Espresso brewing into a white demitasse cup.

One of the biggest equipment costs for any coffee shop will be its espresso machine. This purchasing decision is important and can be complicated for a variety of reasons.

Common Mistakes in Buying Espresso Machines

The two most common mistakes people make when purchasing espresso machines is either underpaying or overpaying. Before making your purchase, have solid answers for these three questions:

  • How busy is your shop going to be?
  • What is your personal budget?
  • What bells-and-whistles are must-haves for your espresso machine?

I often use a car-buying analogy when I’m consulting with wholesale customers or students on this issue. Don’t buy an economy car when you need a heavy-duty vehicle. Don’t buy a Ferrari when your budget only supports a Ford.

You can spend a ton of money on a top-of-the-line espresso machine, but a higher price doesn’t mean that it’s the best or even the right machine for you.

Types of Espresso Machines

The first decision you will need to make is determining how big your machine needs to be.

The number of group heads, or groups, determines the number of shots you can produce at a time. Do you anticipate being a high-volume shop? You may want a three-group espresso machine. Are espresso-based drinks only a small portion of your beverage menu? You might want a one-group machine.

In addition to determining the number of group heads, you will also need to decide how much control you want to have over each shot.  

There are four types of espresso machines that each give you a different capacity to control the flavor profile of your espresso shot.  They are: Manual, Semi-Automatic, Automatic, and Super-Automatic.

Manual Espresso Machines

Manual machines require a lot more barista training, but they offer the barista more control over the flavor profiles of the end-product. On a manual machine, the barista can control the pressure of the espresso shot, which is a key variable that determines the strength and extraction of the final cup.  Most modern manual machines offer pressure profiling. This allows the pressure to be varied throughout the shot, but also set by a computer to help maintain some consistency.

Semi-Automatic Espresso Machines

Semi-automatic machines are generally no-frills machines where the barista must start and stop each shot.  The barista can influence the brew time (another important variable that impacts strength and extraction) by controlling when to start and stop a shot, as well as through grind size and tamp. The pressure of the water as it moves through the coffee puck is controlled in a semi-automatic machine. This is my favorite type of machine. I learned to pull espresso shots on this type of machine, and it was a great vehicle to learn about the variables that impact espresso. It is typically more user-friendly for beginners than a manual machine.

Automatic & Super-Automatic Espresso Machines

Automatic espresso machines don’t quite do it all for you, but can take a lot of the guesswork out of the barista’s hands by programming shot volumes. If you want a super-automatic espresso machine, it will pull shots, texture milk, and even auto-clean for you. You will pay for that convenience.  High-end super-automatic single-group head espresso machines can $15,000 or more. A Semi-Automatic might be priced as low as $3000.

Buyers should beware a bargain, though! If it seems too good to be true, it usually is.  It’s easy to fall in love with the price point of a $1,200 machine. Unfortunately, this is either a high-quality home machine that won’t have the power to keep up with your needs as a coffee shop, or it’s a low quality machine that claims to be commercial grade.  In my experience, a low-quality machine both makes bad coffee and breaks down frequently. When it breaks down, it will also be difficult to find service technicians and replacement parts for it, because there will be fewer of those types of machines in commercial use.

It’s important to remember that your espresso machine is where you make most of your money as a coffee shop. When it breaks, you lose money. You should invest in a quality piece of equipment from a reputable brand, like Nuova Simonelli, La Marzocco, or Rancilio, that has service available in your area.

Automatic 2 head espresso machine with two coffee bean grinders, cleaned and ready to brew. Clean coffee cups stacked on top.

2-Group vs. 3-Group Espresso Machines

Most shops do best with a two-group machine, and that means expecting to spend closer to $5,000–$11,000 (or more, depending on the make and model). Unless you know you are going to be EXTREMELY high-volume, then you can probably save the money of investing in a three-group machine.  Two well trained baristas can work faster on a two-group than one person producing coffee on a three-group machine.

Within each of these classes of machines, there are different grades. For example, a three-group Rancilio Classe 5 Automatic Machine may cost around $8,000. The same size Victoria Arduino Black Eagle Gravimetric machine, with all of its bells and whistles, can run upwards of $25,000.  At the end of the day, you can literally spend as much as you want on your espresso machine.

Choosing the Right Machine & Parts Dealer

Where you buy your machine will also have a big impact on your cost. Most of the prices quoted in this blog are from online retail stores, specifically espressoparts.com.  If you buy your machine directly from an equipment dealer or manufacturer, they may offer package deals that could include purchasing an espresso grinder at the same time.

Many dealers also include installation and warranties for the first few years.  Personally, this has always been a major selling point, especially for new businesses. You will want to minimize the downtime of your machine and be able to call a qualified tech if something breaks.  It’s also possible that the dealer will have a showroom where you can try out different machines, which is the case with my personal favorite dealer in Georgia, Espresso Southeast.

Whatever machine you choose, just make sure that you know how to use it properly.  At the end of the day, the person running the machine will dictate your drink quality, not how many gadgets the machine has.

As a specialty coffee roaster, we regularly meet interesting, passionate people from a broad array of backgrounds who aspire to opening a coffee business. In fact, one of the most exciting and challenging parts of my job is collaborating with fellow entrepreneurs to think through coffee business concepts, lend our experience and expertise to their planning, and support them with the roll-out and launch of their new coffee shops. Even more exciting is watching these coffee businesses take root, hit a sustainable rhythm, and grow.

Ask Those Who’ve Been There

Over the course of our 20 years in business, we have been mighty fortunate to work with folks who have – through blood, sweat and tears – built successful coffee businesses from the ground up.

Drip-Thru Coffee serves many regulars each morning at their Stockbridge and College Park, GA location.

