How to develop a business plan for a coffee shop

A coffee shop is one of the most profitable types of catering business, with profitability of over 400%. Especially during the crisis, when large restaurants suffer large losses in profits, takeaway coffee shops and small coffee houses with a couple of tables remain afloat.

If you decide to open a coffee shop, you should start by drawing up a business plan – this is the basis for everything.

For opening a coffee shop, a business plan will show how profitable it is to open a coffee shop in a particular area, what budget is needed for opening, and the first time of work. The article will analyze how to draw up a short business plan for a coffee shop, what sections it consists of, and how to fill them out correctly.

Coffee Shop Business Plan Summary

The draft business plan for a coffee shop consists of 10 sections, the first of which is a summary. This section briefly describes all the business plan points, so it is better to write a summary after writing it.

What does a business plan summary consist of:

• the name of the coffee shop;
• description of the concept;
• analysis of competitors and your advantages;
• a list of employees for the operation of the coffee shop;
• payback goal;
• risk analysis;
• opening costs.

If you are going to attract partners or investors to open a coffee shop, write a summary in a simple but useful way – use payback numbers, and give a detailed description of the concept to interest partners. Establishing a coffee shop in a business plan should also be written in a resume to briefly make it clear to yourself and those who will read it what kind of establishment you want to open and what you expect.

A resume is a short presentation of a coffee shop business plan.

Checklist for launching an institution

About the company

Make a short description of the coffee shop in the business plan, indicate what legal form you have chosen, and what type of business you will implement. The first thing you should decide and indicate in your business plan is whether you will open a coffee shop from scratch or buy a ready-made franchise. There are advantages to opening a coffee shop from scratch and in a franchise. For example, you get a ready-made concept and action plan for the first time when you open a franchise coffee shop. In the case of opening a coffee shop from scratch, you can realize your desires, make the concept the way you see it, and work according to your plan.

Prepare and write a list of documents you received for opening a coffee shop. A standard set of documents for opening a coffee shop with seating, toilet, and running water:

1. The document on business registration in the tax.
2. Declaration from the State Inspectorate of Ukraine on consumer protection and fire declaration.
3. Lease or purchase agreement.
4. Sanitary books of personnel.

Coffee house concept

A concept needs to be thought through to the smallest detail, from interior design to grain selection. For example, the concept of a coffee shop depends more on the format of the establishment. You can come up with your unique format or choose ready-made and proven ones:

• American-style coffee shop – you can buy desserts and coffee in these coffee shops. There are no dishes and alcoholic drinks. Instead, service takes place at the bar, and you can drink coffee at a table in the hall.
• Coffee to go is a small mobile coffee shop or kiosk with coffee and hot drinks.
• A modular coffee house is an island with coffee in a shopping or business center. Usually, without seats, you can take coffee with you. The target audience of such a coffee shop is business center employees and shopping center visitors.

The format and concept directly affect the payback of the business – be sure to think about this stage first.

Description of the target audience

It is important to determine the target audience of your coffee shop and describe the portrait of a potential client. For example, if you open a third-wave coffee shop with a cozy space, young people and freelancers looking for alternative coffee flavors will be your target audience. In addition, being located near the business center, you will attract office workers who will drop in on you before work or at lunchtime. Before opening, you should study what kind of audience awaits you in the area and what to focus on in marketing.

To create a portrait of your potential guest, answer the following questions:

1. Who is your guest, and how old is he?
2. What are his hobbies?
3. Activity time?

So, for example, you can understand that your target audience is students and young people who like to spend time in a coffee shop with a laptop or the company of friends.

Market and competitor analysis

This section of the business plan describes your main competitors and your advantages over them. Also, give a general description of the market in which you will work, namely, the current trends in the coffee business.

As for the market, the coffee business is becoming more and more popular every year, especially during the pandemic, as its payback is higher than that of large establishments. The popularity of coffee houses is also because people have become more interested in trying different coffee drinks.

Opening a coffee shop is not difficult, but to be successful in this business, you need to know the competitors in the market and have an advantage over them. To do this, you need to study the service in coffee shops that are already open near your planned establishment. Also, check out the range of coffees that other coffee shops offer, and see if they have desserts or other drinks that can be sold in the summer.

