Start a mobile coffee cart by following these 10 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your mobile coffee cart. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Check out our How to Start a Business page.
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a mobile coffee cart?
Start-up costs for a mobile coffee cart business are relatively low — around $16,000 — because, unlike coffee shops, you don’t require a physical space in which to operate. This amount includes licensing for one county, which can vary based on location so check with your local county or city administrative office. To further refine your starting budget, invest in only what you absolutely need. If you plan to serve coffee to go at your first few events, for example, don’t spend money on porcelain cups right away.
Here’s the essential equipment you’ll need to get started:
- Coffee Cart
- A Point-of-Sale (POS) system
- Espresso Machine*
- Drip Coffee Maker and Airpots*
- Serving Items (E.g., Pitchers, Stirrers, Cups, and Lids)
- Steaming Pitchers
- Handwashing Sink
- Water Pump for Your Coffee Maker
- Refillable 5 Gallon Water Jugs
- Drink Add-Ons (E.g., Syrups and Sugar)
*Depending on the type of coffee cart you plan to operate. If you only serve espresso, you don’t need a drip coffee maker. Likewise, you won’t need an espresso machine if you only serve drip coffee.
How does a mobile coffee cart make money?
Mobile coffee cart owners can operate their business in several ways: by selling cups of coffee, by renting their cart to clients with an open bar business model, or by offering a combination of both. The first option works well if you plan to operate at a farmers market or other event for which you personally rent a space and then sell coffee to attendees. The second option involves a client hiring your cart at a flat rate to provide an open bar service. The client pays for your time and product instead of individual attendees, and you can charge a set price by the hour. Finally, the third option involves some combination of renting your coffee cart to local companies and selling cups of coffee at farmers markets or other events.
Your sales volume will depend on the season, but this is a year-round gig for the most part. Summer, for example, will likely be your most profitable season because it typically features many weddings, markets, and fairs. Winter may be your next busiest season if you network enough to secure bookings for company parties. The in-between seasons likely will require diligent budgeting as you focus on promoting your business, booking future events, and working existing bookings.
How much can you charge customers?
To calculate what you should charge your clients and individual customers, consider the amount you invested or owe (e.g., if you took a loan to start your business) as well as your monthly expenses. For example, say you plan to pay $1,333 each month in order to repay a $16,000 loan within a year. If you also plan to book four events per month, you’ll need to make at least $333 per event to cover just your start-up costs.
If you plan to charge by the hour, consider setting a minimum time limit to ensure you can make enough money at each event. For events at which you’ll sell coffee by the cup, research the prices your local competitors charge. If the coffee shops in your area typically charge $3 for a shot of espresso, for example, you’ll know that’s a reasonable price point for your customers.
How much profit can a mobile coffee cart make?
After your initial investment, you can expect several ongoing business expenses. These include the cost of your product ingredients (e.g., coffee, milk, and syrups), water jugs (e.g., refillable five-gallon jugs), transportation costs like gas and insurance, and employee wages if you have any staff members.
How can you make your business more profitable?
Your profitability will depend on how many events you can book each month. The more events you book after you cover your monthly expenses, the more profit you can make.
You can boost your profits by booking bigger events, offering more items like food or tea drinks at an additional cost, or stocking in-demand coffees and other products to drive interest. If you only serve espresso drinks or drip coffee, another way to increase your profitability is to sell both to help attract more customers with an expanded set of offerings.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Mobile Coffee Cart Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your mobile coffee cart is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
Start A Mobile Coffee Cart In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
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What happens during a typical day at a mobile coffee cart?
On days when your coffee cart supports an event, you’ll focus on serving your customers. This includes setting up your cart, making coffee, and providing excellent customer service. On the other days, you’ll need to focus on networking and promoting your business in order to find more events to which you can bring your cart.
What are some skills and experiences that will help you build a successful mobile coffee cart?
Running a successful mobile coffee cart requires business owners to excel in four areas:
- Coffee Knowledge: This is the most important skill to have before starting this type of business. You’ll need a strong understanding of how to extract espresso, steam milk, and build drinks as well as the ability to operate other coffee equipment, such as drip coffee makers.
- Adaptability: You’ll also need a high degree of flexibility to operate a business with a schedule that shifts every week and requires you to solve problems as they arise at events. Troubleshooting skills are essential when you’re on the go.
- Customer Service: This will take up the majority of your time and energy while you operate your cart. Whether you’re serving the client who hired you or their guests, you’ll need to provide a consistently outstanding customer experience.
- Networking: This is how you’ll find and book all the events you work. As such, you should feel confident in your ability to network with potential customers.
What is the growth potential for a mobile coffee cart?
The growth of your mobile coffee cart business depends partially on your availability and your networking skills. If you can book events consistently, your business will grow. As your cart’s popularity and brand recognition increase, you may consider turning your business into a brick- and-mortar coffee shop.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
How and when to build a team
Starting out, this business won’t require much labor as long as you can set up your cart — and then take it down — alone. For high-volume events, such as a farmers market, you’ll need at least one other person to help you balance taking orders, handling payments, and making customers’ drinks. You should consider adding an additional person to your team once you start to book more events.