how to start a coffee shop business plan

• QR Code Menu

How to Write a Successful Coffee Shop Business Plan (with Template)

• By Tam Nguyen

Table of Contents

Dreaming of opening a coffee shop? You’re not alone. The coffee industry is bustling with passionate business owners eager to make their mark. However, becoming successful coffee shop owners requires more than just a love for the brew. It demands a clear vision that differentiates your coffee house in a saturated market. A well-crafted business plan not only gives life to your idea but also sets your business on a path to thrive. Whether you’re a newbie or a seasoned entrepreneur, this guide, complete with a free template, will help you craft a business plan that markets and propels your coffee venture to success.

What is A Coffee Shop Business Plan?  

A coffee shop business plan is a comprehensive document that explains what your business idea is, how you intend to penetrate the coffee market, and the strategies you’ll employ to run your coffee shop successfully. When opening a cafe, many aspiring cafe or coffee shop owners underestimate the value of a structured plan. However, this document does more than just outline the needs to open a coffee shop; it gives a detailed roadmap for your new business, offering clarity on every aspect of its operation.

More than that, presenting a well-structured business plan to potential investors is essential. It not only showcases your commitment but also your understanding of the industry, making it a vital tool for securing funding. While crafting a business plan can seem daunting initially, it’s the foundation that both clarifies your idea and sets your business on the trajectory for growth and success in the competitive world of cafes and coffee shops.

Why A Business Plan Is Important For A Successful Coffee Shop Business?

1. Clear Vision and Objectives

When you set up your coffee shop, having a business plan establishes a clear vision and defines your objectives. It is the backbone that steers every decision you’ll make. Without a clear outline, you may find yourself swaying from one idea to the next. With a detailed business plan, you can present a clear business proposal to stakeholders, ensuring them and yourself of the path you plan to tread.

2. Financial Planning

A comprehensive business plan is imperative for accurate financial planning. It will include information on how much capital is required to start, what your ongoing costs will be, and the revenues you plan to generate. If you’re seeking external funding, investors will want to see how you plan to use their money, and most importantly, how you plan to make a return on that investment. If you plan to sell specialty blends or unique treats, the financial section can also help you plan a strategy for pricing, promotion, and sales forecasts.

3. Operational Efficiency

Operational efficiency is the linchpin that holds all business operations together. A business plan will map out every detail, from supplier agreements to employee schedules. You may want to create special events or loyalty programs for regular customers, and this is where a business plan can help you plan a strategy for success. It becomes the reference point, ensuring that daily tasks align with the broader objectives, guaranteeing that resources, time, and efforts are used optimally.

Step-by-step Guide To Write A  Coffee Shop Business Plan

1. Executive Summary

The Executive Summary is like the introduction of a novel – it provides a snapshot of what is to come. Typically, you write the executive summary last, even though it appears first in your business plan. It encapsulates the essence of your coffee shop’s mission, objectives, and financial overview, succinctly explaining what your business concept is about. This section is crucial because many coffee shops fail to engage potential investors right off the bat. Ideally, it should be concise – a page or two.

What should you cover in an Executive Summary?

• Introduce Your Coffee Shop or Cafe: Provide a company overview, giving readers insight into what makes your coffee shop unique from the myriad of coffee bars in the market.
• State Your Mission and Vision: Describe what drives your coffee business and where you see it in the future.
• Outline Your Objective: Define clear, measurable goals that you aim to achieve.
• Provide a Financial Overview: Highlight projected profit margins, a brief balance sheet, and other pertinent financial data.

2. Coffee Shop Business Description

This section paints a picture of your coffee shop. It’s where you elaborate on how you plan to infuse the local coffee market with your unique brews and pastries.

What should you cover in the Coffee Shop Description section?

• Coffee Shop Concept: Dive into the types of coffee drinks you plan to offer, whether it’s a rich espresso or a classic brewed coffee.
• Unique Selling Proposition: Discuss what makes your coffee shop stand out, be it a special blend of coffee beans, a unique roasting method using a specific coffee roaster, or artisanal pastry offerings.
• Operational Plan: Briefly touch upon how you’ll manage your coffee shop, from sourcing beans to serving cups of coffee.

3. Market Analysis

Before pouring your first espresso, performing market research before starting your coffee business is essential. This section dives deep into understanding your potential customer base and the coffee industry landscape in your area.

What should you cover in this section?

• Target Market: Describe your ideal customer. Are they local residents, office workers, or students?
• Location: Discuss the significance of your chosen location. Are there many coffee shops in the area? How does your location cater to your target market?
• Competition: Analyze existing coffee shops. What coffee and food products do they offer? What pricing strategy do they employ? How will your coffee shop compete or complement them?

4. Organization and Management

Behind every successful coffee shop is a robust organizational structure and a competent management team.

What should you cover in the Organization and Management Plan?

• Coffee Shop Ownership Information: Highlight the business’s legal structure.
• Profiles of Your Coffee Shop Management Team: Include details about your baristas, perhaps a part-time accountant, and someone to manage marketing. It can be helpful to create profiles for each role, detailing responsibilities and expertise.

5. Sample Menu

Your menu is the heart of your coffee shop. It’s more than just a list of coffee and tea; it’s an expression of your brand.

What should you consider when creating a Sample Menu?

• Menu Items: Detail the types of coffee, espresso drinks, and pastries you plan to offer. Maybe consider including non-coffee items like teas or specialty drinks.
• Unique Selling Proposition: Reiterate what makes your coffee or food items different from other coffee shops in the area.
• Menu Pricing : Discuss your pricing strategy, keeping in mind profit margin, competitors’ prices, and your target customer base.

6. Marketing Plan

To brew success, it’s not enough to have a fantastic coffee product; you must effectively market it.

What should you cover in a Marketing Strategy for your Coffee Shop Business?

• Define Your Brand: What voice, theme, or emotion do you want your coffee shop to evoke?
• Lay out your plans for social media campaigns, local partnerships, loyalty programs, SEO for website, and other promotional strategies.
• Considering using an  online food ordering system  in your food truck
• Create a  digital menu with QR code  to make your menu easy for your customers to access online

7. Operations Plan

Efficiency is key to the daily grind of running a cafe. The operations section provides a detailed look at the day-to-day operations of your coffee shop business. 

What Operational Issues should you address in your Business Plan?

• Supply Chain: Where will you buy your coffee beans? Who will be your coffee roaster?
• Operating Hours: Consider the best times to cater to your target market.
• Staffing: Detail roles, such as barista, manager, and part-time support.
• Equipment: List down essential equipment, from espresso machines to ovens.

8. Financial Plan

In this crucial section of your business plan, delving into the financial specifics is paramount to lay out a concrete roadmap for the fiscal aspects of your coffee shop.

How Much Does It Cost to Start a Coffee Shop?

Starting a coffee shop is not just about brewing the perfect espresso; it’s also a substantial financial commitment. The cost for opening a coffee shop can range from $80,000 to $250,000. These costs can vary widely based on factors such as location, size of the establishment, equipment quality, and inventory requirements. Moreover, the process of opening a coffee shop might also involve unexpected expenditures, so it’s essential to account for some buffer in your budget.

How Many Ways to Fund Your Coffee Shop?

There are multiple avenues for funding your coffee venture. Traditional bank loans, personal savings, angel investors, crowdfunding campaigns, and partnerships are just a few options. It’s crucial to assess which option aligns best with your business vision and financial situation.

Important Questions to Consider When You Create Your Funding Request If you’re seeking funding, there are several questions you’ll need to answer in your business plan:

• How much money do you need to start and maintain your coffee shop until it becomes profitable?
• What will the funds be used for specifically?
• How do you plan to handle financial challenges that might arise?
• How do you plan to repay any loans or provide a return on investment?

9. Financial Projections

The financial projections section of your business plan forces you to translate your coffee shop vision into numbers, ensuring you’ve accounted for all key metrics that can make or break your venture.

Break-even analysis:

This is the point where your coffee shop’s total revenues equal its total costs. Simply put, it’s when you neither make a profit nor a loss from selling coffee. 

Use this formula:  Fixed Costs / (Price – Variable Costs) = Break Even Point

Projected profit and loss statement:

This will provide a forecast of your expected income and expenses, giving a clear view of your venture’s profitability.

Cash flow analysis:

Essential for understanding the liquidity of your business, this tool is especially crucial for coffee shops, considering the fluctuating expenses and incomes coffee shops offer. When drafting this, consider who will read it, as stakeholders like investors or lenders might have specific expectations.

Coffee Shop Business Plan Template 

• Mission: To offer the community high-quality coffee in a comfortable and vibrant environment.
• Vision: To become the go-to local coffee spot that fosters community connections and coffee appreciation.
• Coffee Shop Description: “Java Junction” will be a modern coffee hub that emphasizes direct-trade coffee beans and a relaxed, inclusive atmosphere.
• Costs: Estimated initial costs are $125,000.
• Profits: Projected annual profit by year two is $75,000.

2. Description of the Coffee Shop

• Coffee Shop Concept: A community-focused café emphasizing artisanal methods.
• Coffee Shop Name: Java Junction
• Coffee Shop Type: Sit-down café with an adjacent mini-library.
• Location: Main Street, Downtown Area – chosen for its high foot traffic.
• Order Fulfillment: Orders taken at the counter with table service for food.
• Working Hours: Mon-Fri (7 am – 9 pm), Sat-Sun (8 am – 10 pm).

3. Menu Offer

• Type of Food and Drink: Coffee, teas, pastries, and sandwiches.
• Offer: From classic espresso shots to unique blends like “Lavender Latte”.
• Unique Selling Point: Every coffee product uses direct-trade beans, ensuring farmer fairness.

4. Market and Competition Analysis

• Market Analysis: The local population includes a mix of professionals, students, and tourists. Many search for quiet spots to work or relax.
• Target Customer: Professionals aged 25-40 and students.
• Size of the Target Customer: Approximately 15,000 individuals.
• Competition Analysis: Three established coffee shops within a mile.
• Size of the Competition: Ranging from small boutique coffee shops to a larger chain.
• Competitors’ Offer: Basic coffee drinks, with limited specialty items.
• Competitors’ Prices: Average of $4 for a coffee drink.

5. Investment Plan (Detailed Cost Analysis)

Investment Cost (One-off): $75,000

• Equipment: $30,000
• Renovations: $20,000
• Initial Stock: $10,000
• Licenses: $5,000
• Miscellaneous: $10,000

Operating Costs (Monthly): $17,000

• Rent: $3,000
• Salaries: $10,000
• Utilities: $1,000
• Stock: $2,000
• Marketing: $1,000

6. Financial Forecast

Year one is projected to break even, with a profit of $50,000 expected in year two, and $75,000 in year three, considering growth and expanding customer base.

• Owner: Jamie Smith, a coffee enthusiast with a business degree.
• Manager: Alex Brown, previously managed a successful coffee chain for five years.
• Baristas: A team of 4 skilled individuals passionate about coffee.

8. Marketing Plan

Java Junction will use a mix of social media marketing, local print advertising, and loyalty programs to attract and retain customers. Regular events, such as “Buy Our Coffee Day” and collaboration with local businesses, will drive foot traffic and community engagement, integral components for starting your coffee shop and making it successful.

This coffee shop business plan sample is hypothetical and serves as a template. Tailoring specifics to your local market, vision, and unique aspects will be necessary. Every coffee shop has nuances that can make them successful, whether it be the coffee products they sell, the environment they cultivate, or the events they host. Focus on what will make your coffee shop stand out and be sure to engage your community.

Tips For Writing a Business Plan For a Coffee Shop

Your business plan becomes the blueprint of your vision. Here are essential tips to consider:

Comprehensiveness is Key: Ensure your plan encompasses all sections you should include, such as marketing, financial projections, and operations. A well-rounded plan provides a holistic view of your business.

Tailor to Your Audience: If you’re presenting to potential investors, focus on profitability and growth projections. For a landlord, emphasize the benefits your coffee shop will bring to their property.

Specialize in Marketing: Given the competitiveness in the coffee industry, it’s crucial to have a solid marketing plan. If marketing isn’t your strength, consider hiring someone to do marketing for your venture. A strong online presence, loyalty programs, and community engagement can set you apart.

Research Your Market: Understand what nearby coffee shops include in their offerings. Identify gaps in the market and strategize on how your shop can fill them.

Stay Flexible: While a business plan provides direction, remain adaptable. The coffee industry is dynamic, and your ability to pivot can prove invaluable.

Separate Sections for Clarity: If your plan becomes too dense, you might want to create a separate document for specific sections like a detailed marketing strategy or an in-depth market analysis. This makes your primary business plan concise and more readable.

Frequently Asked Questions

1. how profitable is owning a coffee shop.

