How to Start a Coffee Shop Business in the Philippines - Step-by-Step Guide

In spite of differing socio-economic classes, Filipinos are widely regarded as coffee drinkers, consuming the drink throughout the day. Single-served coffee mixes like 3-in-1 sachets are popular during breakfast due to their value for money and short preparation time. However, over the years, the market for specialty coffee shops has increased immensely.

Retail coffee shops that are barista- and preparation-focused, serving Arabica and Liberica coffee varieties, are highly in demand, as reported by the Department of Agriculture¹. These coffee shops provide a cozy environment for customers to relax and socialize with friends.

Fueled by the country’s dynamic coffee culture and lifestyle-driven consumption, coffee shops continue to be a thriving venture for entrepreneurs. With sufficient research and planning, you may be well on your way to starting a successful cafe. This guide will help you learn how to start a coffee shop business in the Philippines. We’ll also mention how businesses in the Philippines can use Wise Business Account to manage your finances and transactions with vendors and suppliers locally and globally, often with less fees and more convenience.

Table of contents
Why launch a coffee shop business 10 steps to starting your coffee shop Challenges and success factors in opening a coffee shop

Why launch a coffee shop business

The rate of coffee consumption among customers is growing at a remarkable rate. Coffee made from high-quality coffee beans and prepared with care by trained baristas also adds to the experience. Coffee shops have become cultural hubs for general meetups and social gatherings. Customers also go to coffee shops to unwind, study, or work.

For aspiring cafe owners, opening a coffee shop business can be both a profitable undertaking and a gratifying pursuit. Below are some of the reasons for starting a coffee shop business.

1. Financial stability

Generally speaking, being your own boss and managing your own business grants you the ability to yield a higher and more recurring flow of income than working for someone else. Depending on the location, size of the operation, and operational efficiency, coffee shops can be a profitable enterprise.

2. Broad Customer Base

One coffee shop can cater to a wide range of customers, from students and professionals to remote workers and social groups. So, cafe owners do not have to rely on one market segment to generate profit. Attracting different customers creates a steady demand for coffee all day.

3. Personal fulfilment

Managing a coffee shop allows owners to create a space where people come together, talk about their lives, and build community. As a cafe owner, interacting with customers - especially regulars - can be rewarding. Many coffee shop business owners also find satisfaction knowing they support local farmers and provide employment opportunities.

4. Creativity

To stand out from the competition, coffee shop owners learn to develop signature blends and create food menus that are consistent with their branding. Seasonal drinks and secret menus are always exciting for coffee drinkers. Owning a cafe also allows owners to reward local customers by offering perks like reward cards, birthday treats, and exclusive access to new items.

5. Opportunity for Expansion

Coffee shop owners can scale their business in various ways. They can open multiple branches and develop coffee products to distribute in supermarkets nationwide and even internationally.

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10 steps to starting your coffee shop

1. Research the market

Identify your target customers, their coffee-drinking habits, and how much they are willing to spend per visit. Analyze the competing coffee shops by studying their menu, prices, and loyalty programs. Then, identify the gap by offering what your competitors do not provide.

2. Budget and financing

Determine the capital needed to set up your coffee business. Startup costs can include rent, renovations, ingredients, equipment, and salaries. You can fund your business through savings, investors, or loans from local banks.

3. Pick a business model

Depending on the customer's needs, financials, and long-term goals, you can open an independent cafe, a franchise, a cart, a specialty coffee shop, or an online or subscription-based model. You can also set up a cafe that offers a co-working space. Some of these business models are low-cost and flexible, while others are more scalable and niche.

4. Location

Choose a location with measurable foot traffic and increased visibility. Is the location near schools, commercial establishments, and residential areas where demand is consistent? Accessibility is also important for customers who are mainly grab-and-go.

5. Comply with legal and regulatory requirements

Apply for a Certificate of Registration from the appropriate agency: Department of Trade and Industry for sole proprietorship; Securities and Exchange Commission for partnerships or corporations; or Cooperative Development Authority for cooperatives.

You must obtain a Mayor’s Permit or Business Permit to operate your coffee shop business legally in your local city.

📚 Take a few moments to check out our guide to acquiring a Mayor’s Permit.

6. Design and layout

Decide on the concept and personality of the coffee shop. Is it modern, rustic, artsy, or classic? Every aspect of the design – from lighting and color to furniture choice and decorations – should reflect the brand identity of the cafe.

