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

• By Tam Nguyen

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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.

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How to Open a Coffee Shop

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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.

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How to Start a Coffee Shop

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15 Steps To Start a Coffee Shop Business

How big is the coffee shop industry.

• What are the Key Segments of the Coffee Shop industry?
• What External Factors affect the Coffee Shop market?
• Who are the Key Competitors in the Coffee Shop industry?
• What are the Key Customer Segments in the Coffee Shop industry?

What are the Key Costs in the Coffee Shop industry?

What are the typical startup costs for a new coffee shop, keys to coffee shop success, helpful videos.

• Additional resources in the Coffee Shop industry

If you’re looking to start a Coffee Shop, you’ve come to the right place. Since we’re going to show you exactly how to do it.

We’ll start with key Coffee Shop industry fundamentals like how big the market is, what the key segments are, and how revenues and profits are generated.

Then we’ll discuss keys to not only starting a Coffee Shop business, but succeeding in it!

And don’t forget to look at our coffee shop business plan template if you need a plan to start or grow your coffee shop.

Download our Ultimate Coffee Shop Business Plan Template here

Starting a coffee shop can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful coffee shop.

1. Choose the Name for Your Coffee Shop Business

The first step to starting a coffee shop is to choose your business’ name.

This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your coffee shop:

• Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also, check to see if a suitable domain name is available.
• Keep it simple. The best names are usually ones that are easy to remember, pronounce, and spell.
• Think about marketing. Come up with a name that reflects the desired brand and/or focus of your coffee shop.

2. Determine the Type of Coffee Shop Business You Will Launch

When determining the type of coffee shop you will launch, consider factors like your interests, target market, location, and the atmosphere you want to create.

Here are several types of coffee shops you can consider:

• Traditional Coffee Shop/Café: A classic coffee shop that serves a variety of coffee beverages, pastries, and light snacks. It offers a cozy and relaxed atmosphere for customers to enjoy their coffee.
• Espresso Bar: Specializes in serving high-quality espresso-based beverages like lattes, cappuccinos, and macchiatos. Emphasizes the art of coffee making.
• Specialty Coffee Shop: Focuses on sourcing and brewing specialty coffee beans, often from specific regions or single origins. Educates customers about coffee quality and flavor profiles.
• Drive-Thru Coffee Stand: A convenient option for customers on the go. Offers quick service with a limited menu, catering to those who want to grab coffee without leaving their vehicle.
• Coffee Truck or Mobile Coffee Shop: A mobile coffee business that can move to different locations, such as events, festivals, or busy street corners. It’s versatile and can reach a variety of customers.
• Coffeehouse and Bakery: Combines coffee offerings with a selection of baked goods like muffins, croissants, and pastries. Appeals to those seeking both coffee and snacks.
• Coffee and Bookstore: Integrates a coffee shop with a bookstore, creating a relaxing environment for customers to read, study, or socialize.

3. Develop Your Coffee Shop Business Plan

One of the most important steps in starting a coffee shop is to develop your business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.

To enhance your planning process, incorporating insights from a  sample coffee shop business plan  can be beneficial. This can provide you with a clearer perspective on industry standards and effective strategies, helping to solidify your own business approach.

Your business plan should include the following sections:

• Executive Summary: This section should summarize your entire business plan so readers can quickly understand the key details of your coffee shop.
• Company Overview: This section tells the reader about the history of your coffee shop and what type of coffee shop you operate. For example, are you a traditional coffee shop, espresso coffee shop, or coffee and bookstore business.
• Industry Analysis: Here you will document key information about the coffee shop industry. Conduct market research and document how big the industry is and what trends are affecting it.
• Customer Analysis: In this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing products or services like the ones you will offer?
• Competitive Analysis: Here you will document the key direct and indirect competitors you will face and how you will build a competitive advantage.
• Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
• Product: Determine and document what products/services you will offer
• Prices: Document the prices of your products/services
• Place: Where will your business be located and how will that location help you increase sales?
• Promotions: What promotional methods will you use to attract customers to your coffee shop? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
• Operations Plan – Determine the key processes you will need to run your day-to-day operations. Determine your staffing needs. Create a projected growth timeline showing the milestones you hope to achieve in the coming years.
• Management Team – this section details the background of your company’s management team.
• Financial Plan – finally, the financial plan answers questions including the following:
• What startup costs will you incur?
• How will your coffee shop make money?
• What are your projected sales and expenses for the next five years?
• Do you need to raise funding to launch your business?

Finish Your Business Plan Today!

4. choose the legal structure for your coffee shop business.

Next you need to choose a legal structure for your coffee shop and register it and your business name with the Secretary of State in each state where you operate your business.

Below are the five most common legal structures:

1) Sole proprietorship

A sole proprietorship is a business entity in which the owner of the coffee shop and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.

2) Partnerships

A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a coffee shop together. The partners share in the profits and losses of the business. The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.

3) Limited Liability Company (LLC)

A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a coffee shop include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.

4) C Corporation

A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a coffee shop is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.

5) S Corporation

An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.

Once you register your coffee shop, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.

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5. Secure Startup Funding for Your Coffee Shop Business (If Needed)

In developing your coffee shop business plan, you might have determined that you need to raise funding to launch your business.

If so, the main sources of funding for a coffee shop to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a coffee shop that they believe has high potential for growth.  

6. Secure a Location for Your Business

Finding the right space for your coffee shop is crucial to its success. When considering potential locations, take the following factors into account:

• Foot Traffic: Assess the volume of foot traffic in the area. A location with high foot traffic, such as a busy street or near a transit station, can attract more customers.
• Proximity to Other Businesses: Consider nearby businesses, offices, schools, and residential areas. Being close to complementary businesses, like bookstores or boutiques, can help drive traffic to your coffee shop.
• Competition: Research existing coffee shops and cafes in the vicinity. Determine if there is room in the market for your coffee shop concept and whether you can differentiate yourself.
• Visibility and Signage: Ensure your coffee shop is visible from the street. Effective signage can attract passersby and make it easier for customers to find you.
• Parking Availability: Assess the availability of parking for your customers. Having nearby parking options can be a significant advantage, especially in areas with limited street parking.

7. Register Your Coffee Shop Business with the IRS

Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).

Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.

Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.  

8. Open a Business Bank Account

It is important to establish a bank account in your coffee shop’s name. This process is fairly simple and involves the following steps:

• Identify and contact the bank you want to use
• Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
• Complete the bank’s application form and provide all relevant information
• Meet with a banker to discuss your business needs and establish a relationship with them

9. Get a Business Credit Card

You should get a business credit card for your coffee shop to help you separate personal and business expenses.

You can either apply for a business credit card through your bank or apply for one through a credit card company.

When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.

Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.  

10. Get the Required Business Licenses and Permits

Starting a coffee shop involves obtaining various licenses and permits to operate legally and serve food and beverages. The specific requirements can vary depending on your location and the scope of your coffee shop, but here are common licenses and permits you may need:

• Business License: Obtain a general business license from your city or county government to legally operate any type of business, including a coffee shop.
• Food Service Permit: A food service permit, also known as a food handler’s permit or food establishment permit, is typically required for preparing and serving food and beverages to the public.
• Health Department Permit: Comply with local health department regulations by obtaining a permit that ensures your coffee shop meets food safety and sanitation standards.
• Zoning Approval: Verify that your chosen location is properly zoned for a coffee shop or restaurant business. Check with your local zoning department for compliance.
• Signage Permit: If you plan to display signs or banners advertising your coffee shop, you may need a signage permit from your local government.
• Outdoor Seating Permit (if offering outdoor seating): If you plan to have outdoor seating on a sidewalk or patio, obtain a permit to comply with local regulations.
• Sidewalk Cafe Permit (if applicable): Some areas require a separate permit for sidewalk cafes or outdoor seating.
• Fire Department Permit: If your coffee shop uses open flames (e.g., candles), you may need a fire department permit to ensure safety compliance.

Depending on the type of coffee shop you launch, you will have to obtain the necessary state, county and/or city licenses.  

11. Get Business Insurance for Your Coffee Shop Business

Other business insurance policies that you should consider for your coffee shop include:

• General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
• Product Liability Insurance: If your coffee shop sells food items or products, consider product liability insurance to protect against claims related to foodborne illnesses or product defects.
• Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
• Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
• Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
• Professional liability insurance: This protects your business against claims of professional negligence.

Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.  

12. Buy or Lease the Right Coffee Shop Business Equipment

To run a coffee shop successfully, you’ll need a variety of equipment to prepare and serve coffee and related products.

Here’s a list of essential equipment for your coffee shop:

• Espresso Machine: This is the heart of your coffee shop. Choose a high-quality espresso machine to make espresso shots and espresso-based drinks like lattes, cappuccinos, and Americanos.
• Coffee Grinder: Invest in a burr grinder to ensure consistency in coffee particle size for espresso and drip coffee. Consider having a separate grinder for decaffeinated coffee.
• Coffee Brewers: Choose coffee brewers suitable for your desired coffee offerings, such as pour-over coffee makers, drip brewers, or batch brewers for large quantities.
• Steam Wand: Essential for frothing milk for lattes and cappuccinos. Espresso machines typically come with built-in steam wands.
• Coffee Beans Storage: Use airtight containers to store coffee beans and keep them fresh. Consider clear containers to showcase your coffee beans.
• Coffee Filters: Stock a supply of appropriate coffee filters for your brewing equipment, whether it’s drip, pour-over, or a specific brewing method.
• Water Filtration System: Ensure your water is of high quality and free from impurities that can affect the taste of your coffee.
• Refrigeration Units: Invest in refrigerators for storing milk, creamers, syrups, and other perishable coffee shop items. Consider separate units for dairy and non-dairy options.
• Ice Machine: If you offer iced coffee or blended beverages, you’ll need a reliable ice machine.
• Blenders: Blenders are necessary for making smoothies, frappes, and other blended drinks.

13. Develop Your Coffee Shop Business Marketing Materials

Marketing materials will be required to attract and retain customers to your coffee shop.

The key marketing materials you will need are as follows:

• Logo: Spend some time developing a good logo for your coffee shop. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
• Website: Likewise, a professional coffee shop website provides potential customers with information about the products and/or services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
• Social Media Accounts: Establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn, and/or other social media networks will help customers and others find and interact with your coffee shop.

14. Purchase and Setup the Software Needed to Run Your Coffee Shop Business

Running a coffee shop efficiently and effectively often involves using various software tools and platforms to manage orders, inventory, customer relationships, and finances.

Here are some essential software types for your coffee shop:

• Point of Sale (POS) System: A reliable POS system is essential for managing customer orders, processing payments, and tracking sales. Modern POS systems may also include inventory management, customer loyalty programs, and reporting features.
• Inventory Management Software: Inventory management software helps you track coffee beans, supplies, and food items in real-time. It can optimize inventory levels, generate purchase orders, and minimize waste.
• Accounting Software: Use accounting software like QuickBooks or Xero to manage your coffee shop’s finances, including payroll, expenses, and revenue tracking.
• Employee Scheduling Software: Employee scheduling software simplifies the process of creating staff schedules, managing shift changes, and tracking labor costs.
• Customer Relationship Management (CRM) Software: CRM software helps you build and maintain customer relationships by tracking customer preferences, sending marketing emails, and managing loyalty programs.
• Online Ordering and Delivery Software: If you offer online ordering and delivery services, use software or platforms to manage orders, track delivery routes, and process payments.

Choose software that aligns with your coffee shop’s specific needs, budget, and operational requirements. Many software options offer free trials or have different pricing plans, so you can explore and select the ones that best suit your coffee shop’s requirements.  

15. Open for Business

You are now ready to open your coffee shop. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.  

The Coffee Shop industry has grown at a rate of 4.3% over the past five years. The industry’s 74,267 establishments are expected to collectively bring in $39.4 billion this year.

What are the Key Segments of the Coffee Shop Industry?

Sales in the Coffee Shop industry are dominated by coffee beverages. At over half of industry revenue, this is the largest product segment. Other beverages and food items make up another 45% of revenue, and other items such as mugs and packaged coffee round out the remainder of industry revenue.

What External Factors affect the Coffee Shop Industry?

A number of factors affect the performance of the Coffee Shop industry. These drivers include:

Consumer spending – Like any business in the food service industry, coffee shops depend on consumers’ willingness to spend discretionary cash. As such, times of economic growth tend to benefit the industry.

Healthy eating index – Consumers are becoming more aware of the health issues associated with a poor diet. Therefore, coffee shops that offer healthier alternatives alongside other menu items will benefit.

Per capita coffee consumption – Coffee shops depend on coffee drinkers. Per capita coffee consumption in the US has remained fairly steady over the past five years, and is expected to rise slightly in the next five years.

Who are the Key Competitors in the Coffee Shop Industry?

Starbucks leads the Coffee Shop industry, with a 39.8% market share. In second place, Dunkin’ Brands has captured a 21.9% market share.

What are the Key Customer Segments in the Coffee Shop Industry?

The key customer segments in the Coffee Shop industry are Households with the highest income quintile and Households in the three middle income quintiles (>50%)

Purchases – The greatest expense for Coffee Shops is the purchase of food and beverages, and account for over 1/3 of revenue.

Wages – Wages are the second-largest expense for the industry. This is due in large part to the labor-intensive nature of the business.

Other expenses include equipment depreciation, rent, advertising, and sometimes franchise royalties.

One-time costs:

• Lease deposit
• Building upgrade
• Equipment purchase – including espresso machine, brewing equipment, refrigerator, POS system, etc.
• Permits and licenses
• Starting inventory

Ongoing costs:

• Equipment maintenance
• Inventory replacement
• Utilities – including wireless internet

Coffee Shop Business Plan Example PDF

Download our coffee shop business plan pdf here. This is a free coffee shop business plan example to help you get started on your own coffee shop plan.  