Owning a coffee shop can be profitable, depending on factors like location, quality of products, and management. On average, after expenses, many coffee shops report a profit margin of around 3% to 5%, with some successful ones achieving even higher. However, it’s essential to factor in initial setup costs, ongoing expenses, and market competition.

2. How do I start a coffee shop business plan?

Starting a coffee shop business plan involves multiple steps. Begin by defining your coffee shop’s mission and vision. Conduct market research to understand your target audience and competitors. Then, detail out sections like your product offerings, pricing strategy, marketing plan, financial projections, and operational procedures. If you’re thinking of opening a coffee shop, a well-thought-out business plan is indispensable.

3. What is a business plan for a coffee shop?

A coffee shop business plan is a detailed document that outlines your coffee shop’s objectives, strategies, and operational procedures. It acts as a roadmap, guiding you from the startup phase to establishing a thriving business. Moreover, if you need a coffee shop business loan or investment, this plan becomes crucial in convincing stakeholders of your venture’s viability.

4. What are the 4Ps in a coffee shop business plan?

The 4Ps stand for Product, Price, Place, and Promotion. In the context of a coffee shop:

• Product: What type of coffee and related products will you offer?
• Price: How will you price your coffee? Will it be premium or competitive?
• Place: Where will your coffee shop be located? Is it accessible to your target audience?
• Promotion: How will you market your coffee shop? Will you offer promotions or loyalty programs?

These elements help in creating a marketing strategy tailored to your coffee shop’s unique needs and market position.

Launching a coffee shop is not just about brewing the perfect cup but weaving a narrative that resonates with your community, fostering an ambiance that people gravitate towards, and maintaining a seamless operation that drives profitability. The meticulous creation of a business plan is a pivotal step in this endeavor. It’s the beacon that guides budding entrepreneurs through the complexities of the coffee industry. In such a competitive marketplace, a well-structured, comprehensive business plan can make the difference between a fleeting venture and a thriving institution. To potential coffee shop owners, embrace the process, let your passion shine through in your plan, and remember that every great coffee shop started with a simple idea, much like a single coffee bean ready to brew greatness.

Related articles

QR Code on Table Tents for Restaurants and Bars

How much does it cost to open a small restaurant

How much does it cost to open a bakery

Menubly LLC 8 The Green Suite R, Dover, Delaware 19901

Privacy Policy

Terms of service

Cookie Policy

• Credit cards
• View all credit cards
• Banking guide
• Loans guide
• Insurance guide
• Personal finance
• View all personal finance
• Small business
• Small business guide
• View all taxes

You’re our first priority. Every time.

We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.

So how do we make money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Here is a list of our partners .

How to Open a Coffee Shop

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

It's been a few decades since Starbucks emerged from Seattle to take over the world and made a coffee shop on every corner the norm. As a result, the way Americans drink coffee has changed drastically.

This has also created a window for entrepreneurs looking to start a business. While the big coffee chains have expanded, so have specialty, independently run shops. According to an article in the New York Times , Americans drink less coffee today than we did in the 1930s, but we’re drinking higher quality, better-brewed cups. As such, many entrepreneurs today might wonder how to start a coffee shop to serve their own high-quality brews.

How to open a coffee shop in 7 steps

Wondering how to start a coffee shop of your own? These seven steps will take you through everything you need to know.

Step 1: Decide whether you want to open your own shop, a franchise, or buy an existing business.

When it comes to starting a business you usually have at least two ways to go about doing it, and with coffee shops, you've got three. When it comes to how to open a coffee shop you can do one of the following:

Completely start from scratch and open your own shop

Open a coffee shop franchise

Buy an existing coffee shop that's for sale

Each of the options has its pros and cons and varying degrees of work required by you. If you choose to open a franchise you'll be bound by many of the aspects of that franchise like the beans they use and the decor of the actual shop. If you buy another coffee shop you might have less construction to do to set up the space as a coffee shop. These options come with limitations as well.

Step 2: Create a business plan.

A well-thought-out business plan is key to creating any business, and a coffee shop is no exception. If you want to open a coffee shop, you probably already have a love of good coffee. To create a successful coffee shop you have to decide how you'll get other people to love coffee as much as you do. A business plan will help get your ideas focused and in one place. Besides the basics of what your coffee shop will be and the products you'll sell, a business plan also includes a marketing and sales plan, as well as financial projections.

An important consideration you'll need to take care of in the early stages, and that you'll include in your business plan, is to decide on the business structure you want your company to operate as. There are several business entity options you can choose, including a sole proprietorship, LLC, C-corp, and more—and the entity you choose will have both tax and legal implications for your business. It's always a good idea to seek the advice of a business attorney when making these big decisions as you start your coffee shop. if you choose to open a franchise, you might already have a business entity that you have to use.

While creating your business plan, you'll have to come up with a name for your business and an idea of where you want to open your coffee shop. Once you find the perfect location be sure to add it to your business plan, it might happen before or after you've written the plan.

You'll also want to outline the pricing of your products, what goods you want to offer, the type of coffee shop you want to have (sit-down, drive-through), and more. It's a lot to think about, but a business plan is where you can get all of these plans down in one place. Beyond that, if you'll need outside capital to make your coffee shop dreams a reality, you'll need to provide a business plan for funding consideration.

Luckily, there are several options for business loans for a cafe, and whether you're looking for funding to start your coffee shop or want to leave the option open for expansion down the road, having a solid business plan from the start will make the process easier.

Step 3: Find the right location.

This step can not be glossed over and you should take your time and consideration when completing it. The location of your coffee shop can make or break it in terms of success. There are some things to look for when looking for a coffee shop location. Coffee shop location considerations:

Size: You want to make sure enough people can fit in the space without feeling cramped. Coffee shops are relaxing areas where people tend to hang out with friends or colleagues and you want the space to be accommodating.

Accessibility: Make sure your cafe is accessible and anyone can enter.

Parking: Will you be dependent on foot traffic? If not you're going to want to make sure there's somewhere for your customers to park either a lot or street parking nearby. If biking is popular in your area, consider adding a bike rack.

Seating: Will customers be limited to seating indoors or is there some outdoor seating you could set up when the weather is right for it?

Rent: This should be one of your top considerations when deciding on a location. How much a business location will cost you is going to be a significant chunk of your budget and you should be sure to include this in your business plan.

Step 4: Register your business and get the proper licenses and permits.

The city or county where you plan to open your coffee shop will dictate the specifics of registering your business, what taxes you'll be responsible for, any necessary licenses and permits, and more. The details of registering a business vary from state to state, but you will need to apply for an employer identification number (EIN) and establish your business structure before you can start the registration process.

You also need to make sure that since you'll be serving coffee, and most likely some food, that you have the right business licenses and permits for that, as well. Usually, health licenses and permits are necessary for serving food. Other types of business licenses include building, zoning, and land-use permits. Be sure you consult with your local business resources so you have the proper documentation in place before you open your coffee shop.

Step 5: Find suppliers.

Customers are looking for a quality experience when they come into your coffee shop. That means quality ingredients and coffee, but also quality service and experience.

While it’s tough to produce the same quality every time, this is crucial in the coffee business, especially in a time when people are becoming more knowledgeable about specialty coffee. Having consistent and quality providers, from the beans to cups and everything else customers interact with can help keep your coffee shop running smoothly and customer experiences consistent.

When you're first starting your coffee business, don't be afraid to spend the necessary time finding the right coffee supplier for your business. Though if you're starting a franchise, they'll take care of this step for you by having their specific grounds. You may have to try a lot to find the right one that will work for the products you want to offer, at the right price, with the perfect taste.

The other way to create consistency is by training employees extensively. If you want patrons to walk past all the other coffee shops on the block and go into yours, you need to offer consistent quality.

Step 6: Create a warm, inviting environment.

A coffee shop is never just about a good cup of coffee. Many people frequent coffee shops as a place to do work, catch up with friends, or to take a break from the workday.

You want your coffee shop to have a warm and inviting atmosphere that's conducive to meetings, relaxing, and chit chat, but also one that's easy to keep clean and orderly. When choosing how to design the shop, be sure to take into account how many people you want the shop to fit and the kind of atmosphere you're looking to create for them all.

Remember when we were talking about the location of your shop? Here's where that comes in because the location can only do so much work for you. The work you do to design the cafe on the inside will also greatly matter. You're creating an entire atmosphere that also serves a purpose.

Step 7: Adopt a good inventory system.

Pay attention to your inventory. At first, you won't really know how much you need when it comes to things like beans and baked good, you probably won't even know how many cups you need a day. So track these things carefully at first so you can get a good handle on how much you're using.

There are a number of inventory management apps available to small business owners who need a way to manage their inventory and budget. Some point of sale systems also offer inventory management, which is something you might want to consider when choosing one. There are specific coffee shop POS systems out there to consider.

No matter what you choose, you want to make sure you have a way to manage what you need for your business so you don't run out of customer favorites or over-order on what you don't need.

How much do you need?

with Fundera by NerdWallet

We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

How much does it cost to open a coffee shop?

We've gone over many of the expenses you'll face when opening a coffee shop. The rent of the location, everything for the interior design, the machinery, the supplies like beans and cups, employees and more will all add up. Some of these things may cost far more than you're expecting them too, a good espresso machine along can run you up $20,000.

In all you can expect that opening a coffee shop will likely cost you upward of $200,000 when all is said and done. This goes for some franchises as well, Dunkin' for example, requires that you have $250,000 in liquid assets to start a franchise with them. You could consider starting smaller, with a coffee cart or a small pop-up location if you're unsure of the cost or if you don't want to dive in headfirst. But know that none of these options will be cheap or require no money up front.

Start Your Dream Business

The bottom line

Running a small business is no easy feat, but for all of those coffee enthusiasts who have dreamed of opening a cafe of their own, now might be the time. Consumption and interest in the specialty coffee culture has increased steadily in recent years and doesn’t seem to be stopping any time soon.

While competition from bigger chains might have been a problem at one time, modern consumers prefer to support local neighborhood shops—especially if they’re offering what the big chains can’t. So if you've been wondering how to start a coffee shop, start thinking about the above steps to see if this is a feasible business venture for you.

This article originally appeared on JustBusiness, a subsidiary of NerdWallet.

On a similar note...

BUSINESS STRATEGIES

How to write a coffee shop business plan

• Nirit Braun
• Oct 30, 2023
• 12 min read

A coffee shop business plan is a detailed and strategic document outlining the essential aspects of starting and operating a coffee-focused business. It encompasses a comprehensive analysis of the business's goals, target audience, competitive landscape, marketing strategies, financial projections, operational procedures and more. This plan acts as a roadmap that guides entrepreneurs through the various stages of establishing and running their coffee shop, providing clear direction and a solid foundation for success.

When starting a business, especially in the competitive and dynamic realm of the coffee industry, creating a comprehensive and clear business plan is of paramount importance.

Ready to get your business brewing? Take Wix’s website builder for a whirl.

Top benefits of creating a coffee shop business plan

A well-crafted business plan helps entrepreneurs articulate their business goals, whether it's about offering unique coffee blends, creating a cozy ambiance or supporting sustainable sourcing practices. At the same time, a business plan requires entrepreneurs to identify and understand their target audience. This insight helps tailor marketing strategies, menu offerings and the overall customer experience to meet the specific preferences and needs of the intended customers.

Here's an overview of some key advantages to creating a coffee shop business plan:

Attracting investors and funding: A well-structured business plan acts as a persuasive tool when seeking investors or raising money for your business . It showcases your thorough understanding of the coffee industry, market trends and your strategies for success. This level of preparedness increases your credibility and instills confidence in potential investors, making them more likely to support your coffee shop venture.

Clear resource requirements: Writing a business plan prompts you to identify the specific resources, supplies and staff necessary to launch and operate your coffee shop. This includes everything from coffee beans and brewing equipment to furniture and interior decor.

Strategic financial planning: A comprehensive business plan outlines your financial projections, startup costs, operating expenses and revenue forecasts. This level of financial planning helps you determine how much funding you need to start a business . It also guides you in setting prices, managing cash flow and assessing profitability.

Market understanding and differentiation: Through market research and analysis, a business plan allows you to understand your target audience's preferences, behaviors and expectations. This knowledge helps you tailor your coffee shop's offerings, ambiance and marketing strategies to effectively attract and retain customers.

Risk mitigation: The process of creating a business plan prompts you to identify potential risks and challenges that your coffee shop might face. By acknowledging and addressing these risks early on, you can develop contingency plans and strategies to mitigate their impact.

Operational efficiency: A business plan outlines the operational processes required to run your coffee shop smoothly. It includes staffing plans, inventory management strategies and quality control measures. By establishing efficient procedures from the outset, you can minimize wastage, optimize resource allocation and ensure consistent customer satisfaction.

