If you are thinking about starting your own coffee cart business in New Zealand, you have a few options to set up your cart, including: 

  • setting up your business from scratch; 
  • buying an already kitted out coffee cart; or 
  • taking on a franchise.

This choice is often determined by the current opportunities in the market and how they fit in with your interests and budget. Other elements to consider include: 

  • will you manage the business on your own or will you have a business partner; 
  • how many locations will you operate in; and
  • what drinks you will offer.

This article will explain how to define your value proposition, how to set up your coffee cart business and what licences you will need to operate in New Zealand.

Defining Your Value Offering

When joining a relatively crowded industry sector like food trucks, it is essential to think about how to differentiate yourself. You should also carefully select your catchment area to maximise your earnings potential.

Once you determine where you will operate your business, you may want to think about who will be your target market or potential customers (business professionals on their way to work, tradies, tourists) and what their beverage preferences are. This can influence a series of key decisions, such as:

  • where to source your coffee beans from;
  • the range of drinks and menu options to offer; and 
  • environmentally friendly packaging and practices.

Creating a business plan can help you analyse your competition and set out how you will be offering value to your customers.

If you would like to buy into an established brand rather than setting up your business from scratch, you could take on a franchise. When making this decision, you should consider: 

  • what opportunities are available in the market at the time; and
  • how they fit in with your interests and budget.

Setting Up Your Coffee Cart Business

From choosing your business name to getting an NZBN, there are several essential things to do to set up your coffee cart business in New Zealand, including:

  • deciding on the location you will operate your cart; 
  • estimating the costs to purchase your equipment;
  • developing relationships with your suppliers;
  • deciding on a business structure and registering your business with the NZBN or Companies Office;
  • getting an IRD number for your business and registering with Inland Revenue as an employer, GST or provisional tax; 
  • getting your business insured; and
  • obtaining appropriate licences to operate.

What is The Business Structure for Your Coffee Cart?

You can structure your coffee cart business as a sole trader, partnership or company. Each of these has different financial advantages for your business.

For example, when you operate as a sole trader, you can avoid the costs and formalities involved in setting up and managing a separate legal entity. While operating as a company allows you to limit your liability towards the business’s debts and enjoy a lower tax rate. If you would like to compare each of these structures, take a look at this article. 

If you incorporate your business as a company, you will register with the Companies Office and receive an NZBN automatically. Otherwise, you can register with the NZBN and apply to get your NZBN number at no cost. We explain how to get one in this article. 

Your Legal Obligations

When you register your coffee cart business with Inland Revenue, you will have certain obligations beyond completing your income tax return at the end of the year. For example, if you register as an employer, you are responsible for making deductions from the payments you give to employees. If you estimate you will earn $60,000 in a year, you need to register for GST and add it to your prices. 

If you operate as a company, you have additional reporting requirements. Your accountant can help you understand how to meet your tax obligations on time and how to keep appropriate records to make your work easier.

Getting Your Coffee Cart Insured

You also need to consider what types of insurance you will need for your coffee cart business. Since you will be operating out of a cart or truck, commercial vehicle insurance is vital. You should also consider exploring:

  • public liability: to protect you against claims for injuries from slips and falls, especially if you operate in high traffic areas;
  • business interruption: profit associated with location or vehicle in the event you are forced to close for an extended period; and
  • equipment breakdown: coffee machine or refrigerator breakdown resulting in loss of stock.

Do You Need a Licence to Operate Your Coffee Cart?

To operate your coffee cart business in New Zealand, you need to: 

  • decide on the areas where you plan to operate; and 
  • get your food registration.   

Applying for Food Registration

To apply for your food registration, you need to get consent to operate in your chosen location. Your local council planners can provide you with advice and approval.

You have to register your coffee cart business with your local council or the Ministry for Primary Industries (MPI). You can use the ‘My Food Rules?’ tool on the MPI website to find out which plan suits your business. You also need a food control plan. Most coffee cart businesses use one of the templates provided by the MPI.

To apply for food registration, you will need to provide a series of documents, including a printout of your scope of operations outcome from My Food Rules results. There are additional requirements for coffee carts that trade from more than one place. You can check these by visiting your local council’s website.

Your application can take up to twenty days, and you have to pay an application fee. Your food registration has to be renewed every year before your notice of registration expires.

Applying for a Mobile Trading Licence

To open a mobile trading business like a coffee cart, you need to find out where you can trade, and apply for your mobile trading licence with your local council. This licence allows you to trade from the locations you apply for. You can have up to five locations on one licence unless you plan to trade in these areas at the same time.

To apply for your licence, you need to meet with an inspector to discuss: 

  • your trading set-up, including any vehicles, tables, chairs and displays; and 
  • the aerial map with your proposed trading locations. 

There is a fee to apply, and your application can take around ten working days depending on your local council.

Choosing Your Coffee Cart Equipment

Due to the nature of your business, investing in high-quality equipment is crucial. You should buy high-quality, commercial equipment from trusted brands such as Boema, Caffe and Wega Coffee Machines.

Key Takeaways

Starting a coffee cart business in New Zealand can be relatively easy, especially if you are buying an already kitted out cart or taking on a franchise. In addition to purchasing your equipment, you will need to register with the Ministry for Primary Industries and get a mobile trading licence. If you are starting your business from scratch, it is a good idea to think about who will be your customers and how to offer value to them. There are some legal and tax obligations you will need to follow when you set up your business, which includes registering your business with the NZBN or Companies Office and Inland Revenue; and getting your business insured. If you need help with setting up your coffee cart business or understanding your legal obligations, LegalVision’s business lawyers can help. Call 0800 005 570 or fill out the form on this page. 

FAQs

How do I start a coffee cart business in New Zealand?

To start a coffee cart business in New Zealand you need to purchase your equipment, register with the Ministry for Primary Industries (MPI) and get a mobile trading licence. If you are starting your business from scratch, it is important to differentiate your service offering from other competitors in your area. There are some legal and tax obligations you will need to follow when you set up your business, which includes registering your business with the NZBN or Companies Office and Inland Revenue; and getting your business insured.

What do I need to start a coffee cart?

To start a coffee cart in New Zealand, you need to decide whether you want to set up your business from scratch, buy an already kitted out coffee cart; or take on a franchise. This choice will determine your next steps. In making your decision, you should assess the current opportunities in the market and how they fit in with your interests and budget.

Do I need a licence to operate my coffee cart business in New Zealand?

You have to register your coffee cart business with your local council or the Ministry for Primary Industries (MPI) and prepare a food control plan. To apply for food registration, you will need to provide a series of documents, including your scope of operations. To become a mobile coffee business, you need to find out where you can trade, and apply for your mobile trading licence.

What type of insurance does my coffee cart business need?

Before you start operating your coffee cart business, you should get commercial vehicle, public liability, business interruption and equipment breakdown insurance. An insurance broker can help you find the most competitive providers and policies.

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