How to start a mobile coffee business

June 12, 2024

Mobile coffee businesses have surged in popularity across the UK, capitalising on the nation’s love affair with coffee. According to data in 2023, in-store coffee purchases fell by 6% but mobile sales are on the rise*. There is increasing demand for quality beverages served at bustling urban centres, events, and local markets, focused on convenience.

Success stories include seasoned baristas who sought entrepreneurial opportunities and coffee enthusiasts who turned their passion into a startup. So, whatever your background, if you have a passion for coffee, you can start your own startup story.

In this blog, we’ll explore the ins and outs of starting a mobile coffee business, from navigating legal requirements to creating a winning marketing strategy, empowering aspiring entrepreneurs to embark on their caffeine-fuelled journey.

Understanding the Mobile Coffee Business

A mobile coffee business involves serving high-quality coffee and related beverages from a portable setup, allowing operators to reach customers at various locations, such as busy streets, events, and festivals.

Unlike traditional coffee shops, mobile setups offer the significant advantage of lower startup and operational costs, greater flexibility in choosing and changing locations, and the ability to directly engage with a diverse customer base.

There are several types of mobile coffee businesses to consider, including coffee carts, which are compact and highly manoeuvrable; coffee vans, which offer more space for equipment and supplies; and coffee bikes, which provide an eco-friendly and novel approach to serving coffee. Each type has its own benefits, catering to different business models and customer needs.

Market Research and Business Plan

Market Research

Conducting thorough market research is crucial for the success of a mobile coffee business, as it helps you understand the demand, competition, and potential customer base in your chosen area. Identifying your target audience, such as commuters, office workers, or event attendees, allows you to tailor your offerings and marketing efforts effectively.

Know your USP!

A unique selling point (USP), such as specialty coffee blends, eco-friendly practices, or gourmet pastries, can set your business apart from competitors.

Business Planning

This planning phase ensures that you have a well-defined roadmap for launching and growing your mobile coffee business. Drafting a comprehensive business plan is essential and should include:

  1. Clear business goals
  2. A detailed financial plan outlining startup costs and projected earnings
  3. A robust marketing strategy that leverages social media, local partnerships, and event participation to build brand awareness and attract customers.

Legal Requirements and Licencing

Let’s look at the significant licences you will need to operate legally, including how to apply for the licence and the approximate cost and timeframe to apply.

Street Trading Licence

Required for selling goods in public spaces. This licence is typically issued by the local council and allows you to legally operate in designated areas.

Apply through your local council’s website or office. You’ll need to provide details about your business, the type of products you’ll sell, and where you intend to trade.

Costs vary by location and can range from £100 to £1,000 annually. Processing times can take anywhere from a few weeks to a couple of months.

Food Business Registration

Registering as a food business is mandatory for any business preparing, cooking, storing, handling, distributing, supplying, or selling food.

You can register with your local environmental health department, which can often be done online, providing information about your business operations and premises. This is generally free of charge, but registration should be completed at least 28 days before you start trading.

Waste Disposal and Recycling Permits

Ensure that you manage waste responsibly, including proper disposal and recycling of coffee grounds, cups, and other waste materials.

Contact your local council to understand the specific requirements and apply for the necessary permits or waste collection services. Costs depend on the volume and type of waste. Fees may be incurred for special waste collection services, and processing times vary by council.

Health and Safety Regulations

Adhering to health and safety regulations should be a high priority for a mobile coffee business. Customers will want to see excellent ratings, which will in turn help to increase your credibility and reputation and develop loyalty.

Food Hygiene

Key regulations to comply with include maintaining high standards of food hygiene, which involves proper storage, handling, and preparation of coffee and related products to prevent contamination.

Equipment Safety

Equipment safety is also critical; regular maintenance and checks are necessary to ensure that all machinery operates correctly and safely.

Staff Training

Comprehensive staff training in both food safety practices and emergency procedures is essential to uphold these standards consistently.

Regular inspections by local health authorities not only enforce compliance but also provide opportunities to address potential issues proactively, ensuring that the business maintains a reputation for quality and safety.

Insurance for Your Mobile Coffee Business

Securing the right insurance is crucial for protecting your mobile coffee business against potential risks and liabilities. Key types of insurance required include:

Public Liability

Public liability insurance which covers legal costs and compensation claims from third parties for injuries or property damage caused by your business operations.

Product Liability

Product liability insurance is essential for safeguarding against claims related to any harm caused by the products you sell, such as allergic reactions or food poisoning.

Employers’ Liability

If you employ staff, employers’ liability insurance is mandatory, covering claims from employees who may suffer work-related injuries or illnesses.

Having comprehensive coverage ensures that your business can handle unexpected incidents without suffering significant financial setbacks, providing peace of mind and stability as you grow your mobile coffee enterprise.

Read more on why Catering Businesses need insurance.

Equipment and Setup

We’ve highlighted a checklist of essential equipment you’ll need to get started.

Coffee Machine: A high-quality espresso machine suitable for mobile use.

Coffee Grinder: A reliable grinder for fresh coffee beans.

Water Filtration System: Ensures clean, high-quality water for brewing.

