Business Plan for a Café in Dubai and the UAE

What a cafe business plan includes

A plan for a small coffee shop or a large café answers one question: when does income cover costs? To answer it you need these lines:

• Licence and approvals: the activity, the premises and Dubai Municipality's layout approval.
• Fit out and equipment: the coffee machine, grinder, fridges and furniture, at the prices you are quoted.
• Team and pay: how many baristas and cashiers you need, and what each costs a year.
• Rent: by area and size, with the lease registered with Ejari.
• Income: orders a day and the average ticket, which are your own estimates.

The licence and Dubai Municipality's approval

The cost of opening a café starts with the licence. On the mainland the Department of Economy and Tourism issues it, and a normal licence fee varies with the activity and licence type, with no single figure published.¹² A normal licence needs a Memorandum of Association and a site lease.¹³ Pick the activity that matches what you really do: serving coffee to customers is one activity, and roasting and selling beans may be another.

A café is a food business, so Dubai Municipality requires its design layout to be approved before construction to activate the licence and start trading. The fee for this approval is not on the Municipality page we read, so ask for it before you start the fit out. The full licence steps are on how to open a company in Dubai.

Fit out and equipment

The fit out is often the largest one off amount you pay before opening, and no authority publishes a general price for it, because it changes with the size, the supplier and the quality. Get at least three quotes for each line and put their figures in your plan:

• The coffee machine and grinder, the heart of the café.
• Fridges, the ice machine and the dishwasher.
• Furniture, lighting and the outside sign.
• The point of sale system and cameras.
• Finishing, air conditioning and fittings, following the approved layout.

Give each line its payment date, because some suppliers ask for a deposit before delivery, and that decides how much cash you need before you open your doors.

Team and pay

These are averages of the pay employees report to each site, not official figures, and real pay varies with experience and location.

Pay is not the whole cost of an employee. The employer pays the work permit fee, between AED 250 and AED 3,450 depending on the company's category with the Ministry of Human Resources and Emiratisation,¹⁴ and buys health insurance before the residence is issued or renewed.¹⁵ A barista's full cost is on barista salary in the UAE.

Break even: how to work it out

Break even is the number of orders that covers your monthly costs. Work it out in three steps:

1. Add up your fixed costs a month: rent, pay, insurance, utilities and subscriptions.
2. Work out the profit on one order: the average ticket minus the cost of the coffee, milk, cup and whatever goes into it.
3. Divide the fixed costs by the profit on one order, then by the trading days in the month, to see how many orders you need a day.

We publish no average ticket or rent, because a general figure would mislead you. Your plan works out break even from your prices and location, and the calculator gives the café setup cost for the first year.

Before you sign the lease

• Check that the site allows a café and that its layout can get the Municipality's approval.
• Keep cash in your plan for pay and rent in the first months, before income settles.
• Register for VAT once your taxable sales and imports pass AED 375,000 in the last 12 months.¹⁶
• Compare the café with a close business on cost and team, such as a restaurant business plan or a bakery business plan.