How to Start a Coffee Shop Business in India: Step-by-Step Guide, Budget, Location & Costs

India's love for coffee is growing stronger than ever! Once seen as a niche beverage, coffee has become a lifestyle choice for millions of Indians. With a booming middle class and a growing appetite for global trends, this is the perfect time to tap into this lucrative market.

Whether you dream of a cozy, bohemian café that feels like home or a vibrant, Instagram-worthy coffee shop, the possibilities are endless. In this article, we walk you through the step-by-step process of starting a coffee shop business in India, from understanding the market and planning your concept to managing finances and crafting a memorable brand.

Understanding the Indian Coffee Market

India’s coffee market has seen a massive rise over the past two decades, expanding at a robust 10-15% annually. The Indian coffee industry is projected to reach up to $3.2 billion by 2028. This surge is fueled by rising global exposure, shifting lifestyles, and India’s strong coffee cultivation roots. With a growing base of coffee enthusiasts, the demand for trendy and cozy coffee shops has skyrocketed. 

The road to success is not an easy one. Your coffee shop’s profitability will hinge on factors like location, competition, product quality, pricing, and a solid marketing strategy. The Indian coffee shop business offers a highly promising avenue for aspiring entrepreneurs.

How to Start a Coffee Shop in India: Essential Steps for Beginners

Here are the key steps you need to follow to start a coffee shop business in India. These will help you plan better, avoid common mistakes, and build a strong foundation for your cafe business:

Building a Coffee Shop Business Plan in India

Before thinking about your cafe’s design or menu, it's important to make a clear coffee shop business plan in India. This plan will help you decide what kind of cafe you want, who your customers are, what you’ll sell, and how much everything will cost. A strong plan gives you direction and helps avoid mistakes later.

Think about whether you want your cafe to be a quiet place for students or a lively hangout for friends. This will guide your menu, prices, and marketing. Also, include your cafe’s layout in the plan. This helps you use the space well and makes customers feel comfortable.

Planning Your Cafe’s Ambience and Menu

Before diving into logistics, prepare a strong concept that shapes your café’s menu, design, and brand. Think about the atmosphere you want to offer: a cozy reading nook and a vibrant social hub. Next, identify your target audience: are you catering to students, professionals, or families, because each segment has unique tastes, price expectations, and preferences. 

Tip: Visit popular cafés in your city and observe their crowd, menu, and pricing. Note what works and think about how you can stand out.

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Choosing the Perfect Location for Your Coffee Shop

This step is as crucial as your concept and budget; it needs to be factored in early. If you’re venturing into an unfamiliar city, then study customer behaviour, popular hangouts, and existing coffee trends.

• Location demographics – Who lives, works, or passes by?
• Competition – Are there too many similar cafés nearby?
• Accessibility – Is it easy for people to reach?
• Visibility – Can your shop catch the eye of passersby?
• Traffic flow – Are there enough people moving through the area?
• Budget – Can you afford rent, utilities, and other costs here?

Set a Budget for Your Coffee Shop

The cost to open a coffee shop in India depends on several factors like location, size, and menu offerings. Starting a café in India typically costs between INR 5–10 lakhs, though costs can rise to INR 25 lakhs for larger setups. If you are considering a coffee shop franchise, entry-level investments can start from INR 3 lakhs.

Here’s a quick breakdown of the key expenses to budget for:

• Rent
• Equipment and inventory
• Furniture and decor
• Staff salaries
• Marketing and advertising

Create a Functional Floor Plan

Your café’s layout is key to attracting and retaining customers. Whether you’re designing cozy corners for solo visitors or larger tables for groups, it is important to optimize space to ensure customer flow without overcrowding.

Apply For Permits and Licenses

Before launching your cafe or thinking of serving your first customer, make sure you have secured all the necessary permits and licenses for opening a cafe in India. These include health and safety clearances, FSSAI registration, shop and establishment licenses, GST registration, and fire safety approvals. 

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Purchase Essential Equipment and Tools

In order to run your coffee shop efficiently, you will need the following equipment:

• Brewing equipment (grinders, espresso machines, drip makers)
• Water filtration systems

These essentials can cost around INR 8.5 lakhs. No wonder many opt for franchises—they provide everything from setup to support at a lower upfront cost.

Other essentials include:

• Quality coffee beans and teas
• Cups, containers, straws, napkins
• Food and beverages
• POS systems and billing software

Hire the Right Team for Smooth Café Operations

Your café’s success hinges on the team behind the counter. Friendly and skilled staff not only keep operations running but also create a welcoming atmosphere that keeps customers coming back.

For a medium-sized café, you will typically need 5–6 employees, while larger setups may require 8–12 staff. Essential roles include:

• Manager
• Baristas
• Cashier
• Accountant
• Baker

Start recruiting early to find reliable talent who aligns with your café’s culture and service standards.

Choose the Right Coffee Supplier

Are you looking for suppliers with a solid reputation, transparent sourcing practices, and reliable delivery timelines? Building a good relationship with your supplier ensures consistent quality and supply, which is necessary for customer satisfaction. Don’t hesitate to sample different beans before finalizing a supplier.

Promote Your Coffee Shop

The key to making your coffee known is marketing. As a newcomer, you need both online and offline strategies to reach your audience and build buzz.

Here are some quick tips:

• Build a website and post regular blogs to boost online visibility.
• Share new offers and discounts on social media platforms.
• Try promotions like “Buy 1 Get 1 Free” to attract first-time customers.
• Create a unique brand voice and stay consistent.
• Engage actively with customers, online and offline, to build loyalty.

Coffee Shop Startup Costs – A Detailed Breakdown

Launching a coffee shop requires careful financial planning. Here’s a breakdown of the key expenses:

5 Tips for Opening a Café on a Low Budget

Here are practical, budget-friendly tips to launch your dream coffee shop with limited investment:

• Focus on Essentials: Start with the basics, invest in a quality espresso machine, and simple yet cozy seating, and consider second-hand or leased equipment to cut costs.
• Smart Inventory Management: Plan your menu to minimize waste and improve storage and portion control. This boosts profits and cuts unnecessary expenses.
• Negotiate a Favourable Lease: Look for spots with flexible, affordable lease terms. Consider shared spaces or temporary pop-ups to keep rent manageable.
• Use Low-Cost Marketing: Focus on digital channels like social media, your website, and local community engagement to build awareness without overspending. Consider online ordering to expand reach.
• Efficient Staffing and Training: Optimize your schedule and train staff well to maximize productivity, reducing the need for excessive hiring.

Conclusion

Opening a coffee shop in India can be rewarding business, but it requires a solid plan and readiness to overcome challenges. Startup costs will vary based on factors like location, space, and equipment. With the café industry in India growing rapidly, this is a golden opportunity for aspiring entrepreneurs. You can set your coffee shop up for lasting success by following the steps we have covered in this article.

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FAQs

How much does it cost to open a coffee shop in India?

The average cost to open a coffee shop in India ranges from INR 5–25 lakhs, depending on factors like location, size, menu, and design. Budget setups can begin around INR 5 lakhs.

What licenses are required to start a coffee shop in India?

You need several licenses, including FSSAI registration, GST registration, Shop & Establishment Act license, Fire safety clearance, and a local municipal health license.

Is opening a coffee shop in India profitable?

Yes, with the rising café culture, a well-located and managed coffee shop can be profitable. Profitability depends on location, menu pricing, branding, and operational efficiency.