Structure the layout by dividing the space into designated areas, such as the entrance, counter, seats, kitchen, and restroom. Avoid overcrowding spaces and make sure there are clear pathways for customers and staff to pass through. Use signage efficiently so customers know where to go to put their orders in, pay, and pick up.

7. Source ingredients and equipment

Different countries are known for their quality and diverse coffee bean varieties. Brazil grows beans with nutty and deep flavor profiles, while Ethiopia produces fruity beans. However, cafe owners can also research local varieties. The most common variety of coffee grown in the Philippines is Robusta, accounting for more than 50% of the country’s total coffee production².

Make sure you offer dairy and non-dairy options. While some customers prefer full-fat, some are lactose-intolerant and can only drink plant-based. Before committing to bulk orders, sample the different milk options with the coffee to identify the blends that offer the best aroma, roast profile, and overall taste.

Invest in high-quality machines for your core equipment (coffee grinder, espresso machine, blender, drip coffee maker, refrigerator, freezer, and POS). Check the warranty and repair services, and make sure after-sales support is available.

💡If you are buying coffee beans, grinders, and other special equipment from foreign suppliers, make sure to note that when you convert between PHP and USD, EUR, JPY and other major currencies frequently for these payments, you can expect hidden exchange rate markups from most banks to slowly eat into your profit margins. A great way to work around this is by using a business account with multicurrency capability, such as Wise Business.

8. Hiring staff

Staff represent the brand identity of your coffee shop, maintain the quality and efficiency of operations, and shape the customer experience. Before hiring, identify the roles and number of employees according to the size and operating hours of your coffee shop. The staff consists of baristas, a manager, kitchen staff, a cashier, and utility personnel.

Break down and communicate the job descriptions of your staff. Make sure your employees have growth opportunities. They should be learning, improving, and progressing in the company.

9. Understand sales and marketing

Identify the most profitable drinks and desserts and promote them heavily. You can also bundle meals and sell them at a discount rate. Train your staff to suggest add-ons, especially if there are new items on the menu.

Track the best-selling and slow-moving items so you can keep pushing the products, adjust the prices, or remove them altogether. Monitor the peak hours to determine the optimum staffing schedule.

10. Understand cafe operations

A great service is crucial to running a coffee shop business. Customers will keep coming to your shop and advocating your brand if they consistently get quality service. Always ensure that the coffee shop is clean and welcoming. Train your staff to be personable, quick, and to take pride in their work.

Prioritize food safety by managing inventory, training staff to handle ingredients with care, and observing proper handwashing techniques. To prevent contamination, staff should keep their uniforms clean and wear hair caps at all times. Ensure that all the utensils and machines are clean, sterilized, and working properly. Empty and disinfect the trash bins frequently to avoid pests and foul smells.

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Challenges and success factors in opening a coffee shop

Starting a coffee shop business in the Philippines is not without challenges. Competition is fierce with local cafes like Pickup Coffee and Bo’s Coffee, as well as international chains like Starbucks and Tim Hortons, offering diverse options for avid coffee drinkers. Meanwhile, the overhead costs of running a cafe while maintaining the quality of taste and service can be overwhelming.

However, you can still stand out in a saturated market by making sure the quality of the coffee, atmosphere of the shop, and theme reflect the brand identity of your business. Balance the quality and affordability of your menu items to attract customers and encourage repeat business.

Build relationships with suppliers locally and abroad to avoid delays and inconsistent quality of ingredients.

If you want on-time and hassle-free payments for your coffee shop suppliers, both locally and internationally, Wise Business can help.

💡Whether you're handling one-off invoices, recurring payments, or mass payouts, Wise Business makes it easy to send money in your preferred currency while avoiding excessive fees and hidden exchange rate markups.

• Send from PHP with both Instapay and Pesonet.
• Fast and secure payments to 140+ countries with no exchange rate markups.
• Always get the mid-market rate with transparent conversion fees starting from 0.57%.
• Set up Batch Payments to make up to 1,000 payments in a single click.

➡️Start Paying Overseas Invoices for Less with Wise Business

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Sources:

1. Department of Agriculture, 2017-2022 Philippines Coffee Industry Roadmap
2. Philippine Statistics Authority, Non-Food and Industrial Crops

Sources checked on October 8, 2025