Goal setting and tracking: Your business plan serves as a benchmark against which you can measure your coffee shop's performance over time. By setting clear goals and key performance indicators (KPIs), you can track your progress and make necessary adjustments to stay on course toward achieving your objectives.

How to create a coffee shop business plan in 6 steps

Now we’ll walk through the six essential steps for crafting a coffee shop business plan tailored to your company's unique needs.

Executive summary

Business and domain names

Market analysis and research

Operations plan

Marketing and advertising plan

Financial plan

01. Executive summary

Your executive summary is a concise and compelling overview of your coffee shop business plan. It encapsulates the key elements of your plan and provides a snapshot of your business concept, strategies and financial projections. While appearing at the start of the business plan, it's often written last, as it draws from the content of the entire document.

A clear executive summary for a coffee shop business should include:

The essence of your coffee shop: What makes it unique? What kind of experience will customers have when visiting your establishment?

Market potential and your target audience: Explain why your coffee shop is well-positioned to capture this opportunity.

Competitor landscape: Identify what sets your coffee shop apart from the competition. This could be your specialty coffee blends, unique ambiance, sustainable practices or exceptional customer service.

Example executive summary for a coffee shop: "Bean Haven Coffee is a meticulously crafted coffee shop that aims to provide not just beverages, but an immersive coffee experience. We pride ourselves on our curated selection of ethically sourced beans, offering customers the finest hand-crafted brews in a cozy, rustic ambiance. Our competitive edge lies in our commitment to sustainability, from our bean-sourcing practices to our eco-friendly packaging. With a strong emphasis on community engagement and partnerships with local artists, we are set to become a cultural hub that brings people together over a shared love for exceptional coffee. Through strategic marketing campaigns, leveraging social media and collaborating with nearby businesses, we aim to establish Bean Haven Coffee as the go-to destination for coffee enthusiasts and connoisseurs alike. Our projected financials indicate that we will reach profitability within the first 18 months of operation. We seek funding to cover initial startup costs and our business model is designed to achieve sustainable growth and profitability."

02. Company and domain names

Knowing how to name a business is crucial for a coffee shop venture and a key step before you register your business . A strong and memorable name can resonate with customers and differentiate your coffee shop from competitors. Use descriptive words that reflect your coffee shop's essence, whether it's about taste, ambiance or values.

Utilizing a business name generator like the one from Wix can provide inspiration and spark creativity. Play with different combinations of words and ideas until you find a name that feels right. Once you've settled on a name, check its availability for domain registration. A domain name that matches your company name is essential for an effective online presence.

When choosing a domain name consider the following best practices:

Ensure that the domain name reflects your coffee shop's identity and offerings

Choose a name that is easy to spell and remember

Opt for a timeless name that won't become outdated quickly

If possible, include relevant keywords in the domain to improve search engine visibility

Steer clear of names that are easily confused with competitors or other brands

03. Market analysis and research

With more than 38,000 coffee shops in the U.S. alone, there are plenty of competitors to analyze. Including a comprehensive market analysis in your business plan is essential for understanding the competitive landscape and formulating effective strategies. Research your local coffee market, identify existing competitors and analyze their strengths and weaknesses. Determine your target audience's preferences, behaviors and demographics to tailor your offerings and marketing campaigns accordingly.

A well-rounded market analysis can guide your business strategy, helping you position your coffee shop effectively, develop compelling value propositions and devise strategies to capture your desired market share.

04. Operations plan

The operations plan is a crucial section of your coffee shop business plan. It outlines the practical aspects of running your coffee shop. Use it to describe your chosen location and its significance for foot traffic, accessibility and target audience reach.

Then, take the opportunity to detail the interior design, layout and ambiance of your coffee shop to create a welcoming atmosphere. Next be sure to list the equipment needed for brewing, food preparation and service. Ensure it aligns with your menu and production capacity. Finally define the roles and responsibilities of your staff, from baristas to managers, and outline their qualifications and training needs.

05. Marketing and advertising strategies

The marketing and advertising portion of your business plan outlines your strategies for promoting your coffee shop and attracting customers. Depending on your target audience and brand positioning for this type of business , consider a mix of traditional and digital marketing methods. This means using social media platforms like Instagram, Facebook and Twitter to showcase your coffee creations, engage with customers and share your coffee shop's story. Collaborate with influencers, local organizations or other businesses to expand your reach and tap into new customer segments.

Additionally, you can choose to participate in community events, farmers' markets and collaborations with other local businesses to increase your visibility. Also consider implementing loyalty programs that reward repeat customers and incentivize them to visit regularly.

You’ll need to develop a suite of brand assets to use in your marketing as well, starting with a company logo. You can use a free logo maker to get a professional design in minutes.

Learn more: How to make a website

06. Financial plan

The cost to start a coffee shop business can range from $50,000 for a mobile operation to over $400,000 for a brick-and-mortar location with booth seating and a drive-thru. This hefty expense is just another reason why a financial plan is so important.

The financial plan is the backbone of your coffee shop business plan. It outlines your startup costs, operating expenses, revenue projections and funding strategy. Investors and lenders will closely scrutinize this section to assess the viability of your coffee shop venture, so remember to do the following:

Detail the initial investment required for equipment, interior design, licenses and permits

Estimate ongoing costs such as rent, utilities, supplies and salaries

Provide realistic revenue forecasts based on your expected capacity and customer traffic

Specify how you plan to secure funding

Highlight when you anticipate reaching profitability and generating positive cash flow

By meticulously planning your finances, you demonstrate a solid understanding of the financial aspects of your coffee shop business and showcase its potential for success.

Coffee shop business plan examples

Below we’ve put together business plan templates for two hypothetical coffee shop businesses, including all the sections discussed in our previous how-to steps.

Coffee shop business plan template 1: Coffee Haven Café

Coffee Haven Café is a charming coffee shop dedicated to delivering a premium coffee experience in a cozy and inviting setting. Our unique blends, ethically sourced beans and commitment to sustainability set us apart in a competitive market. By fostering community engagement and partnering with local artists, we aim to become a cultural hub that brings people together over exceptional coffee. Through strategic marketing efforts and a strong online presence, we project profitability within 18 months.

Company and domain name

Company name: Coffee Haven Café

Domain name: www.coffeehavencafe.com

Our marketing analysis revealed a growing demand for specialty coffee in our target location. We've identified key competitors and highlighted their strengths and weaknesses. Our target audience consists of young professionals and students who value quality and ambiance. By understanding these dynamics, we can tailor our offerings and marketing strategies effectively.

Location: Centrally located in a busy commercial area with high foot traffic

Premises: Rustic and inviting interior design that promotes relaxation and conversation

Equipment: High-quality espresso machines, grinders, brewing equipment and display cases for baked goods

Staffing: Experienced baristas, friendly waitstaff and a dedicated manager to oversee operations

Social media: Engage customers through Instagram, Facebook and X with enticing coffee shots and behind-the-scenes content

Local events: Participate in local festivals, art exhibitions and collaborate with nearby businesses for cross-promotions

Content marketing: Regular blog posts on coffee trends, brewing tips and spotlight features on local artists

Loyalty programs: Offer a loyalty card program with rewards for frequent visitors

Partnerships: Collaborate with nearby bookstores for reading sessions and local influencers for social media endorsements

Startup costs: $70,000 for equipment, furnishings, licenses and initial inventory

Operating expenses: Estimated monthly costs of $12,000 covering rent, utilities, supplies and staff salaries

Revenue projections: Projected revenue of $300,000 in the first year, growing to $450,000 in the second year

Funding strategy: Initial funding from personal savings and a small business loan from a local bank

Profitability timeline: Aim to achieve profitability within 18 months of operation

Coffee shop business plan template 2: Brew & Gather Coffee House

Brew & Gather Coffee House is a community-focused coffee shop aiming to create a warm and inclusive space for coffee enthusiasts. Our commitment to locally sourced ingredients and artisanal brewing techniques sets us apart. By fostering partnerships with neighboring businesses and hosting regular events, we aim to become a staple in the neighborhood. Our projected financials indicate profitability within the first two years.

Company name: Brew & Gather Coffee House

Domain name: www.brewandgathercoffee.com

Through extensive market research, we've identified an opportunity to serve a diverse community seeking an authentic and welcoming coffee experience. We've assessed competitors' offerings and identified an untapped niche. Understanding our target audience's preferences and values will guide our menu and marketing strategies.

Location: Situated near a local park, providing an oasis for relaxation and community gatherings

Premises: Modern yet cozy interior design with flexible seating arrangements to accommodate groups and individuals

Equipment: State-of-the-art espresso machines, pour-over stations and an open bakery display

Staffing: A blend of skilled baristas, friendly hosts and a community engagement coordinator

Social media: Utilize Instagram and TikTok to showcase brewing techniques, share customer stories and host virtual coffee-tasting sessions.

Local events: Host open mic nights, book clubs and workshops to engage the community.

Content marketing: Publish a monthly newsletter featuring coffee culture insights, staff spotlights and local partnerships.

Loyalty programs: Introduce a tiered membership program offering exclusive discounts and early access to events.

Partnerships: Collaborate with local farmers, artisans and musicians to create a truly immersive community experience.

Startup costs: $100,000 for leasehold improvements, equipment, permits and initial inventory

Operating expenses: Projected monthly expenses of $15,000, covering rent, utilities, wages and supplies

Revenue projections: Anticipate revenue of $350,000 in the first year, with a 15% increase in the second year

Funding strategy: Initial investment from personal savings and a crowdfunding campaign targeting the local community

Profitability timeline: Aim to reach profitability within the first two years of operation

How profitable is a coffee shop?

The profitability of a coffee shop can vary depending on a number of factors, including location, business model and marketing strategy. However, in general, coffee shops can be quite profitable.

According to a report by IBISWorld, the average profit margin for coffee shops is 8.33%. This means that for every $100 in revenue, coffee shops generate $8.33 in profit.

Some coffee shops are even more profitable. For example, coffee shops located in high-traffic areas, such as airports and office buildings, can generate profit margins of up to 15%. And coffee shops that sell specialty coffee drinks and food items can also generate higher profit margins.

Here are some tips for increasing the profitability of your coffee shop:

Choose a good location. A good location is essential for success. Look for a location that is convenient for potential customers and has high visibility.

Offer a unique selling proposition. What makes your coffee shop different from others? What can you offer that your competitors cannot?

Provide excellent customer service. This is essential for building a loyal customer base. Make sure your staff is friendly and knowledgeable, and that they are always willing to go the extra mile for your customers.

Market your coffee shop effectively. Let potential customers know about your coffee shop and the unique offerings you have. You can do this through online marketing, social media and word-of-mouth.

Control your costs. Coffee shops have high costs, so it's important to control your costs as much as possible. This means negotiating good deals with your suppliers, managing your inventory carefully and keeping your labor costs under control.

Why do coffee shops fail?

There are a number of reasons why coffee shops fail. Some of the most common reasons include:

Poor location: A coffee shop in a bad location won't attract enough customers to be successful. Coffee shops need to be located in areas with high foot traffic, such as near office buildings, universities and parks.

High overhead costs: Coffee shops have high overhead costs, such as rent, utilities and labor. If a coffee shop can't generate enough revenue to cover its overhead costs, it will eventually fail.

Poor management: Poor management can lead to a number of problems, such as low customer satisfaction, high employee turnover and financial difficulties. Coffee shop owners need to have a strong business plan and be able to manage their finances effectively.

Lack of marketing: Coffee shops need to market themselves effectively to attract new customers and keep existing customers coming back. Coffee shop owners need to develop a marketing plan and budget, and they need to track their results to see what is working and what is not.

Competition: The coffee shop industry is very competitive. Coffee shops need to offer something unique to stand out from the competition.

Coffee shop business plan FAQ

How do you start a coffee shop business plan.

To start a coffee shop business plan, you need to consider the following factors:

Location: Choose a location that is convenient for potential customers and has high visibility.

Target market: Identify your target market and tailor your business plan to their needs and preferences.

Menu: Develop a menu that includes a variety of coffee drinks and food items that will appeal to your target market.

Pricing: Set prices that are competitive and generate a sufficient profit margin.

Operating costs: Estimate your operating costs, such as rent, utilities, labor and inventory.

Marketing: Develop a marketing plan to reach your target market and generate awareness of your coffee shop.

How many cups of coffee does a coffee shop sell per day?

Is a small coffee shop profitable, what percentage of coffee shops are successful, want to cook up another business plan.