Power Supply: Generator or battery system to run equipment.

Storage Solutions: Cabinets or bins for storing coffee beans, cups, and other supplies.

Refrigeration Unit: For storing milk, cream, and other perishable items.

POS System: A mobile point-of-sale system for processing payments.

Cash Register/Drawer: For handling cash transactions securely.

Serving Utensils: Cups, lids, stirrers, and napkins.

Cleaning Supplies: Brushes, cloths, sanitisers, and waste disposal bins.

Milk Frother: For creating lattes, cappuccinos, and other milk-based drinks.

Hot Water Dispenser: For making teas and other hot beverages.

Signage and Menus: Clearly display your offerings and prices.

Portable Sink: For handwashing and cleaning utensils.

Canopy or Umbrella: Protection from weather conditions.

Temperature Control Solutions: Heaters or coolers, depending on climate needs.

Seating Arrangements: Optional, but helpful if space allows.

Marketing Your Mobile Coffee Business

Creating a strong marketing strategy is essential for promoting a mobile coffee business and attracting customers. By focusing on these marketing strategies, you can effectively promote your mobile coffee business and differentiate yourself in a competitive market.

Social Media

Establishing a strong social media presence on platforms like Instagram, Facebook and TikTok allow you to showcase your offerings, engage with customers, and build a loyal following.

Local Events

Participating in local events and festivals provides excellent opportunities to reach a diverse audience and generate buzz around your business.

Local Partners

Forming partnerships with local businesses, such as offices, shops, or community centres, can expand your reach and attract regular customers. Building a loyal customer base requires consistent quality, excellent customer service, and personalised interactions.

Branding

Furthermore, branding plays a crucial role in creating a memorable experience for customers, from eye-catching logos and signage to unique packaging and consistent messaging.

Is a coffee van profitable?

A mobile coffee business can be highly profitable due to lower overhead costs compared to traditional brick-and-mortar coffee shops. The initial investment is generally lower, encompassing expenses for the mobile unit, equipment, licences, and initial stock. Operating costs, such as fuel, maintenance, and ingredients, are also relatively manageable.

Profit margins can be significant, especially with premium pricing for specialty coffee and minimal staffing requirements. A mobile coffee business can yield impressive earnings and profit margins. For instance, with an average cup of specialty coffee priced at £3 and an estimated 100 cups sold per day, daily revenue could reach £300. Considering an average monthly operation of 20 days, monthly revenue could amount to £6,000.

Profit margins can vary but are typically around 60-70% after deducting costs for ingredients, fuel, maintenance, and other expenses. Managing expenses efficiently is key to maximising profitability.

Tips include bulk purchasing ingredients for discounts, optimising routes to minimise fuel costs, and implementing eco-friendly practices to attract environmentally conscious customers. Additionally, diversifying revenue streams by offering catering services for events and corporate functions can further boost earnings.

Is a mobile coffee van a good business?

Ultimately the decision is yours but let’s look at the pros and cons of a mobile coffee business to help you measure up whether it’s worth it.

Pros

Cons

Lower startup costs

Weather dependency

Flexibility in choosing locations

Limited space for equipment and supplies

Ability to reach diverse customer base

Competition for prime locations

Reduced overhead expenses

Equipment maintenance on-the-go

Potential for high profitability

Limited seating options for customers

Mobility allows for testing multiple locations

Reliance on foot traffic and events

Opportunity for creative branding and unique experiences

Limited capacity for growth compared to stationary coffee shops

Typical Customers for mobile coffee stalls

The customer base for a mobile coffee business is diverse and includes various demographics with distinct preferences. Understanding and catering to these diverse preferences are essential for attracting and retaining loyal customers in the competitive mobile coffee market.

Commuters

Commuters rushing to work often seek quick and convenient coffee options, preferring grab-and-go beverages that can be enjoyed on the move.

Office workers

Office workers appreciate the convenience of a nearby coffee vendor, often opting for specialty blends or gourmet options to kickstart their mornings or fuel their afternoon productivity.

Event attendees

Event attendees at festivals, markets, or corporate gatherings crave quality coffee to enhance their experience, with preferences ranging from traditional espresso drinks to trendy specialty brews.

Get Caterers Insurance with Protectivity

As you’ve read, starting a mobile coffee business really requires very little startup costs and give you plenty of flexibility to operate from multiple locations. In terms of financial risk, it is a relatively low risk option, giving you the opportunity to expand as you grow. It’s up to you to take the plunge!

To assist you with the security of your business, Protectivity can provide the essential Catering Insurance you need to avoid any costly losses from claims that might arise. Whilst you focus on sourcing unique coffee and supplying a special service to your customers, you never know when things can go wrong so make sure you’re prepared.

Our catering liability insurance covers public liability, products liability with the option to add Employers Liability, only if it’s necessary, paying for what you need.

Take a closer look and find out more about the catering cover you need today.

 

*Mintel.com – UK Coffee Shop Industry Trends and Opportunities

This blog has been created as general information and should not be taken as advice. Make sure you have the correct level of insurance for your requirements and always review policy documentation.