cover page of a coffee shop business plan

Coffee Shop Business Plan Template & PDF Example

• September 4, 2024
• Food & Beverage

Creating a comprehensive business plan is crucial for launching and running a successful coffee shop. This plan serves as your roadmap, detailing your vision, operational strategies, and financial plan. It helps establish your coffee shop’s identity, navigate the competitive market, and secure funding for growth.

This article not only breaks down the critical components of a coffee shop business plan, but also provides an example of a business plan to help you craft your own.

Whether you’re an experienced entrepreneur or new to the food and beverage industry, this guide, complete with a business plan example, lays the groundwork for turning your coffee shop concept into reality. Let’s dive in!

Our coffee shop business plan is structured to cover all essential aspects needed for a comprehensive strategy. It outlines the shop’s operations, marketing strategy, market environment, competitors, management team, and financial forecasts.

• Executive Summary : Offers a quick look at your coffee shop idea, market research , your team, and money plans.
• Coffee Shop & Location: Talks about the design, special features, and why the spot is great for customers.
• Operations: Describes how your shop runs daily, like hours, staff roles, and your menu items with prices.
• Key Stats: Gives numbers on how big the coffee shop world is and what’s trending.
• Key Trends : Points out new things in coffee shops, like eco-friendly practices or tech for ordering.
• Key Competitors: Looks at other coffee places nearby and how your shop is different.
• SWOT: Lists strengths, weaknesses, opportunities, and risks for your shop.
• Marketing Plan : Ideas for getting the word out and keeping customers coming back.
• Timeline : Major steps and goals from starting up to the first year.
• Management: Highlights Info on your leading team and their roles.
• Financial Plan : Predicts financials for 5 years, like how much you’ll make, spend, and keep as profit.

Coffee Shop Business Plan Template (Download)

Fully editable 30+ slides Powerpoint presentation business plan template.

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Executive Summary

The Executive Summary presents a concise overview of your coffee shop’s business plan, encapsulating the essence of your establishment and its offerings. It should articulate your market positioning, the variety of coffee and related products you offer, its location, size, and a brief on the daily operations.

This section should also delve into how your coffee shop will carve its niche within the local community, including an analysis of the number of direct competitors in the vicinity, identifying who they are, as well as highlighting your coffee shop’s unique selling points that set it apart from these competitors.

Moreover, information about the management and co-founding team should be included, elaborating on their roles and the value they bring to the coffee shop’s success. Additionally, a synopsis of your financial projections, including anticipated revenue and profits over the next five years, should be provided here to offer a clear view of your coffee shop’s financial strategy.

Coffee Shop Business Plan Executive Summary Example

Business Overview

The  business overview  section should detail the coffee shop’s specific features, including its size, seating capacity, and concept. This is where you explain what makes your coffee shop unique, such as its focus on specialty coffees and local artisanal pastries, and how it operates.

Example: “Bean Haven,” located in the bustling Midtown area, spans 2,000 square feet and can seat 40 customers. It stands out with its range of gourmet coffees and fresh pastries, all sourced from local suppliers. The shop’s modern POS system ensures efficient service, enhancing the overall customer experience.

Market Overview

In this section, analyze the local and national coffee shop market. Discuss the size of the market, growth trends, and consumer preferences. This analysis should position your coffee shop within the broader industry context and highlight its potential to meet current consumer demands.

Example: Bean Haven enters a U.S. coffee shop market valued at $45.8 billion. In its neighborhood, known for a dense population of young professionals, Bean Haven’s focus on health-conscious options and its role as a community hub align with shifting consumer preferences, setting it apart from six main competitors in the area.

Management Team

This section outlines the experience and roles of your management team. Detail how their background and skills contribute to the success of the coffee shop.

Example: Bean Haven is led by a CEO with 10 years of experience in café management, overseeing daily operations and supply chain efficiency. The CFO, with a background in hospitality sector marketing, handles the shop’s financial strategies and marketing campaigns, ensuring robust business operations.

Financial Plan

Here, present your financial goals and projections. Include revenue targets and profit margins, providing a clear picture of your coffee shop’s financial aspirations and health.

Example: Bean Haven aims for $830,000 in annual revenue with an 11%  EBITDA  margin by 2028. This goal is supported by a focused approach on high-quality offerings, strategic marketing, and community engagement, positioning Bean Haven for success in the  competitive  market.

For a Coffee Shop, the Business Overview section can be neatly divided into 2 main slides:

Coffee Shop & Location

Talk about your coffee shop’s look and feel, highlighting cozy seats and nice lighting that make it welcoming. Mention its location, noting how easy it is to get there, like being close to shops or having easy parking. Explain why this spot is great for attracting customers.

