An espresso costs between 0.15 and 0.20 EUR to make and sells for more than 1.50 EUR: gross margins of 85-90%. A café con leche costs around 0.30 EUR in raw materials. With numbers like these, losing money looks impossible. And yet plenty of coffee shops close. The reason isn't in the cup, but in the fixed costs: rent, wages and social security contributions that tick over every month, whether you sell one coffee or a hundred.
That's why the useful question isn't "how much do I make per coffee", but "how many coffees do I need to cover the cost of simply raising the shutters". That's the break-even point, and working it out before signing the lease is what separates a realistic plan from wishful thinking.
A real specialty coffee shop we documented set the business up for 105,000 EUR. Its monthly fixed costs run to around 7,000-7,500 EUR (rent, wages and contributions), and once you add the coffee and the milk, total costs reach 9,000-10,000 EUR a month. Its break-even point is 470 EUR a day. With an average spend of 5 EUR, that's about 94 transactions a day just to avoid a loss. Sector benchmarks set the bar higher: between 120 and 180 transactions a day to make a comfortable living from a specialty coffee shop.
Put into the trade's old rule of thumb: to earn 1,000 EUR, you have to serve on the order of 600 coffees. Every coffee above break-even contributes 1.50-2.00 EUR of margin; every coffee below it, on the other hand, doesn't even cover its proportional share of the rent.
The formula is straightforward: break-even in euros = fixed costs ÷ (1 − variable cost percentage). First add up your real monthly fixed costs; then estimate what percentage of each sale goes on raw materials (in coffee shops, given the weight of drinks, cost of goods can land between 15% and 22%). And the practical advice: don't settle for reaching break-even, aim to beat it by 20-30%, because that's where the real profit begins.
Rent should stay below 10-15% of turnover; in a neighbourhood coffee shop it's usually 1,000-2,000 EUR a month. Electricity comes as a surprise: the average bill runs from 400 to 500 EUR a month, and the two-group espresso machine alone consumes 125-150 EUR a month. On top of that come the accountant (gestoría, 25-60 EUR), insurance, card-terminal fees and product wastage of 2-5% during the initial calibration. No single item is huge; together they decide viability.
A coffee shop turning over 240,000 EUR a year (20,000 EUR a month) typically splits that into 28% on goods, 35% on staff, 10% on rent and the rest on utilities and other expenses. By year-end, net profit comes out at around 10-12%: roughly 2,200 EUR a month. The bar and coffee shop sector operates on net margins of 10-20%. It's a good business, but not one that forgives runaway costs.
A simple rule to avoid selling below value: multiply the total cost of the cup (raw materials plus the share of indirect and fixed costs) by three or four. A coffee that costs 0.50 EUR to make shouldn't sell for less than 2.50 EUR. Copying the price of the bar next door without knowing your own cost structure is the most common way to work hard and earn little.
On top of the initial investment, set aside a working-capital reserve of 5,000-10,000 EUR for the first few months. A coffee shop can take a while to hit its normal stride, and if there's no cash to cover rent, wages and purchases during the ramp-up, a promising business can run out of air before it proves its real demand.
In our practical guide to opening a coffee shop in Spain we include a paper-based decision simulator -CAPEX by format, cost breakdowns, step-by-step break-even and an indicative P&L- so you can work out your own "how many coffees a day" before you commit the money.