A thorough study of competitors will help you decide which direction to move, what to focus on in the service, and what positions to add to your coffee shop to attract more visitors.

Production plan

The coffee house production plan in the business plan contains information about the coffee house premises, menu, staff, selection of equipment for the coffee house, and coffee brewing processes. In addition, you need to write down how your coffee shop will work, who will prepare the coffee, what suppliers you will work with, and how the coffee sale will be organized.

Establishments nearby

Equipment

Make a list of equipment for making coffee and other drinks. The main thing you will need:

• professional, semi-automatic, or automatic coffee machine for coffee shops,
• grinder,
• water filter,
• refrigerator for desserts and milk.

Coffee shop automation

Connect an automation system to establish processes in a coffee shop and keep records. Thus, you can work more efficiently, view sales analytics, and keep financial and inventory records.

First, the program for a coffee shop should be convenient and simple for your staff. And secondly, run on various devices: tablet, PC, and laptop. So, for example, you do not need to buy expensive monoblocks with Poster – you can automate your coffee shop using a tablet and a printer. So you save on equipment and free up space at the barista’s workplace.

Suppliers

Find out from which suppliers you will order goods: coffee, milk, desserts. Particular attention should be paid to coffee suppliers – this is a key product, and it must be of the highest quality. It is advisable to choose several types of coffee in the coffee shop so that guests can choose what they like best.

Write a list of suppliers and estimated purchase prices to calculate the costs in the business plan.

Menu

Positions in the menu of the coffee shop need to be associated with the concept of the institution. For example, consider whether you want to sell desserts and pastries or only serve coffee to guests. Make flow charts, for example, for cappuccino, and write a list of all the items you want to sell in the business plan.

Guests service

The production plan should also describe how you will serve guests: at the counter at the bar or deliver drinks to the tables. Add information about how many guests can be in the coffee shop simultaneously.

Marketing section

Here you need to describe the marketing plan of the coffee shop, both for the opening period and for development in general. It is worth starting an advertising campaign for a coffee house even before opening a coffee house. For example, create a page on social media a month or two before the launch. Networks and create posts with targeting – this will increase recognition and coverage.

Of the popular marketing tools for a coffee shop, the following are suitable:

1. Paid social media promotion
2. Flyers and outdoor advertising
3. Contextual advertising on the Internet
4. Loyalty programs

The latter needs to be described in more detail in the business plan. For example, the permanent promotion “6th coffee for free” to get a free drink.

The financial section of the coffee shop business plan

A business plan for a coffee shop with calculations is needed to plan and schedule the costs of opening a coffee shop, analyze future profits, and calculate the payback period for a future coffee shop.

Risk analysis

A study and risk assessment must be included in the business plan for opening a coffee shop. For example, a breakdown of equipment or an increase in grain prices. Risk analysis in a coffee shop business plan will help you understand what budget should be set aside as a reserve so that there is something to cover unforeseen costs.

It is best to list such risks in a table and prescribe how much damage they can cause and how much they will affect the budget. Along the way, develop an action plan for each type of risk so you can address it quickly.

Examples of risks that can occur in a coffee shop:

• Breakdown of coffee equipment or refrigerator;
• Staff theft;
• Decreased purchasing power;
• Rising prices for imported raw materials;
• Unfortunate positions in the menu;
• Increasing competition.

In catering, risks are divided into categories of probability, some moments may not happen, but it’s worth considering the actions. You should have a plan for everything.

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Conclusion

Developing a business plan for a coffee shop is an important step in starting a business. The successful start of the coffee shop depends on it because you will calculate the costs and risks and be ready for force majeure. Also, a business plan will help attract investors or partners to open a coffee shop. It is very difficult to describe the objectives of your new business in words, but in a business plan, you can reflect the essence and profitability of the project.

You have a choice: buy a ready-made business plan for a coffee shop or write your own, but keep in mind that it will be more difficult to implement a template option as it will take a lot of time to study and adjust the plan your desire.

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