Operations & Offerings

List the kinds of coffee and other items you sell, including snacks or light food. Discuss pricing, making sure it matches the quality of what you’re selling and suits your target customers . Share special features of your shop, such as using local products or offering unique coffee flavors. Mention any deals or events you have to keep customers coming back.

Industry Size & Growth

In the Market Overview of your coffee shop business plan, begin by exploring the size of the coffee industry and its potential for growth. This analysis is key to understanding the breadth of the market and pinpointing opportunities for expansion.

Key Market Trends

Next, discuss current trends in the coffee market, like the growing demand for specialty coffee, the appeal of ethically sourced and organic beans, and the innovation in coffee brewing techniques. Highlight the interest in offerings that cater to diverse preferences and dietary needs, such as plant-based milk options and artisanal blends, as well as the increasing importance of sustainability in the coffee industry.

Competitive Landscape

A  competitive analysis  is not just a tool for gauging the position of your coffee shop in the market; it’s also a fundamental component of your business plan.

This analysis helps identify your coffee shop’s unique selling points, which are essential for differentiating your business in a  competitive  market.

In addition, competitive analysis is integral in laying a solid foundation for your business plan. By examining various operational aspects of your competitors, you gain valuable information that ensures your business plan is robust, informed, and tailored to succeed in the current market environment.

Identifying Your Coffee Shop’s Competitors

The first step in conducting a competitive analysis for your coffee shop is identifying your direct and indirect competitors. Direct competitors include nearby coffeehouses or chains that offer similar services and products, while indirect competitors might encompass local juice bars, tea houses, or even convenience stores selling coffee.

Utilize tools like Google Maps to map out competitor locations and understand their distribution across your area. Online platforms like Yelp, Google Reviews, or social media channels provide invaluable insights into customer reviews and ratings, shedding light on competitor  strengths and weaknesses . For instance, if a rival coffee shop receives praise for its artisanal coffee blends and cozy ambiance, it signifies a notable strength.

Coffee Shop Competitors’ Strategies

To gain a deeper understanding of the competitive landscape, analyze various facets of your competitors’ strategies:

• Coffee Menu Offerings:  Assess the range and uniqueness of coffee offerings. For instance, if a local competitor, “Brew Masters,” is gaining traction with exotic single-origin coffees or specialty cold brews, it highlights a potential trend or gap in the market for distinctive coffee blends.
• Service and Ambiance:  Consider the ambiance and customer service. Perhaps a competitor, “Sip & Chill Café,” is known for its relaxed atmosphere and friendly staff, enhancing the overall customer experience.
• Pricing Strategy :  Compare your pricing with competitors. Are your coffee prices aligned with those of other local cafes, or do you position yourself as a premium establishment akin to “Gourmet Grinds,” offering artisanal blends at a higher price point?
• Marketing and Branding:  Analyze how competitors market their brand. Do they rely heavily on social media campaigns, influencer collaborations, or community events? Understanding their marketing tactics can help refine your promotional strategies.
• Innovative Offerings and Technology:  Look for innovative approaches. Are competitors embracing technology for online ordering or loyalty programs? For example, “TechBeans Café” might leverage an efficient app-based ordering system, catering to tech-savvy customers.

What’s Your Coffee Shop’s Value Proposition?

Defining your coffee shop’s  unique value proposition  is critical. Perhaps your establishment specializes in single-origin, ethically sourced beans, or you have a signature blend that customers rave about. Emphasize these unique offerings to distinguish your brand in the market.

Consider market gaps and evolving customer preferences. If there’s a growing preference for sustainable practices or an increasing demand for specific coffee types (organic, fair trade, etc.), tailoring your offerings to meet these needs can position your coffee shop favorably amidst competitors.

Tailoring your offerings to your location is essential. A coffee shop in a bustling business district might emphasize quick service and convenience for professionals on the go. At the same time, a suburban café could focus on creating a warm, family-friendly environment to attract locals seeking a relaxing spot for gatherings or leisurely coffee breaks.

Start by doing a SWOT analysis for the coffee shop. Point out Strengths (like skilled baristas and a variety of coffee options), Weaknesses (such as high running costs or lots of competitors), Opportunities (for instance, more people wanting unique coffee experiences), and Threats (like economic changes that might reduce how much people spend on coffee).

Marketing Plan

Then, make a marketing plan that shows how to draw in and keep customers. This could include ads aimed at the right people, deals to save money, an active and interesting online presence, and getting involved in the local area.

Marketing Channels

Utilize various marketing channels to reach and engage your audience effectively.

