1. Rent and Business Rates
Rent is one of the biggest fixed expenses for a coffee shop. Monthly rent varies depending on location, but for a small to medium-sized shop, it typically ranges from £2,000 to £10,000. Business rates—essentially commercial council tax—can add a few hundred to a few thousand pounds each month.
2. Staff Wages
Labour is a significant recurring cost. Expect to pay around £2,000 to £2,200 per full-time employee per month, including National Insurance and other contributions. A coffee shop employing 3 to 5 staff members could spend between £6,000 and £10,000 per month on wages.
3. Stock and Supplies
The cost of ingredients like coffee beans, milk, pastries, cups, lids, cleaning supplies, and packaging usually accounts for about 25% to 35% of sales. For a busy coffee shop, this translates to around £4,000 to £8,000 per month, depending on sales volume and menu offerings.
4. Utilities and Insurance
Monthly expenses for electricity, gas, water, internet, and waste management typically range from £800 to £1,500. Adding insurance and necessary licenses brings this total to roughly £1,000 to £2,000 per month. Insurance usually includes public liability, employer’s liability, and contents cover.
5. Marketing and Promotion
Marketing efforts, including local advertising, social media promotion, loyalty programmes, and community events, can cost between £300 and £1,000 per month. The amount depends on the strategy and how much is managed in-house versus outsourced.
6. Maintenance and Miscellaneous Costs
You’ll also need to budget for equipment maintenance, uniforms, staff training, accounting software, and occasional repairs. These miscellaneous costs can add an additional £500 to £1,000 per month.
7. Typical Monthly Cost Summary
For an average coffee shop in the UK, the monthly operating costs generally fall within this range:
- Rent and business rates: £3,000
- Staff wages: £8,000
- Stock and supplies: £6,000
- Utilities and insurance: £1,500
- Marketing and promotion: £800
- Miscellaneous: £700
Estimated total: £20,000 per month
8. Profitability Considerations
Most coffee shops aim for a gross profit margin of 70–80%. The profit per cup of coffee often ranges between £1 and £1.50. To be profitable, a coffee shop needs to consistently attract customers, control costs, and optimise its menu and service model.
Frequently Asked Questions
Is £20,000 a month realistic for running a coffee shop?
Yes. While some may operate below this figure, most mid-sized independent coffee shops fall within this range.
Can I reduce staffing costs?
Yes, by using part-time or multi-skilled staff and managing rotas efficiently, you can reduce wage expenses.
How can I lower supply costs?
Negotiating with suppliers, managing stock better, and reducing waste are effective ways to cut supply costs.
What is a healthy profit margin for a coffee shop?
A gross margin of 70–80% and a net margin of 10–20% is considered healthy.
Are there seasonal fluctuations in costs?
Yes. Utility bills may increase in colder months, and customer traffic may vary throughout the year.
Should I outsource marketing?
It depends on your skills and budget. Small shops often manage marketing in-house to reduce costs.
Conclusion
Running a coffee shop in the UK typically costs between £15,000 and £25,000 per month. Key expenses include rent, staffing, stock, utilities, and marketing. With smart budgeting, efficient management, and consistent customer flow, a coffee shop can become a profitable and sustainable business.