Additional resources in the Coffee Shop Industry

For additional information on the Coffee Shop market, consider these industry resources:

• National Restaurant Association:  www.restaurant.org
• National Coffee Association USA:  www.ncausa.org
• US Bureau of Labor Statistics:  www.bls.gov
• Specialty Coffee Association of America:  www.scaa.org

How to Finish Your Coffee Business Plan in 1 Day!

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Other Helpful Business Plan Articles & Templates

• Business Ideas

Last Updated: March 27, 2024, 1:22 pm by TRUiC Team

How to Start a Coffee Shop Business

Starting a coffee shop, or any other type of coffee business is a great way to earn a living in an interesting industry while also actively participating in your surrounding community.

The three main ways most entrepreneurs start coffee shops are:

• Starting a coffee shop business from scratch
• Opening a coffee shop franchise
• Buying an existing coffee shop business

Inspired by coffee professionals, our 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.

Steps to Start a Coffee Shop Business

Step one: research and make a coffee shop business plan.

A strong coffee shop business plan  is a good first step towards building a profitable company. A business plan should have enough structure to give you firm footing, but enough flexibility to allow for growth as it is an ever-changing document. You'll also want to know the type of coffee shop business to open, like a traditional coffee shop , a coffee roaster , a mobile coffee cart , or other types of businesses, as well as how much everything will cost to start .

Also important to this planning stage is how to do research and find connections in the industry. Networking will always get you further than some Google searches when it comes to valuable information that will help you succeed. The next things we discuss are the costs to start your business and what essential items go into your budget. We wrap it up with a resource for starting your business plan.

Recommended:  Learn all about Planning a Coffee Shop Business   [Part 1]  in our in-depth guide.

Step 2: Find a Target Market and Define Brand

The next step in starting your coffee business is developing your marketing and brand strategies . In this guide, we focus on who makes your business successful: your customers and yourself. Your customers should be at the heart of your marketing strategy , especially because your business will bring in different types of customers. Ask yourself what they need and desire from your establishment. 

Categorize your customers into specific target markets. Do you operate your business near a university? Expect students wanting a place to study or socialize. Do you operate in a residential area? Parents might want to stop in for a quick coffee on their morning route. 

When you think of these people as you develop a marketing strategy, think of how best to reach out to them. As helpful, successful coffee owners discuss what worked for their marketing, they highlight the importance of creating engaging social media for your business.   

Developing a brand strategy involves thinking of yourself next. How can your unique story give meaning to your brand?  

You can’t have a brand without the right equipment to make your business a success. That’s why we asked our coffee entrepreneurs about how to source products and equipment. Again, they emphasized how important it is to connect with people in this industry. 

Recommended:  Learn all about Developing a Coffee Shop Business   [Part 2]  in our in-depth guide.

Step 3: Form the Business And Launch

This is the guide that will actually put what you're doing into a business structure , with all the permissions it needs to do business. With our resources on how to start an LLC , and other topics like  you can easily move forward into the next stages of opening your business.

Learn how to pick a great location by listening to the success stories of professionals in our video. One of the most beneficial things you can do is choose a convenient spot where the surrounding tenants bring in a lot of traffic. 

Read our guide on the best Point-of-Sale (POS) systems . Cash registers are a thing of the past. Most shops have smart POS systems that make it easy for you to keep track of inventory and sales from the comfort of your home. Our guide covers various factors to consider while making a choice on POS systems. 

Just as important as picking a good location is making sure that space has everything it needs to support your business, like the right amount of electrical power, for example.

You'll learn that you need to put in a great deal of work in order to get a turnout for your opening day. Part of making that opening day a success is to hire and train the right kind of staff. 

You want your customers to feel the culture of your business right away, and the staff you hire contribute to that atmosphere. Learn what coffee entrepreneurs think are the best traits to look for in a new hire. Any skill can be learned; personalities make the culture of your business thrive. 

Recommended:  Learn all about Opening a Coffee Shop Business  [Part 3]  in our in-depth guide.

Step 4: Take Care Of Day-to-Day Operations

Ever wonder what it looks like to run a coffee business day-to-day? It includes a lot of work hours. If you want your business to be popular, you need to commit. 

All of the technology and equipment your business uses will likely need regular maintenance in order to keep your sales flowing. This means you’re going to need to be ready for problems on a daily basis. Watch our guide to listen to how coffee entrepreneurs put themselves in the right mindset for being an efficient problem-solver. 

You’ll also learn some tips for balancing work and play as they try to set a healthy example for staff. As busy as you’ll be owning a business, you (and your hardworking employees) should take the time to relax. Since you’re probably going to be on your feet a lot, it’s important to do things like stretching or yoga so you can be your best self every day.

Recommended:  Learn all about Operating a Coffee Shop Business  [Part 4]  in our in-depth guide.

Step 5: Think About How To Grow

The final part of this guide deals with what happens after you get your footing in running your business. 

You could take your business in any direction. Before you think of growing, consider how well your current business is performing. Does every little thing feel right? Do you have a high-quality team? 

After thinking it over, you could expand your product lines, get more space, or even grow into a franchise. But don’t take on too much at once. It all depends on what you want your business to be. 

Coffee experts advise entrepreneurs to stay consistent with their original purpose and brand. Other than that, you need to put thought into the future and what your cash flow will be like down the road. Financial changes are likely and you don’t want to be caught off guard. 

Watch this guide to see the importance that coffee experts place on listening to customers in order to expand their community. Even competition can be a part of that community if you have a positive attitude.

Recommended:  Learn all about Growing a Coffee Shop Business  [Part 5]  in our in-depth guide.

TRUiC presents “Starting a Coffee Shop Business”: A Documentary Series

Starting a Coffee Business is a five part video and written guide series about planning , developing , opening , operating , and growing a coffee shop or brand.

Our video guides feature advice and personal stories from these Michigan coffee companies & experts :

• John Roos, RoosRoast
• Maliesha Pullano, Mamaleelu Cold Brew
• Marcus Goller, Brighton Coffeehouse and Theater
• Lisa Bee, Sweetwaters Coffee & Tea
• Jess Harmon, Coffee Expert

See the full Starting a Coffee Shop Business Playlist to watch all of the videos.

Subscribe to our YouTube channel

How Much Does it Cost to Start a Coffee Shop?

The cost of starting a coffee shop depends on a few variables like your location, size, and what type of shop you’d like to open. Generally, a coffee shop could cost anywhere from $80,000 to $250,000.

Recommended: Read our full How Much Does it Cost to Start a Coffee Shop guide.

Starting Costs

If you’re starting a business from scratch, a lot of your money will be used on a location and all the necessary equipment. Thankfully, we have a resource to help you sort through the required equipment for starting a coffee business. 

Not only do you have to pay the rent on your new location, but you also have to keep in mind any repairs that need to be made or building codes that need to be addressed.

Franchise Costs

The first thing you’ll need if you want to operate a franchise business is a franchise fee, which ranges anywhere from $10,000 - $50,000 or more depending on the franchise. 

Franchisees usually pay an ongoing franchise fee or royalty. This is usually a percentage of the gross revenue. The average royalty percentage is 5 to 6 percent, but this can vary.

The royalty could also be a fixed amount no matter the revenue.  

Marketing fees are likely to be another cost if you’re a franchise. Oftentimes there is an advertising or marketing fund that every franchise in the region or country contributes to. This fee will also be either a fixed amount or percentage, likely in the 1-4 percent range. 

Another possible cost is for products or services that the franchisor requires. 

If this sounds like a good idea for you, take a look at our Coffee Shop Franchising Guide . 

How to Hire for a Coffee Shop

You want to hire good employees for your brand-new business. We can help with that. Check out our Hiring Guide .

Coffee Shop General Manager

If you don’t want to be both the owner and the general manager, you’ll need to think carefully about who to hire for this important role. It will benefit you to look for someone who’s had a background in management and who’s had experience with keeping calm in the face of customer complaints.

Someone needs to serve the drinks. Since baristas are the face of your company, you need to hire them wisely. Look for someone who will be an engaging, friendly barista. Anyone can be trained to make coffee, but that positive attitude is hard to come by.

How to Name Your Coffee Shop

Unless you are franchising, choosing a name for your coffee shop may be the most important first step. There are many factors to consider when choosing a name. We've included some of them below:

• How do you want your coffee shop to be perceived?
• Are there specific emotions you want to elicit in your customers?
• Can you use the coffee shop location in the name?

Recommended: Use our free Coffee Shop Business Name Generator .

Different Coffee Business Ideas

Coffee roaster.

If you love high-quality roasted coffee, maybe you want to try to make it yourself. The big piece of equipment you need to make this business idea work is your coffee roaster. It’s important to research as much as possible in order to make a good choice. Getting a coffee roaster can cost as little as $400 or as much as $58,000.

Mobile Coffee Cart

A coffee cart might be a great option for you if you want a highly portable and flexible business. You need a profitable venue where there’s foot traffic in order to make this idea work, as well as a cart, which could cost up to $20,000 if it includes all of the things you would need.

Coffee Kiosk or Stand

A coffee kiosk is different than a coffee cart in that it gives you more counter and refrigeration space because it’s a more permanent structure than a cart. A kiosk would allow you to expand beyond the typical espresso bar model to include additional products. You could spend anywhere from $15,000 to $80,000 to start your kiosk.

Drive-Thru Coffee Shop

If you value a fast-paced environment and quality customer service, maybe opening a drive-thru coffee shop is the way you can show your love of coffee to the world. The price for opening a drive-thru coffee shop varies from $35,000 to $80,000.

Do you love cats too? Combine your passion for cats and coffee by starting a cat cafe, a popular concept in Asia but one that is just finding its footing here in the States. Having a cat cafe will call for additional costs than a regular cafe because of all the cat-care you’ll need to provide. You might need around $100,000 for this quirky idea.

Other Coffee Shop Business Resources

Business Insurance for Coffee Shops

Best Small Business Credit Cards for Coffee Shops

Finding the Right Equipment for Your Cafe

Coffee business skills.

• What is Third-Wave Coffee?
• Branding Your Specialty Cafe: An Introduction
• 8 Tips to Prevent a Toxic Work Environment in Your Cafe
• Tips for Managing a Coffee Shop: New Ideas for Your Cafe
• The Best Coffee Education and Certification Programs
• How to Build a Coffee Shop Employee Handbook
• Advice to Go from Barista to Coffee Shop Business Owner
• How to Introduce Third-Wave Coffee to New Customers
• How to Build Community in Your Coffee Shop
• How to Make Your Coffee Shop More Sustainable
• How to Make Your Coffee Shop More Inclusive
• How to Adjust Your Extraction to Produce the Best Espresso
• How to Cup Coffee: An Introduction
• Operating a Roastery: the Pros and Cons
• To Roast or Not To Roast: Deciding for Your Cafe
• Best Chemex Recipes for Your Coffee Shop 
• A Guide to Coffee Roast Levels
• How to Lower the Turnover Rate in Your Coffee Shop
• Best Practices for Renting an Espresso Machine
• The Best Scales, Tampers, and Kettles for Your Cafe
• Rocket Espresso Commercial Espresso Machine Review
• Best POS Systems for Coffee Shops
• The Best Commercial Coffee Grinders
• Renting vs. Buying a Commercial Espresso Machine
• Why Semi-Automatic Espresso Machines Are the Best Option
• The Best Cold Brew System for Your Cafe
• Rancilio Commercial Espresso Machine Review
• La Marzocco Commercial Espresso Machine Review
• Nuova Simonelli Commercial Espresso Machine Review
• Victoria Arduino Espresso Machine Review
• Best AeroPress Wave Recipes for Your Coffee Shop
• Best Hario V60 Coffee Dripper Recipes for Your Coffee Shop

Planning & Products

• Branded Merchandise for Your Coffee Shop
• CBD and Coffee: Combining Them at Your Cafe
• Choosing Flavors & Drink Enhancements for Your Cafe
• Choosing Manual-Brew Methods for Your Specialty Cafe
• How to Develop a Tea Menu for Your Coffee Shop
• Choosing the Right Food & Pastries for Your Specialty Cafe
• Coffee and Alcohol: Should You Serve Both at Your Cafe?
• Designing the Perfect Floor Plan for Your Cafe
• Finding the Right Location for Your Specialty Cafe
• The Importance of Coffee Shop Atmospherics
• How to Market Your Specialty Coffee Shop
• How to Start a Specialty Coffee Shop
• 7 Event Ideas for Your Coffee Shop
• Coffee Businesses You Can Start From Home
• Coffee Packaging Design Tips

Sourcing Coffee

• How to Choose a Roaster
• How to Choose a Coffee Farm/Provider
• How to Source Coffee from an Importer
• Wholesale Coffee Beans Buyers' Guide
• How to Source Coffee from Brazil
• How to Source Coffee from Colombia
• How to Source Coffee from Ethiopia
• How to Source Coffee from Indonesia
• How to Source Coffee from Kenya
• How to Source Coffee from Guatemala
• How to Source Coffee from Honduras
• How to Source Coffee from Mexico
• How to Buy Ethical Wholesale Coffee Beans

• Try it out »

The Ultimate Coffee Shop Business Plan and Template

If you are looking to write a coffee shop business plan, you have come to the right place.

A coffee shop business plan is an essential tool for coffee shop owners or people who want to open a coffee shop. A business plan will help you plan your strategy for success and act as a guide as you look to build your coffee shop.

In this article, we’ll look at why you should write a business plan for your coffee shop or cafe, as well as provide you with a sample and a template that contains inspiration for the things you should include in your coffee shop business plan.

Table of Contents

• 1 Why Write a Coffee Shop Business Plan?
• 2.1 Executive Summary
• 2.2 Company Overview
• 2.3 Market and Customer Analysis
• 2.4 Sales and Marketing Plan
• 2.5 Management Team
• 2.6 Financial Plan
• 3 Wrapping Up

Why Write a Coffee Shop Business Plan?

The basic idea behind a coffee shop is simple. The business needs to sell enough coffee products to cover costs and make a profit. However, many variables will define whether your business is successful.