Digital Marketing

• Establish a Strong Online Presence:  Leverage social media platforms like Instagram for visually appealing coffee shots, TikTok for engaging short videos, and Twitter/Facebook for engaging with customers and sharing updates.
• Email Marketing:  Build an email list and send newsletters featuring new coffee blends, upcoming events, or promotions. Offer incentives for signing up, such as a discount on the first purchase.
• Website and SEO:  Develop a user-friendly website showcasing your menu, the story behind each coffee blend, and a blog section for brewing tips or coffee-related content. Optimize for local SEO to attract nearby customers.

Local Advertising

Connect with the local community to increase foot traffic:

• Flyers and Local Print:  Distribute eye-catching flyers in nearby offices, community centers, and partner businesses. Advertise in local newspapers or magazines to reach a broader audience.
• Community Engagement:  Host events like cupping sessions, live music nights, or art exhibitions to create a gathering space. Partner with local artists, musicians, or charities to foster community connections.
• Partnerships: C ollaborate with neighboring businesses, such as bakeries, bookstores, or gyms, for cross-promotions or joint events.

Promotional Activities

Attract customers with enticing offers and loyalty programs:

• Special Deals:  Launch seasonal or themed promotions to attract customers. For instance, during colder months, promote warm beverage options with discounts, or offer a summer-themed menu with refreshing iced coffees or specialty drinks.
• Loyalty Programs:  Implement a rewards system where customers earn points for every purchase. These points can be redeemed for free drinks, merchandise, or even exclusive experiences. This encourages repeat business and fosters a sense of loyalty among customers.
• Referral Incentives:  Encourage your existing customers to refer friends and family by offering incentives. This could be in the form of discounts or free beverages for successful referrals. Word-of-mouth remains a powerful tool in the coffee industry.

Sales Channels

Optimize  sales channels  to maximize revenue and customer satisfaction.

In-Store Upselling

Maximize each customer’s visit:

• Upsell Specialty Items:  Train baristas to suggest specialty drinks, pastries, or merchandise based on customers’ preferences or current promotions.
• Merchandising:  Display branded merchandise like travel mugs, brewing equipment, or specialty beans near the checkout counter to encourage additional purchases.

Subscription Services

Offer subscription-based models for regular income and customer retention:

• Coffee Delivery Subscription:  Introduce a coffee delivery subscription service where customers receive their preferred coffee blends regularly at a discounted rate. Customize subscription options based on frequency and quantity to cater to diverse preferences.
• VIP Memberships:  VIP memberships can provide exclusive benefits such as early access to new blends, members-only events, or personalized recommendations. These memberships create a sense of belonging and offer additional value to loyal customers.

Mobile Ordering and Pickup

Facilitate convenient ordering and pickup options:

• Mobile App Ordering:  Develop a user-friendly mobile app that allows customers to browse your menu, place orders, and make payments seamlessly. Offer incentives such as loyalty points or app-exclusive deals, to encourage app usage.
• Curbside Pickup:  Implement a curbside pickup option, allowing customers to order ahead and collect their beverages without leaving their vehicles. This convenience factor can attract busy individuals or those seeking contactless service.

Strategy Timeline

Lastly, set up a detailed timeline that marks important steps for the coffee shop’s start, marketing actions, growth in the number of customers, and goals for getting bigger. Make sure there’s a clear plan and goal for moving the business forward.

The Management section focuses on the coffee shop’s management and their direct roles in daily operations and strategic direction. This part is crucial for understanding who is responsible for making key decisions and driving the coffee shop toward its financial and operational goals.

For your coffee shop business plan, list the core team members, their specific responsibilities, and how their expertise supports the business.

The Financial Plan section is a comprehensive analysis of your financial projections for revenue, expenses, and profitability. It lays out your coffee shop’s approach to securing funding, managing cash flow, and achieving breakeven.

This section typically includes detailed forecasts for the first 5 years of operation, highlighting expected revenue, operating costs and capital expenditures.

For your coffee shop business plan, provide a snapshot of your financial statement (profit and loss, balance sheet, cash flow statement), as well as your key assumptions (e.g. number of customers and prices, expenses, etc.).

Make sure to cover here _ Profit and Loss _ Cash Flow Statement _ Balance Sheet _ Use of Funds

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Coffee Shop Business Plan Sample

Fill the form to download coffee shop business plan example.

The coffee shop business plan is an essential tool for coffee shop owners and those who want to open a coffee shop.

A coffee shop business plan will give you an idea of how much a coffee shop will cost, how those costs will be funded, and how much money you expect to make from it. 

When it’s ready, you can show it to investors, banks, partners, and anyone else who can help you open a cafe. Getting this document right is worth your time and effort, so make sure you do it right.

After helping entrepreneurs in the USA launch more than 400 independent coffee shops , we know that a business plan is vital for success.

We are here to help you write a coffee shop business plan.

Here’s a business plan sample pdf and a template that will give you some inspiration for what should be included in your coffee shop business plan.

