How to Start a Coffee Shop in the UK? [Comprehensive Guide]

Did you know that the first London coffeehouse opened in 1652 – and the trend hasn’t stopped since?

Coffee shops have become a staple of daily life in the UK, with demand for quality coffee and welcoming spaces continuing to rise. From independent cafés to modern takeaway concepts, the sector offers strong opportunities for new businesses willing to plan carefully and deliver a great experience.

This guide explains how to start a coffee shop in the UK in 2025, with market insights, legal requirements, costs, and practical steps to get your coffee business off the ground.

💡 Ready to turn your coffee dream into a business?

Register your company today with ANNA Money. You’ll get free same-day company formation, a UK business account, and tools that handle invoicing, expenses, and tax compliance, so you can focus on perfecting your brews instead of chasing paperwork.

Understanding the coffee market in the UK

The UK coffee shop market in 2025 is thriving, with both chains and independents seeing growth. Consumers are spending more on out-of-home coffee even during economic pressures, treating it as an affordable luxury and social experience.

Market value and growth

The sector is valued at around £6.6 billion, growing steadily at 4% annually. There are now over 20,000 coffee outlets nationwide, including 11,400 branded shops and thousands of independent cafés. Forecasts predict this number could reach 30,000 by 2030.

Customer habits and trends

• Frequency: Over 80% of UK adults visit a coffee shop at least once a week, with 60% doing so multiple times.
• Consumer focus: Price-conscious customers are seeking value, while younger generations (Gen Z, millennials) prefer specialty coffee, ethical sourcing, and unique interiors.
• Digital habits: Around 45% of sales now come from mobile or online ordering, with loyalty apps driving repeat business.

Current trends to note when looking at how to start a coffee shop

• Specialty and ethical sourcing: Demand for fair-trade, single-origin beans is at an all-time high.
• Cold and functional drinks: Cold brews, iced lattes, and wellness-focused beverages (with protein or adaptogens) are expanding menus.
• Tech-driven experiences: Digital ordering, QR menus, and automated service are becoming standard.
• Community-focused spaces: Cafés are increasingly serving as co-working hubs or cultural spots for events.

📍 Did you know? Over the last decade, London saw a 700% rise in quality independent coffee shops, with “micro-chains” becoming especially popular for their blend of scale and personality.

How to Legally Start a Coffee Shop in the UK

Opening a coffee shop in the UK includes several legal steps before you can start brewing and serving. Compliance is strict in the food and drink sector, so planning ahead is essential.

1. Choose your business structure

Decide early if you will operate as a sole trader, partnership, or limited company:

• Sole trader: Simple to set up with HMRC, low admin, but you are personally liable for debts.
• Limited company: Registers with Companies House, offers limited liability, and is often more tax-efficient.
• Partnership: Suitable if you are co-owning with someone else, but liability is shared.

💡 Tip: If you want a professional setup with less admin, register your company with ANNA Money. ANNA provides free same-day incorporation, a business account, and tools for invoicing and tax compliance.

2. Register your premises

• You must register your coffee shop premises with your local authority at least 28 days before opening. This applies to all food businesses, even if you only serve drinks.
• Environmental Health Officers (EHOs) will inspect your premises for compliance with food hygiene standards.

3. Licenses you may need

Depending on your concept, you might require:

• Food business registration – mandatory for all coffee shops.
• Premises license – required if selling alcohol or serving hot food between 11 pm and 5 am.
• Personal license – at least one person must hold this if alcohol is served.
• PRS/PPL licenses – if you plan to play music.
• Planning permission – if converting a building for café use or altering its layout.
• Signage consent – for exterior signs in regulated areas.
• Waste disposal permits – for commercial waste collection.

4. Health and safety compliance

You must follow Food Standards Agency (FSA) regulations:

• Implement a food safety management system based on HACCP.
• Train all staff in food hygiene (minimum Level 2).
• Provide allergen information clearly to customers.
• Maintain a safe environment under the Health and Safety at Work Act.

5. Insurance

When running a café, several policies are essential:

• Public liability insurance – covers claims from customers.
• Employers’ liability insurance – legally required if hiring staff.
• Product liability insurance – protects you if a customer suffers illness from your food or drink.
• Contents insurance – covers your equipment and furnishings.

