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How to Start a Coffee Cart Business

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Edited by:

Reviewed by: Daniel Javor

Updated on December 23, 2022

How to Start a Coffee Cart Business

Disclaimer: Step by Step Business’ content is for informational and educational purposes only. It’s not intended to be a substitute for professional legal or tax advice. All of our articles are thoroughly reviewed and fact-checked by our editorial team. Read our editorial guidelines for more details.

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Fast Facts

Investment range

$9,050 - $18,100

Revenue potential

$63,000 - $96,000 p.a.

Time to build

1 – 3 months

Profit potential

$44,000 - $67,000 p.a.

Industry trend

Growing

Commitment

Flexible

How to Start a Coffee Cart Business

About 70% of Americans drink coffee at least weekly, and some like to grab a cup when they’re on the go. Food trucks, which include coffee trucks and coffee carts, are a booming industry, with the number of food trucks operating in the US tripling in a mere decade.

A mobile coffee cart can operate in city centers with a lot of foot traffic, at festivals, or even at events such as weddings or corporate events. If you start a coffee cart business, you can have some fun, share some great java, and make a good living. 

You’ll need to do some homework though, to learn how to start and run a business. Luckily, this step-by-step guide will put you on the path to coffee cart success.

Step 1: Decide if the Business Is Right for You

Pros and cons

Starting a coffee cart business has pros and cons to consider before deciding if it’s right for you.

Pros

  • Fun Lifestyle – Be out and about meeting people
  • High Demand – Most Americans love a good cup of joe
  • Good Money – Profit margins on coffee are high

Cons

  • Investment Required – A cart and equipment will be $$$
  • Crowded Market – Compete with coffee trucks and other beverage trucks

Coffee cart industry trends

Industry size and growth

There are no specific coffee cart industry statistics, but they fall under the food truck industry.

coffee cart industry size and growth

Trends and challenges

Trends in the coffee cart industry include:

  • Coffee carts at weddings are growing in popularity, particularly with “brunch weddings” trending.
  • Younger consumers are demanding coffees that contain no GMOs or artificial ingredients.

Challenges in the coffee cart industry include:

  • Consumers are demanding unique flavors and a variety of options, so coffee cart businesses have to create strong menus to stand out in the market.
  • As coffee carts gain more fans, the market is becoming more competitive.
coffee cart Trends and Challenges

Consumer spending

coffee cart consumer spending

Demand hotspots

  • Most popular states The most popular states for baristas are Nevada, Alaska, and Hawaii.((https://www.zippia.com/barista-jobs/best-states/))
  • Least popular states The least popular states for baristas are Montana, South Carolina, and Idaho.
coffee cart demand hotspots

What kind of people work in coffee carts?

  • Gender – 69.7% of baristas are female, while 30.3% are male.((https://www.zippia.com/barista-jobs/demographics/))
  • Average level of education The average barista has a bachelor’s degree.
  • Average age The average barista in the US is 24.3 years old.
coffee cart demographics

How much does it cost to start a coffee cart business?

Startup costs for a coffee cart business range from $9,000 to $18,000. Costs include the cart itself and the coffee equipment. There are a variety of types of coffee carts that you can get, most of which are trailers you hitch to your vehicle. If you get one that is not a trailer, you’ll need a trailer to transport it. 

You’ll need a handful of items to successfully launch your coffee cart business, including: 

  • Coffee Cart
  • Espresso Machine
  • Coffee Grinder
  • Coffee Brewer
  • Coffee Roaster
  • Serving Supplies
  • Steaming Pitchers
  • Handwashing Sink
  • Water Pump for Your Coffee Maker
  • Water Jugs
Start-up CostsBallpark RangeAverage
Setting up a business name and corporation$150 - $200$175
Business licenses and permits$100 - $300$200
Insurance$100-$300$200
Business cards and brochures$200 - $300$250
Website setup$1,000 - $3,000$2,000
Coffee cart$6,000 - $10,000$8,000
Equipment$1,000 - $3,000$2,000
Inventory of coffee beans and add on ingredients$500 - $1,000$750
Total$9,050 - $18,100$13,575

How much can you earn from a coffee cart business?