Coffee Shop Business Plan Template

A coffee shop business plan template should include the following sections. Let’s look at a coffee shop business plan template and discuss what each section should include.

1. Business Plan Title Page 2. Executive Summary 3. Market Overview 4. Competitive Analysis 5. Swot Analysis 6. Marketing Plan 7. Funding Request 8. Management Summary 9. Financial Highlights

1. Business Plan Title Page

Start with the legal name of your business. Provide the address of a likely location or website if you already have one. Include your company logo at the top or bottom of the title page. On the title page, there should also be a table of contents listing each section and its page number.

What makes a great cover page for a business plan?

Visit our page on business plan cover page examples to download our free business plan cover page templates and create a beautiful cover page yourself.

2. Executive Summary

The Coffee Shoppe will be a business service provider based in Miami, Florida. Founded by Mrs. Nancy Harrigan.  The Coffee Shoppe will offer a menu of services which include coffee, lattes, capacinos, expressos, deli sandwiches and baked goods.

While these services will comprise the initial market entry core, long-term plans call for the integration of storage and relocation capabilities to the business mix.

The local area has been in dire need of a service of this type for some time and The Coffee Shoppe plans to adequately serve them through the consistent delivery of real-time hospitality. 

The market is definitely filled with opportunities but in order to capitalize on them, a strong infusion of working capital must be acquiesced. 

The founder projects needing 100K for their business venture with repayment being made out of the profits that are driven annually. Funding that is secured will be used in a variety of areas including marketing, logistics, management, site procurement as well as the day to day operations of the organization.

The marketing for The Coffee Shoppe will be done through a variety of mediums including the Internet, mass media, print and networking. Internet efforts will center on the creation of a user-friendly website that clearly list all of the core services that will be offered. 

To read the full executive summary, click here to download the PDF

Read more: Executive summary examples

Financial Highlights

3. Market Overview

The Company is entering the market at a time when the industry in which it operates is experiencing substantial growth. According to market research firm IBIS World, the Coffee & Snack Shops Industry has seen an average annual growth rate of 5.8% over the last five years, positioning industry revenue to be around $47.7 billion in

2018. The Coffee & Snack Shops industry is projected to see an average annual growth rate of 1.4% over the next five years, placing industry revenue at $51 billion in 2022.

Market Analysis

Target Market

4. Competitive Analysis

The following is a listing of the primary competitive advantages of the Companv upon entering the market

• Congenial customer service
• A central location wit greater foot traffic Parking facility available for customers
• Soothing ambiance for calm eating
• Excellent visibility from the road
• Aggressive marketing campaian
• Understanding visitors food choices and integrating the same in the menu
• Inviting feedback from customers
• Key understanding of trends and flavor
• The company will hire experienced management and staff

5. Swot Analysis

The following is an analysis of the  SWOT analysis of the coffee shop business as well as the opportunities and threats present in the market.

• Location. The location is one of the primary strengths of the The Coffee Shoppe business model as there are currently no other organizations that have the capabilities to offer the types of services that will be introduced to the market.
• The founder. Founder Nancy Harrigan is a seasoned, strategic business professional with an eye towards success, profit and achievement. These qualities will form the basis of the The Coffee Shoppe brand and be a catalyst that propels the success of the operation.
• Servicing of a need. The services that will be brought to the local residents of Miami are one that is truly needed. The fact that The Coffee Shoppe will be satisfying this need will endear the organization to the customer base and allow for consistently strong growth.
• Lack of funding. Funding is the sole weakness of the The Coffee Shoppe business venture. While funding is a weakness it should be noted that the founder is confident that if adequate funding is secured, she will be able to develop a viable business.

Opportunities

• Limited competition. The limited amount of local competition is the primary opportunity for The Coffee Shoppe as it will give the organization the opportunity to develop a loyal customer base while erecting barriers to entry.
• Small business growth. The projected growth of small businesses will provide another opportunity and will feed opportunities directly into the The Coffee Shoppe pipeline.
• Larger organizations. Larger organizations could possibly realize the opportunities that can be found in the local region and begin entering the market. While this is a threat, the founder believes that with strategic marketing, community efforts and customer service, this threat can for the most part be mitigated.

Free: Business Plan Examples

Do you need help creating a business plan? Check out these six free, proven business plan examples from different industries to help you write your own.

6. Marketing Plan

Marketing for The Coffee Shoppe will be done through a variety of mediums with television, print and the Internet being the primary drivers. The website will have SEO capabilities and will be developed using all of the latest in web and graphics technologies.

In addition to the home website, plans also call for the creation of a strong social media presence using Facebook.com and Twitter.com with regular updates occurring on each of the aforementioned pages.

Commercial time has already been purchased through ABC and commercial production will begin immediately following funding acquisition. Print marketing will consist of advertisements being placed in publications that are typically read by members of the targeted audience including small business owners and corporate types.

