Why is there a coffee shop on every corner in Muscat?

I have a theory.

A coffee shop looks like a fairly simple business to start.

The paperwork might cost around OMR 3,000. Then you need a location, one or two trained baristas, a good coffee machine and some cash to get going.

That one expensive machine can make most of what you sell.

And when you look at what goes into a cup versus what we happily pay for it, the maths looks rather attractive.

Until you start counting cups.

Try the maths yourself

I built a simple calculator because I wanted to see what happens when you change a few numbers.

You don’t need to know the costs of running a café. Pick the type of café and I have already loaded some reasonable starting numbers.

Then play with them.

Change the rent. Change the salaries. Change the average customer spend.

A small shop using the example numbers, with an average spend of OMR 1.500, needs about 233 customers a day to cover its costs and recover the initial investment over three years.

Get the average spend to OMR 2 and that drops to about 175 customers a day.

A larger lounge with heavier monthly costs can need around 550 customers a day at OMR 1.500.

That number interests me far more than the price of the coffee machine.

Because 233 customers sounds perfectly achievable when you are looking at a packed café on Thursday night.

Stand outside the same café at 11am on a Tuesday and count.

It starts to look like a different business.

These are example numbers, not a survey of Muscat cafés. The calculator is there precisely so you can change them.

The OMR 3,000 illusion

Getting permission to open is relatively inexpensive.

Published setup guides put licences and approvals at roughly OMR 2,500–5,000, covering things such as commercial registration, municipality licensing, food safety, Civil Defence clearance and staff health cards.

But getting permission to open a café and being able to afford a café are very different things.

A small coffee shop might require OMR 15,000–35,000 to open.

A larger lounge in a good location could easily be OMR 60,000–120,000.

There are wider estimates too. One published guide puts a full coffee-shop setup at OMR 36,000–134,000 once you include rent, fit-out, equipment, initial stock, marketing and enough cash to keep the place running for three to six months.

Fit-out alone can run from OMR 5,000 to 20,000. An espresso machine can cost OMR 2,000–8,000, with another OMR 300–1,500 for grinders.

So the CR isn’t really the expensive bit.

It is simply the first cheque.

Coffee shop or lounge?

This distinction gets blurred in Muscat.

A coffee shop needs throughput. People come in, buy something and leave. Takeaway can be a large part of the business.

A lounge is selling something slightly different: somewhere to spend time.

Soft chairs. Larger tables. More space between them. Better interiors. A location people want to sit in.

All of that costs money.

The dangerous combination is lounge costs with coffee-shop spending.

If someone occupies a nice table for two hours and buys one OMR 1.500 coffee, the fact that the coffee itself has a healthy margin doesn’t solve much.

That table has rent attached to it.

And this is where the cake suddenly makes a lot of sense.

You don’t necessarily need a pastry chef or even a kitchen. Buy cakes, sandwiches and pastries from somebody who already makes them, put them in the display cabinet and sell a slice or sandwich for OMR 2.500.

Now the customer who came in for a OMR 1.500 coffee might spend OMR 4.

The café hasn’t doubled the number of people coming through the door. It has increased what one of them spends.

That is why average spend matters so much in the calculator.

Move it from OMR 1.500 to OMR 2 and, in our small-café example, the daily customer requirement falls from about 233 to 175.

You can see why every coffee counter has a cake cabinet.

So why do we keep opening them?

Because cafés make sense in Muscat.

We need indoor places to meet. For much of the year, sitting outside isn’t particularly attractive. Families, friends and businesspeople need somewhere to meet that isn’t a bar or restaurant.

And there is something wonderfully tempting about the café business.

You can see the product.

You understand what the customer pays.

You can buy the machine.

You can design the room.

You can imagine it full.

What is much harder to imagine is a quiet Tuesday six months after opening.

The rent still arrives.

So do salaries, electricity and the rest of the monthly bills.

Instagram doesn’t help much with those.

Month six

I don’t think the interesting question is whether Muscat has too many cafés.

Clearly, people still want to open them and people still want to visit them.

The interesting question is whether the numbers work for this café, in this location, at this rent, with this many customers.

Which brings me back to the calculator.

Try the averages first.

Then put in the rent for that location you have always looked at and thought:

“This would make a nice café.”

You might be right.

Try your numbers