A coffee shop business plan will help you plan a strategy for success. It will consider factors such as opportunities, risks, and how you will market yourself . By having a good idea of this before you start a coffee shop, you will be better placed to overcome or avoid any difficulties.

Here are some examples of how a business plan could help iron out any difficulties:

• While creating the market analysis section, you may decide that competition is too intense. If this is the case, you could look for a new area with fewer competitors or find a way to make your coffee shop business stand out.
• By creating a marketing plan before you open, you can put yourself in an excellent position to make sales from the moment you start a coffee shop.
• By creating cash flow projections, you will be able to spot any potential financial issues well before they come to light, preventing cash flow problems.

Without a business plan, you would either not know about the potential difficulties listed above, or you would be aware of them but lacking any defined strategy for overcoming them. By creating a coffee shop business plan, you can tackle issues with a clearer head.

Business plans are also essential documents if you plan to apply for funding for your coffee shop.

You’ll likely need to submit the business plan to the bank when applying for a loan, or to investors when applying for equity funding. Having a well-thought-out business plan shows you have done your market research and analyzed your idea which helps give investors an overview of the risks and potential rewards of investing.

If you are going to use your business plan to apply for funding, you’ll need to go into a little more detail about the financials of your business. This will include your income and expenses and you’ll also need to include a section that discusses how you will use the money you’re raising.

Coffee Shop Business Plan Template

A Google search will reveal differences when it comes to the exact sections you should include in your coffee shop business plan.

Nonetheless, a coffee shop business plan template will include the sections listed below. In this part of the article, we’ll go through a coffee shop business plan template and discuss what you should include in each section.

Executive Summary

The executive summary is a short overview of your coffee shop business plan. It should include all the important details about your business. When deciding what to include, think about what you would want someone to see if they told you they would only read this one section of your plan.

Open your executive summary with a statement about what your coffee shop business is all about. Talk about what it will offer that is unique and mention why you think it will be successful. Is it the only coffee house in town, for example?

Coffee shop name: AI Coffee Shop

Executive Summary:

AI Coffee will serve high-quality coffee to office workers and business people who work nearby. We will sell espresso-based drinks with a focus on providing quality at speed. We will sell coffee to take away as well as to eat in, with an indoor seating area with space for 25 customers in our coffee shop.

While there are other coffee shops in the area, we believe that there is demand for more — especially ones that focus on a high-quality product. We will also provide a light lunch menu and pastries that we believe will differentiate us from other coffee shops in the area. 

Company Overview

In the company overview section, you should include practical details about your coffee shop business. This will include:

• The structure and ownership of your coffee shop
• The staff you plan to hire and what you will pay them
• Your company’s mission statement, and startup expenses

While this may seem like a lot of work, the good news is this also serves as a way to kill two birds with one stone. As you flesh out your company’s goals & vision statements, it’s important to track this information in an internal wiki . Not only will this help your business stay true to its course, but it can also serve as a great resource for your staff.

AI Coffee will be a privately held company owned entirely by Mr Smith, who will also manage the coffee shop. We will hire two full-time employees with at least two years of barista experience, as well as four part-time employees to help during busy periods.

Startup costs for the coffee shop will be $70,000, which will be spent on rent, renovations, and purchasing equipment. The owner has put up half the money and has borrowed half from a bank. Based on annual sales of $160,000 and after costs and wages, we expect to be profitable within the second year. 

Market and Customer Analysis

In the market analysis section, you should include details about the local market. This can include information on competitors, such as other coffee shops or any fast-food joints, restaurants, or bars that you think will be competing for your coffee shop’s money.

You should also outline what makes your coffee shop business unique and why you think it can be successful despite the competition. You can also include wider information about the coffee industry.

In the customer analysis section, you need to include information about your target market. Include details on who they are and why you think they will like your coffee shop, with metrics where possible. If you performed market research before starting your coffee shop business plan, include that here.

Market Analysis

The coffee industry is expected to keep growing between 2020 and 2024 in the U.S. Research suggests that coffee is one of the most consumed beverages in the country, with the average person drinking two cups per day. We believe that this growth, plus the high volume of coffee people drink each day, makes opening a coffee shop a good business opportunity . 

Competitor Analysis

AI Coffee will be located in a vibrant district that is seeing offices open up and new companies move in. There are currently two other coffee shop competitors in the immediate area, but we believe there is room for more.

Our shop’s main advantages are that it is closer to a new office building than the other shops. We also plan to differentiate ourselves by offering a small lunch menu, unlike any of the existing coffee shops, as well as various customer loyalty schemes . 

Customer Analysis

The location of the coffee shop has high footfall, especially before and after work and during lunchtimes. The area has a high proportion of local professionals who can afford to spend money on coffee and other drinks. 

The office blocks in the immediate vicinity are home to around 2,500 people. There are also other buildings being developed nearby. The location is also close to shopping and entertainment districts. We expect to receive significant revenue from passersby, who will keep us busy during the day. 

Sales and Marketing Plan

Before you start a coffee shop, you should have a clear idea of what your business’s sales strategy will be.

Your sales strategy contains practical details on how you will handle sales. You should also include sales forecasts and how you have come up with these forecasts. In this section, you should include information about the products you will sell and your pricing strategy.

Your marketing plan will discuss the strategies you will use to get customers through the door. Discuss your budget and expected returns on investment. If you have a particularly complex marketing plan, you may want to create a separate document for this and only include the highlights in your business plan.

AI Coffee will open from 7.30 a.m. until 7.30 p.m. seven days a week. We expect the hours immediately before and after office hours, as well as between 12 p.m. and 1 p.m., to be the busiest of the day, with much of our sales being to take out. 

We will use a commercial espresso machine and we expect to be able to produce up to a maximum of 70 cups of coffee per hour, which should be sufficient during busy times. 

We will sell our espresso-based drinks and tea at between $3 and $6, depending on the drink and the size. We will sell pastries at between $2 and $5, as well as light meals at between $7 and $12. These meals will be packaged so customers can either eat them on-site or take them away. 

We expect to generate around $730 per day from food and drink sales. 

Marketing Plan

We will market our coffee shop to customers in the nearby area through display marketing in relevant locations. We will also use social media marketing to target people nearby, and we will connect with people through our social media accounts. We will use these accounts to keep customers updated with new menu items as well as offers and discounts. 

We will also create a website and an app, which we will use to run a customer loyalty scheme . We will provide the option to order coffee through the app and pick it up at the shop. We think this will appeal to busy professionals. 

Our marketing will focus on the quality of the coffee we sell, as well as the benefits of our shop to office workers ( in-app ordering ). During the week after we open, we will offer substantial discounts on coffee to attract people to our business. This offer will be central to our marketing during this period. 

We will encourage repeat customers using a loyalty scheme that will give them a free cup of coffee when they buy eight drinks.

Our marketing budget will be $500 in the first two months, but we will cut this down to around $350 a month after that. 

Operating Plan

The operating plan will include details of how you will run your coffee shop. This will include costs, as well as specifics about things like opening times, food and drink production, prices, and more.

It will also allow you to spot any potential conflicts. For example, if you plan to serve 150 office workers between 7:30 a.m. and 9 a.m., can you do it with only two members of staff or would you be better off hiring another employee?

You can also use this section to explain any licenses or certifications you need to get before you open your shop, as well as how you will train employees.

We will open from 7:30 a.m. to 7.30 p.m. We will always have at least three staff members in place to take care of making coffee, process sales, and keep the coffee shop tidy.

We will buy our coffee wholesale from a supplier that specializes in high-quality coffee. This coffee will cost $40 per five-pound bag. We will keep enough coffee in stock to last for at least one week. 

In terms of equipment, we will use a commercial grinder to grind beans before making each cup. 

We will buy pastries and light meals from a local supplier who will also take care of the packaging. We will receive a daily delivery at 7 a.m., thirty minutes before the shop opens. 

We will thoroughly clean up the shop after closing to ensure it is ready for the following day. We will build HACCP processes to stay compliant with food safety regulations. All members of staff will receive training so they know about these processes.

Management Team

In the management team section, you should include who the business owners are and who will manage your coffee shop. You should write about any experience or qualifications they have that will help make them successful.

If the owners won’t be managing the coffee shop, you should include details about who will take care of the day-to-day running of the business. In this section, include how much you will be paying each of the management team as well as how any profits will be shared amongst the owners.

The owner will also manage the coffee shop. The owner has over ten years’ experience working in coffee shops, including six years in various management positions. AI Coffee will also hire two full-time employees. These employees will have at least two years’ experience working in a coffee shop. We will pay each full-time employee $22,000 a year.

We will also hire four part-time employees with or without experience to work at weekends and provide cover during the week. We will pay these employees $10 an hour. 

Financial Plan

The final section of the coffee shop business plan is the financial plan. Here you need to go into detail about how your business will be financially successful.

Include operating costs (this includes the cost of equipment), loan repayments, cash flow and expected revenue (in the first year, especially). Also, include a balance sheet analysis that shows how much revenue you need to take in to become a profitable coffee business.

In this section, we will explain our financial plan, including costs, expected sales, and profit. We will also include a balance sheet. We believe this plan accurately illustrates why AI Coffee will be financially successful. 

ADD FINANCIALS 

Wrapping Up

That’s all for our coffee shop business plan guide. We hope that this has equipped you with enough knowledge on how to start a coffee shop and will help you with your business planning.

To find out more about getting a business up and running, check out our guides to writing a business proposal in 2019 and writing a small business marketing plan.

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• STARTUP COURSE AND DOCUMENTS

Coffee Shop Business Plan Outline: A Roadmap to Café Excellence

In today’s fast-paced world, coffee shops have become more than just places to grab a quick caffeine fix. They serve as community hubs, meeting places, and havens for individuals seeking a cozy ambiance and a delicious cup of coffee. If you’re considering starting your coffee shop, having a well-thought-out business plan must be the first thing you need to consider.

A coffee shop business plan should have an executive summary, company description, market analysis, product and services, marketing and sales strategies, organization and management structure, financial projections, operations and logistics, SWOT analysis, sustainability efforts, risk management, and an exit strategy.

In this article, I will provide you with an outline to help you kick-start your coffee shop venture.

Table of Contents

1. Executive Summary

The executive summary is a vital section of your coffee shop business plan as it provides a concise overview of your venture. It serves as a snapshot of your entire plan, offering potential investors or partners a clear understanding of your business.

In this summary, you should outline your vision, target market, unique selling proposition, and financial goals succinctly. By encapsulating these key elements, the executive summary acts as a powerful tool to grab the attention of readers, enticing them to delve deeper into your comprehensive plan and consider the potential of your coffee shop business.

Read more about: Business Plan on Coffee Cafe: Coffee Dreams to Reality

2. Company Description

In the section dedicated to describing your coffee shop concept, it is important to provide a comprehensive overview. Start by sharing the name, location, and mission statement of your coffee shop. Dive deeper into the type of coffee shop you envision, whether it’s a welcoming neighborhood café, a specialty coffee roaster focusing on single-origin beans, or a trendy espresso bar serving innovative brews. 

Emphasize what sets your coffee shop apart from competitors, such as your unique menu offerings, sustainable sourcing practices, or commitment to supporting local artisans. Additionally, discuss your strategies for delivering exceptional customer experiences, such as providing friendly and knowledgeable staff, creating an inviting ambiance, and offering personalized service that exceeds expectations.

By clearly communicating your vision and differentiation, you will pique the interest of potential investors and partners, showcasing the potential for success in the competitive coffee shop industry.

3. Market Analysis

Making a thorough market analysis is a crucial stage in creating your business plan for your coffee shop. It entails a thorough investigation of both the local coffee scene and your target demographic. You can learn a lot about the requirements, preferences, and behaviors of your customers by examining the demographic, psychographic, and geographic elements that affect their preferences.

Furthermore, assessing the competitive landscape allows you to understand existing coffee shops, their strengths, weaknesses, and market positioning. This analysis provides you with a clear understanding of the market opportunities and potential challenges you may encounter.

With this knowledge, you can make adjustments to your branding and marketing tactics to further distinguish your coffee shop and draw in your target demographic. You lay the groundwork for a successful coffee shop business that is in sync with the local coffee scene and ready for development by doing a thorough market analysis.

4. Products and Services

Describe the variety of coffee products and additional offerings you plan to provide. Discuss the sourcing of your coffee beans, whether you intend to partner with local roasters or establish direct trade relationships with coffee farmers. Highlight any unique or specialty beverages you plan to offer, such as cold brews, pour-overs, or signature blends. Additionally, outline any complementary products or services, such as pastries, sandwiches, or merchandise.

Read more about: Business Plan of Coffee Shop: Aroma and Ambition

5. Marketing and Sales Strategy

When describing the variety of coffee products and additional offerings in your coffee shop business plan, provide a comprehensive overview. Start by discussing the sourcing of your coffee beans, showcasing your commitment to quality and sustainability. You may highlight partnerships with local roasters, ensuring a focus on supporting the community and promoting local flavors. Alternatively, you might emphasize direct trade relationships with coffee farmers, emphasizing fair and ethical practices.

In addition to standard coffee options, mention any unique or specialty beverages that will set your coffee shop apart. These could include cold brews with innovative flavor profiles, meticulously brewed pour-overs showcasing the nuances of different coffee beans, or signature blends crafted exclusively for your shop.

Outline any complementary products or services that will enhance the customer experience. This may include a delectable selection of pastries made in-house or sourced from local bakeries, sandwiches crafted with fresh ingredients, or merchandise like branded mugs and apparel that customers can purchase as mementos of their visit.

6. Organization and Management

In outlining the structure of your coffee shop business, it is important to provide a clear understanding of the roles and responsibilities of key personnel. Discuss the qualifications and experience of your management team, underscoring their expertise in the café industry and their ability to drive your business forward. If you are a sole proprietor, detail your responsibilities and lay out your plans for hiring additional staff as your business grows.

Highlight the significance of training programs that will equip your team with the necessary skills to deliver exceptional service. Emphasize your commitment to fostering a positive work culture, where employees feel valued and motivated to provide outstanding customer experiences.