How to create a bakery business plan

How to create a bar business plan

How to create a virtual assistant business plan

How to create a cleaning business plan

How to create a plumbing business plan

How to create a trucking business plan

How to create a daycare business plan

How to create a food truck business plan

How to create a restaurant business plan

How to create a clothing line business plan

How to create a hair salon business plan

How to create a real estate business plan

How to create a contractor business plan

How to create a vending machine business plan

How to create a party planning business plan

Looking for another business idea?

How to start an online business

How to start a consulting business

How to start a fitness business

How to start a fitness clothing line

How to start a makeup line

How to start a candle business

How to start a clothing business

How to start an online boutique

How to start a T-shirt business

How to start a jewelry business

How to start a subscription box business

How to start a beauty business

How to start a flower business

How to start a car wash business

How to start a food prep business

How to start a DJ business

How to start a pool cleaning business

How to start a baking business

How to start a trucking business

How to start a construction business

How to start a landscaping business

How to start a food business

How to start a vending machine business

How to start a contractor business

How to start a coaching business

Coffee dropshipping

Looking to start a business in a specific state?

How to start a business in Arizona

How to start a business in South Carolina

How to start a business in Virginia

How to start a business in Michigan

How to start a business in California

How to start a business in Florida

How to start a business in Texas

How to start a business in Wisconsin

Related Posts

How to create a website from scratch in 11 steps (for beginners)

How to start a business in 14 steps: a guide for 2024

How to start a coffee shop in 7 steps

Was this article helpful?

How to Start a Coffee Shop: 9 Steps to Success

Nearly 90% of Americans consume caffeine on a daily basis , whether its a cup of coffee, a shot of espresso, or an energy drink. For many, a cup of coffee is their preferred choice, and some even have multiple cups per day. A coffee shop offers people a place where they can quickly grab a coffee, a pastry, or another specialty drink, and also provides customers an inviting space to work, relax, or socialize. If you want to find out how to start a successful coffee shop, this article covers the basics you'll need to know, from crafting a business plan, to startup costs, to common business licenses required in the coffee industry.

Inspired by coffee professionals, our coffee shop business guides  will steer you through the necessary steps to make your coffee dreams real, from  picking a location  to  buying equipment , sourcing beans ,  hiring baristas , choosing a POS system ,  forming an actual company , and everything in between.

Learn how to start your own Coffee Shop and whether it is the right fit for you.

Ready to form your LLC? Check out the Top LLC Formation Services .

Start a coffee shop by following these 10 steps:

• Plan your Coffee Shop
• Form your Coffee Shop into a Legal Entity
• Register your Coffee Shop for Taxes
• Open a Business Bank Account & Credit Card
• Set up Accounting for your Coffee Shop
• Get the Necessary Permits & Licenses for your Coffee Shop
• Get Coffee Shop Insurance
• Define your Coffee Shop Brand
• Create your Coffee Shop Website
• Set up your Business Phone System

We have put together this simple guide to starting your coffee shop. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas .

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

What will you name your business?

• What are the startup and ongoing costs?
• Who is your target market?

How much can you charge customers?

Luckily we have done a lot of this research for you.

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Coffee Shop Name Generator

If you operate a sole proprietorship , you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name , we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability .

It's very important to secure your domain name before someone else does.

Want some help naming your coffee shop?

Business name generator, what are the costs involved in opening a coffee shop.

The startup costs for a coffee shop business can vary widely, depending on the size and type of coffee shop you want to open. Your expenses will depend largely on the type of coffee business you want to start, the specific equipment you need, your location , if you want to include space for a bakery , etc. For instance, a small kiosk in the corner of an existing building can be opened for as little as $5,000, although many cost between $25,000 and $75,000. Free-standing drive-thrus can cost between $80,000 and $200,000 to start up, and shops with their own seating can be more than $200,000. The main expenses that contribute to these costs include rent , staffing costs , taxes , and equipment , such as Point-of-Sale (POS) systems, espresso machines, and so on. Espresso equipment alone can run up to $20,000.

There are several ways to minimize startup costs. Running a small kiosk yourself will keep rent low and eliminate any staffing costs. Focusing solely on high-quality brewed coffee, rather than espresso, will eliminate the need for expensive espresso equipment and reduce how much milk you use.

Read our coffee shop purchasing guide to learn about the materials and equipment you'll need to start a coffee shop, how much to budget, and where to make purchases.

What are the ongoing expenses for a coffee shop?

The ongoing expenses of a coffee shop are labor, which shouldn’t exceed 35 percent of sales, rent, which should be kept below 15 percent of sales, utilities, and the costs of good sold. Costs of goods sold includes the costs for coffee (~$7.50 per pound), milk (~$3.00 per gallon), syrups ($4.50 per 25.4 ounces), and cups, lids and sleeves ($0.20 per beverage served).

Who is the target market?

An ideal customer is someone who has discretionary income and enjoys food and beverages. Customers with little discretionary income are less likely to purchase higher-priced beverages and food items.

How does a coffee shop make money?

Coffee shops charge their customers based on what beverages and food items a customer orders. Some coffee shops have problems with people “camping out.” These customers may purchase one beverage, but then remain at the shop (typically on a computer) for several hours without spending any additional money. To combat this, a few coffee shops in higher-traffic areas ask customers to make a purchase every hour or two. Other coffee shops don’t offer Wi-Fi, but this can also deter customers from coming at all.

The average cost of a cup of plain, brewed coffee at a coffee shop is $2.70. Brewed coffee accounts for 51.5 percent of the beverages sold in coffee shops. Espresso-based beverages, such as americanos, cappuccinos and lattes have an average price ranging from $2.62 to $3.94. The food products sold at coffee shops often are in a similar price range.

How many customers can you expect your business to serve in a week?

How many customers a coffee shop will serve in a week or day varies widely. Busy shops centrally located in cities may serve more than a thousand in just one day, while shops in rural areas may see only a few hundred a week.

How much profit can a coffee shop make?

A coffee shop's net profits are directly tied to how many cups of coffee and pastries a shop sells. A shop that is in a higher-traffic area and sells more coffee will usually have higher profits than one with little traffic. When run well, a coffee shop's profits are typically between 10 and 18 percent of its gross revenue. To see how much volume increases profits, consider coffee shops that are open every day of the year and have average tickets of $3.00. A shop that sells 100 beverages a day would grow $109,500 annually, and hopefully bring in a profit of $10,950 to $19,710. One that sold 300 cups a day would gross $328,500, and hopefully have an annual profit between $32,850 and $59,130.

How can you make your business more profitable?

Upselling customers is the easiest way to increase the profitability of a coffee shop. Customers can be offered larger sizes, additional shots of espresso, flavored syrups or baked goods

Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship , partnership , limited liability company (LLC) , and corporation .

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your coffee shop is sued.

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services . You can choose to hire a registered agent or act as your own.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

You can acquire your EIN through the IRS website . If you would like to learn more about EINs, read our article, What is an EIN?

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil .

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history , which can be useful to raise money later on.

Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a coffee shop business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

In particular, most states require a coffee shop businesses to obtain a seller’s permit. A seller’s permit allows states to record and collect taxes from the sale of goods and services.

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses .

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance . This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance . If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

FInd out what types of insurance your Coffee Shop needs and how much it will cost you by reading our guide Business Insurance for Coffee Shop.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners , we'll give you helpful tips and advice for creating the best unique logo for your business.

Recommended : Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker .

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator . Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market a coffee shop

Coffee shops serve a small area, and marketing efforts should be focused on reaching the people who live and work in the neighborhood. Signs can help attract attention, but going out into the community with freebies is often a much more effective way to initially get customers in the door. You can hand out free samples or coupons for free beverages at local schools, fire stations, police stations, businesses or churches. Even if an establishment doesn't want you soliciting the establishment's patrons, many organizations and businesses will be happy to share coupons for free coffees with their volunteers or employees.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business .

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

• All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
• Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
• Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Recommended : Get started today using our recommended website builder or check out our review of the Best Website Builders .

Other popular website builders are: WordPress , WIX , Weebly , Squarespace , and Shopify .

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: Phone.com

Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

Is this Business Right For You?

People who love coffee, food and other people are well-suited for working in or owning a coffee shop. The business involves plenty of hands-on work making beverages, and business owners regularly interact with both employees and customers. Most people drink coffee in the morning, so most coffee shops are open during morning hours. Shops can also be open the afternoon or evening, but owners should at least expect to be working almost all mornings. Some owners close their shop one day a week so they can have a day off, and many either close their shops or have limited hours on holidays.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

Entrepreneurship Quiz

What happens during a typical day at a coffee shop?

In a coffee shop, day-to-day activities center around making and serving customers coffee. When not brewing coffee and ringing up customers, downtime is filled by restocking supplies and ordering more inventory (e.g. milk, coffee and cups), scheduling employees (if a shop has multiple employees), washing dishes, cleaning, and prepping more coffee and food for sale.

What are some skills and experiences that will help you build a successful coffee shop?

First and foremost, coffee shop owners should be familiar with coffee. They need to know much more than the average drinker. In addition to knowing about coffees and coffee beverages, owners also need to be proficient in inventory management and managing employees.

Many coffee shop owners get the initial skills and knowledge they need by working in a coffee shop for several months before opening their own shop.

Alternatively, coffee expertise can be learned in just a few days by hiring an experienced barista or coffee roaster to serve as a consultant. Managing inventory and employees can be learned on the job, although not having these skills will make the startup phase much more hectic.

What is the growth potential for a coffee shop?

A coffee shop business can be as small as a single drive-thru or as large as a national, or even international, chain. Starbucks, for example, has more than 24,000 stores around the world. Many successful coffee shops are local or regional, having a few locations in a relatively small area.

Should you consider joining a franchise?

Joining a coffee shop franchise can be a good option for entrepreneurs who prefer to use a proven model rather than start from scratch. While joining one can mean slightly higher initial costs and less control, a quality franchise offers great benefits such as initial and ongoing support, marketing assistance, and brand recognition.

Opening a coffee shop franchise typically requires $200,000-$700,000. Larger coffee shop franchises like Biggby Coffee and Dunkin' Donuts typically cost more, while more niche favorites like Sertino's and Classic Rock Coffee often have lower startup costs.

Interested in joining a coffee shop franchise? Check out our favorites .

TRUiC's YouTube Channel

For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe to view later.

Take the Next Step

Find a business mentor.

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

How and when to build a team

While running a coffee shop yourself will keep operating expenses low, hiring at least one employee as soon as the business can afford it has multiple benefits. With an employee, you can take an occasional day off and focus on marketing efforts that grow the business. You’ll also be able to serve customers faster during peak times when working with someone.

Depending on how big your coffee shop is and how many customers it serves, you may want to hire additional employees. Coffee shops may have anywhere from one to a couple dozen employees who work on rotating shifts.

Coffee shop employees are called baristas. Baristas earn an average annual salary of $22,000, which includes tips. Hourly wages tend to be between $8.80 and $13.20 per hour.

Read our coffee shop hiring guide to learn about the different roles a coffee shop typically fills, how much to budget for employee salaries, and how to build your team exactly how you want it.

Useful Links

Truic resources.

• TRUiC's Coffee Shop Hiring Guide
• TRUiC's Coffee Shop Purchasing Guide
• TRUiC's Coffee Shop Franchising Guide

Industry Opportunities

• Scotter's Coffee — franchise opportunity
• Find more  Business Ideas  perfect for Small Towns!
• Franchise Opportunities

Real World Examples

• Bearclaw Coffee Co.

Further Reading

• Starbucks Coffee International
• The Economics of Owning a Coffee Shop
• States Where You Can Find the Cheapest Cup of Coffee
• Gettin’ Paid: The Results From Our International Barista Income Survey

Have a Question? Leave a Comment!

Restaurants | How To

How to Start a Coffee Shop in 11 Steps

Published April 4, 2023

Published Apr 4, 2023

REVIEWED BY: Meaghan Brophy

WRITTEN BY: Mary King

Get Your Free Ebook

Your Privacy is important to us.

This article is part of a larger series on Restaurant .

Starting A Business?

Step 1: Research the Market

Step 2: design your concept, step 3: source beans, step 4: find a location.

• Step 5: File Business Paperwork
• Step 6: Open a Bank Account & Raise Funds
• Step 7: Purchase FF&E
• Step 8: Obtain Permits & Licenses
• Step 9: Hire & Train Staff

Step 10: Order Opening Inventory

Step 11: advertise, bottom line.

Opening a coffee shop is a great way to combine the strengths of a food service and a retail business. Six to 12 months and a $50,000 to $300,000 budget are all it takes to start a coffee shop in most locations. We’ll walk you through the steps you need to take to open an independent or franchise coffee shop and offer options for smaller footprint businesses like coffee kiosks, coffee trucks, and coffee carts.

