for the business to grow.
The second stage is starting.
What actions does your business need to start doing to help your business grow and transform?
Perhaps you need to start a referral program or offer a particular type of product that your customers want.
Don’t be afraid to combine a few different ideas to produce something unique.
The third stage is continued.
On the timeline of how to start a cafe business in the Philippines, you are probably at the beginning stages, and your business is likely relatively new.
However, over the past few weeks or months, what things do you need to continue doing to bring success to your business?
How Much Does It Cost To Open A Coffee Shop In the Philippines
The cost to open a coffee shop in the Philippines depends on several factors, including size, location, and type of coffee business.
A large coffee shop will cost upwards of 4,000,000 pesos.
A small kiosk or coffee bar will cost as low as 100,000 – 150,000 pesos.
It’s important to note that the costs above are based on several factors, and the total cost could be higher or lower depending on these factors.
There are a few things that you can do to lower the cost of opening a coffee shop business in the Philippines.
These include negotiating with suppliers, choosing a good but less expensive location, and renting equipment.
Alternatively, you may be looking at increasing capital to open a cafe business in the Philippines.
If this is the case, you may wish to look into business loans or crowdfunding.
What Is The Income Per Day Of Coffee Shop In the Philippines
Working out the income per day a coffee shop could earn in the Philippines is challenging without some basic information.
Nonetheless, as an estimate, if a small coffee shop makes an average of 10 pesos profit per cup and sells on average 30 cups of coffee, then the daily income excluding other costs will be approximately 300 pesos.
To answer this question…
We have made some assumptions.
But it is possible to work out your expected income per day if you were to open a coffee shop business in the Philippines if you have the cost, price, and daily expenses of your business.
Download Coffee Shop Business Plan Philippines PDF
So as you know, opening a cafe in the Philippines or starting a coffee shop business is an idea that may entail many questions.
Perhaps you are looking to download a coffee shop business plan PDF?
If so, Filipino wealth has you covered.
By clicking on the hyperlink above all by clicking on the business plan at the top of this page, you will be redirected to our official business plan template for small businesses in the Philippines.
You can use the plan to input your cost prices and other important information through the template.