7. Financial Projections

When presenting your financial projections in the coffee shop business plan, it is crucial to provide a comprehensive overview of your financial expectations. Start by outlining the startup costs involved, including expenses for rent, renovation, equipment, furniture, permits, and licenses. 

Next, detail your revenue forecasts based on your target market, pricing strategy, and projected sales volume. Consider factors such as seasonality and local economic conditions that may impact your revenue streams. 

Include a detailed budget that encompasses all operating expenses, including costs for inventory, supplies, utilities, marketing and advertising, staff salaries, and insurance. This will demonstrate a clear understanding of the financial requirements of running the coffee shop on a day-to-day basis.

Consider creating a three-year projection that illustrates the growth potential of your coffee shop. This can include anticipated increases in revenue, expansion plans, and adjustments to expenses as your business matures.

Furthermore, discuss your funding requirements and potential sources of investment. If you plan to seek financing from banks or investors, highlight the expected return on investment and outline how the funds will be utilized to support the growth and success of your coffee shop.

Read more about: Business Plan of a Coffee Shop: Bean Business Blueprint

8. Operations and Logistics

When providing insights into the day-to-day operations of your coffee shop in the business plan, it is essential to cover key aspects. Begin by describing the layout and design of your space, considering factors such as seating capacity, restroom facilities, and strategic placement of equipment to optimize workflow.

Discuss your inventory management processes, highlighting how you will track stock levels, manage orders, and ensure a consistent supply of coffee beans, ingredients, and other necessary items. Mention your supplier relationships and any efforts to source high-quality products.

Outline your planned hours of operation, taking into account peak hours and potential variations based on customer demand. Address staffing requirements, detailing the number of employees needed to run your coffee shop effectively. Additionally, describe your employee scheduling approach to ensure smooth operations and adequate coverage during busy periods.

9. SWOT Analysis

Conducting a comprehensive SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis is crucial for evaluating both the internal and external factors that can impact your coffee shop business. Start by identifying your strengths, which could include aspects like a unique menu, exceptional customer service, a prime location, or a strong brand presence. These strengths differentiate your business from competitors and contribute to your competitive advantage.

Next, assess your weaknesses and areas that require improvement, such as limited parking space, lack of visibility, or a need for additional staff training. Addressing these weaknesses will help you enhance the overall efficiency and performance of your coffee shop.

Identify growth opportunities, such as expanding your product offerings, exploring new markets, or partnering with local businesses for cross-promotion. Capitalizing on these opportunities can lead to increased revenue and market share.

Finally, consider potential threats that may arise from competition, changing consumer preferences, or economic fluctuations. Analyze how these threats could impact your coffee shop and develop strategies to mitigate their impact.

10. Sustainability and Social Responsibility

In today’s coffee industry, sustainability and social responsibility play an increasingly significant role. It is crucial to address this growing importance in your coffee shop business plan. Discuss your commitment to environmentally friendly practices, such as using biodegradable cups, implementing recycling programs, or sourcing and promoting fair trade coffee.

Highlight any partnerships with local organizations or initiatives that align with your values and contribute to a sustainable coffee supply chain. Communicate your dedication to giving back to the community and fostering a positive impact through initiatives like supporting local farmers, donating a portion of profits to charitable causes, or participating in community events.

Read more about: Business Plan Mobile Coffee Truck: The Roaming Baristas

11. Risk Management

When running a coffee shop, it is essential to outline the potential risks and challenges that may arise. These can include market saturation, where competition is intense, changing consumer trends that may impact demand, rising costs of ingredients affecting profitability, or unforeseen events like natural disasters disrupting operations.

To mitigate these risks, develop contingency plans that outline steps to be taken in response to each potential challenge, ensuring business continuity. Additionally, consider obtaining comprehensive insurance coverage to safeguard your assets and investments in case of unexpected circumstances.

12. Exit Strategy

While it may appear premature, including an exit strategy in your long-term planning is essential. Outline the various options for exiting your coffee shop business, such as selling it to a new owner, considering franchising opportunities, or passing it down to a family member as a generational business.

Discuss the factors that would trigger an exit, such as retirement, changes in personal circumstances, or the achievement of specific financial goals. Additionally, detail the steps you would take to ensure a smooth transition, such as documenting standard operating procedures, maintaining accurate financial records, and establishing relationships with potential buyers or successors.

By incorporating an exit strategy into your business plan, you demonstrate foresight and preparedness for the future, enabling you to navigate potential transitions effectively and maximize the value of your coffee shop business.

Crafting a detailed coffee shop business plan is crucial for launching a successful venture in the café industry. A well-executed business plan serves as a roadmap to guide your coffee shop’s growth and prosperity. With passion, dedication, and a solid plan, you’ll be well on your way to brewing success in the world of coffee. Good luck on your coffee shop journey!

Frequently Asked Questions

Questions: How can I identify my target market for a coffee shop?

Answer: Analyze demographics such as age, gender, income level, and location. Think on psychographic elements like values, interests, and way of life. Research local coffee consumption habits and preferences

Question: What are some effective marketing strategies for a coffee shop?

Answer: Effective marketing strategies for a coffee shop include social media engagement, creating an enticing online presence, hosting events or workshops, partnering with local businesses or influencers, offering loyalty programs, providing personalized customer experiences, and leveraging community involvement through sponsorships or charity initiatives.

Question: What are some common challenges in the coffee shop industry?

Answer: It include intense competition, changing consumer preferences, rising ingredient costs, staffing and training issues, maintaining consistent quality, managing inventory effectively, coping with seasonality, keeping up with industry trends and innovation, and adapting to evolving regulations and health standards.

To learn more on how to start your own coffee shop, check out my startup documents here.

Disclaimer: The information provided by  StartMyCoffeeShop.com  (“The Site”) is for general informational purposes only. All information on the Site is provided in good faith. However, we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of any information on the Site. Under no circumstance shall we have any liability to you for any loss or damage of any kind incurred as a result of the use of the Site or Reliance on any information provided on the Site. Your use of the Site and reliance on any information on the Site is solely at your own risk. This blog post is for educational purposes only and does not constitute legal advice. Please consult a legal expert to address your specific needs. Terms and Conditions. ( https://startmycoffeeshop.com/terms-and-conditions/ )

Hi! I’m Shawn Chun

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

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

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

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

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

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

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

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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.

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How to Write a Coffee Shop Business Plan + Free Template

You are a smart entrepreneur. You don’t jump right in and open a coffee shop just because you decoded the secret of making perfect cups of steaming delicious coffee.

Instead, you wait and plan to write a unique business plan that resonates with your coffee shop’s concept.

But hey, writing a business plan is actually complex. Without any structural format or direction, you may end up making a hotchpotch of your business idea.

To ensure that your business concept translates properly into a plan, we created this step-by-step guide that will prompt you to write an insightful coffee shop business plan in great detail.

Also, get a free coffee shop business plan template that has all the relevant examples for you to get started.

So get yourself a cup of coffee and decode the secrets of writing a stellar plan in easy steps.

Let’s get started.

Key Takeaways

• Craft a compelling executive summary for your coffee shop business plan. Add key details regarding financials, marketing, business objectives, and operations to help investors evaluate your business idea.
• Conduct thorough research on the coffee shop market by analyzing the key trends, consumer preferences, and needs of your target market.
• Streamline your coffee shop operations with a detailed plan outlining the standard operating procedures of your key business processes.
• Ensure the compliance of business by acquiring essential licenses and permits.
• Design a brief sales and marketing plan to ensure that the coffee business reaches its target customer and starts making sales.
• Identify your unique selling proposition and determine your competitive edge in the market.
• Using SWOT analysis, analyze the strengths, weaknesses, opportunities, and threats of your competitors and your own business.
• Create a sample menu and determine your menu offerings by considering varying different aspects.

Why Prepare a Coffee Shop Business Plan?

A lot of variables play together to write the success story of your coffee business.

From choosing a shop location to remodeling it as per your unique concept, hiring staff, determining sales strategy, acquiring licenses and insurance, and planning operations-you need to undertake multiple activities, consecutively at a time, to start and run a coffee business.

A business plan will guide you like a map in the right direction. It will ensure that all the business objectives are achieved without breaking a compliance code.

It forces you to assess the viability of a coffee shop idea before you invest the money in it. You can strategically plan the coffee shop’s success by making detailed financial projections relating to the company’s sales, revenue, costs, and expected expenses, and cash flow.

And most important of all, a business plan will help you acquire the required funds by winning the trust of potential investors.

How to Write a Coffee Shop Business Plan: A Complete Guide

Let’s walk through the process of writing a coffee shop business plan with detailed step-by-step instructions.

1. Get a business plan template

Writing a business plan from scratch is pretty exhausting. You are likely to leave behind an important detail without any structural format.

So do yourself a favor and get a business plan template. Trust us, it’s going to make your plan writing process so much simpler.

A template helps bring clarity and focus to different sections of the plan by prompting you in specific directions. Moreover, the templates contain examples and tips specific to coffee shops making it extremely relevant for your business.

Looking for a well-structured and modern business plan template?

Well, we knew you would. Presenting the Upmetrics business plan template that can be easily customized for your unique coffee shop business. Simply download our template and modify it as per your business concept.

Need Assistance Writing a Coffee Business Plan?

Get Upmetrics’ business plan template, import data directly into the editor, and start editing using Upmetrics AI Assistant.

Start Planning Now

2. Write an executive summary

An executive summary is like a north star of your business plan. It will act as a guiding light for stakeholders to understand your journey ahead.

Investors will read the executive summary of your coffee shop business plan before even allowing you a presentation.  So definitely it needs to be compelling and converting.

Keep your executive summary concise but detailed enough that it summarizes the key points of your entire plan. Include the problems you would be solving and the solutions you have to offer. Adapt a storytelling tone and focus on highlighting the business goals, financials, objectives, and overall business strategy.

Now, move ahead and visit this part when you are done writing for the entire plan. Summarizing becomes much easier and more effective when you are aware of the entire plan’s details.

Also, two pages are more than enough for writing a capturing executive summary.

3. Conduct a competitive and market analysis

Build a strong foundation for your coffee business by diving deep into the market research of the coffee industry, competitors, target audience, market trends, and your attainable target market.

Analyze the coffee shop industry from a macro viewpoint and then gradually narrow it down to your particular market. For instance, the revenue in the US coffee market size was $85.2 billion in 2022 and is expected to grow by 3.21% between 2023-2028.

Now, identify your targeted available market (TAM) from this and analyze the growth potential of your particular coffee shop. Overall, try to show that the coffee shop business has a thriving opportunity to grow in the market.

The market analysis for a coffee shop business must include the study of the following:

Customer analysis

Customer analysis is essential to identify your target customers. Having a thorough understanding of your target market will help formulate the business and market strategies appropriate for your business.

Create the buyer persona of your ideal customer. Focus on these details to outline your ideal customer:

• Customer demographics: Age, gender, location, income, occupation, and ethnicity of the customers who will visit your coffee shop.
• Customer psychographics: Beliefs and values of your ideal customer, their interests, spending pattern, and their media consumption.

For instance, the ideal customer for Steamy Sips is 23-38 years old and works in a corporation. He/ She likes to spend money on coffee regularly and prefers fresh roasted seasonal brews, is socializing, and loves working in a cafe remotely.

Competitors analysis

After determining your target market, look around and identify your potential competitors.

Begin by identifying the top competitors of your coffee shop. This can be neighboring coffee shops, kiosks, or coffee karts that offer similar services to your business.

Now conduct a SWOT analysis of these coffee shops by analyzing their strengths and weaknesses. Also, analyze your strengths against competitors and highlight your competitive edge in the market. Be realistic with your assessment as this will form the foundation of your related business policies.

Lastly, identify if there are any stellar opportunities for you to leverage in this market.

Collect data from highly authoritative websites, data publications, and local studies specialized in the coffee industry. For instance, SBA , SCA coffee , Mintel , Business Wire , COFFEEBI , etc.

This section is your chance to prove to the potential investors that you are aware of the market challenges and there exist favorable chances for your coffee shop to thrive and grow.

4. Prepare a company overview

Just like the executive summary of your coffee shop business plan, this section includes a brief business description of your coffee shop. It offers readers a peek into your business structure, goals, mission, and company values.

Depending on your market analyses choose the type and structure of your business concept. Clearly describe whether you will start a cafe or coffee shop, coffee kart, coffee bar, or coffee house and whether the business structure will be LLC, partnership, or sole proprietorship.

Further include your mission statement, coffee shop objectives, and goals to complete the company overview section.

Mission statement: A mission statement highlights the purpose of your coffee shop’s existence and its long-term objective.

For instance, Steaming Sips’ mission is to cultivate a culture of freshly roasted coffee, serving a welcoming space for young individuals to connect, create, and unwind with every cup of our brews.

Coffee shop objectives: In this part, highlight your business objectives in terms of milestones, growth goals, revenue goals, sales numbers, etc.

For instance, Steaming Sips aims to open 3 branches across San Fransisco by the end of 2025.

5. Present your sample menu

The market research earlier helped you understand your potential audience in great detail. Now, it’s time to decide what to offer on your menu.

A sample menu is an important component of your coffee shop business plan. With a menu, investors will know what exactly you will be serving and what makes you different.

A coffee shop can stand apart selling just coffee drinks. However, there are many coffee shops that sell coffee and food products together. Depending on your coffee shop concept and the target market, decide the menu items.

Here are a few things to consider while making your menu and establishing yourself as a specialty coffee shop.

• Different types of coffee drinks that suit your customer’s taste. For ex. filtered coffee, frappuccino, brewed coffee, hot coffee, etc.
• The type of coffee beans to produce high-quality coffee, e.g. organic coffee beans.
• Different types of coffee roasts, e.g. dark roast, medium roast, light roast.
• Different types of milk, e.g. plant-based milk options and dairy milk.
• Seasonal coffee specialties.