The first step to launching your coffee shop is familiarizing yourself with the market where you plan to open your shop. The more you know about the coffee scene in your area, the better. Here are some general trends to keep in mind as you begin your coffee shop journey.

To get a handle on your local coffee community, follow these steps:

Identify Local Coffee Shops to Visit

One of the best ways to do research in your market is to visit all types of coffee shops and take great care in noting how they operate. At this stage in your research, you want to learn from anyone who is in the business. Spend some time checking out their online presence, too; websites and social channels offer a wealth of information.

When you’re conducting your competitive research, the goal is to look for ideas you might want to employ in your business. It’s important to be a keen observer of what’s happening throughout each coffee shop visit—from the impression you get before you enter to your overall satisfaction as you leave.

Observe & Evaluate Local Coffee Shops

You’ll want to visit a dozen or more coffeehouses before starting your business. Vary your research so you visit both large, moderate, and small shops. Don’t be afraid to strike up casual conversations with managers and employees, as many are willing to share their knowledge with you. Take thorough notes at each stop along the way, as they’ll be invaluable as you move forward.

Visit each shop during peak and non-peak times to get a feel for the flow of business. A few things you’ll want to note when visiting competitor coffee shops include:

• What menu items are offered?
• What is the price for each menu item?
• What items are made in-house, and which are bought-in?
• What promotions and special offers are currently running?
• How is the shop laid out?
• How many employees are working and what are they doing?
• What are customers ordering?
• How long are customers waiting for their orders?
• How many customers stay in the shop after getting their order? What do they do if they stay?
• What are the general ages and demographics of the customers?
• What type of decor, furnishings, and music set the tone?
• Is the shop active on social media? Which platforms?
• Does the shop have a website?

At this stage, it’s most helpful to take literal notes. Have a notebook or a spreadsheet for recording your observations. After you’ve visited several shops, look through your notes to identify trends. These trends will help you make the best decisions about everything from your menu items to your name and location.

After you’ve done your market research, it’s time to figure out what niche your coffee shop will fill in your community. You’ll need to pick a name, decide what style of beverages and food—if any—you’ll serve, and come up with branding. It helps to start by precisely pinpointing your ideal customer. The research you completed in the previous step will help you do this.

Identify the most likely customer type in your location, and design your coffee shop to cater to their tastes. A coffee shop catering to college students will have a different name, branding, and operating hours than a shop that supplies caffeine to workers in a downtown office tower. But before you get too far down the road, you need to answer one question: will you open an independent coffee shop or a franchise shop?

What is a coffee shop “concept?” In the food service business, the word “concept” is a popular catch-all term that describes a business’s service style, cuisine, decor, menu design, and name.

Once you’ve decided what type of customer your coffee shop will most likely cater to, you’ll have another important question to answer: Should you open an independent coffee shop or a franchise shop? Like many food service businesses, a coffee shop might be an independent business or operate as an outpost of a franchise. There are many popular coffee shop franchises to choose from, including one of America’s favorites, Dunkin’ (formerly Dunkin’ Donuts). Let’s take a look at the pros and cons of each below.

Independent vs Franchise Coffee Shops

Independent shop, franchise shop, popular franchises.

There are dozens of coffee shop franchises to choose from. The selection listed below are good jumping-off points to begin your research for various types of coffee shops.

If you want the stability that comes from working with an established brand with a proven business model, you’ll probably want to start a franchise coffee shop. If the idea of creating your own store from scratch excites you, starting an independent coffee shop is likely the best route for you.

Each coffee franchise has its own approval process and investment requirements. If opening a coffee shop franchise interests you, it is best to reach out to the franchisor directly to request more information. Read our guide to financing a franchise to learn more about getting the funds you need to get started.

Name Your Coffee Shop

You want to ensure your coffee shop’s name is memorable, aligns with the overall feeling of your brand, and isn’t already trademarked.

Here are a few techniques you can use when naming your coffee shop :

• Focus on coffee: Include the word coffee in your name—or a “coffee-related” term such as bean, espresso, perks, grounds, or grind—so that people instantly recognize what you’re selling.
• Be playful: Puns and rhyming names are often both fun and memorable.
• Focus on why your customers are buying: Many people are buying coffee to wake up or recharge, so you can work that theme into your coffee shop name by using words like octane, boost, or wired.
• Add your name to the shop : Some successful coffee shop names include the first name of the owner, which typically evokes a friendly and casual vibe. You could also use your last name, which may evoke a more upscale or formal vibe.
• Reference a trait of your location: Think about the special traits of the area you serve. For example, if you’re near a courthouse, incorporate the word court or justice into your name. If you’re near mountains, you may want to add peaks or sky-high or another mountain reference to your name.
• Focus on your shop’s key feature: Use words that convey the vibe of your shop, such as express, if you focus on quick service, or hangout, if you’re going for a casual place to relax and chill with your friends.

You might choose to name your shop using one of the methods above, or you can go an entirely different route. That’s what Starbucks did to get its name . “Starbucks” comes from a character in Herman Melville’s classic novel “Moby Dick.” Starbuck was the name of the first mate.

Before finalizing your coffee shop’s name you must make sure the name you select is not trademarked. You can search the US patent and trademark database to find registered trademarks.

If you prefer, you can also consult with an attorney directly about trademark status for your coffee shop name. If you don’t have an attorney, you may want to search a site like LegalZoom to find a lawyer that specializes in business development and trademarks. The last thing you want to do is invest in branded signage , advertising, cups, employee uniforms, and menus only to find out you can’t use the name you selected.

Visit LegalZoom

Design Your Coffee Shop Menu

Creating a menu plan involves taking great care to have the right mix of items, at acceptable profit margins, that your clientele will buy. By now, you’ve done your research and visited several coffee shops. You have a sense of the types of items offered by coffeehouses in your area and the range of prices you can charge.

When launching your shop, be sure to include items that you know are in demand based on your market research. You’ll also want to include other items that are unique to your coffee shop; these may help you differentiate your shop from the crowd.

• Choose a brewing style: Espresso beverages are a coffee shop classic, but you can expand your offerings with specialty drip brewing techniques like pour-overs, French press coffee, or house-made cold brew.
• Change offerings seasonally: Starbucks created the model for this with their seasonal flavors like pumpkin spice and peppermint mocha. Create a rotating list of specialties that you roll out seasonally to keep customers coming back.
• Offer non-coffee options: Tea is an obvious companion for coffee beverages, but don’t forget ready-to-drink (RTD) options like bottled water, juices, and soft drinks. These RTD beverages have the added benefit of driving sales without increasing your labor.
• Don’t forget food: You don’t have to have a full-service kitchen to serve food in your coffee shop. You can complete your food menu with baked goods from local bakeries to stand out from your competitors. Create a mouthwatering list of all your food offerings to drive add-on sales.

This step will likely overlap with your menu development phase—but beans are such an important part of a coffee shop operation that bean selection deserves its own step.

If you choose a coffee shop franchise, this step will be done for you, so you can skip ahead. However, deciding what type of coffee to serve at your shop is the most consequential decision you’ll make as an independent coffee shop owner. You can either purchase roasted coffee beans from a wholesaler or roaster or purchase unroasted ”green” coffee beans to roast yourself.

Roasting Your Own Beans

Green coffee beans tend to be about one-third the cost of roasted coffee beans, but the equipment you need to roast beans is pricey. So, you don’t save much upfront, but over time, the cost savings could be considerable. Roasting your own beans also has cachet and offers you more control over your end product.

There are two major reasons you might want to roast your own beans:

• You are a coffee aficionado who is passionate about coffee roasting and knows how to do it well.
• You intend to sell your house-roasted beans to other businesses as an additional revenue stream.

If neither of these reasons is relevant to your business, you’re better off buying pre-roasted beans from a wholesale roaster. You can always start by buying roasted beans from a wholesaler and build an in-house roasting operation as your business grows.

If you want to learn how to roast coffee, the Coffee Skills Program , offered through the Specialty Coffee Association, is a popular program for those looking for comprehensive, hands-on coffee roasting training.

Purchasing Wholesale Beans

If you want to purchase roasted coffee beans wholesale, you have a few options. You can purchase through a mainline distributor like US Foods. Most independent coffee shops strike up a relationship directly with a wholesale roaster. This gives you the opportunity to proudly tout the reputation of the coffee brand in your shop. Wholesale roasters also typically provide some training materials to ensure that you and your staff prepare their coffee perfectly.

Popular Wholesale Coffee Roasters

You’ll pay more for roasted beans than for green ones, but you get a lot for the investment. Wholesale roasters have a vested interest in preserving their brand quality, so they tend to provide complimentary barista training and may even help you source brewing equipment and consult on your overall menu and coffee shop layout. If you are new to the coffee industry, working with a wholesale coffee roaster will be the best move for your business.

The type of coffee you serve can be a major selling point, so we recommend you determine your coffee source before writing your business plan or raising funds. You’ll want to include your roaster—or your on-site roasting plan—in your business documents. This information can help you raise funds and show banks and investors that you are organized.

Now that you know what style of shop you want to run and what type of coffee you’ll serve, you need a location. This step and the following one—filing business paperwork and writing your business plan—typically happen simultaneously because the costs of your location will become part of your business plan.

You want your business to be in the path of your ideal customers, as it’s imperative that your customers can easily find and access your shop. You should also consider the physical characteristics of the space. Will it meet your plumbing and electrical needs, or will you need to renovate? Will the landlord share the cost of renovations, or are you entirely on your own?

If this is your first time renting a commercial property, familiarize yourself with the ins and outs of leasing commercial real estate by reading our guide to commercial real estate leases before you begin your location search.

Step 5: Complete Business Paperwork & Business Plan

Whether you plan to be an independent or franchise coffee shop, you’ll need to file your business with the state—and typically the city—where you will operate. Since incorporating your business is a bit of paperwork, it makes sense to combine all the administrative tasks and write your business plan at the same time. You’ll need all of your paperwork in order before you can move on to the next step, raising funds.

Incorporate Your Business

Most coffee shops—even franchises—will need to incorporate as a business entity to do business in their state. You can typically find all the forms you need from your state’s Secretary of State’s office. Your Secretary of State’s office is usually happy to answer any questions you may have, or you can get free assistance from a Small Business Development Center (SDBC) if there is one nearby.

SBDC offices are partially funded by the United States Congress and affiliated with the Small Business Administration. Their primary purpose is to assist independent entrepreneurs with starting and operating small businesses. You can find your nearest SBDC chapter on The America’s SBDC website .

Filing fees for business licenses vary by state and business type. Costs tend to be less than $500. Most coffee shops register as a limited liability company (LLC), though certain franchises may advise you to register a different type of legal entity—like a partnership or corporation—depending on your franchise arrangements. If you plan to operate a multi-unit coffee shop enterprise or a multi-unit franchise, you should consult with an attorney and CPA to determine the best legal entity for your business.

Learn more about different types of legal entities for your business in our guide to LLC vs S-Corp vs C-Corp .

Write Your Business Plan

Your business plan will include an executive summary of your business objectives, where you plan to launch your coffee shop, types of products you’ll offer and anticipated profitability for each, a marketing plan, and a thorough financial plan along with financial projections. For your convenience, you can download the Coffee Shop Business Plan template that is provided below.

FILE TO DOWNLOAD OR INTEGRATE

Coffee Shop Business Plan

Thank you for downloading!

If you struggle with various aspects of creating your business plan—such as coming up with sound financial projections—contact your local SBDC as they can help with this, too.

Step 6: Open a Bank Account & Raise Funds

With your business plan in hand, you can start raising funds. Before you raise a penny, though, you should open a business bank account so your business funds remain separate from your personal funds.

Open a Business Bank Account

This bank account is separate from your personal bank account. It is the account where you will receive investment funds and the account you will use to make your business purchases. When your shop is up and running, this is the account that will receive payments from your credit card processor and from which you will pay vendors and staff.

See our guides to the best small business bank accounts and top-recommended free business checking accounts to find the best bank for your business.

Raise Funds

You’ll need between $50,000 and $300,000 to open a coffee shop. The biggest variables are the size of your shop and the market where you are located. Shops in busy urban centers will spend a lot more on rent than a coffee kiosk on a college campus.

This is where you flex your business plan. Pull that plan out to present to bank loan officers or prospective investors. The word “investors” might sound intimidating. But investors for independent coffee shops tend to be friends, family, and community members. Depending on your shop size, you may also be able to fund your business entirely with small business loans or business credit cards.

It is common to see coffee shop campaigns on crowdfunding sites like Kickstarter. (Source: Kickstarter)

Another alternative is crowdfunding . Crowdfunding is very popular for coffee shops. They are a good fit because coffee shops tend to have lower startup costs than a full-service restaurant. Coffee shops also have a reputation for becoming part of their communities, and your crowdfunding contributors can easily become your first regular customers.