If you set your coffee cart up in busy city areas or at festivals, you’ll charge by the cup. Specialty coffee drinks might be about $4 per cup. If you do events, like weddings, you can charge by the hour or a flat fee for the whole event. You can probably expect to make about $300 per event. Your profit margin should be about 70%.

In your first year or two, you might do three events per month and when you’re not at events, sell 50 coffee drinks a day, five days a week, bringing in $63,000 in annual revenue. This would mean $44,000 in profit, assuming that 70% margin. As your business gains traction, you might do five events per month and sell 75 coffee drinks a day five days a week. With annual revenue of $96,000, you’d make a healthy profit of $67,000.

coffee cart business earnings forecast

What barriers to entry are there?

There are a few barriers to entry for a coffee cart business. Your biggest challenges will be:

  • The startup costs of the coffee cart and equipment
  • Standing out in a competitive market

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Step 2: Hone Your Idea

Now that you know what’s involved in starting a coffee cart business, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Why? Identify an opportunity

Research coffee carts in your area to examine their products, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a coffee van business or a cold brew coffee cart.

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as latte foam art.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your products or services

You should come up with a specialty menu so that your coffee cart is unique. You could also offer bakery items at your cart. 

How much should you charge for coffee?

A regular cup of coffee might cost $2 to $3 while a specialty coffee drink could cost $4 to $6. For events, you should make at least $50 per hour. Check prices in your area to make sure you’re competitive. After your costs of ingredients and fuel, you should aim for a profit margin of about 70%. 

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will be broad since the majority of people drink coffee. You should spread out your marketing to include sites like TikTok, Instagram, and Facebook. 

coffee cart business idea rating

Step 3: Brainstorm a Business Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

  • Short, unique, and catchy names tend to stand out
  • Names that are easy to say and spell tend to do better 
  • Name should be relevant to your product or service offerings
  • Ask around — family, friends, colleagues, social media — for suggestions
  • Including keywords, such as “coffee” or “mobile coffee cart”, boosts SEO
  • Name should allow for expansion, for ex: “Jim’s Bakery” over “Jim’s Cookies”
  • Avoid location-based names that might hinder future expansion
  • Use online tools like the Step by Step Business Name Generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

  • Executive Summary: Brief overview of the entire business plan; should be written after the plan is complete.
  • Business Overview: Overview of the company, vision, mission, ownership, and corporate goals.
  • Product and Services: Describe your offerings in detail.
  • Market Analysis: Assess market trends such as variations in demand and prospects for growth, and do a SWOT analysis.
  • Competitive Analysis: Analyze main competitors, assessing their strengths and weaknesses, and create a list of the advantages of your services.
  • Sales and Marketing: Examine your companies’ unique selling propositions (USPs) and develop sales, marketing, and promotional strategies.
  • Management Team: Overview of management team, detailing their roles and professional background, along with a corporate hierarchy.
  • Operations Plan: Your company’s operational plan includes procurement, office location, key assets and equipment, and other logistical details.
  • Financial Plan: Three years of financial planning, including startup costs, break-even analysis, profit and loss estimates, cash flow, and balance sheet.
  • Appendix: Include any additional financial or business-related documents.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist at Fiverr to create a top-notch business plan for you.

what to include in a business plan

Step 5: Register Your Business

Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to coffee cart businesses. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your coffee cart business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

  • Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
  • General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
  • Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
  • C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
  • S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using ZenBusiness’s online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have. 

types of business structures

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist, and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

  • Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
  • SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
  • Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
  • Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
  • Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
  • Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a coffee cart business. You might also try crowdfunding if you have an innovative concept. 