Networking will round out the The Coffee Shoppe marketing mix with the founder joining various networking groups that give her the ability to champion the brand that she has created.

Read more: how to do market research research

7. Funding Request

Read more: ways to find investors for your business

8. Management Summary

9. Financial Highlights

Financial Indicators

To learn more about financial indicators, click here to download the pdf

Break even analysis

Profit and Loss Statement

Projected Cash Flow

Projected Balance Sheet

Coffee Shop Business Plan Sample. FAQs:

Starting a coffee shop can vary greatly depending on location, size, and concept. On average, the initial investment can range from $80,000 to $300,000. This includes lease deposits, equipment purchases, inventory, permits, and marketing expenses.

The specific permits and licenses needed will vary based on your location and local regulations. Common requirements include health department approvals, business permits, food service licenses, and zoning permits. It’s crucial to research and comply with all necessary legal requirements.

A successful marketing strategy is essential for attracting customers. Utilize social media platforms, collaborate with influencers, and host events to create buzz around your coffee shop. Offering unique beverages, outstanding customer service, and a welcoming ambiance will keep customers coming back.

While it’s not mandatory, offering organic or fair trade coffee can attract environmentally conscious consumers. It also reflects your commitment to sustainable and ethical practices, which can build a loyal customer base.

Track key performance indicators (KPIs) such as sales revenue, customer retention rates, average ticket size, and social media engagement. Analyzing these metrics will help you gauge the success of your coffee shop and identify areas for improvement.

Implementing a loyalty program, offering personalized perks, and providing excellent customer service are effective ways to retain customers. Engage with your audience on social media, respond to feedback, and continuously improve your offerings based on customer preferences.

Our free real sample business plans will show you how to write a plan that looks as polished and professional as this one.

Click to view the coffee shop business plan sample. Our experienced business plan writers professionally write each business plan and work with you to develop a winning plan.

Coffee Shop Business Plan PowerPoint Presentation

Download coffee shop business plan example pdf.

We will show you some real-world business plan examples so you may know how to write your own, especially if you are seeking a bank loan or an outside investment and need to use SBA-approved formatting.

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How To Write A Coffee Shop Business Plan

Do you have a great idea for a coffee shop that you would like to pursue as a business opportunity? Well, after conceptualizing your coffee shop in full, your next step will be to begin writing a business plan that outlines everything from how you will obtain opening capital to how your business will be structured.  

The thirteen outline points in writing a thorough and successful coffee shop business plan. These are:

• Create a branded cover page
• Detailed concept outline
• Create a sample menu of offerings
• Style of service
• Management structure and team introduction
• Store design and specialized equipment
• Target demographic
• Proposed locations
• Market overview and forecasting
• Marketing plan
• Retainer team
• Business structure
• Financials  

Table of Contents

Why Is Writing A Business Plan Important

Before we delve into the meat and potatoes of writing a business plan let’s discuss why a business plan is important in the first place. At the bare minimum, your business plan will help you form an order of operations and clearly define the goals of your business. It’ll serve as an outline for completing important tasks leading up to opening the doors and beyond. By setting these benchmarks and either achieving them or not, you will be able to determine the viability of your concept before getting too deep financially. Proving your concept’s viability is also necessary for convincing investors by showing them that there is demand for your coffee shop. Finally, working through the process of writing the business plan will help you, as an entrepreneur, decide if your concept is truly something that you’d like to take on personally under the parameters that you’d like to move forward within.  

Now, let’s get started.

Creating A Branded Cover Page

The creation of your brand starts here and is your coffee shop’s chance at making a strong first impression. Before we go any further, we need to define what constitutes a brand so that you can ultimately decide how to define yours.

  A brand, in essence, is the personality of a business created through using specific language and imagery. When you talk about your coffee shop, what words do you use to describe it, and, more importantly, what words do you use to describe the product and service that you intend to deliver. By identifying the clear message you’d like to send with your core values, you can begin to identify who you are as a brand.

  After building the framework for your brand identity you may begin to think about the visual aspect of your coffee shop’s brand. Create a color scheme and logo ( a few iterations may be needed) that inspire emotion. Start by asking the question “what does my brand look and feel like to me?” When you begin answering that question keep these five key things in mind to make sure that you are sending a clear message about your brand through its imagery and creating a strong brand identity:  

• Distinctive – Your brand and logo need to stand out from your competition while also catching people’s attention.
• Memorable – The logo design must make a visual impact. A successful logo will identify a brand entirely on its own.
• Scalable and Flexible – The imagery can grow and evolve as the brand progresses.
• Cohesive – All components make sense in regards to symbolizing the coffee shop.
• Easy to Apply – Easily utilized across all media platforms.