Franchise coffee shops don’t do well on crowdfunding sites, though. If you’re planning to open a franchise, you’re better off requesting funding advice from your franchisor and seeking small business loans.

Our expert-written guides to getting a small business loan , the best easy business loans , and leading small business credit cards will help you apply for the funds you need to start your business.

Step 7: Purchase FF&E

Furniture, fixtures, and equipment is commonly referred to by the catch-all acronym “FF&E.” Once your coffee shop is open, you’ll see FF&E on all your monthly profit and loss statements; it’s a term that might haunt you. But now is the time to purchase all of those items. Coffee shop FF&E includes everything from your espresso machines and refrigerators to light fixtures and countertops.

Coffee Shop Equipment & Supplies Checklist

There are several key types of FF&E that are uniquely important to coffee shops, like point-of-sale (POS) equipment and espresso machines. We’ll explore those in more detail in the expandable sections below.

Coffee Shop Point of Sale (POS)

The best coffee shop POS systems help you accept cash and credit cards, track cost of goods sold (COGS), help you manage inventory, and assist with employee scheduling. Most also include loyalty tools that collect customer information and track order history so you can send highly relevant email promotions to spark return visits. Loyalty tools frequently come at an additional cost, but for coffee shops, the extra money is well worth it.

There has never been a better time to buy a POS system. Many cloud-based systems compete aggressively for customers, so it’s not hard to find a good deal. For example, popular food service POS providers Toast and Square for Restaurants both offer a baseline POS with no monthly software fees. Toast also gives you the option to pay as you go for hardware, so you can get started for $0 upfront.

Popular Coffee Shop POS Systems

There are, of course, many more options for a food service POS . You shouldn’t be surprised to spend $0 to $99 per month for software and from $300 to $600 for a full POS hardware setup, including a touchscreen display, cash drawer, receipt printer, and card reader. Your costs will vary based on whether the system operates on consumer-grade tablets or industry-grade terminals. You’ll also pay higher monthly fees if you need additional software functions like drive-thru management.

Because of the relatively low average sale per customer—which for a single coffee drink is around $3 to $4 , depending on the order—coffee shops rely on repeat business. So make sure your POS system offers strong loyalty tools.

Coffee Equipment

You’ll need a lot of standard food preparation equipment like walk-in and reach-in refrigerators, a dishwasher, and handwash sinks. You’ll also need coffee-specific equipment like grinders, brewers, and espresso machines. It’s best to purchase standard equipment from restaurant suppliers like Webstaurant Store, Sysco, and others.

We recommend buying new equipment when your budget allows since new equipment comes with manufacturers’ and suppliers’ warranties. Equipment that tends to need a lot of maintenance, like ice machines and dishwashers, is commonly leased. These items typically come with regular service visits to ensure they are properly calibrated and in good working order.

The La Marzocco Linea espresso machine—one of the most popular commercial espresso machines on the market—retails for $14,000 to $20,000, depending on how many group heads you need. (Source: La Marzocco)

Group head: The group head is the part of the espresso machine that forces the hot water through the espresso puck to extract the coffee. The more group heads your machine contains, the more espresso shots you can pull in a short time. Espresso machines with more heads are generally more expensive.

Espresso machines, grinders, and brewing equipment will be major purchases. As with ice machines, you may prefer to lease your espresso machine rather than purchase upfront. Espresso machines can be pricey, and they are also temperamental. So, leasing can be a good deal because a lease typically comes with an on-call technician to help if you need repairs.

Though with solid training (typically available from a wholesale roaster), purchasing a new espresso machine outright is also a good bet. New machines will have manufacturer’s warranties, and you won’t have to worry about any previous damage impacting the machine’s performance (a major concern with used espresso machines). Your roasting partner is typically eager to advise you on the best equipment, so you don’t need to look far for help making a decision.

Step 8: Obtain Permits, Licenses & Insurance

In addition to the general business documents that you filed in previous steps, you’ll need several permits and licenses before you can sell food and beverages to the public. Many permits cover general business functions, like sales tax permits (also called a “vendor’s license”) resale licenses that excuse you from paying taxes on items you plan to resell. You’ll also need health and safety licenses from your local health department. Click through the tabs below for a detailed list of the permits and insurance you’ll need to obtain.

General Business Licenses

Food service licenses.

• Doing Business As (DBA) Registration: If you operate your coffee shop under a different name than the LLC you registered with the state, you’ll need a DBA to document the fictitious name.
• Employer Identification Number (EIN): This number is your business’s identification for federal tax purposes. You can register for free on the IRS website ; you’ll typically be assigned a number within 48 hours.
• State tax ID: You’ll also need a state tax identification number to file sales and payroll taxes with your state. This is also typically free, and in some states, called a state tax license.
• Business license: Some states roll the business license process with registering an LLC. Others have a separate process for business licenses. Check with your local Secretary of State’s office for more information about your location.
• Reseller’s license: This is the license you need to excuse you from paying sales tax on wholesale purchases. Your vendors will need a copy of it.
• Certificate of Occupancy: This is typically issued by the local fire safety authority and allows you to open your premises to the public. If you are moving into a space that has already operated as a coffee shop and you don’t make substantial changes to it, then you may be covered by the previously existing certificate of occupancy. But this can vary state to state; some require a new certificate any time a new tenant takes occupancy of a retail space.

Food service licenses are issued by the health department in your city, county, or state. In some places—like California—you’ll need a license that covers your space and separate food safety licenses for each of your employees.

Food service licenses include:

• Health permit: This permit covers your location, enabling you to sell food and drink to the public. Prices can vary widely from state to state but if you budget at least $1,000 for this, you’ll rarely be surprised. This permit always requires a physical inspection of your premises, where you are typically awarded a letter grade. In many locations, you’ll be required to prominently display this grade in your front entrance.
• Food Safety Manager’s Certification: Most locations require at least one staff member to have a food safety manager’s certificate. Typically the certificate is held by the owner or general manager. To get one, you need to pass a food safety test, typically offered through ServSafe . Prices range from $99 to $179 depending on whether you need to take the food safety class and whether you take the assessment online or in-person.
• Food handler permit for employees: Several states, like California, Texas, and Illinois, require all food service workers to have their own food handler’s permit. Your staff can obtain these for $15 to $20 through ServSafe, though some states offer a lower-priced course through their health departments.

You’ll need a few types of insurance to cover your coffee shop. First, you’ll need to cover the property itself, plus a policy to cover your business liability. Since most coffee shops have employees, you’ll also need workers’ compensation insurance.

• General Business Liability: This policy protects your business from common business risks like bodily injuries and property damage. General liability is especially important for food service businesses that serve customers on their premises. It’s only a matter of time before an employee spills hot coffee on a customer (or their laptop) or you have a foodborne illness claim.
• Commercial Property: You may prefer to combine your general liability with commercial property in what is called a Business Owner’s Policy (BOP). Your insurance broker will be able to advise you if a BOP is a better fit for your location and business size.
• Equipment Coverage: This is an additional, optional policy that covers your highly used and most expensive equipment. It is especially useful if you spent a few thousand dollars on a brand-new espresso machine.
• Workers’ Compensation: If you have employees, you need workers’ compensation insurance. Most states set minimum workers’ comp limits. So, check with your local labor department for requirements and your insurance broker for guidance.
• Commercial Property: This covers You may prefer to combine your general liability with commercial property in what is called a Business Owner’s Policy (BOP). Your insurance broker will be able to advise you if a BOP is a better fit for your location and business size.
• Worker’s Compensation: If you have employees, you need worker’s compensation insurance. Most states set minimum worker’s comp limits. So, check with your local labor department for requirements and your insurance broker for guidance.

Step 9: Hire & Train Staff

The startup staffing stage of running your coffee shop can be difficult. Exceptional service is a must so you want to make great hires. You also want to be smart about how many people you hire. Labor will likely account for 30% or more of your costs; hire too many people, and costs balloon, hire too few, and service could suffer.

Write Manuals & Standard Operating Procedures (SOPs)

Before you bring any employees on board, you need to create basic procedures for preparing and serving various menu items. Since the quality of your coffee is so essential to your business, the most important procedures you create are those for safe and correct beverage preparation. If you work directly with a preferred wholesale coffee roaster, they can likely provide you with excellent training information for your team.

You’ll also want to create SOPs for less glamorous procedures like cleaning the espresso machine, using the POS, and calling in sick or requesting time off.

Our human resources experts have written comprehensive guides (and free templates) for everything from creating your time off policy , to writing an employee handbook and setting up employee benefits .

Write Job Postings

Most coffee shops have at least two to 10 employees, besides the owner. The number of employees you need depends on your hours of operation. The longer you are open, the more staff you will need.

Coffee shops tend to be busiest during the morning rush from 6 a.m. to 10 a.m. But if you have the staff, you can also boost your sales with a later afternoon hit when customers get out of school and work between 3  p.m. and 6 p.m. With opening and closing duties, that could mean you need staff from 5 a.m. to 7 p.m.; too long a day for a single person.

Click through below for a look at the most common coffee shop employees:

Baristas prepare all types of coffee drinks and are familiar with all types of coffee brewing equipment, from espresso machines to drip brewers, pour-overs, and French presses. In most coffee shops, every single staff member—regardless of seniority or additional duties—is trained as a barista. Even you, the owner, should train as a barista if you don’t already have those skills. Pay for baristas ranges from $12 to $22 per hour, plus tips. Wages vary based on location and experience.

An experienced barista keeps business moving during a rush, which can greatly increase your sales. Coffee lovers in busy city locations are also known to follow their favorite baristas from shop to shop. So, it is definitely worth it to pay for experience, even if an experienced barista costs you twice as much per hour.

Busy coffee shops might have some non-barista cashiers. Cashiers tend to be extremely entry-level and are typically paid minimum wage plus a share of tips. Cashiers are a good option if your shop is busy and you want to save some money on labor costs. But it’s generally a good idea to treat this role as a barista trainee; eventually, you want all of your staff to be able to turn out excellent coffees and espresso drinks. It makes scheduling and shift coverage much easier when all of your team members can perform any assigned task.

Drive-thru Attendant

If your shop has a drive-thru, you may also have a drive-thru attendant. This position is similar to a cashier, but they have the added skill of keeping orders organized and managing the queue of waiting cars. Like a cashier, a drive-thru attendant typically earns minimum wage plus tips, unless they are also a trained barista, in which case the pay scale is from $12 to $22 per hour, plus tips.

Shift Supervisor

A shift supervisor is a good idea if you need to cover some simple managerial tasks when you can’t be in the shop yourself. Shift supervisors are typically expert baristas who take on tasks like managing cash drawers and delegating tasks to other hourly employees. Shift supervisors are different from managers in that they are typically hourly employees that do not have the power to hire or fire other staff members. They also do not control the schedule.

So in most locations, shift supervisors can participate in tip pools. But you should check your local labor laws to be sure.

If you do not plan to actively work in your coffee shop, you’ll need at least one manager. The manager is typically paid an annual salary. According to ZipRecruiter, coffee shop manager salaries ranged from $32,000 to $55,500 in 2023, with the average manager earning $42,450 annually.

In addition to being a skilled barista, your coffee shop manager should order supplies, verify payroll records, hire, train, coach, and terminate employees and write schedules. They should also maintain daily, weekly, and monthly reports, communicate profits and losses to ownership, and develop ideas to expand or improve the business. Managers cannot participate in tip pools.

See our guides to advertising a job and writing job descriptions to help you staff up your coffee shop. And learn how to distribute shared tips among hourly employees in our guide to tipping methods ; the hours-based tip pool is the method used by most coffee shops.

Train Staff

Staff training is another place your roasting partner or franchisor can be a big help. If you opted to open a coffee franchise, your franchisor will provide training materials and sometimes even send a training manager to assist with training your team. Roasters want to ensure that their coffee is prepared correctly, and they also tend to provide a wealth of training options, from in-person training at your shop, to written manuals and training videos. Some roasters, like Intelligentsia, even have training classrooms in several major cities to provide in-depth training.

It’s helpful to create a new hire checklist when training is fresh in your mind. So each time you bring new employees on board, you’ll remember exactly what information you need to cover.

To get your supplies ahead of opening to the public, you’ll need to open vendor accounts with food and beverage suppliers. You should already have your coffee supplies locked in, but you’ll also need a supplier for all your milks, flavorings, sweeteners, and paper goods. If you don’t plan to cook food in-house you’ll also want to buy baked goods that are popular with coffee drinkers, like bagels, scones, muffins, and more. Read our guide to food suppliers for details on finding suppliers and opening accounts.