Strategically place the items in your menu and add the prices alongside. Incorporate branding elements of your coffee shop in the menu as well.

6. Coffee shop design and layout

Till now, the coffee shop idea was just a business concept, jumbled randomly across your mind. Writing a business plan will help you to sort those ideas, one section at a time.

The design and layout section helps potential investors visualize the appearance of your coffee shop. It is your chance to help them understand your coffee shop concept and the aspects that set you apart from other coffee shops.

Begin by highlighting your coffee shop location in this section. Briefly explain how the location is suitable for your potential customers.

Also, present the moodboard of your coffee shop and highlight the branding and visual elements of its design.

Overall, explain how you will create a welcoming atmosphere for your customers by incorporating design and decor elements in your shop.

7. Prepare a coffee shop marketing plan

Now that you have the concept, design, and menu for a coffee shop, it’s time to work on its marketing plan. The coffee market is intensely competitive and only a solid marketing action plan can differentiate your business from other coffee shops.

Using your market research, identify the best marketing strategy for your business. Ideally, coffee shops build a cohesive brand image using a mix of digital marketing practices.

For instance, a website can be used to build a robust web image, while social media can be used to connect with your target audience organically. Similarly, your coffee shop emails can focus on special offers and promotional invites while paid ads can help you target the wider audience.

In this section, you also highlight various promotional activities for your cafe such as karaoke evenings, art workshops, musical nights, happy coffee hours, etc.

Overall a comprehensive marketing plan must answer the following questions:

• How will you draw coffee enthusiasts to your coffee shop?
• What will be the pricing strategy of your coffee shop?
• What will be your marketing budget?
• What marketing channels will you use and who will undertake the marketing activities?
• Will there be any promotional events at the cafe? If so, what type of events?

8. Introduce your management team

In this section, you will introduce the management team that will ensure the smooth functioning of your coffee shop business.

Begin by introducing the coffee shop owners and their relevant experience in the coffee market. Also, clarify if you will work both as owner and manager or hire a coffee shop manager to look after the day-to-day operations.

If you are going to hire a manager, introduce them and their key responsibilities in the section. Offer a brief description of their skills, experience, and expertise that can help your coffee shop business.

Overall, this section shows the potential investors that you have all the right people in a team to drive your coffee shop toward success.

9. Outline your operational plan

This section of a coffee plan offers brief details of everyday business processes that will guide you to build and run a successful coffee shop.

An operations plan includes a lot of details, answering some of these prominent questions.

• Inventory and stock management: How will you manage and track the inventory? Who will be responsible for stock management? How often would you restock the inventory?
• Production: Who will develop the recipes for coffee beverages? Will there be recipe cost cards for coffee preparation? Will there be kitchen staff working with food orders or will you outsource that?
• Coffee shop equipment: What equipment will you buy for the coffee shop, i.e. espresso machine, coffee grinders, etc? Will that be a new purchase or a second-hand one? How much will the equipment cost?
• Management: Who will serve the food and coffee in the shop? Who will look after customer complaints? What is the conflict resolution system at your coffee shop?
• Technology: What technologies will you use at your coffee shop? Which payment and POS system will you use? Will there be an ordering kiosk?

A well-planned operations plan demonstrates your ability to run a coffee shop to your readers. So keep it detailed and revamp it as and when needed.

10. Create a Financial Plan

A financial plan helps assess the viability of your business idea by evaluating its financial aspects. It’s an important part of your coffee shop business plan whether you want to seek funding or not.

A well-built financial plan is presented in numbers, graphs, and charts and includes the following:

• Evaluation of startup costs: Identify the startup costs of your proposed coffee shop. Take into account the costs for lease rental, licenses, equipment, remodeling as well as operating expenses for the first few months.
• Sales forecasts and pricing: Determine the drink sales for your coffee shop and your pricing structure by conducting market research.
• Operating costs: Your financial projections should include a thorough calculation of operating expenses to run a coffee shop business.
• Balance sheet: A balance sheet will help investors assess your assets and liabilities and the liquidity of your business.
• Cash flow statement: Make cash flow projections and demonstrate the inward and outward flow of money in the business.
• Income statement: The figures in this sheet help evaluate the profitability of your business
• Break-even analysis: The calculations here will help determine the sales level after which your coffee shop will start making a profit.

Now, making all these financial projections and calculations is a bit taxing. Not only that, you will have to create visual reports to make the financial section appealing and insightful.

Well, let’s make things easier with our financial forecasting tool. Simply enter your assumptions in a tab and our tool will generate important key reports for your business.

Don’t stress. You don’t need to worry about the visual reports anymore. Go, check your dashboard. You will have all the visual reports ready to be added to your financial plan.

And that’s your detailed guide to writing your coffee shop business plan. Now, let’s check the latest industry trends ruling the coffee shop market. 

Coffee Shop Industry Highlights 2023

Let’s dive further deep into market analysis with these latest industry trends in the coffee shop market:

• Coffee shop industry: The US coffee shop industry grew from $36 billion to 45.8 billion dollars between 2020-2022.
• Number of coffee shops: According to Statista , in 2022 there were a total of 38.4 thousand coffee shops in the US.
• Coffee drinkers: A performed market research indicates that the top coffee consumers aren’t youngsters, but seniors. Nearly, 70% of seniors consume coffee regularly.
• Employment growth rate: The total number of people employees in the coffee shop industry in th US increased on average by 4.9% between 2018-2023.
• Specialty coffee market: According to Grandview research , the US specialty coffee market is expected to grow at 10.9% CAGR between 2023-2030.
• Price per cup: According to Business Insider , the average price per coffee cup in the coffee shop is almost $5, making it an affordable luxury for people.

Related Coffee Shop Resources

• Coffee Shop Operational Plan
• Coffee Shop Financial Plan
• Coffee Shop Marketing Plan
• Latest Coffee Shop Business Trends

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Need help writing your business plan? Let’s ease your plan writing process with our coffee shop business plan pdf . Download it for free and customize it as per your needs.

This modern intuitive template offers a step-by-step guide that will help you write a comprehensive and actionable business plan. It’s designed specifically for coffee shop businesses and includes examples relevant to your industry.

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Whether you are starting your own coffee shop or taking over an existing coffee business, Upmetrics’ insightful guides and resources will help you craft a compelling business plan in easy steps.

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Frequently asked questions, what are the key components of a successful coffee shop business plan.

The key elements of a coffee shop business plan are

• Executive summary
• Business overview
• Coffee industry and market analysis
• Sample menu
• Coffee shop design and layout
• Marketing and sales plan
• Key management team
• Operations plan
• Financial plan

Should we consider franchising our coffee shop?

Yes, you can. Franchising is a proven way of increasing the reach and profitability of your coffee business. Moreover, it’s easy to scale your business through a franchise business model.

What is a traditional business plan for a coffee shop?

A traditional plan is very similar to modern business plans. It includes a summary of the company’s goals, objectives, business values, marketing objectives, and financial plan. The modern plans, however, are intuitively designed to be more suited to investors interest.

Do I need a business plan to secure funding for my coffee shop?

Yes. Investors and investing firms will ask for a business plan before giving you a chance to present the coffee shop concept. By studying your plan, they will gauge the viability of your coffee business, and depending on the analysis they will decide whether to invest or not.

What should I include in the financial projections section of my business plan?

The financial projections of your coffee shop plan must include the following:

• Sales forecast
• Startup cost estimates
• Operating costs
• Balance sheet
• Income statement
• Cash flow statement
• Break-even analysis

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Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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Want to Start a Coffee Shop…

But Don't Know Where To Start?

Let's Get Your Coffee Business Started

If you want to learn how to open a coffee shop, you're in the right place. Since 2013, we've been a resource for thousands of aspiring coffee entrepreneurs in the United States and worldwide. We value the trust we have earned with our customers.

It's the perfect time to start planning your coffee shop business.

From big cities to small towns everywhere, we've seen strong growth in the demand for specialty coffee. This means that opening a coffee business can be a profitable venture when it is planned right.

Unfortunately, many aspiring coffee shop owners don’t know where or how to open a coffee shop. We want to help change this.

Up until now, an aspiring coffee shop owner generally had three options to learn how to open a coffee shop :

• Buy an overpriced book (and not learn much).
• Hire an expensive business consultant.
• Learn as they go with little help.

Unfortunately, all of these options for learning how to open a coffee shop fall short. They either provide you with a very narrow window of success, or they set you up for spending too much money. In the end, most aspiring coffee shop owners overspend and waste tons of time.

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There has never been a better online resource to learn how to open a coffee shop business. So join  the thousands of motivated people who have already decided to start their coffee shop planning with us!

Planning Your Coffee Shop Startups Success

These core coffee shop planning elements include:

Developing your coffee business concept

Writing your coffee shop business plan and coffee shop budget, understanding the potential pitfalls and common mistakes, save money and time with expert recommendations.

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Start a Coffee Shop With Less Money

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When you purchase our Complete   Coffee Shop Startup Kit , you will receive a collection of real and tested resources. They are all designed to help answer the most critical questions about opening a coffee shop successfully.

By utilizing the knowledge from real-world coffee shop owners , you'll gain the valuable resources you need to plan, start, and launch your own coffee business.

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When you invest in our Complete Coffee Shop Startups Kit, y ou’ll hear directly from coffee business owners and experts. They'll give you an unprecedented look at how they have started their own coffee business. You will better understand the steps needed to start a coffee shop successfully. 

By the end of our streaming audio series…  You’ll better understand how to start a coffee shop business successfully. By hearing in-depth interviews with real-world coffee shop owners, you’ll know what mistakes are often made – and how to avoid them.  

There are no   gimmicks , just real advice from coffee shop business experts and coffee shop owners. Taken together with our coffee business guide, you will have the tools you need to plan your own coffee business.

Photo credit: Alfie Price

Most Coffee Shops Don't Fail

Because of Their Coffee…

Being a coffee shop owner is hard work. Beyond preparing amazing coffee, you need to think about managing people and inventory, understanding budgets, hiring and firing employees, and training baristas .

You'll need to invest in coffee equipment , understand your property lease, and prepare for when things go wrong. And you will need to be smart about your price points and managing customers. You must avoid making the biggest, most common mistakes that bleed money and could doom your business.

Open Your Coffee Shop Successfully

The best-pulled espresso shot or latte art will never be able to save a poorly planned and operated coffee business.

Don’t let your coffee business steam out like that!

By now, you know better.

You know that you can’t afford to cut corners on your coffee shop business plan. You also know that the most successful independent coffee shops develop their branding, build strong community partnerships, and always have their eye on their budget.

But if you didn’t know all that, you do now. Knowledge is power. And we believe that we can help you use it to start a successful coffee shop.

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How to Launch a Cafe Business

So, you’ve got this dream to launch a cafe business. A beautiful haven where people can connect, recharge, or even work while enjoying aromatic brews and delightful treats.

The idea excites you, but where do you start? Before you roll your sleeves and start steaming milk, let’s lay down the groundwork.

First, you’ll need a clear vision for your cafe, why do you want to launch a cafe? Who are your target customers? Launching a cafe also requires careful planning, attention to detail, and a solid checklist to ensure nothing slips through the cracks.

Then there’s the big question about funding. Starting a cafe requires a significant upfront investment, with the average startup cost estimated to be $19,815 .

Sound overwhelming already, right? But don’t give up on your cafe dream yet, because the journey is just as rewarding and fulfilling as the destination. Allow us to walk you through the essential steps to make that dream a reality.

1. Visualize your mission

Visualizing your cafe’s mission and vision is like laying the foundation for a sturdy building. It provides a clear direction and purpose that guides every decision you make along the way.

To ensure relevance, your mission and vision statement should ideally build on and align with your unique selling points (USP). Check out Java Whisker’s (the London cat cafe), which highlights their USP–cats in a cafe!

To begin mapping out your cafe’s unique vision and mission, start by asking yourself some fundamental questions:

• What inspires you? Think about what inspired you to launch your cafe in the first place. Is it a love for coffee and food? A desire to create a welcoming space for your community?
• Who do you want to serve? Define your target audience. Are they busy professionals looking for a quick caffeine fix? Students seeking a cozy study spot? This will help you tailor your mission and vision to meet their needs and desires.
• What Sets You Apart? Take a look at the competitive landscape – what makes your cafe unique? Is it your commitment to sustainability and ethically sourced ingredients? Your focus on creating a warm and relaxing atmosphere?

Once you’ve answered these questions, it’s time to craft your mission and vision statements. Keep them concise, authentic, and compelling. Also, revisit and revise them as your cafe evolves and grows.

2. Comprehensive market research

Before you launch a cafe business, or any other business for that matter be it a call center business or a social media management business, you need to understand the landscape in which you’ll be operating.

Start by getting to know your target customers. Who are they? What are their demographics, preferences, and purchasing habits? Conduct surveys, interviews, and focus groups to gather insights directly from your target audience. The more you understand their needs and desires, the better equipped you’ll be to tailor your offerings to meet them.

Next, take a closer look at the competition. What are their strengths, weaknesses, and USPs? Visit their establishments, sample their products, and observe their operations firsthand. You can learn plenty from their successes and failures.

Additionally, stay up-to-date on the latest trends and developments. Are specialty coffee drinks gaining popularity? Is there a growing demand for plant-based options?

You identify these trends by attending food industry events, reading industry reports , or following experts. You can also join relevant online communities like Reddit’s r/coffee, which currently has over a million members.

Last but not least, crunch the numbers to assess the financial viability of your cafe concept. Calculate startup costs, projected revenues, and operating expenses to determine whether your business idea is financially feasible.

3. Finalize the location

Choosing the perfect location for your cafe is not just about finding a space that looks good on paper. It’s about finding a spot that aligns with your vision, attracts your target audience, and sets you up for success.

So, before you start scouting locations, revisit the target audience insights you got from your research above. Then, go ahead and find potential locations in your target area. Assess factors like foot traffic, visibility, accessibility, and proximity to complementary businesses like galleries or theaters.

