How to Create a Coffee Shop Business Plan

A person triumphantly holding a blended coffee drink in front of a Scooter's Coffee location.

When you’re dreaming about wowing the public with your coffee, it all seems so simple: brew it, and they will come. But many factors go into planning the business of a coffee shop, before you can open it, to get it going and operating in the black (with room for cream, of course). Creating a smart coffee shop business plan will enable you to increase the odds that your fledgling coffeehouse not only will survive but will thrive. The plan will not only be crucial in demonstrating the validity of your concept to lenders and investors, but it will also help clarify your vision, strengthen your own confidence in the path ahead, and serve as a roadmap as you go.

The U.S. Small Business Administration outlines the key sections of a traditional business plan: the executive summary, the company description, the market analysis, organization and management, your service or product line, your marketing and sales plan, the funding request (if applicable), financial projections, and an appendix of supporting documents. These key pieces of the puzzle apply directly to the business plan for a coffeehouse.

Executive Summary

By the time you start to assemble your business plan, you should already have done extensive research and planning about what offerings your coffeehouse will have, what your point of difference will be in your local market among competitors, and much more. The Executive Summary is your chance to begin to tell your story to the world.

Consider this section your “elevator pitch,” summing up your vision, from where you’ll source your beans, to the flavor profiles of the coffee you will serve, to how many people you’ll need on staff to make it, to where it’s going to happen, and beyond. You can flesh this out in the following sections, but here’s your chance to secure the reader’s attention with a succinct summary.

Company Description

Here, you can delve into more detail about the company and your vision. Explain what demand your coffeehouse will answer or what niche it will fill. Describe your target customer and where they live, what they do, what their income is, and where your coffeehouse site will be located to serve them.

If you already have certain resources such as partial funds, loan collateral, equipment, background in coffee service or operations — or just a strong, unique point of view about what makes for a great coffee experience — put it in your Company Description.

Market Analysis

This section picks up where your Company Description left off. Give more insight from your deep research of the area and the competition. Are you competing with Starbucks or a couple of independent coffeehouses — or a mix of chain and indie?

How far are they from your site? What will your coffeehouse’s strengths be compared to them? How many residents are in the area, and what other businesses are there whose employees may come to you for coffee? If your price points will be a differentiator, explain. If you’ve already determined a site for your coffeehouse, talk about why you chose that location.

Organization and Management

By now, you should already have a fairly good idea who you’ll bring on board to help carry out your coffeehouse concept and who you can count on. Are you going to hire a manager who has three years’ experience managing another successful coffeehouse? Tell the reader all about her. Have you recruited a talented barista? Share the story of his skills in this section. Are any of your coffee crew entrenched in community organizations? Talk up their networks and reach. All of this adds to the success potential for your coffeehouse.

Also set forth here what business structure you’ll use, such as a sole proprietorship, an LLC with other members, or a corporation. Consult a trusted attorney for guidance on what form to take.

Service or Product Line

You’ll have to get more specific than just telling the reader you’re opening a coffeehouse. If you want investors or lenders to get behind your passion, show them how you’re going to be different from the pack.

What types of coffee and other beverages will you offer? If you’re going to use specialized equipment that may be atypical in your market, say so. Will you be seizing on emerging coffee trends that your competitors may not be utilizing? Will you be the only coffeehouse in the market or part of town with a drive-thru window? Maybe you’ve even surveyed consumers in the area and discovered feedback on how other coffee businesses have failed to provide good service, and you aim to do better.

Here’s where you persuade the reader that you have something special to offer. Even if you’re offering fairly typical products, maybe your coffeehouse will set up shop in an underserved area of the market that previously had no supply or demand. If so, explain that.

Marketing and Sales

Remember all that data you mined for intel on your potential customers? If you’re doing due diligence, you should also have calculated the best ways to market to them. Do you plan some newspaper ads to alert older consumers of your arrival?

Will you have a visually savvy social media guru on the team posting tantalizing photos of coffee, tea, and croissants every day on your coffeehouse’s Instagram account, along with information on specials of the day or week? And once you spur customers to their first trial of your products and your brand, how will you keep them coming back? What is your pricing strategy?

Funding Request

If you’ve done a good, persuasive job of making your case in the previous section, the Funding Request will feel natural to the reader. You’ve crunched the numbers again and again. You’ve read expert advice to make sure you’re not forgetting anything you may need.

Whether you’re presenting your coffee shop business plan to a bank or to a wealthy grandparent who may invest in your coffeehouse dream, show them you know what you need for success and that every dollar will be accounted for.

Financial Projections

This is a reassuring data set for potential lenders or investors after they’ve read your Funding Request. Starting out, you may want to break it down by month. For example, in your first months, you may still be absorbing startup costs and your profit and loss picture won’t be as positive as later in your evolution. That’s common. Just be sure to show a detailed plan over time to demonstrate you know how to become gradually more profitable.

Appendix

In earlier sections, you introduced readers to key personnel, product concepts, and a lot more. If you wrote those sections well, you explained just enough to keep the reader’s interest, without getting bogged down. The Appendix is where you can include deeper information on specific matters, in case the reader is interested in reading further. You might even add copies of insightful business articles touting the great performance of similar businesses in other areas. You can also include formation documents from your entity and any other documentation that helps paint the picture that this coffeehouse is much more than a fantasy — it’s the real deal.

Of course, as thrilling as it can be to come to the point in your journey where you’re putting together the business plan for your coffeehouse, if you opt to open a franchise of a coffeehouse brand instead of opening a from-scratch independent shop, you will avoid having to shoulder the burden of doing all the research, number-crunching, and business planning. Either way, realize that you can’t do it all yourself, and you’ll need help. Your business plan is a launchpad for setting forth who will be helping you and how, and what additional help you need.

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