Now apply what you have instilled as the brand identity of your coffee shop onto the opening pages and we have begun writing the business plan!

Detailed Concept Outline

So, you started simply with the idea to open up a coffee shop, but have now begun developing what will define your coffee shop from the one down the street and how it will ultimately fit into the market overall. This will primarily come from your concept outline. The concept outline for your coffee shop will be a bite-sized explanation of what makes it unique and why it will be in demand. You will be able to build upon this as your business evolves, but this will give investors something tangible in the early stages of business development.  

Along with making a statement about the specific idea of your coffee shop, your concept outline will need to include a few other key details . As mentioned before, your concept outline must also include how your shop will fit into the market and why there is a specific need for your brand. Why is your business the one to fill this void in the market and, more importantly, why are you the person to oversee that?

Next, detail how your coffee, style of service, or both are different. How will you structure your business and operations that will show potential investors that you not only know how to make money in the market but that you will make money at the end of the day? Also, completing a market analysis of your prospective competitors will help you support your chosen business structure by outlining what has and hasn’t been working currently in the market.  

Finally, briefly summarize your marketing plan that will complement your brand and how you intend to turn a profit.

Sample Menu

Though seemingly simple and straightforward, putting an appropriate amount of thought into creating your menu is crucial in determining the kind of coffee shop you are going to end up opening. Do you want to be known for the distinct flavors or varieties of coffee that you serve or the specialized drinks that you make? Espresso forward, drip coffee, or both? Will you serve food and, if so, will it be full service or merely pastries and baked goods? As you create your menu and go about asking these questions (and many others), the answers will shape so many other aspects of your business. After setting the menu you can begin to think through the progression of what equipment you will need, staffing levels, and how much capital you will need to pursue the style of service that you have chosen.

Learn more about what to offer HERE .

Style Of Service

Just as deciding on a sample menu ultimately impacts many aspects of your business down the road, so does select a style of service. Because you are planning on opening a coffee shop this may not have been something that was at the forefront of your mind like it would for someone that was planning on opening say a restaurant or bar, but it is equally as important in the row of dominoes that fall while writing your business plan for your coffee shop. After deciding on your sample menu, the style of service that compliments that menu should be fairly evident in some respects. Keep in mind though that how you choose to serve your guests greatly dictates the perception of hospitality put forth by your business. Use this to your advantage by choosing to go above and beyond. Tying it back into your brand identity.  

Management Structure And Team Introduction

Unless you are starting with several business partners or a large amount of capital to have the ability to bring on executive-level talent then your management structure will be simple and straightforward. In many cases, the owner of a small business spearheads the majority of operations as the general manager of the property as well. It may not be for several years that you will have the luxury of bringing on other upper-management caliber employees to assist in running your coffee shop.  

Regardless of that fact, including verbiage about how you intend on structuring your eventual management team and identifying their roles and who it is, that may currently or eventually will fill those roles will show investors that you have some kind of structure in place supporting your business goals and suggesting stability.  

Before we discuss the eight types of management structures we should clearly define the idea behind management structures as a whole. Business News Daily explains it best when they say that “An organizational structure is a set of rules, roles, relationships and responsibilities that determine how a company’s activities should be directed to achieve its goals. It also governs the flow of information through levels of the company and outlines the reporting relationship among mid-level staff, senior management, executives, and owners. It is effectively a hierarchy for a company, though some organizational structures emphasize a near-total lack of hierarchy.” The eight management structures are as follows:

• Hierarchical or Line Structure – The most common organizational structure where power flows from top to bottom.
• Functional Structure – Departments are headed by specialized leadership which all report back to a central figure.
• Divisional Structure – This is mainly for larger corporations where each division may operate autonomously under a larger umbrella of leadership.
• Flatarchy Structure – Structure where all employees have the same amount of power and say in day-to-day operations.
• Matrix Structure – A more fluid form of the hierarchical structure where different employees may be chosen to lead different projects at different times based on skillset.
• Team Structure – Groups of teams lead different aspects of the business.
• Network Structure – Organizes relationships amongst departments and separate locations.
• Projectized Structure – Structure that focuses all resources on completing projects in a linear order.

As you set out initially, your small business will most likely take on a hierarchical structure of management with you as the central figure at the top.

Store Design And Specialized Equipment

Unless you are renting or purchasing a pre-existing property that was a similar business before your occupancy then you will need to endure the arduous process of store design. Even if you move into a pre-existing property there will still be some redesign to some extent. To start, you will need to consult the proper contractors and designers to guide you through outlining what your specific needs will entail in regards to a buildout. On top of what you’d like your cafe to look like aesthetically, there are many other key components to take into consideration.  