You can use location intelligence tools like SafeGraph and Placer.ai to help you find ideal locations.

Once you have a short list of locations, carefully review the lease terms and costs associated with the space like rent, utilities, and maintenance fees. Then choose the physical space that aligns with your long-term business goals .

Keep in mind choosing the right location for your cafe is as much about intuition as it is about analysis. So trust your instincts and go with your gut feeling. If a location feels right, it probably is.

4. Chalk a business plan

You can’t launch a successful cafe without a great business plan. The key components of a great business plan include:

• Executive Summary : Summarize the key highlights of your business plan, including your cafe concept, ideal customer base, unique selling proposition, and financial projections.
• Business Description : Provide a detailed overview of your cafe business, including its name, location, concept, and the products you will offer.
• Marketing Plan : Outline your marketing strategy to attract customers, build brand awareness, and drive sales. This may include online strategies like email marketing campaigns and SEO to offline ones like promotions at industry events and billboards.
• Operations Plan : Detail the day-to-day operations of your cafe, such as staffing requirements, hours of operation, inventory management, equipment needs, and supplier relationships.
• Management and Organization : Introduce the key members of your management team and describe their roles, responsibilities, and qualifications.
• Financial Plan : Have a comprehensive financial plan that includes startup costs, operating costs, revenue projections, and cash flow forecasts.

If you’re seeking a business loan for your cafe business, specify the amount of funding you need and the terms of the investment.

Including these key details in your business plan will provide you and your cafe stakeholders with a thorough understanding of your cafe business and its success potential.

5. Acquire licenses

Before you can open your cafe doors to the public, you’ll need the right licenses and permits to operate safely as a legal entity.

Start by getting a business license from your city or county, which will ensure you comply with any legal requirements and local regulations. It will also guide you on what licenses you require.

Some of the obvious licenses and permits include a food service permit, liquor license, building health permit, live entertainment license, signage permit, and pavement license. If you’re in the US you must also obtain an Employer Identification Number (EIN) from the IRS to ensure tax compliance.

While it does not necessarily fall under the licenses you need to launch a cafe business, insurance is key. It will protect you, the business owner, in case of accidents that lead to property damage or injuries. Key insurance policies include general liability insurance, workers’ compensation, and business property insurance.

6. Procure raw materials

With the legalities sorted, it’s time to stock up on the essentials. Source fresh produce, premium ingredients for your menu, and, of course, high-quality coffee products. Cafely offers a wide variety of premium Vietnamese coffee products you can choose from.

Also, invest in commercial-grade equipment you need to prepare and serve the food and beverages. These include espresso machines , coffee grinders, ice machines, ovens, refrigerators, and blenders. Don’t forget about packaging and serveware for your cafe’s takeout and dine-in offerings.

When procuring any materials for your cafe, prioritize quality, sustainability, and customer satisfaction. Take the time to research suppliers, compare options, and negotiate pricing to get the best value for your investment.

7. Team hiring

You will need the help of a great team to run your cafe successfully. A typical cafe team includes:

• Baristas : Baristas are responsible for preparing and serving coffee and other beverages to customers. They must be skilled in working with different coffee equipment.
• Kitchen staff : Kitchen staff like cooks and pastry chefs are responsible for preparing food items on the menu. They must be familiar with the items on your food menu and maintain cleanliness and hygiene standards to avoid food safety hazards.
• Cashiers : Cashiers are responsible for processing transactions, handling cash, and maintaining accurate sales records. They should have strong math skills, attention to detail, and excellent customer service skills.
• Managers/supervisors : Managers or supervisors oversee the day-to-day operations of the cafe and ensure that everything runs smoothly. They are responsible for scheduling staff, managing inventory, handling customer complaints, and enforcing cafe policies and procedures.

Depending on the size, scale, and type of cafe, you may need to hire for additional roles to ensure you provide high-quality customer experiences.

8. Create brand visibility

With everything in place, it’s time to drum up excitement for your grand cafe opening. You can market your cafe launch through a mix of traditional and digital channels.

For instance, you can hang eye-catching posters in the neighborhood, run billboard ads, or use social media marketing to create anticipation around your cafe launch. Check out how WatchHouse did this to promote their opening in New York.

You can even host a sneak peek event for VIPs, including local influencers, bloggers, and food enthusiasts, to showcase your cafe and reach a wider audience.

Ideally, use various channels you’re sure will resonate with your target audience to generate a buzz around your cafe and draw your potential customers in.

And there you have it, your roadmap to launching a cafe business that’s as unique and vibrant as you are.

From visualizing your mission to creating brand visibility, each step is essential in laying the foundation for success. So roll up your sleeves and get ready to make your mark on the cafe scene.

The journey won’t always be smooth sailing, but with passion, determination, and perseverance, the sky’s the limit for your cafe business. Cheers to your new venture!

About the author

Nicholas Prins

I'm the founder of Launch Space. We work with global companies helping them scale lead generation through SEO and content marketing. Head over to the homepage to find out more.

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How to start a café or coffee shop

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In recent years, the UK had been steadily moving towards the kind of well-established café culture that our European cousins are famous for. These independent brewers have taken a hit due to the ongoing cost of living crisis, but the industry is readying for growth and recovery in 2024.

In April, the UK economy grew by 0.2% thanks to a boost from the nation’s humble hot coffee makers. And, according to an economic report by UKHospitality, the sector has the potential to increase its contribution to create half a million new jobs by 2027.

It’s also now easier than ever to set up a simple store or pop-up with limited equipment – taking payment on your phone using a mobile card reader , for example. This means that starting your own café or coffee shop is becoming an increasingly accessible (and affordable) venture.

Still, future cafe owners need to be aware that consumer behaviour, and buying habits, have changed. Although convenience and cost are still big drivers, brand identity and aesthetic now play a huge part in a customer’s purchase decision – making marketing a crucial consideration for wannabe baristas.

Below, we’ll outline exactly what you need to know to take your café or coffee shop business plan from bean, to cup.

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There’s a huge amount of planning that needs to go into launching a coffee shop. Thankfully, one area which needn’t cause undue stress is creating a website to promote your business. Thanks to modern templates like the one below , you can create one of your own in under an hour.

At Startups.co.uk, we test and rate website builder tools, and we’ve identified Wix as one of the best you can choose for creating a business site. Wix even has a selection of  custom website templates designed specifically for cafes – you simply drop your own menu, location, wording and preferred imagery into your chosen template. Better still, it’s completely free to try for yourself.

Read on to find out more…

How to write a café or coffee shop business plan, market research, financing your café or coffee shop business, concept, branding and design, waste disposal, equipment, utilities and supplies, taking payments, recruitment, regulations, useful links.

At Startups.co.uk, we’re here to help small UK businesses to get started, grow and succeed. We have helpful resources for helping new businesses get off the ground – you can use the tool below to get started today.

What Does Your Business Need Help With?

When writing a business plan for a café or coffee shop specifically, you’ll need to consider:

• The overall industry, and how your business will fit into it – are you catering to the growing trend for premium products? Are you offering an independent alternative in an area with a lot of chain brands?
• Competitor analysis – following on from the above, the business plan needs to show a clear understanding of your intended area and customer base, as well as how your café will cater to a gap in the market
• Sales and marketing – for a coffee shop, this means outlining how you plan to price products, along with which items will be available on the menu. Similarly, if you have any ideas for promotions or other purchasing incentives (such as deals or loyalty schemes), include them in this section. See the dedicated marketing section for more information

This is in addition to the standard requirements of any business plan, such as account information and financial forecasts, as well as details of the management structure and operations plans. 

You can learn more about what to include, and get help to create your coffee shop business plan, using our business plan template page.

Sarah Heward, founder and co-owner at The Real Food Caf é tells Startups : “I had to think about the main players in the business and their backgrounds. I then conducted market research before focusing on design, including building a website and menus. My SWOT analysis came next, followed by timeline and financials.

“We made some basic errors – one was getting carried away with our enthusiasm and not doing our homework thoroughly enough, which led to some costly adjustments and mistakes.”

While choosing a convenient location is key, when it comes to running a café, coffee quality is still paramount. With the continued interest in premiumisation and sustainability in the industry, people are becoming increasingly aware of where their coffee is sourced and how it’s roasted. This connects with the growing conscious consumerism movement.

However, while some coffee brands are expanding rapidly, it appears that customers are nonetheless enticed by the intimacy of an independent coffee shop.

Starbucks struggled through the recession, and was forced to close a number of stores across the UK. Fast forward to 2019, however, and the company now has 995 UK stores – the second highest number of outlets for coffee shops in the country. 

While the estimated value of the UK coffee shop market stands at £10.1bn (according to the Allegra Project Café UK 2019 report), there are still opportunities within the sector. Indeed, approximately 95 million cups of coffee are drunk each day in the UK. 

What’s more, high street café culture is booming – according to data published by The British Coffee Association , 80% of people who visit coffee shops make a visit at least once a week, while 16% visit each day.

Cafe owner Heward  continues:  “I feel that the customers are now more into the quality of the coffee and they are conscious about reducing plastic waste. Artisan coffee producers are now more favoured over the bigger brands; people know the blends that they like and where to find it.”

Need help staying organised?

Starting a cafe or coffee shop takes time, and there are a number of steps to take.

We think project management software is a great way to keep everything on schedule. Whether you’re working alone or with other people, you can streamline processes, assign times and track progress to keep everything moving efficiently in the right direction.

Find out which project management tool we think is best .

Premises, equipment, staff… all of these things take money. Fortunately, there are a number of options available if you’re just starting a business and need to raise finance. While many people start businesses using their own savings, or money borrowed from family, there are also various other paths to pursue.

Despite the phenomenal success of Costa and other chains, coffee shops are not the kind of business to set up if you’re expecting a quick multi-million pound exit. Profit margins will only become significant if you open multiple outlets, and even then, your initial costs will be considerable. If you’re feeling particularly ambitious, it may be worth investigating if you can get a business loan to help you get started.

However, if you’re after a lifestyle business which provides you with a modest income, then setting up a coffee shop could be a great decision.

Startup loans – the Startup Loan company is a government-backed scheme, where you can borrow up to £25,000 with a fixed interest rate of 6% p.a.

Business loans – business loans are similar to startup loans, except they are not just for new businesses and don’t have the same caps.

You should also consider how you will keep track of your finances. It’s best practice to use a business bank account to separate your personal and business expenses and income, and you’ll have to if you’re starting a limited company. Nerdwallet compares leading UK business bank accounts if you need to find one.

Consider lighting, layout, and furniture when creating your café’s concept

Managing your money

Starting a business takes money and time, and accountancy software can help with both.

Whether you’re running your cafe alone as a sole trader, or with a staff, you’ll need to stay on top of your finances. If you’re not ready to employ an accountant to help out, then we suggest using an online accountancy tool.

Accountancy software is designed to simplify the complex processes related to money. From tracking your outgoings – whether that is salary or other necessary costs – to managing your taxes, you’ll find any finance process simpler with the right tools in place. Take a look at the accountancy software that we’ve rated best .

Or, take a quick look at our top recommended picks for accounting software that’s best suited to small and fledgling businesses below:

It’s not vital for you to have worked in a café before, but as with any business, industry experience goes a long way . If you don’t have any prior experience, it’s a good idea to spend at least a few weeks working in a similar establishment to the kind you want to open. 

If you choose a business to learn from that’s in a different geographic area, there won’t be any issues with competition, and you’ll find people are surprisingly receptive to offering advice if you’re honest about what you’re planning to do.

When doing her research , Sahar Hashemi , the co-founder of Coffee Republic, spent a day on the Circle Line, getting off at each of the 27 stops to investigate what type of coffee was on offer. It’s important to make sure you’ve spent some time considering the business from more than just a customer’s point of view.

This includes thinking about the type of company you want to create: do you have plans to become a big brand eventually? Or do you want your coffee shop to keep its small and local vibe for the foreseeable future?

And in turn, consider what your café can bring to the scene : whether that’s a focus on a certain type of bean or drink, a particular atmosphere you want to create, or an overarching ethos (e.g. charitable, eco-friendly).

As part of the design process , you’ll need to create a floor plan – you can either hire a professional to do this for you, or use floor planning software to do it yourself. Some of the most well-known software packages are RoomSketcher and CADPro.

Essentially, a floor plan will divide the space into customer-facing areas and dedicated work spaces. Ensure you meet any legal requirements, such as building and accessibility regulations. 

Also, think about the layout of the space, including decoration , along with how your staff will interact with customers. You should also consider what your logo will look like, and where it will be positioned. These are some of the main points to consider when creating your café concept, and contribute to how your coffee shop will be branded and designed.

One of the most well-known coffee brands around the world is Starbucks. For inspiration and advice that could benefit your own brand, think about the beverage giant’s marketing strategy, and the process it followed to create such a remarkable brand .

Ozkan Ozdemir is owner of Emy’s Kitchen, a Turkish cafe based in Islington. Ozdemir tells Startups  said :  “The idea to start Emy’s Kitchen was on our mind for many years. My mum, Emy, is a really good cook and we knew her food would be appreciated by other people too.”

Your café stands to benefit from having a website that provides the key details that your customers need to know. This includes contact information, opening hours, what’s on the menu, and where to find the café.

But a website goes beyond a business listing: think of it as an opportunity to further showcase your brand and reach a wider audience. As your coffee shop grows, you could write a blog that responds to industry developments, or highlights the social good your café is doing. Be sure to include any awards or nominations that your café may receive, too. 

An ‘About us’ section is a great way to connect with customers and create a sense of community. Plus, it’s an opportunity to reinforce your café’s USP. 

If you want to sell products online (such as coffee beans or bespoke cakes), then you’ll need to set up an online shop. Not sure which platform is best for your business? Check out our guide to the best ecommerce platforms for more information.

Also, if you want to host events (whether personal or private hire), then a website will allow you to easily and quickly manage registrations and bookings.

If you’re wondering how to create a business website , it can either be designed professionally, or you can use a website builder to make your own. 

