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.

Coffee cart industry trends

Industry size and growth

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

• Industry size and past growth – The US food truck industry is worth $1.2 billion in 2022 after expanding 6.4% annually over the last five years.((https://www.ibisworld.com/industry-statistics/market-size/food-trucks-united-states/)) 
• Growth forecast – The US food truck industry is projected to grow by 3.4% in 2022.
• Number of businesses – In 2022, 35,512 food truck businesses are operating in the US.((https://www.ibisworld.com/industry-statistics/number-of-businesses/food-trucks-united-states/)) 
• Number of people employed – In 2022, the US food truck industry employs 40,547 people.((https://www.ibisworld.com/industry-statistics/employment/food-trucks-united-states/))

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.

Consumer spending

• Average consumer spend –  US women spend about $2,327 per year on coffee, while men spend $1,934 per year.((https://www.yahoo.com/video/much-americans-spending-coffee-smarter-181719981.html))
• Potential customer base – About 70% of Americans drink coffee at least weekly.((https://www.ncausa.org/Newsroom/NCA-releases-Atlas-of-American-Coffee))
• Average prices – The average price of a cup of coffee is $2.70.((https://www.usnews.com/news/blogs/data-mine/2015/09/29/americans-pay-an-average-270-for-coffee-while-tipping-20-percent)) 

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.

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.

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 Costs	Ballpark Range	Average
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.

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

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. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

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.

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

What? Determine your products

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. 

Where? Choose your coffee cart location

Choosing the right location for your coffee cart business is essential for attracting customers and ensuring its success. Look for a spot with high foot traffic and strong demand for coffee, such as near a busy intersection, a transit hub, or a popular shopping area.

Consider accessibility and convenience, ensuring that the location is easily reachable by pedestrians and has ample space for your coffee cart. Additionally, assess the competition in the area and aim to differentiate your coffee cart business by offering unique blends, flavors, or brewing methods, or by creating a welcoming and personalized experience for customers.

By strategically choosing the right location, you can establish a profitable and popular coffee cart business that caters to a wide range of customers and stands out in the competitive coffee industry.

Step 3: Brainstorm a Coffee Cart 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: “Caffeine Crusade” over “Vegan Coffee Cart”
• Avoid location-based names that might hinder future expansion

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 Coffee Cart 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: A brief overview of your coffee cart business, summarizing its key aspects, goals, and potential for success.
• Business Overview: A detailed description of your coffee cart business, including its mission, vision, and the problem it aims to solve in the market.
• Product and Services: Clearly outline the specific coffee and snack offerings, emphasizing what sets your products apart from competitors.
• Market Analysis: Analyze the target market for your coffee cart, including demographics, trends, and potential growth, to demonstrate a clear understanding of your customer base.
• Competitive Analysis: Evaluate competitors in the coffee industry, highlighting strengths, weaknesses, and how your coffee cart will differentiate itself to gain a competitive edge.
• Sales and Marketing: Outline strategies for promoting and selling your coffee products, including pricing, promotions, and the channels through which you’ll reach your customers.
• Management Team: Introduce key members of your coffee cart business team, emphasizing their relevant skills and experience in the industry.
• Operations Plan: Detail the day-to-day operations of your coffee cart, covering location, suppliers, equipment, and any necessary partnerships to ensure smooth functioning.
• Financial Plan: Provide a comprehensive financial overview, including startup costs, revenue projections, and a break-even analysis to demonstrate the financial viability of your coffee cart business.
• Appendix: Include any additional documents, charts, or information that supports and enhances the content of your coffee cart business plan, such as permits, licenses, or detailed market research data.

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

Step 5: Register Your Business

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 an 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.

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.

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 Coffee Cart Business Licenses and 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.

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.

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.

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.

You can create your own website using website builders. 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.

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. 

Marketing

For your coffee cart business, the marketing strategy should focus on highlighting the quality of your coffee, the convenience and uniqueness of your mobile setup, and the personal touch you bring to each customer interaction. Emphasize your commitment to providing a great coffee experience, whether it’s for busy commuters, office workers, or at events and gatherings. Here are some powerful marketing strategies for your future business:

Kickstart Marketing

• Professional Branding: Your branding should reflect the quality, warmth, and convenience of your coffee service, from your cart design to your cups and signage.
• Direct Outreach: Network with local businesses, event planners, and community groups to offer your coffee services for meetings, events, and local markets.

Digital Presence and Online Marketing

• Professional Website and SEO: Develop a simple yet inviting website that details your menu, locations, and schedule. Use SEO best practices to optimize for local search terms related to coffee, mobile cafes, and event catering.
• Social Media Engagement: Use platforms like Instagram and Facebook to post engaging content about your daily offerings, special brews, and the locations you’ll be serving.

Content Marketing and Engagement

• Coffee Blog: Share posts about your coffee sourcing, brewing techniques, and the story behind your business.
• Customer Stories and Reviews: Feature happy customers and their testimonials, showing the community aspect of your cart.
• Interactive Campaigns: Run social media contests or polls, like voting for a new seasonal drink or sharing coffee preferences.

Experiential and In-Person Engagements

• Pop-Up Events: Partner with local businesses or events to set up your cart, offering special promotions or themed drinks.
• Coffee Tasting Sessions: Host occasional coffee tastings to introduce new blends or brewing methods to your customers.

Collaborations and Community

• Partnerships with Local Businesses: Collaborate with local bakeries or food vendors to offer complementary products at your cart.
• Community Involvement: Participate in community events, festivals, and markets, positioning your cart as an integral part of the local scene.

Customer Relationship and Loyalty Programs

• Loyalty Cards: Offer loyalty cards that provide a free drink after a certain number of purchases to encourage repeat business.
• Referral Incentives: Encourage customers to refer friends or colleagues to your cart for special discounts or a free drink.

Promotions and Advertising

• Targeted Local Advertising: Use local advertising in community bulletins, at nearby businesses, and on local online forums.
• Email Marketing: Collect email addresses to send out updates about your location, new offerings, and exclusive deals for subscribers.

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

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: Run a Coffee Cart Business – 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.