Costs & finances

Opening a coffee shop in the UK involves careful planning around startup and running expenses. These costs can vary depending on your location, the size of your café, and whether you buy or lease equipment.

🔸 Startup costs typically range from around £20,000 for a small kiosk to over £100,000 for a mid-sized café in a busy city.

Expect to budget for:

• Premises and fit-out: Rent deposits and interior work can cost £15,000 – £30,000 or more.
• Equipment: Espresso machines (£5,000 – £10,000), grinders, refrigeration, dishwashers, and furniture can total £10,000 – £35,000.
• Licensing and insurance: Allocate around £1,000 for permits and insurance cover.
• Initial stock and supplies: Beans, milk alternatives, syrups, baked goods, and takeaway packaging may cost £1,500 – £3,000.
• Marketing and branding: Creating a website, signage, and promotional campaigns can add an additional £2,000 – £5,000.

🔸 Ongoing costs include monthly rent (£1,000 – £3,000 outside London), utilities, staff wages, stock replenishment, waste collection, and routine maintenance.

Staffing is usually the largest expense, often around 30 – 35% of turnover.

🔸 Profit margins for well-run coffee shops average 10–15%. Keep pricing competitive, but make sure it covers the rising costs of ingredients and energy.

Seasonal drinks, small food items, and loyalty promotions can boost average spend per customer.

How to Market a New Coffee Shop

Attracting and keeping customers is an ongoing effort that starts long before your opening day. A successful strategy combines digital visibility, local connections, and memorable experiences that make people want to return.

1. Build buzz before launch

• Announce your café on social media months in advance with behind-the-scenes updates.
• Offer a free coffee tasting day for locals a week before opening to gather early feedback and create word-of-mouth.

2. Maximise your online presence

• Claim and optimise your Google Business Profile with accurate hours, appealing photos, and a call-to-action to visit.
• Post daily on Instagram, TikTok, and Facebook. For example, show off latte art, seasonal specials, and snippets of your team in action.
• Encourage customers to tag you; user-generated content works as free advertising.

3. Run creative promotions

• Launch a loyalty program, either digital or with classic stamp cards.
• Use time-limited offers (e.g., half-price cold brew on Fridays) to boost traffic during slow periods.
• Collaborate with influencers or local food bloggers to review your café in exchange for a tasting.

4. Engage with the community

• Host events like live music nights, art exhibitions, or barista workshops to position your café as a community space.
• Partner with nearby businesses, for example, a gym next door might promote your healthy smoothies in exchange for discounts to their members.

5. Encourage repeat visits

• Personalise the experience: greet regulars by name and remember their usual order.
• Rotate special drinks or guest roasters to keep the menu exciting.
• Ask for feedback via a QR code survey on receipts and act on suggestions to show customers you listen.

Operations & capabilities

Running a coffee shop is a daily balancing act between quality, speed, and customer experience. Beyond serving great coffee, you’ll be managing staff schedules, supplier relationships, inventory, and finances, and all while keeping your doors inviting.

1. Staffing and training

Start with a core team of 2 – 3 baristas and one manager (this can be you initially). As foot traffic increases, consider adding part-time help during busy periods.

Don’t forget to invest in proper barista training so every drink meets consistent standards. We all know that poor coffee is the quickest way to lose customers.

2. Menu planning

A short, focused menu is easier to execute and reduces waste:

• Offer core espresso-based drinks, teas, and a small range of pastries or snacks.
• Seasonal drinks (think pumpkin lattes in autumn or iced matcha in summer) keep regulars excited without complicating operations.

3. Supplier relationships

Build strong ties with coffee bean roasters and bakery suppliers. Independent cafés often stand out by sourcing ethically produced beans or local baked goods, giving customers a reason to choose you over chains.

4. Daily processes

Your typical day starts early: prepping equipment, stocking ingredients, and briefing the team. During service, focus on speed, quality, and a friendly atmosphere. After you are done with cleaning, inventory checks, and cashing up, set the stage for the next day.

5. Skills that matter

• Leadership: To motivate and guide your team.
• Customer service: Warm, personalised interactions create loyal customers.
• Time management: Keeping queues moving without sacrificing quality.
• Problem-solving: From machine malfunctions to last-minute stock shortages.