Location and size are key when choosing a premises

The biggest decision you’ll have to make when thinking about how to start a coffee shop is regarding your premises. When looking at prospective sites, location and size are the two main factors you need to consider.

Mintel research found that 79% of Brits purchased an out-of-home hot drink in 2017, while this figure increased to 90% for younger millennials aged 18-27.

Ozkan Ozdemir, founder of Emy’s Kitchen, recalls: “Our biggest challenge was finding a good premises. As the business was a whole new concept we had started, we didn’t actually know which area in London would be best.”

So when choosing a café location, it may be worth looking for a busy urban area with a lot of foot traffic. However, these types of properties are expensive and the amount of square feet you will be able to get will be less than if you choose a more suburban or rural location.

Equally, you may have envisioned a spacious, airy coffee and tea shop with room for large sofas and coffee tables covered in newspapers or books – bear in mind that this may come at a price. 

And as the premiumisation trend continues, it may even be more profitable to forsake the perfect location in favour of investing in better beans. The important thing is to be flexible – focus on visiting a range of properties, big and small, in busy and quiet locations. 

Researching your market is essential: look into the locations that are popular among branded coffee shops, as these are the areas that have been identified for drawing in a good trade. If these shops are too busy during peak times, there could be room for an independent alternative. 

It is also important to know your competition. Consider what the most popular brands are offering, and how you could improve upon that.

While the size of the property you will buy or rent is intrinsically linked to its location, you should know roughly what sort of size and square footage you need. You should also be aware of how many covers (i.e. people seated) it can accommodate, as this will help you when going through property adverts. 

You need to be clear about your requirements: you’ll require a large seating area, a kitchen, a coworking area, a performance space, and/or a small retail section. A rough guide to café sizes is as follows:

Think about what you need from your coffee or tea shop, what is already provided, and what you would need to add yourself. When viewing properties, take the layout into careful consideration. Imagine your service area is fully staffed, and that you’re dealing with a bustling sitting space decked out with tables, chairs, and lots of customers in need of a caffeine injection.

Ozkan adds: “After we had started the business, we realised that the location wasn’t really that important as we have customers travelling from all around London for our breakfasts.”

As part of getting your café up and running, you’ll need to ensure you dispose of its commercial waste correctly. Whether you choose to hire a private company to collect it, or opt for the service provided by your local council, this is an essential part of operations. 

Some providers offer specific services for the hospitality sector, such as collecting glass, food waste, or coffee grounds. To help you choose a provider, read our guide to the best waste management companies . 

Of course, it’s ideal to reduce the amount of waste created in the first place as much as possible. Not only does this help to save money (less waste means fewer collections), but it’s good for the planet, too. Look for a provider that offers coffee cup recycling, and learn more about business recycling in general.

Before you negotiate the lease or purchase of a property, you must also check what commercial classification it currently falls under. If the property does not already have the correct classification for a coffee or tea shop, you will need to get planning permission from your local authority. You can use the Gov.uk licence finder to help you.

A café or coffee shop will most probably be classified as an A3 use class, although this will depend on the local authority. Planning permission for A3 use permits the sale of food and drink to be consumed on premises. For example, if you take on a property with a different class (e.g. a shop, which falls under category A1) and want to use the premises as a café, you’ll need to get the planning permission to change it to an A3 use class. 

To learn more, and to apply for a licence, visit the Gov.uk page on food business registration . 

Here, we outline the equipment, utilities and supplies you’ll need to start your own coffee shop. We’ll also look at the process of sourcing equipment, utilities, and suppliers.

Opening a café or coffee shop requires a lot of equipment. Some of it you’ll need straightaway, while other items you may be able to get further down the line, depending on your business requirements.

Essential kit includes:

• Coffee makers – espresso machines, as well as drip and cafétieres, plus equipment for any other specific drinks you offer e.g. pour over/filter
• Coffee grinders – ensure these are suitable for commercial use
• Cooking devices – e.g. ovens, toasters, sandwich presses
• Cooling and storage – e.g. refrigerators, freezers, shelving/cupboards
• Food containers – for syrup, ingredients, milk etc.
• Security devices – e.g. alarms , CCTV cameras , water detectors  
• Payment equipment – this includes a card reader, an iPad and/or a till, plus software. For more information on payment equipment, read our guide on small business POS systems

You can choose to buy some items outright from the beginning, or you can hire them on a rental or lease basis. For example, espresso machines are notoriously expensive, and it may be more sensible to rent one. By contrast, food containers are likely to be cheaper to purchase. 

Utilities 

You’ll need to get connected with business gas and electricity suppliers – be sure to compare energy suppliers to get the best packages for your small business.

Supplies/suppliers

You’ll need to think about the type of coffee you’ll choose for your café. Consider which (and how many) strengths will be on offer, and do your research about where it comes from and how it’s produced. When choosing suppliers, be sure to do taste tests (with coffee that’s been correctly prepared) so that you can know what your customers will experience. 

Also, check out a supplier’s record – have they won any awards or other industry recognition? Are they FairTrade and/or organic certified? Be sure to review the contract from a potential roaster as well – would you prefer an exclusive supplier, or to be able to use beans from multiple roasters?

Beyond this, the supplies you’ll require will depend on the type of café you run. For instance, the supplies used in a café that specialises in plant-based foods compared to a coffee shop that offers rum and other alcoholic beverages (like London-based Grind ) are going to be very different. 

You’ll also need to factor in non-edible supplies, like plates and cutlery, including both those used in-store and for takeaway. Plus, take into consideration the aprons or other items that your staff will need to wear or use.  

You can find suppliers in the following ways:

• Asking other small business owners for recommendations
• Attending trade shows and industry events (such as Caffé Culture , Coffee Shop Innovation Expo , and European Coffee, Tea & Soft Drinks Expo )

The Real Food Cafe founder, Sarah   Heward, advises:  “Speak to industry leaders with a lot of experience – they will challenge your thinking and not just tell you what you want to hear! Listen to them and prepare to be flexible

A card machine is an essential piece of equipment for your café. While cash is still popular, it’s good business sense to offer customers as many payment options as possible. Read our guide on how to take card payments to learn more.

As well as the device itself, you may need to enable online payment methods, such as a payment gateway . This will be the case if you’re offering online ordering or other ecommerce options.

Baristas, kitchen staff, and waiters are some of the roles to hire for in a café

Any business in the catering or hospitality industries involves hard, physical labour. Unless you can afford to employ staff from the outset, running a café will involve standing on your feet for the vast majority of the day.

Taking on staff is a highly legislated area, so you’ll need to understand and follow regulations on everything from health and safety to managing holiday requests . How much of the process you do yourself, and how much you outsource to a HR company , will depend on you, your vision for your business, and your budget.

Some top tips to consider when recruiting in the hospitality sector include:

• Culture – what type of atmosphere do you want to create, for both your staff and customers?
• Attitude – café staff are the face of your business, so it’s crucial to hire people who reflect its ethos and brand
• Experience – want perfect latte art with every pour? In need of standout dishes? If so, seek out experienced candidates for more skilled roles (such as baristas and chefs) so that your café can offer top-quality produce from the outset (and while other team members receive training)

Product images and other visual, shareable content are great for social media marketing

Emy’s Kitchen owner, Ozkan Ozdemir points out: “The food industry is very hard and you only have 20-30 mins to make customers happy, so you need a good team to achieve that goal.”

There are a number of ways to promote your café, including:

Social media

Loyalty programmes

Traditional marketing

When it comes to marketing a café or coffee shop, be sure to use social media. Creating content tailored to your target audience and the platforms they use is an essential part of social media marketing . 

Whether you film your baristas making the perfect cup of coffee, or share photos that your customers have taken, this type of business is highly visual – making it ideal for social media platforms. But it’s more than that just advertising – social media also offers an opportunity to engage and interact with your customers.

Whether you opt for a card that’s stamped per purchase, or a digital app that allows customers to collect points, loyalty programmes are a key part of marketing a café or coffee shop. 

Not only is this an incentive for people to return to your coffee shop, but if you use a digital system you can collect valuable information as well, such as common orders or popular visiting times.

While it’s easy to focus solely on digital marketing, remember that cafés and coffee shops are often central places in a local community. Be sure to connect with people face-to-face as well.

Options include printing and handing out flyers in your local area, as well as printing banners and posters. Plus, reach out to nearby offices and other companies to let them know you’re new in town.

Currently, there is no law that states you must undertake formal training to open a café or coffee shop. 

However, you must ensure that you and anyone else working with food at your business has the appropriate level of training and/or supervision to do their job properly. The legal responsibility lies with the business owner, so make sure you have all the information you need. 

You’ll need to be clued up on the basic principles of food preparation. Make sure you check out our restaurant and sandwich shop guides, as many of the principles for those kinds of businesses will also apply here.

The Food Standards Agency (FSA) is the body appointed by the government to be responsible for all food safety standards. The FSA can provide you with advice on all food hygiene matters, and offers an information pack called ‘Safer food, better business’ , which will help you to comply with the law and make your premises safe for the public. The publication covers key aspects of serving food, including contamination, cleaning, chilling, cooking, management, and keeping a food diary. 

Your business must also be registered with the local authorities. You can and likely will face inspections in the future, and a failed inspection is bad for your café in a number of ways: either legally (you could be closed down), in terms of business (bad publicity and referrals) or morally (as people could be taken ill or even die from contaminated food). 

In order to avoid such pitfalls, you should follow the Hazard Analysis Critical Control Point (HACCP) . This is an internationally recognised and recommended system of food safety management that focuses on identifying the ‘critical points’ in a process where food safety hazards could arise, and puts steps in place to prevent things from going wrong.

Take a look at the rules and regulations section of our catering guide , as the same restrictions on food preparation will apply. 

Your café or coffee shop will need to be appropriately insured – this is to protect you, as well as your customers. 

There are a range of providers out there who can offer cover that is tailored to your unique business requirements. However, you’ll usually need the following types of insurance:

• Building contents – this protects your café’s stock 
• Business interruption – with this type of cover, you’re insured for profit losses if you’re made to stop trading temporarily
• Employers’ liability – cover for the health and safety of your employees

Sarah Heward, founder and co-owner at The Real Food Café has this positive final message for Startups readers  comments :  “Starting your own business and seeing it go from strength to strength is an incredible sense of achievement. Hopefully, the long-term financial benefits make it all worthwhile.”

Here’s a recap of some of the most useful links from throughout the article:

• Gov.uk Licence Finder
• Gov.uk Food Business Registration
• Safer food, better business
• HACCP guidance

In addition, check out the links below to learn more about relevant industry organisations and events:

• British Coffee Association
• Specialty Coffee Association (UK Chapter)
• Caffe Culture Show
• Coffee Shop Expo
• European Coffee, Tea & Soft Drinks Expo

Startups.co.uk is reader-supported. If you make a purchase through the links on our site, we may earn a commission from the retailers of the products we have reviewed. This helps Startups.co.uk to provide free reviews for our readers. It has no additional cost to you, and never affects the editorial independence of our reviews.

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What do I need to start a coffee shop?

Starting a coffee shop can be an exciting endeavor for coffee enthusiasts and entrepreneurs alike. From crafting delicious brews to creating a warm and inviting atmosphere, running a coffee shop requires careful planning and preparation. So, if you’ve been dreaming of opening your own coffee shop, you may be wondering, “What do I need to start a coffee shop?” Well, let’s dive in and uncover the essentials to get you started on the path to coffee shop success!

• 1 What do I need to start a coffee shop?
• 2.1 1. What funding options are available for starting a coffee shop?
• 2.2 2. How can I create a unique brand identity for my coffee shop?
• 2.3 3. How can I find reliable suppliers of coffee beans?
• 2.4 4. Is it necessary to have a food menu in a coffee shop?
• 2.5 5. How important is customer service in a coffee shop?
• 2.6 6. Should I offer alternative milk options for non-dairy customers?
• 2.7 7. How can I effectively market my coffee shop?
• 2.8 8. How much staff do I need for a small coffee shop?
• 2.9 9. Should I offer special promotions or discounts?
• 2.10 10. What characteristics should I look for when hiring baristas?
• 2.11 11. How can I stay informed about the latest coffee trends?
• 2.12 12. Do I need to partner with a local bakery for pastries?

Now, to answer the burning question on your mind, here are the key elements you need to start a coffee shop:

1. **A Solid Business Plan**: Developing a comprehensive business plan is crucial for success. It should include market research, competitor analysis, financial projections, and your unique value proposition.

2. **Location**: Finding the perfect location for your coffee shop is vital. Consider factors such as foot traffic, proximity to other businesses, and the overall atmosphere of the area.

3. **Licenses and Permits**: Obtain the necessary licenses and permits to legally operate a coffee shop. This may include health permits, business licenses, and food handling certifications.

4. **Equipment**: Invest in high-quality coffee brewing and espresso machines, grinders, blenders, refrigerators, and other essential equipment. Don’t forget the furniture, cash registers, and a reliable internet connection too!

5. **Suppliers and Ingredients**: Source coffee beans from reputable suppliers and ensure a consistent supply of fresh and quality ingredients, milk, syrups, and any other supplies necessary for your menu.

6. **Menu Development**: Craft a well-rounded and appealing menu that suits the preferences and tastes of your target audience. Strive to offer a variety of coffee beverages, tea options, and perhaps even a small selection of pastries or sandwiches.

7. **Staffing**: Hire knowledgeable and passionate staff members who can provide excellent customer service and expertly prepare delicious coffee. Train them on various brewing techniques and the art of latte art!

8. **Branding and Marketing**: Develop a unique brand identity for your coffee shop, including a memorable name, logo, and aesthetic. Create a marketing strategy to reach your target audience through social media, local advertisements, and collaborations with other businesses.

9. **Financial Planning**: Determine the initial startup costs, ongoing expenses, and projected revenue. Secure funding through personal savings, loans, or investors to ensure your coffee shop has a solid financial foundation.