Take HVAC for example. Heating and cooling are not only important for creating a comfortable environment for your guests, but your coffee shop will also be generating ambient heat and smells (especially if you decide to do food preparation on-site) that must be ventilated away. This can quickly turn into one of the more expensive and expansive projects of your buildout, but poorly routed HVAC will cost you more in lost revenue than in upfront costs.

Restrooms are another design piece that is often overlooked at first. The placement and overall build quality can contribute to the ambiance of your cafe either positively or negatively. Perception of cleanliness also hinges greatly on how well maintained the restrooms are so building them with that in mind will do you a favor down the road. After all, an establishment is only as good as its restrooms!

Acoustics and sound distribution are subtle things that play a large role in setting the mood at any establishment. Because you will most likely be wanting to create a relaxed mood consider applying sound dampers on the ceiling and installing recessed speakers to further immerse your guests in the atmosphere.

Lastly, whether you decide to be quick service or sit-down coffee shop your design flow must reflect that. Keep in mind how your guest will make it in the front door, through the line, and then either to a seat or the exit with ease and without confusion or a traffic jam occurring.

Target Demographic

As a coffee shop, your overall demographic will be fairly universal purely due to the demand for good coffee, but you will need to identify your specific target audience to improve your chances of success. Doing so may seem like a daunting task at first but the following are a few tips to get you started.

• Start with your current clientele – Connect with your current client base to become more in tune with their needs building a strong base pool.
• Benefits vs. Features – Consider who benefits most from your style of service, your products, and your coffee shop as a whole.  
• Gather specific information on your target audience – consider your target audience as a single person. What do they look like, how do they act, and most importantly, what do they want?
• Solicit customer feedback – The easiest way to figure out what people want is simply to ask! Gather their feedback through surveys and questionnaires.
• Look for trends in feedback – What are your guests asking for more of, less of, and what do they want in general from your cafe?
• Own your niche – Know who you are as a business and stick to it. The business will follow.
• Research the competition – What are your competitors having success within the market? Take cues from your surroundings and shape their successes to fit your identity.
• Create a marketing map – Identify gaps in the market and formulate a targeting marketing plan to capture that business potential.
• Don’t overthink it – Discover who is most likely to respond to your marketing push and cater to them directly.

Proposed Locations

Choosing the location for your coffee shop may be one of the most difficult and make-or-break decisions you make during this process. Your location will determine several factors which ultimately make up your success or failure as a business so making an informed decision on where you open up shop is an absolute must. First, take several locations into careful consideration and narrow down your options to suit your needs. Identify what each location has to offer and what its strengths and weaknesses are about your business structure. Lastly, you will need to determine which few locations offer the highest rate of exposure to your target demographic that also fit into your budget. To further assist you in deciding on a location for your business plan here are a few further points to consider when choosing a location.  

• Style – Your location should be consistent with your business identity.
• Demographics – How close are you to your target audience and how easy is it for them to access you.
• Traffic – Is your building on a busy street with a good amount of foot traffic and parking.
• Competition – What is your proximity to your competition. Similar businesses nearby can boost business for both businesses but too much of the same can be detrimental.
• Complimentary Businesses – What is your proximity to other businesses that compliment your coffee shop. These could include bakeries, bookstores, or schools where you share a common clientele pool.
• Zoning – Knowledge of your proposed locations’ zoning laws is necessary to understand what you are and aren’t allowed to do with the property and what is acceptable within that area of business.
• Infrastructure – Is the building you’re interested in a new build or an existing structure. Regardless, you will need to ensure that everything is up to code and capable of supporting the needs of your cafe.
• Utilities and hidden costs – Do your homework on what it has cost prior tenants to operate out of the location you’re interested in. Utilities and upkeep costs should be overestimated and built into your financial plan.

Market Overview And Forecasting

The market overview is just as its name implies. It involves taking all aspects of your concept, location, competition, and target demographic into consideration to report on the outlook of the coffee shop market as a whole in your area. You will also need to create a forecast of your flow of business, income, and expense projections over five years. This will help investors take confidence in your business model to succeed. You will need to work with an accountant and financial advisor on these to vet them before betting your business on them.  

Marketing Plan

Your marketing plan should be an outline of your strategy and advertising goals over your first year of business. The plan should also include the characteristics of your target audience and key indicators that show you that you have reached specific goals along the course of your marketing plan. As a small business and brand new coffee shop, the majority of your advertising will be focused on social media which is both convenient and cost-effective. That being the case, the majority of your year one marketing strategy should reflect how you intend on utilizing your social media channels to reach your intended demographic and build a business that only costs you your own time in the process.

