Start a mobile coffee cart by following these 9 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.
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?
- Who is your target market?
- How long it will take you to break even?
- 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 very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your mobile coffee cart is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
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?.
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.
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: Find the right bank for you, read our review of the Top 5 Banks for Your Small Business
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.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
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?
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.
TRUiC's YouTube Channel
For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe below to view later.
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.
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.