10. **Interior Design**: Design an inviting and comfortable space that reflects your brand’s personality. Consider factors such as seating arrangements, decor, lighting, and music to create a cozy ambiance.

11. **Customer Engagement**: Build a strong relationship with your customers by providing exceptional service, hosting events, and offering loyalty programs. Encourage feedback to continually improve your offerings and customer experience.

12. **Continuous Learning**: Keep up with industry trends, attend coffee-related workshops or courses, and constantly experiment with new brews and flavors. Never stop learning and pushing the boundaries of your coffee shop’s offerings!

Frequently Asked Questions

1. what funding options are available for starting a coffee shop.

Various funding options include personal savings, business loans, investors, and even crowdfunding platforms.

2. How can I create a unique brand identity for my coffee shop?

Focus on your values, target audience, and overall atmosphere. Use creative branding elements like a catchy name, logo, and visually appealing aesthetics.

3. How can I find reliable suppliers of coffee beans?

Research and connect with reputable coffee bean distributors or consider partnering with local coffee roasters.

4. Is it necessary to have a food menu in a coffee shop?

While it’s not mandatory, offering a small selection of pastries or sandwiches can attract a wider customer base and boost sales.

5. How important is customer service in a coffee shop?

Customer service is paramount! Exceptional service can build customer loyalty and create a positive reputation for your coffee shop.

6. Should I offer alternative milk options for non-dairy customers?

Yes, catering to dietary preferences and restrictions is essential. Consider offering a variety of dairy-free milk alternatives, such as almond, soy, or oat milk.

7. How can I effectively market my coffee shop?

Utilize social media platforms, collaborate with local influencers or businesses, and host community events. Engage with your target audience and regularly update your online presence.

8. How much staff do I need for a small coffee shop?

The number of staff members will depend on the size of your coffee shop, but typically you will need baristas, a cashier, and a manager.

9. Should I offer special promotions or discounts?

Absolutely! Promotions and discounts can attract new customers, create buzz, and encourage repeat business.

10. What characteristics should I look for when hiring baristas?

Look for baristas who have a passion for coffee, excellent customer service skills, knowledge of different brewing techniques, and the ability to work well under pressure.

11. How can I stay informed about the latest coffee trends?

Subscribe to industry magazines, attend coffee conventions or trade shows, and follow prominent coffee influencers and blogs.

12. Do I need to partner with a local bakery for pastries?

Partnering with a local bakery can be a great way to offer a wider variety of high-quality pastries while supporting local businesses. However, it is not a necessity.

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Coffee Shop Business Plan

Start your own coffee shop business plan

Java Culture

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">, opportunity.

People near the University of Oregon need not just coffee and tea, or pastries and snacks, but also a place to meet comfortably, have a group discussion, or just sit quietly, work, and read. That is available now near the University of Oregon campus, but too crowded too often, and not the right combination of factors for everybody.

Java Culture coffee bar is determined to become a daily necessity for local coffee addicts, a place to dream of as you try to escape the daily stresses of life and just a comfortable place to meet your friends or to read a book, all in one.

Java Culture will focus its marketing activities on reaching the University students and faculty, people working in offices located close to the coffee bar and on sophisticated teenagers. Our market research shows that these are the customer groups that are most likely to buy gourmet coffee products. Since gourmet coffee consumption is universal across different income categories and mostly depends on the level of higher education, proximity to the University of Oregon campus will provide access to the targeted customer audience.

Competition

Java Culture’s direct competitors will be other coffee bars located near the University of Oregon campus. These include Starbucks, Cafe Roma, The UO Bookstore, and other Food service establishments that offer coffee.

Great coffee, pastries, additional options for tea etc, very welcoming atmosphere, good wireless, desk space, comfortable chairs and tables, good pastries, a location close to the university campus.

Expectations

We plan to grow as shown in the chart below, taken from our sales forecast. We aim to maintain an industry-standard 60% gross profit margin and reasonable operating expenses, and to produce reasonable profits in the second and third year.

Financial Highlights by Year

Financing needed.

The owners will invest $140,000 and take out a bank loan for $30,000  to cover the start-up expenses and assets needed plus deficient spending in the early months.

The start-up expenses of $27,000 include:

• Legal expenses for obtaining licenses and permits as well as the accounting services totaling $1,300.
• Marketing promotion expenses for the grand opening of Java Culture in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
• Consultants fees of $3,000 paid to ABC Espresso Services <name changed> for the help with setting up the coffee bar.
• Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium of $2,400.
• Pre-paid rent expenses for one month at $1.76 per square feet in the total amount of $4,400.
• Premises remodeling in the amount of $10,000.
• Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).

These expenses will be incurred before launch, so they take their place in our financial projections as negative retained earnings of $27,680 at the end of the month before we begin. That number shows up in the balance sheet.

The required start-up assets of $143,000 include:

• Cash in the bank in the total amount of $67,000, which includes enough to cover employees and owner’s salaries of $23,900 for the first two months and cash reserves for the first three months of operation (approximately $14,400 per month).
• Coffee beans (12 regular brands and five decaffeinated brands) – $6,000
• Coffee filters, baked goods, salads, sandwiches, tea, beverages, etc. – $7,900
• Retail supplies (napkins, coffee bags, cleaning, etc.) – $1,840
• Office supplies – $287
• Espresso machine – $6,000
• Coffee maker – $900
• Coffee grinder – $200
• Food service equipment (microwave, toasters, dishwasher, refrigerator, blender, etc.) – $18,000
• Storage hardware (bins, utensil rack, shelves, food case) – $3,720
• Counter area equipment (counter top, sink, ice machine, etc.) – $9,500
• Serving area equipment (plates, glasses, flatware) – $3,000
• Store equipment (cash register, security, ventilation, signage) – $13,750
• Office equipment (PC, fax/printer, phone, furniture, file cabinets) – $3,600
• Other miscellaneous expenses – $500

Funding for the company comes from two major sources–owners’ investments and bank loans. Two major owners, Arthur Garfield and James Polk, have contributed $70,000 and $30,00 respectively. All other investors have contributed $40,000, which brings the total investments to $140,000. The remaining $30,000 needed to cover the start-up expenses and assets came from the two bank loans–a one-year loan in the amount of $10,000 and a long-term (five years) loan of $20,000. Both loans were secured through the Bank of America. Thus, total start-up loss is assumed in the amount of $27,000.

The amounts show up in the balance sheet in the month prior to opening. The $140,000 investment shows up as Paid-in Capital. The $27,000 expenses show up as negative retained earnings. Assets and liabilities are there. This is all according to financial standards.

Problem & Solution

Problem worth solving.

People near the University of Oregon need not just coffee and tea, or pastries and snacks, but also a place to meet comfortably, have a group discussion, or just sit quietly, work, and read. That is available now near the University of Oregon campus, but too crowded too often, and not the right combination of factors for everybody. 

Our Solution

Java Culture will make its best effort to create a unique place where customers can socialize with each other in a comfortable and relaxing environment while enjoying the best brewed coffee or espresso and pastries in town. We will be in the business of helping our customers to relieve their daily stresses by providing piece of mind through great ambience, convenient location, friendly customer service, and products of consistently high quality. Java Culture will invest its profits to increase the employee satisfaction while providing stable return to its shareholders.

Target Market

Market size & segments.

Coffee consumption has shown a steady 2.5% growth rate in the United States over the last decade. The retail coffee industry is flourishing in the U.S. Pacific Northwest. The local climate, with a long rainy season, is very conducive for the consumption of hot non-alcoholic beverages. At the same time, hot dry summers drive people into cafes to order iced drinks. Furthermore, coffee has really become a part of the lifestyle in the Pacific Northwest. Its discerning coffee drinkers are in favor of well-prepared, strong coffee-based beverages, which they can consume in a relaxing environment.

More specifically, the University of Oregon as close to 25K students and another 5-10K faculty and staff. And it is embedded in the Eugene, OR community of 200K people. Our main market will be students, faculty, staff, and nearby residents. But the campus area is a hub for the community and will attract other customers. 

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Our Advantages

Java Culture will cater to people who want to get their daily cup of great-tasting coffee in a relaxing atmosphere. Such customers vary in age, although our location close to the University campus means that most of our clientele will be college students and faculty. Our market research shows that these are discerning customers that gravitate towards better tasting coffee. Furthermore, a lot of college students consider coffee bars to be a convenient studying or meeting location, where they can read or meet with peers without the necessity to pay cover charges. For us, this will provide a unique possibility for building a loyal client base.

Keys To Success

The keys to success will be:

• Store design that will be both visually attractive to customers, and designed for fast and efficient operations.
• Employee training to insure the best coffee preparation techniques.
• Marketing strategies aimed to build a solid base of loyal customers, as well as maximizing the sales of high margin products, such as espresso drinks.

Marketing & Sales

Marketing plan.

Java Culture will position itself as unique coffee bar where its patrons can not only enjoy a cup of perfectly brewed coffee but also spend their time in an ambient environment. Comfortable sofas and chairs, dimmed light and quiet relaxing music will help the customers to relax from the daily stresses and will differentiate Java Culture from incumbent competitors.

In order to build up its client base, Java Culture will use some strategic banners and fliers during the launch period, utilize customer referrals and cross-promotions with other businesses in the community from time to time, and loyalty programs that work with android and IOS and other mobile phones, which is the preference of our market.

Our main thrust will be getting people to know, like, and trust us with content and engagement in Facebook, Instagram, Snapchat, and Twitter.  We intend to maintain social media presences that are light on self-serving promotional quasi-advertising content, heavy on community participation, content, and engagement. 

Java Culture baristas will handle the sales transactions. To speed up the customer service, at least two employees will be servicing clients–while one employee will be preparing the customer’s order, the other one will be taking care of the sales transaction. All sales data logged on the computerized point-of-sale terminal will be later analyzed for marketing purposes.

Locations & Facilities

Java Culture coffee bar will be located on the ground floor of the commercial building at the corner of West 13th Avenue and Patterson Street in Eugene, OR. The company has secured a one-year lease of the vacant 2,500 square feet premises previously occupied by a hair salon. The lease contract has an option of renewal for three years at a fixed rate that Java Culture will execute depending on the financial strength of its business.

The floor plan will include a 200 square feet back office and a 2,300 square feet coffee bar, which will include a seating area with 15 tables, a kitchen, storage area and two bathrooms. The space in the coffee bar will be approximately distributed the following way–1,260 square feet (i.e., 55% of the total) for the seating area, 600 square feet (26%) for the production area, and the remaining 440 square feet (19%) for the customer service area.

This property is located in a commercial area within a walking distance from the University of Oregon campus on the corner of a major thoroughfare connecting affluent South Eugene neighborhood with the busy downtown commercial area. The commercially zoned premises have the necessary water and electricity hookups and will require only minor remodeling to accommodate the espresso bar, kitchen and storage area. The coffee bar’s open and clean interior design with modern wooden decor will convey the quality of the served beverages and snacks, and will be in-line with the establishment’s positioning as an eclectic place where people can relax and enjoy their cup of coffee. The clear window displays, through which passerby will be able to see customers enjoying their beverages, and outside electric signs will be aimed to grab the attention of the customer traffic.

Milestones & Metrics

Milestones table, key metrics.

We have our forecasts for sales, direct costs, and operating expenses. As we get into the business we’ll develop standards based on experience for Facebook likes, Twitter follows, and other social media engagement. We expect to watch these very carefully. 

Ownership & Structure

Java Culture is majority-owned by Arthur Garfield and James Polk. Mr. Garfield holds a Bachelor’s Degree in Business Administration from the University of ZYX. He’s worked for several years as an independent business consultant. Previously, he owned the ABC Travel Agency, which he profitably sold four years ago. Mr. Garfield has extensive business contacts in Oregon that he will leverage to help his new venture succeed. Mr. Polk has a Bachelor’s Degree in Psychology from the XYZ State University. For the last five years he has worked as a manager of DEF Ristorante, a successful Italian restaurant in Portland, OR. Under Mr. Polk’s management, the restaurant has consistently increased sales while maintaining a lower than average level of operating expenses.

Investors will not be involved into the daily management decisions at Java Culture. They will hire a professional manager who will oversee all the coffee bar operations. Three full-time baristas will be in charge of coffee preparation. They will hire two more part-time employees to fulfill the staffing needs. In the second and third year of operation will add additional employees if and when needed. 

Management Team

A full-time manager will be hired to oversee the daily operations at Java Culture. The candidate (who’s name is withheld due to his current employment commitment) has had three years of managerial experience in the definitely industry in Oregon. This person’s responsibilities will include managing the staff, ordering inventory, dealing with suppliers, developing a marketing strategy and perform other daily managerial duties. We believe that our candidate has the right experience for this role. A profit-sharing arrangement for the manager may be considered based on the first year operational results.

Personnel Table

Financial plan investor-ready personnel plan .">, key assumptions.

• We assume a steadily growing potential market in line with growth at the university, trends. 
• We assume industry standard gross margins
• We assume relative status quo regarding technology and trends in the coffee industry

Revenue by Month

Expenses by month, net profit (or loss) by year, use of funds.

The start-up expenses include an estimated $17,000 consisting of several items:

• Legal expenses for obtaining licenses and permits as well as the accounting services totaling $1,500.
• Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium of $1,500.
• Other start-up expenses including website ($4,000) and phone and utility deposits ($2,500).

The required start-up assets of $71,000 include:

• Plates, glasses, etc. worth approximately $2,000
• Espresso machine
• Coffee maker
• Coffee grinder 
• Food service equipment (microwave, toasters, dishwasher, refrigerator, blender, etc.)
• Storage hardware (bins, utensil rack, shelves, food case) 
• Counter area equipment (counter top, sink, ice machine, etc.)
• Serving area equipment (plates, glasses, flatware)
• Store equipment (cash register, security, ventilation, signage) 
• Office equipment (PC, fax/printer, phone, furniture, file cabinets) 
• Other miscellaneous expenses

Sources of Funds

Projected profit & loss, projected balance sheet, projected cash flow statement.

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