To ensure that you have enough supplies on hand before you open to the public, you should plan to create your accounts about a month before your opening date. Place your first orders at least two weeks ahead of your opening date so you can get a sense of all the logistics involved. Larger suppliers may only deliver to your area once a week, so you’ll need to plan ahead to ensure you never run out of stock.

Don’t forget an account with a linen service. You won’t need linen napkins and tablecloths, but coffee shops do go through hundreds of side towels and mop heads every week. You’ll likely find it less expensive to lease these items than to manage cleaning and restocking them yourself. Look for a linen service that also provides aprons; that way, you ensure your staff always looks presentable.

Success won’t happen by chance; it’s imperative that you develop effective promotional and advertising campaigns for your coffee shop. Promotions don’t necessarily have to be costly to work. What’s important is getting the word out about your business. This will be an ongoing task that requires regular investments of time, attention, and effort. A little creativity doesn’t hurt either. In addition to the traditional channels of buying an ad in the local paper, you should try:

• Social media: Coffee lovers tend to find local spots on Instagram and TikTok. Younger consumers like to get a sense of the “vibe” of a space before going, so take lots of pictures and videos of your pre-opening process—featuring your coffee drinks, of course—to get customers excited about your opening.
• Community outreach: Moreso than any other food business, coffee shops have reputation as community hubs. Partner with a local nonprofit ahead of your opening, or host a booth a community happening like a street fair, farmers market, or 5K run to get some face time in your community.
• Events: Poetry readings, art showings, and live acoustic music are classic coffee shop tropes for a reason. Connect with local artists or literary groups to liven up your space. Just be careful about music; some locations will require you get a cabaret license before hosting live performances.
• Classes and contests: Host a coffee tasting, coffee brewing class, or a latte art class and contest. These are great ways to build a fan base (and increase customer knowledge and respect for your offerings).
• Email and text marketing: Leverage your POS system’s customer profiles to send targeted messages. Most systems these days let you create filtered lists of customers with upcoming birthdays, frequent guests, or those that haven’t made a recent purchase. Compose some deals and messages to bring those customers back in your doors.

Starting a Coffee Shop Frequently Asked Questions (FAQs)

How much does it cost to start a coffee shop.

In most locations, you can start a coffee shop for $50,000 to $300,000. The costs vary by the size of your shop, the favorability of your lease terms, and the size of your staff. In a major market like New York City, where real estate is at a premium, your start-up costs can go much higher, though.

How profitable is a coffee shop?

Like most food businesses, coffee shops have pretty tight margins. You can expect to earn a 5% to 7% profit margin most of the time. But you’re only likely to hit this if you keep a close eye on your costs. A good point-of-sale (POS) system is your friend here; most will alert you to lost stock or employees that are getting close to hitting overtime.

If you can keep your sales flowing and your costs down, you can expect to regularly turn a profit on your shop. The owner of a well-run coffee shop can expect to earn $50,000 to $175,000 annually.

Can I run a coffee shop with no experience?

It is not a good idea to run a coffee shop with no experience. But your coffee roaster (or franchising partner if you go that route) can help you get the experience you need quickly. Every coffee roasting company wants to ensure that their coffees are presented perfectly. And because your business is their client, they have vested interest in your success. So you can typically get everything from barista training to marketing advice from your wholesale coffee roaster.

As a coffee shop owner, your education will be ongoing; you also need to keep your eye on changing trends and customer preferences. Understanding what your customers want—and don’t want—as well as how buying behaviors change over time is key to operating a thriving business.

The most successful shop owners keep their pulse on what’s happening as new coffee products, equipment, and marketing strategies emerge on a regular basis. There are many industry resources available to expand your knowledge about coffee and the coffee shop industry.

Here are a few popular resources and associations:

• The Specialty Coffee Association : The association offers a variety of memberships, starting at $70. It also publishes the “SCA 25 Magazine,” has its own podcast, and hosts a variety of live events. As an SCA member, you’ll also automatically gain membership to the Barista Guild of America.
• Fresh Cup Magazine : This monthly magazine features timely conversations and ideas for coffee shop owners. A subscription costs $48 per year.
• Barista Magazine : A one-year subscription for this leading trade magazine costs $30.
• Coffee Talk Magazine : Keep up on the world of coffee by signing up for this quarterly magazine, available for free in both print and digital formats.
• National Coffee Association : This trade association for the coffee industry offers a wealth of industry resources and training, as well as coffee-related news.
• Roasters Guild : If you want to stay up to date on coffee roasting techniques and news, you may want to join the Roasters Guild. Annual membership dues are $200. The Guild also offers training as well as a Roaster Certificate program.

Starting a coffee shop is a pretty straightforward process with a ton of room for creativity. A coffee shop has great potential as a money-making business, whether you open an independent shop or opt to work with a franchisor. With a budget of $50,000 to $150,000, well-roasted beans, and well-trained baristas, you’ll be on your way to creating a business that is vital to your surrounding community. And all the coffee you can drink is a pretty good fringe benefit.

About the Author

Find Mary On LinkedIn Twitter

Mary King is an expert restaurant and small business contributor at Fit Small Business. With more than a decade of small business experience, Mary has worked with some of the best restaurants in the world, and some of the most forward-thinking hospitality programs in the country. Mary’s firsthand operational experience ranges from independent food trucks to the grand scale of Michelin-starred restaurants, from small trades-based businesses to cutting-edge co-working spaces.

By downloading, you’ll automatically subscribe to our weekly newsletter.

Join Fit Small Business

Sign up to receive more well-researched small business articles and topics in your inbox, personalized for you. Select the newsletters you’re interested in below.

How To Create A Coffee Shop Business Plan: Step By Step

Opening a coffee shop is both exciting and challenging.

If you want your business to succeed, learning how to write a coffee shop business plan is important .

Coffee shop owners enjoy a great deal of freedom when it comes to the products and services they offer, the decor within the establishment, the people they hire, and many other aspects of the business.

Even small coffee shops can turn a substantial profit. Why?

Well, coffee shops also add value to the surrounding community, giving residents a safe, uplifting place to gather.

However, some coffee shops will fail .. In fact, the U.S. Small Business Administration reports that approximately one-third of small businesses will fail within the first two years.

By the end of five years, half of all small businesses will fail. To give your coffee shop the best chances of success from the first moment the doors open, you need a solid business plan. To create an effective business plan, follow the steps below.

Competition

Company overview, exit strategy, step 1: brainstorming and market research.

Before you begin writing your coffee shop business plan, spend some time learning about business plans in general. Business plans for all types of businesses usually have six different sections: executive summary, opportunity, execution, company and management summary, financial plan, and appendix.

You should have an executive summary at the beginning of your business plan, although it may well be the last part of the plan that you write.

It is also a good idea to spend some time brainstorming basic ideas for your new coffee shop and performing market research. Write down any ideas you have for the business so you can refer to them later. As you research the market, be sure to focus on your specific region for the best results.

If other people will have a stake in the business, consider including these individuals in the process of brainstorming and writing the business plan.

Step 2: Opportunity Section

The next step in completing your business plan involves constructing the opportunity section of the document. This section focuses on defining several key components of your business, including the products you intend to provide, the problems you will solve within the community or market, your target consumer, and your competition.

Identifying Problems And Solutions

Begin this part of the plan by outlining the problem you will solve for consumers and how your solutions will be different from the competition. Some examples of problems a new coffee shop may solve include:

• Consumers have no access to gourmet coffee within a reasonable driving distance.
• Consumers lack good places to congregate in town.
• Consumers have access to inferior coffee and/or bakery options only.
• The area’s coffee shops have poor service, high prices, or some other characteristic that causes problems for customers .

Now, describe the strategy you will use to solve the problem you have defined.

For example, if you are establishing the town’s first coffee shop, you may be hoping to provide consumers with access to gourmet coffee and bakery products closer to home. On the other hand, if you will be competing with other coffee shops in the area, you may be hoping to provide better quality products, a better atmosphere, and/or better prices.

Target Market

Your business plan’s opportunity section should also define your target market. Although you may be hoping that your new coffee shop will appeal to everyone in the area, you need to narrow down this target market, so you can focus your efforts on the people most likely to frequent your establishment.

For example, your target market may be young adults between the ages of 18 and 35.

Alternatively, you may be looking to advertise as a family-friendly establishment, focusing your efforts on people with children. In some cases, you may define two or more market segments you hope to target.

To complete the opportunity section of your business plan, take some time to research and describe your coffee shop’s competition. Are there other businesses in the area offering the same types of solutions?

Examples may include small coffee shops, as well as chains. If you plan to sell baked goods along with coffee, you may consider local bakeries or counter service restaurants as competition as well.

Step 3: Execution Plan

The execution section of your business plan focuses on the exact strategies and tools you will use to bring your coffee shop vision to life. This section will include information about marketing plans, sales strategies, the specifics of your operations, and your goals and objectives for the business.

This section of your business plan is one of its most important components, as it gets into the details as to how you plan to run your business and achieve success.

Marketing Plan

The purpose of this part of your business plan is to determine how you will reach your target market and draw them into your coffee shop. This plan should include details about the pricing structures you will use for the different products you serve, as well as information about your advertising strategies.

Begin the marketing plan by crafting a position statement. This statement describes how you will present your coffee shop to customers and how you will set yourself apart from the competition.

For example, your position statement may describe your business as a high-end gourmet establishment with quality products that aren’t available anywhere else.

On the other hand, if you are hoping for a more casual coffee shop, your position statement may describe your establishment as low-key and more affordable than other options in the area.

Your marketing plan also must include a pricing structure. As you determine prices for the different products you intend to sell, remember that prices should cover your costs, comply with market rates for the same product, and turn a profit. Your pricing structure will be intricately tied to your positioning statement as well.

Finally, spend time developing a strategy for advertising and promoting your coffee shop to the public.

The operations section of the business plan lays out the details of your business’s day-to-day operations. Having a solid operational strategy will make a significant difference in the efficiency and profitability of your establishment. Subsections that should be covered in this part of the business plan include:

• Sourcing – Before opening a coffee shop, you will need to find sources for the ingredients in your products, including coffee and any food products you want to serve.
• Milestones – Your milestones are your planned goals that indicate what you want to accomplish with your coffee shop over time. For example, you may indicate that you want to open by a certain date or serve a specific number of customers within a certain amount of time.
• Metrics – The metrics section of operations will indicate how you plan to measure your coffee shop’s performance. Examples of metrics include revenue, profit, number of customers served, and number of repeat customers.
• Assumptions and risks – The assumptions and risks section outlines the factors you assume will support your business, as well as the factors that threaten the success of your business.

Step 4: Company And Management Summary

The company and management summary covers the structure of your business and names the key players. In a smaller coffee shop, this section of the business plan may be relatively short. However, you should still list the people who are invested in the success of the establishment.

Team Overview

The team in charge of your coffee shop may consist of the owner as well as the people you have hired to act as managers. If you have not yet hired anyone to act as a manager, you can list the qualifications you hope to see in prospective managers instead.

In fact, if you haven’t hired anyone yet, constructing this part of the business plan is an exercise that will help you figure out exactly how many people you will need to hire before your coffee house can have its grand opening.

In this section, you can include a mission statement that describes the way you will approach customer service. Ideally, this statement should be only one or two sentences in length.

Your company overview can also include information about the business’s location and its legal structure. If your coffee shop has an interesting backstory, you can include a subsection on company history as well.

This section is optional for many coffee shop businesses, but it is a good opportunity to solidify your business’s identity and purpose. If you are seeking help from investors, including this section in the business plan can improve your chances of success.

Step 5: Financial Planning

The last major part of your coffee shop business plan deals with finances. For many people, this is the most difficult part of the plan to write. However, because it will play an important role in the success of your coffee shop, having a solid financial plan is essential.

In order to construct your financial plan, you need to draft several financial statements. These statements include:

Sales Forecast

The coffee shop’s sales forecast is designed to predict how your sales revenue will look over the first few years of your business. If you don’t have much experience in the coffee business , it may be difficult to guess how much you will expect to sell.

If you are not sure how to begin, you can start with average sales information for other businesses in the area and adjust it based on different factors, such as the fact that your business will be new and won’t have regular clientele immediately.

When constructing your sales forecast, remember to take the direct expenses you will incur to make your sales into account. These expenses, which are also known as the “cost of goods sold,” will include any expenses you incur when creating your menu items.

Examples of direct costs include the cost of ground coffee, syrups, and bakery product ingredients. Do not include expenses that are not directly related to products, such as the cost of business insurance or the wages you pay to employees.

Personnel Plan

The personnel plan you create for your coffee shop will include detailed information about the expenses related to employees. These expenses include the wages you will pay as well as other costs such as insurance and payroll taxes.