The Sentient Bean in Savannah, who started about the same time we started Cafe Campesino,  have taught us so much about community-building and coffee house sustainability. Our friends at Drip-Thru Coffee in Stockbridge and College Park also come to mind. They are boldly and successfully introducing the specialty-coffee, drive-thru model to the Atlanta metro region.

We’ve also met our fair share of people over the years who for one reason or another were unable to launch their coffee shop or keep their doors open. Based on those experiences and more, here are some of the key questions I believe every aspiring coffee-shop owner should be asking themselves.

What is your time-frame, and is it realistic?

Rome was not built in a day… most of our successful customers have planned for at least several months – sometimes even years- in advance of opening. Whether or not you are building a new coffee spot from the ground up or upgrading an existing operation, everything will take longer than you think. If it takes less time, be happy!

Do you have enough capital to fund the planning, build-out, outfitting, pre-opening and ongoing operations for the first year?

Do you have enough money to pay yourself until the business generates enough revenue to pay you? ‘How much capital does it take?’ is a frequent question. And, yes, it depends.

Build it or buy existing?

Are you planning on building your business from the ground up? If so, the resources needed are significant. I suggest that folks also consider looking for an existing business to purchase. Many small-business owners want to exit their businesses (for a number of reasons). You might help them do that. Maybe there is an existing coffee house in your target neighborhood that is for sale (or could be)? Buying an existing business is worth considering, because it already has infrastructure in-place and comes with a customer base. Plus, you might be able to find out from the owner what has and hasn’t worked for them in that location.

Is your new coffee business expected to provide all of the income for your family?

It is not recommended that a family (with or without children) relies on a new coffee business for all of its income. That is extremely stressful, risky, and not good for relationships.

Location. Location. Location?

Is there regular, daily foot traffic? Easy parking? Will you stand out or blend in among other businesses? Yes, location makes or breaks a coffee house business. Consider questions like: Is your location easy to access during non-rush hour and rush hour? What is the traffic count, and is it sufficient to drive sales? Will parking be easy or congested? Do you share parking with other vendors? Is there enough reserved parking spaces for your business? What types of businesses surround you, and do they attract the same types of customers you seek? Is your location within walking distance to residential and business communities? If your model depends on foot traffic, are there enough pedestrians to sustain your business?

Many coffee shops find they need to also sell food to be able to generate big enough average ticket sales.

Sales… what do you need in gross sales each month to pay your costs of goods, payroll, and overhead expenses?

To generate the sales revenue you need, do you need to also sell food? (The answer is most often yes.) How many tickets do you need per day, and at what average value? 150 tickets at an average of $10 per day? 300 tickets at $7 per day? Will your location support that number of tickets per day? Will the customer-base spend an average of $10 per visit?

How are you going to generate the foot traffic you need to generate the quantity of tickets you need?

“Build it and they will come” does not work… aggressive community engagement, social media presence, promotion, and fast, happy, excellent customer service are critical. Great online reviews are necessary.  Will you be able to manage the various online review sites where your customers will post? One of the best ways to learn what works and what doesn’t is to study successful coffee houses. For your own business, you should consider having someone designated for generating new customers and keeping existing ones.

Eye-opener (at least for me it always is)… How many $10 tickets does it take, for example, to pay for $2000 in monthly rent?

If you operate on a typical restaurant financial model – with expenses budgeted at 30 percent of gross revenue, then you need at least $6600 per month in revenue just to cover rent… this does not include your other expenses! If your average ticket is $10, then in a given month, you would need 660 tickets to cover the rent. In a 30-day month, that translates into 22 tickets a day… just to pay the rent.

Stamina and going it alone…

Building and running a new business is hard work and requires an above-average amount of stamina. Do you have the energy and resilience it takes to work 7 [long] days a week? Can you do it for the first year or longer?  Are you a good multi-tasker? Can you talk to to customers while you are making their breakfast or their latte?

Finding a good working partner can help immensely, not only to share the workload but also the stress that comes with being a business owner. While not everyone is built for working with a partner (I respect those who have the capacity to go-it alone), I believe that most are. The key is knowing each other on a deeply personal level, getting clear on expected investment of time and capital, responsibilities, etc… and agreeing to an amicable exit strategy if the partnership doesn’t work out. Regardless of what some folks say, friendship is part and parcel to any viable, sustainable business partnership… at least in my experience.

Takeaways

Finally, among the various elements lying at the heart of sustainable coffee house businesses, I would highlight the following three:

  • Make a habit of solid business and financial management systems and practices. You will need a good bookkeeper to help you track your costs of goods and expenses. It will be impossible to know if you’re making money if you don’t accurately track your COGs and expenses.

  • Keep a robust sales and marketing function.  Even when things are going well, your best customers will move, your competition will increase, your best-trained barista will get a full-time job.  You must keep generating new customers.

  • Your commitment to win-win relationships with key stakeholders….. from the hard-working women and men who grow your coffee, to the roaster who supplies you with your most critical ingredient, to your food vendors, staff, the community that surrounds and supports you, and the customers who come back day-in and day-out. The key to all of these is creating win-win relationships all around. Your sanity will depend on it.

General rule of thumb from a cranky old business mentor… “if you want to improve your chances of success with a new business, take your sales projections and cut them in half, double your projected expenses and the amount of time it takes to launch and reach breakeven, and if you have the grit and capital to survive these conditions, you stand a good chance of making it.” A little Draconian but a valid point all the same.

Helping to grow our coffee business has been one of the most exciting, and rewarding endeavors of my life. I am consistently inspired by the work-ethic and creativity I see from everyone along the supply chain- from our trading partners to my fellow coffee entrepreneurs. But my work is not done. It’s never done, and I know now that coffee businesses are not for the faint of heart.