Retainer Team

As a small business owner, you will be expected to wear many hats, but that’s not to say that you won’t need help in building your coffee shop business. It is important to retain the services of multiple different professional resources to help you along your journey. These retainers will assist you in completing tasks that you don’t necessarily have the specific knowledge to complete and can save you time, money, and effort by getting the job done quickly and correctly. This is also enticing to potential investors because it shows that you have taken the initiative to get important tasks done by professionals and that they are there to guide you along the way. Some of the services that you should consider having on retainer are:

• Financial Advisor
• Contractor  

Business Structure

When starting on building your new coffee shop business you will need to decide which business structure to establish your business as. All have pros and cons and whichever you choose will ultimately determine your tax implications and legal liability. There are four types of business structures to choose from and they are as follows.

• Sole proprietorship – There is no distinction between the business and the individual that owns it meaning that the owner is entitled to all of the profits but is subject to all of the business’s liabilities as well.  
• Partnership – There are three types of partnerships where all partners share some degree of liability and profit depending on the degree of their role in owning the business.
• Limited Liability Company – The most common business structure for small businesses. LLC’s have the benefit of being a hybrid legal entity meaning that its members can be taxed as corporations or sole proprietorships but they also do not incur any of the liabilities associated with the business. This is considered the most flexible of all of the business structures.
• Corporation – In this structure, the business is considered as a legal entity of its own and separate from its owner(s). A corporation is also entitled to many of the rights that a person possesses such as the right to free speech, to sue or be sued, or the ability to enter into legal contracts on its behalf.

Entering into an LLC business structure would be your best bet as a small business owner. Allowing you to reap the benefits of your business without any of the liability associated with the risks of opening a new business.

This covers a broad spectrum of analytics that ultimately determine how much capital that you will need to open the doors of your coffee shop. All prior sections of this article culminate in this final section which also includes such things as supplying, stocking, staffing, and furnishing the cafe. All in all, this will serve as your business’s growth plan for years to come and will serve as a reference for investors that can validate your business plan and concept. While going through the process of compiling your financial projections, the most important thing to keep in mind is that it is imperative to be realistic, pragmatic, and even slightly overestimate your financial needs. Listed below is a guideline for gathering your projected financial statements needed to complete your business plan.  

• Sales Forecast – Project your sales for the next three to five years month by month. Know where your strong and weak points are to better plan for times of feast and famine.
• Expense Budget – Create a spreadsheet detailing both your fixed costs and variable costs. This will allow you to see what it will ultimately cost you to make a profit.
• Cash-Flow Statement- This is simply the chart of money flowing in and flowing out of the business.  
• Income Projections – This is your P&L, or profit and loss statement, for the next three to five years.
• Asset and Liabilities – Create a balance sheet of your net worth versus your running expenses.
• Break-even Analysis – The projection of when your coffee shop sales and revenue equal your expenses. The point where you start making a profit.

As you work through the items in this article you will gain a better understanding of the ins and outs of opening up a new coffee shop. It may take multiple attempts to complete even a single business plan. For further reference materials and business plan templates, refer to the SBA website.

Looking to learn more about how to start your very own coffee shop? Download our Free eBook  here  as well as receive our Free newsletter with great tips on how to start your very own coffee shop!

Please note: This blog post is for educational purposes only and does not constitute legal advice. Please consult a legal expert to address your specific needs.

Hi! I’m Shawn Chun

My adventure in coffee began when I first launched my first coffee shop back in the early 2000s. I had to figure out so many things on my own and to make it worse within 2 years of opening two large corporate coffee chains moved in just blocks away from me!

As I saw smaller and even some larger coffee shops in the neighborhood slowly lose customers to these giant coffee chains and slowly close up shop, I knew that I had to start getting creative…or go out of business.

I (like you may be) knew the coffee industry well. I could make the best latte art around and the foam on my caps was the fluffiest you have ever seen. I even had the best state-of-the-art 2 group digital Nuova Simonelli machine money could buy. But I knew that these things alone would not be enough to lure customers away from the name brand established coffee shops.

Eventually, through lots of trial and error as well as perseverance and creativity I did find a way to not only survive but also thrive in the coffee/espresso industry even while those corporate coffee chains stayed put. During those years I learned to adapt and always faced new challenges. It was not always easy, however, in the end, I was the sole survivor independent coffee shop within a 10-mile radius of my location. Just two corporate coffee chains and I were left after that year. All told the corporate coffee chains took down over 15 small independent coffee shops and kiosks and I was the last one standing and thriving.

Along the years I meet others with the same passion for coffee and I quickly learned that it is not only “how good a barista is” that makes a coffee shop successful, but the business side of coffee as well.

Hence why I started this website you are on now. To provide the tools and resources for up and coming coffee shop owners to gain that vital insight and knowledge on how to start a coffee shop successfully.

Stick around, browse through my helpful blog and resources and enjoy your stay! With lots of LATTE LOVE!

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