Coffee Shop Business Plan

Jeanne Grunert
woman making coffee

If you're considering opening a coffee shop, you'll need a coffee shop business plan. Like any business plan, such a plan contains information to guide the business and convince prospective investors the business has the potential to repay loans with a profit. Special attention should be paid to the sections describing the location and product offering to ensure it's well-thought out; this is what will make or break a coffee shop business.

Components of a Coffee Shop Business Plan

Before sitting down to write the business plan, think through the reasons you want to own a coffee shop and your experience in the food service, restaurant, or coffee shop business. Consider the pros and cons of purchasing an established coffee shop or similar restaurant to convert into a coffee shop. If such a business is on the market, it may shorten the ramp up time for your new business, especially if a loyal clientele is already familiar with the establishment.

After reviewing these questions and speaking to a business attorney and accountant, determine the corporate structure. Each of the three major business structures offers different legal and tax benefits and drawbacks. A skilled local business attorney and accountant can help determine which is the best fit for you. Call around and ask for a free consultation; many professionals welcome free consultations.

How to Write the Plan

Writing a business plan is different from writing most documents. Instead of writing it sequentially, the research is typically completed first, followed by the product, pricing, location or customer information, the marketing section and lastly, the summary and financial implications.When you put all the parts together, they should be placed in this order:

  1. Executive Summary: Summarize key points within the plan, including what you will offer, where the business will be located, how it will be promoted, and the profit potential.
  2. Business Description and Products: Write a detailed summary of what the business will offer. Will you serve coffee, specialty coffee drinks, teas, and breakfast items? Or will you offer a full service breakfast and lunch menu? Will you offer take away or take out items or deliveries? Think through all aspects of what you will offer. If you share your business plan with bankers and prospective investors, they will read this section carefully to understand your business model.
  3. Location: Describe the location for the coffee shop, paying careful attention to potential sources of business such as proximity to office buildings, movie theaters, stadiums or other big facilities where crowds of java-starved people gather.
  4. Competition and Market: Provide details on the industry size overall and the local economic climate, too. Describe the main competitors. Keep in mind that competitors aren't just other coffee shops; they may be any place that serves food or beverages. Think about it this way. If a customer has $5 to spend and they want something to eat and drink, where in the neighborhood can they go? Those are your competitors.
  5. Marketing Plan: List marketing activities you intend to use to promote the business.
  6. Operating Plan: List how many people you will need to hire and the various expenses and investments you will need to make into the operation, including purchases of cash registers, computer systems, coffee and food preparation items, refrigerators, and more. A basic staffing plan also helps estimate expenses.
  7. Expenses and Projected Income: Create an Excel spreadsheet or similar document listing potential expenses by category: marketing, cost of goods (food), salaries and wages, taxes, rent, infrastructure items and more. Create a second spreadsheet detailing projected income per month based on estimated number of customers and your best guess as to the average order size. It's a tough number to estimate, but the final comparison of estimated income to expenses tells prospective investors what they really need to know…and will help you determine where you need to expand operations or cut costs, depending on where you net.

Examples

Sometimes it helps to read examples of actual plans. You shouldn't copy plans exactly, since no two businesses will be the same. The following sample plans online can provide insight and clarify details of what to include in a basic coffee shop business plan. General tips on writing a plan can also be found at Your Business Pal. You can also see BPlans offering for an imaginary business called Java Culture.

Coffee Shop Business Plan