Step 8: Apply for Licenses/Permits

Starting a coffee cart business requires obtaining a number of licenses and permits from local, state, and federal governments.

You may need a mobile food license. Check with your state for requirements. You also may need permits to set up your cart in certain locations.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your coffee cart business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

  • General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
  • Business Property: Provides coverage for your equipment and supplies.
  • Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
  • Worker’s compensation: Provides compensation to employees injured on the job.
  • Property: Covers your physical space, whether it is a cart, storefront, or office.
  • Commercial auto: Protection for your company-owned vehicle.
  • Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
  • Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.
types of business insurance

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. 

You may want to use industry-specific software, such as TouchBistro, Harbor Touch, or eHopper, to manage your menu, inventory, and payments. 

Accounting

  • Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero
  • If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Marketing

Some of your business will come from the casual passerby or online visitors, but you should still invest in digital marketing! Getting the word out is especially important for new businesses, as it’ll boost customer and brand awareness. 

Once your website is up and running, link it to your social media accounts and vice versa. Social media is a great tool for promoting your business because you can create engaging posts that advertise your products: 

  • Facebook: Great platform for paid advertising, allows you to target specific demographics, like men under age 50 in the Cleveland area. 
  • Instagram: Same benefits as Facebook but with different target audiences.
  • Website: SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales. Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Coffee Now”. This can sharply increase purchases. 
  • Google and Yelp: For businesses that rely on local clientele, getting listed on Yelp and Google My Business can be crucial to generating awareness and customers.

Kickstart Marketing

Take advantage of your website, social media presence and real-life activities to increase awareness of your offerings and build your brand. Some suggestions include: 

  • Signage – Put up eye-catching signage at your cart and website 
  • Post a video – Post a video about your coffee cart. Use humor and maybe it will go viral!
  • Email marketing/newsletter – Send regular emails to customers and prospects. Make them personal. 
  • Start a blog – Start a blog and post regularly. Change up your content and share on multiple sites.
  • Paid ads on social media – Choose sites that will reach your target market and do targeted ads.
  • Payper-click marketing – Use Google AdWords to perform better in searches. Research your keywords first.

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your coffee cart business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your coffee cart business could be: 

  • The perfect cup of coffee to start your day right 
  • Specialty coffee drinks for your next big event
  • Iced or hot – fresh coffee made your way
unique selling proposition

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a coffee cart business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in coffee carts for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in coffee carts. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a coffee cart business include:

  • Baristas – make coffee, customer service
  • General Manager – scheduling, ordering, accounting
  • Marketing Lead – SEO strategies, social media

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Start Making Money!

If you’re looking for a business to start that offers a fun lifestyle and a lot of potential, a coffee cart business could be for you. Mobile food and beverage businesses are heating up fast, with the food truck market exploding in the last decade. If you have a passion for all things java and a desire to serve customers tasty coffee drinks, you could build a thriving coffee cart operation and later open your own coffee shop! 

You’ve completed your business homework now, so it’s time to launch your coffee cart business and start brewing up success.

Coffee Cart Business FAQs

How much does it cost to start a coffee cart business?

You can start a coffee cart business for about $9,000. Costs include the cart and all the coffee equipment that you’ll need.

Is a coffee cart business profitable?

Yes, profit margins on coffee are high. You just need to set up your cart in good locations, provide a great product and outstanding customer service and you can make a nice living.

What licenses do I need to start a coffee cart business?

You may need a mobile food license. Check with your state for requirements. You also may need permits to set up your cart in certain locations. You might need other business licenses and permits at the state and local levels. Check with your local governments for requirements or visit MyCorporation’s Business License Compliance page.

How should I structure the pricing for my coffee cart?

A regular cup of coffee might cost $2 to $3 while a specialty coffee drink could cost $4 t0 $6. For events, you should make at least $50 per hour. Check prices in your area to make sure you’re competitive.