Although larger businesses may break this information down based on categories of people, smaller coffee shops will usually list employee costs on an individual basis.

Profit And Loss Statement

Your profit and loss statement is the financial statement that demonstrates whether your business is making a profit. If your business does not make a profit, this statement will demonstrate the size of the loss.

Because you have not yet started operating your coffee shop, all of the information on this sheet will be hypothetical when you create your business plan. However, this statement still has value for planning purposes.

Your profit and loss statement will pull information from the two financial statements you have already created (the sales forecast and personnel plan). It will also incorporate other information that hasn’t been covered yet, such as the other expenses you will incur while running your business. Examples include building rent, utilities, and insurance expenses.

In addition, your profit and loss statement should include a final figure that takes all of your hypothetical revenue and expenses into account and calculates either a profit or a loss.

Specific components of a profit and loss statement include:

• Income – This will include the estimated amount of money you expect to bring in from coffee sales and any other source.
• Cost of goods sold – This figure will include the cost of ingredients and other items you must purchase in order to make and serve your coffee, bakery items, and anything else your coffee shop sells.
• Operating expenses – These expenses are indirect expenses associated with running your coffee shops, such as the cost of insurance, rent, and wages paid to baristas.
• Gross margin – Your coffee shop’s gross margin can be calculated as the cost of goods sold subtracted from its total sales.
• Miscellaneous expenses – If you have expenses related to depreciation, taxes, interest, or a similar cost, list them here.
• Total expenses – This figure is the total of all operating expenses and miscellaneous expenses for your coffee shop.
• Operating income – The operating income is your coffee shop’s earnings before taxes, interest, and other such expenses have been subtracted. To calculate this figure, start with your sales total and subtract the cost of goods sold and total operating expenses.
• Net profit or loss – Your net profit or loss is the bottom-line figure that tells the exact amount of profit or loss for your coffee shop.

Balance Sheet

Your coffee shop’s balance sheet is a basic overview of the business’s financial health . This statement will list all of your company’s assets as well as its liabilities. Assets may include a building (if owned) and equipment. Liabilities include any unpaid debts, such as business loans and outstanding employee wages.

Cash Flow Statement

Your business’s cash flow statement is designed to track the flow of cash in and out of your business over time. Most cash flow statements will begin with the amount of cash you currently have on hand. The statement also incorporates anticipated income and expenses.

The coffee shop’s cash flow statement will help you anticipate how your business’s buying power and needs will change over time, so you can make wise financial decisions.

The final section of your financial plan is your exit strategy, which will include details about how you will end your business. If you are just starting out and as such don’t have any plans to sell your business, this section could be omitted or kept very short.

If you decide to include this section, it should describe your ideal situation for leaving the coffee shop business. For example, your exit strategy may involve merging with another coffee shop or chain. Alternatively, you may hope to sell your business to a new owner.

Step 6: Executive Summary

Although the executive summary is usually listed first in a business plan, it is easier to construct this component of the plan after the other sections have been completed. The executive summary section will introduce your coffee shop and provide an overview of the remainder of your plan.

Your executive summary be suitable as a standalone document if necessary. As you construct your executive summary, be sure to include: As you construct your executive summary, be sure to include:

• The problem your coffee shop solves
• The way your coffee shop solves the problem
• The coffee shop’s target market
• The coffee shop’s competition
• An overview of your management plans
• A summary of your finances
• The milestones you hope to meet

The Final Word On Your Coffee Shop Business Plan

Constructing a detailed, useful coffee shop business plan takes time and research. If you are having trouble getting started, consider reaching out to a professional for help. You may also be able to find a business plan template online to help guide your writing.

Coffee Shops Business Guides

10 Most Profitable Things To Sell In A Coffee Shop (Besides Coffee)

15 Top Coffee Shop Chains

How To Come Up With Coffee Business Names

Coffee Shop Marketing Mix: Get It Right And Earn More Money

How To Attract Customers To Your Coffee Shop

Coffee Shop Branding: Get These 5 Key Elements Right

7 Top Coffee Home Business Opportunities

Coffee Shop Furniture: A Buyer’s Guide

Coffee Shop Equipment: Don’t Overlook These 9 Essentials

Best Coffee Shop Tables: 6 Top Choices

How To Create Coffee Shop Marketing Plan: A Step By Step

How To Create A Coffee Shop Logo: A Step-By-Step Guide

Top 9 WordPress Themes For Coffee Shop Owners

Aisling is an Irish food and drinks writer and journalist fueled by coffee and herbal tea. She followed up her journalism degree with nutrition studies. Find Aisling on LinkedIn .

View all posts

• Get Started

Home >> #realtalk Blog >> Manage a business >> How to Write a Coffe…

How to Write a Coffee Shop Business Plan

By Shannon Mulligan

Opening a coffee shop is an exciting endeavor. But before you can open your doors and pour that first cup of joe, you need a coffee shop business plan.

But what is a business plan? Why is it important? And do you really need one?

We’re breaking down everything you need to know so you can brew up your own coffee shop business plan with ease.

What is a business plan for a coffee shop?

A coffee shop business plan is a document that covers your business goals and everything you’re going to do to reach them. 

A business plan goes into all the details about your business, from the location of your coffee shop to where you’re going to source your coffee beans. Put simply, it breaks down how your coffee shop is going to be a success.

Plan for success.

Writing out a coffee shop business plan can feel a bit tedious and unnecessary. And we won’t lie, they do take a bit of time and effort. 

But every business, no matter big or small, should have a business plan in place. A business plan for your coffee shop will help you:

• Set business goals and keep you on track to reach them. A business plan acts as a roadmap to help your coffee shop business become (and stay) successful.
• Identify any gaps in your business ahead of time. We’re only human. We all miss things from time to time. A well-written business plan can help you catch any mistakes or potential problems before they cost you.
• Manage your to-do list before opening your coffee shop. Opening any business is a huge undertaking. A business plan covers all your bases from location to hiring , so you don’t miss anything before opening day rolls around.
• Secure any financing or loans you might need. Banks or investors often want to see a business plan before they’ll offer you loans or even financial products like a business credit card.

Things to consider before you start.

Now that you know that you need a business plan, it’s time to grab your favorite cup of coffee and start thinking about the important stuff.

To help, here are some things to consider before you start writing your business plan.

• What will make your coffee shop business successful? Will you offer a unique specialty coffee selection? Are you going to open in a location with a high demand for coffee?
• Who is the target audience for your business plan? Different stakeholders will likely have different goals when reading your business plan. Banks and investors might be more interested in your financial forecasts. Meanwhile, potential suppliers might care more about your product offering to make sure that your coffee shop is a good fit for their products 
• What information or research will you need to create an informed business plan? A coffee shop business plan will look different than that of a salon or even a bakery. Take some time to think about what information you’ll need to research. For example, before you can write your business plan, you’ll likely need to know the cost of a coffee maker or the average hourly wage of a barista .

How to write a coffee shop business plan in 7 steps

If you’ve never written a business plan before, it can feel more complicated than a grande mocha frappucino with extra whip, hold the syrup. But don’t worry, we’re breaking down the key sections of a coffee shop business plan, so you know exactly how to get started.

Here are the 7 steps and sections you’ll need to write your coffee shop business plan.

1. Executive summary

This is a high-level overview of your coffee shop business plan—the TL;DR of the business plan if you will.  Here, you’ll want to outline the important details in your business plan, but also tell an engaging story that makes the reader want to dive into the rest of your business plan.

Tip: This is the first section someone will read—but you don’t have to write it first. It can be helpful to come back to this section once you’ve finished the rest of your business plan.

2. Company overview and description

This next section in your coffee shop business plan is an overview of your business and your goals. 

In this section, you should answer questions like:

• Who’s the founder or business owner? (AKA who are you and what is your background?) 
• Why did you decide to start a coffee shop?
• What’s your vision for your coffee shop?

3. Market analysis

A market analysis in a business plan helps position your coffee shop against other coffee shops, You want to show how you measure up to competitors or similar businesses. 

For example, as a coffee shop owner you might identify competing coffee shops in the area, or even other competitors like fast-food chains. In your market analysis, you might even look at other successful similar businesses that you can use to show why your coffee shop will be a success. For example, let’s say you’re opening a coffee shop that’s open 24 hours. You can use examples of other 24-hour coffee shops in other areas that you can model your business after.

4. Business offerings

This is where things start to get exciting—you finally get to talk about coffee! 

The business offerings section of your business plan should include everything that you’ll offer to potential customers. For a coffee shop, this will likely include your potential coffee menu.  But if you have other products or services—like selling coffee beans or offering coffee machine repairs—you’ll want to include those here too.

5. Management and operations

Here’s where you’ll cover the day-to-day management and operation of your coffee shop. For example, you’ll want to outline details like: 

• The expected costs of operating your business 
• How many employees you’ll hire
• Your point of sale (POS) system
• How you’ll manage inventory

6. Marketing and public relations strategies

In this section, you should explain how you plan to spread the word. 

Will you hire a marketing agency ? Will you mail out flyers? Do you have any media connections that will help you earn PR?

Basically, you need to show that you have a plan for promoting your business.

7. Financial projections

Last but not least, it’s time to talk money. 

Financial projections provide insight into your revenue and expenses over the short and long term. They aren’t an exact science, but you’ll want to provide an educated estimate. Your financial projections should typically include:

• Your start-up costs: This includes any one-time costs that you’ll incur to open your doors. For example, renovating the interior of your coffee shop.
• Operating costs: This includes expenses like rent, marketing, and utilities. You’ll also need to consider materials and supplies, such as coffee and cups.
• Labor costs: This is the cost of employing any baristas, hosts, or cashiers. For example, wages, cost of employee benefits , and hiring costs.
• Forecasted revenue: This includes any money you’ll earn from coffee sales or any other products and services you might offer.

The goal is to show that your coffee shop business will be profitable.

Let’s get things brewing.

Business plan written and ready to go? It’s time to start growing your coffee shop. From hiring your first employee to opening your second coffee outpost, Homebase is here to help.

Homebase is an all-in-one employee management app that helps small business owners manage hourly employees better and smarter. 

With Homebase, you can:

• Create employee schedules in minutes
• Track employee time and run payroll right from your phone
• Hire and onboard employees for your coffee shop

Coffee shop business plan FAQs

Do you need to create a business plan for a coffee shop.

Yes. Every business, including a coffee shop, should have a business plan. Your business plan should include an overview of your business, what products and services you’ll offer, how you’ll manage and market your business, and financial projections.

How profitable is opening a coffee shop?

How profitable opening a coffee shop will be can depend on several factors. But generally, coffee shops can be a pretty profitable business. A business plan can help you project your revenue, costs, and profit—so you can feel confident growing your coffee shop.

How do you start a business proposal for a coffee shop?

Here are a few steps for how to start writing an effective business proposal for a coffee shop:

• Start with an executive summary.
• Create your coffee shop company overview and description.
• Do a market analysis of competitors and similar businesses.
• Decide on your business offerings.
• Put a plan in place for managing and operating your business.
• Create a marketing and PR plan.
• Forecast your sales and business costs.

Remember:  This is not legal advice. If you have questions about your particular situation, please consult a lawyer, CPA, or other appropriate professional advisor or agency.

Related posts

March 25, 2024

How to Start a Cleaning Business in 6 Steps

So you want to start a cleaning business. You want to work for yourself, you love a good Mr. Clean…

March 22, 2024

How to Start a Construction Business in 8 Easy Steps

Being able to build something from the ground up is an incredible skill: a skill you can monetize into your…

January 19, 2024

How To Write A Bakery Business Plan

Looking to open up your very own bakery? It’s probably safe to say that you’d rather spend your days perfecting…

January 12, 2024

How to Start a Bakery Business in 10 Steps

There are few things in this life as incredible and instantly transformative than a fresh pastry. Warm, gooey, delectable. If you’re…

December 7, 2023

How To Write a Salon Business Plan

So you’re thinking of opening a salon business—congrats! Gearing up to owning your own business is a huge step. But…

December 5, 2023

How to Start a Catering Business in 10 Steps

There are a lot of reasons to take a love of cooking down the path of entrepreneurship with a catering…

Subscribe to our newsletter

Looking for ways to stay up to date on employment laws and small business news?

Homebase makes managing hourly work easier for over 100,000 local businesses. With free employee scheduling , time tracking , and team communication , managers and employees can spend less time on paperwork and more time on growing their business.

• Hiring & onboarding
• Team communication
• Employee happiness
• HR & compliance
• Integrations
• Food & beverage
• Beauty & wellness
• Medical & veterinary
• Home & repair
• Hospitality & leisure
• Education & caregiving
• Contact sales
• Become a Partner
• Careers – We’re hiring!
• #realtalk Blog