📌 Tip: Keep a daily logbook of issues, customer feedback, and sales patterns. Reviewing these notes weekly helps you identify trends and improve efficiency.

Tools, systems & automations

Investing in the right systems early on can save hours of manual work and prevent costly mistakes. A well-organised tech stack keeps your coffee shop running efficiently and lets you focus on customers instead of paperwork.

• POS & inventory systems: Platforms like Square, Lightspeed, or Clover not only handle payments but also track stock levels, send low-inventory alerts, and generate sales reports. This helps you order the right amount of beans and pastries without overstocking.
• Accounting & banking: Using QuickBooks or ANNA keeps finances neat. ANNA automatically categorises transactions, scans receipts, and prepares tax data, so you always know where your money is going. It’s ideal for small business owners who want banking, invoicing, and bookkeeping in one place.
• Marketing automation: Scheduling tools such as Buffer or Hootsuite keep your social feeds active without constant manual posting. You can also set up automated customer emails with Mailchimp to promote specials or events.
• Staff scheduling: Apps like Deputy or Planday make rota planning easy. Staff can swap shifts digitally, and you can monitor labour costs in real time.
• Payments: Offer contactless and mobile options including Apple Pay and Google Pay. In 2025, over 80% of UK café transactions are cashless, so seamless digital payments are expected.

💡 Tip: Automate where you can – from stock tracking to VAT filing. The less time you spend on admin, the more you can spend creating a standout coffee experience.

Final tips & common mistakes

Running a coffee shop is as much about managing people and processes as it is about serving great drinks. Learning from others’ experiences can save you time, money, and stress.

✅ Do this

• Research your location thoroughly – foot traffic, nearby competitors, and rent must all align with your business model. A high-rent high street spot may only work if you can guarantee high volume.
• Invest in staff training – a well-trained barista can turn a first-time visitor into a regular. Even small details like remembering customer names build loyalty.
• Streamline your menu – a focused menu keeps costs under control and simplifies operations. Offer a few standouts instead of an overwhelming list.
• Engage with your local community – sponsor a local event, feature local artists, or collaborate with nearby shops to boost visibility.
• Track every expense – use apps like ANNA or Xero to stay on top of finances. Even small savings on stock or utilities make a difference.

❌ Avoid this

• Overestimating early sales – it can take months to build a regular customer base. Budget for slower initial growth.
• Skimping on hygiene and safety – poor Food Standards Agency ratings can damage your reputation overnight.
• Neglecting marketing – posting consistently on social media and collecting reviews is just as important as brewing coffee.
• Failing to adapt – trends change quickly. Ignoring customer feedback or sticking to outdated offerings can hurt your business.
• Relying only on sit-in customers – delivery apps, takeaway, and pre-order options increases revenue streams.

How to start a coffee shop? The easiest way is with ANNA

Launching a coffee shop is exciting, but the early days can quickly become overwhelming with registrations, banking, and tax obligations on top of getting your café ready.

ANNA helps you cut through the admin, so you can focus on serving great coffee and building your brand.

Here’s what you get with ANNA when starting your café:

✅ Free same-day company registration – ANNA handles your incorporation with Companies House at no extra cost. You’ll get your certificate of incorporation within hours, so you can trade legally from day one.

✅ Instant business account – no waiting weeks for a bank appointment. Open an account in minutes and start accepting payments immediately.

✅ Integrated bookkeeping and expense tracking – capture receipts with your phone, categorise expenses automatically, and keep accurate records for HMRC without spreadsheets.

✅ Automated tax and VAT filing – ANNA calculates VAT, pre-fills returns, and can even file them directly to HMRC. Perfect for staying compliant as your café grows.

✅ Virtual office services– use a London business address with mail forwarding to keep your home address private while projecting a professional image.

✅ Support as you grow – from PAYE setup for your first hires to reminders about confirmation statements, ANNA guides you every step of the way.

Instead of dealing with paperwork, you’ll have more time to focus on refining your menu, training staff, and attracting loyal customers.

Register your coffee shop with ANNA today and start your journey with the right support behind you.