How to Develop a Coffee Shop Business Plan
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Do you have a dream of owning a coffee business in your neighborhood or anywhere else in the world? You are not alone. The good news is that with a properly developed coffee shop business plan, you will be off to a flying start. Needless to say that you have many options to choose from.
You may decide to build a drive-thru coffee stand, outrightly purchase an already existing café, purchase a franchise, and the list goes on and on.
The next thing in line after deciding on which coffee shop concept you want is getting your stuff together. One way to get your stuff together is to develop a great coffee shop business plan. In this article, you will find out everything you need to know on how to develop a coffee shop business plan.
Before we delve into the main business, let us consider some of the reasons why you need a coffee shop business plan.
To save money
One thing common to business owners is their envisioned elaborate plans for their businesses. There’s nothing bad in wanting your business to be successful, but at what cost? A business plan will help you curate a budget, and with a budget, you won’t find yourself spending money more than what you plan for. Without a budget, as included in a business plan, chances are that you will overspend on your business. Not only that, you may also spend more time counting your losses than profits.
To keep you organized
If you don’t want to say A but find yourself doing B or C, then you need a business plan. A business plan not only saves you time and money, it will also shield you from emotional and physical stress related to haphazardly building a business. If you want a standard coffee shop, then you are not supposed to run it in an unorganized manner. Your coffee business plan will ensure that you are on track with your goals and objectives.
To ensure you are not forgetting anything
With a well-developed business plan by your side, you can easily keep track of all the processes you have accomplished, the ones you are currently doing, and the ones you are yet to do, and why. A business plan gives you the opportunity to easily checkmark your progress with your business. Unless not strictly followed, a business plan is your business’ compass.
To present to your interested audience
A business plan is a valid and worthy document to present to investors, franchisors, property rentals, creditors and the government. It might be easier to convince and persuade property rentals to release their properties for your coffee business if you present them with a good business plan. Same can also be said about creditors, investors, government agencies and even yourself.
Getting ready
Developing a business plan is very similar to gathering your resources (land, labor and capital). It’s going to take time and a lot of effort. Therefore, you have to be ready both mentally and physically for the task ahead of you. However, having fun in between is not a taboo. In fact, you should make it as fun as possible. For example, you can divide and separate the processes, rewarding yourself for each accomplished step.
Another way to not get yourself drenched in the work is seeking the opinions of established business owners. You will find it much helpful to get directions from real people, and in real time. They can help you move at a faster pace. And you can choose to become accountable to them, even without their knowing.
How long does a business plan have to be?
If you understand that your coffee business is your business and yours alone, then you should also understand that the length of your business plan depends on how long you want it to be. Your business plan is not a thesis to be submitted to a supervisor to correct or mark.
Wildly speaking, the length of your business plan can be between 10 to 70 pages. It could be less, and it could be more, depending on the scope of your coffee business. Things like the location of your business, the market, availability of resources, creditors, and the likes, will majorly determine the scope of your business.
Having said that, we usually advise business owners to make use of headings and subheadings when developing their business plans. For your benefit, as well as the benefit of other handlers of your business plan, having spaces in between paragraphs and sections is also not a bad idea. Paragraphs introduce legibility and neatness to your document.
The components of your coffee shop business plan
There are numerous main sections in a coffee shop business plan, and there’s no standard arrangement or structure for it. However, it must contain important details, including your mission statement, financial position, estimates, projections, needed resources, etc.
But if you know you are directing the business plan to big investors or creditors, it would be better to adopt a commonly used framework so that it can be easily understandable and relatable. Such big entities must have glanced through a lot of business plans, and probably accustomed to certain structures and labels.
With that said, let us see what you can have inside your coffee shop business plan:
Business Plan section | Description |
Executive Summary | Executive summary is the summary of the entire coffee business plan. It enumerates the content of the entire business plan, detailing the dates, location and every other important information. Executive summary is first on the list, but it is what you will write last. |
Business Description – The Concept | Important information such as the name of your coffee shop, as well as its intended location (precise or approximate), product offerings and your competitive advantage will be detailed in the business description section. |
Development-To-Date Details | As the title suggests, in this section you will describe what progress you have made towards the establishment of your coffee shop as at the time of developing the coffee shop business plan. |
Ownership and Management | In this section, you will include details about you as the supposed business owner. If you have a management team, you will also include their details. |
Business Structure Details | What legal business structure will your coffee shop adopt? Is it going to be a limited liability company, a franchise, or maybe another different kind of structure? You will indicate whichever it is in this section. |
Coffee Shop Objective | While this question may sound like a simple one, you have to utilize this opportunity to succinctly state the objectives of establishing your coffee shop. Investors, creditors and property rentals are mostly interested in this part of your coffee shop business plan. Therefore, you want to make sure you are not getting anything wrong here. |
Products and Services (Menu) | This section is also very important to investors and others. The selection of your product and service offerings will determine to a large extent the direction of your planning. Even the design of your coffee shop and the kind of equipment you will purchase all depend on your product and service offerings. |
The Vison Statement | Your vision statement will appear in this section. Regardless of the size of your coffee shop, you must carve out both vision and mission statements for it. These statements are like an invisible compass that will direct your coffee shop as time goes on. |
Unique Sales Proposition (USP) | Your unique sales proposition is what sets you apart from the rest of the competition. It may include the specialty coffee flavors you have to offer, or a different way you can sell your products to customers. Whatever sets you apart from the crowd, detail it in this section. |
Marketing Details | This includes details about your marketing strategy. Marketing is very important, especially to new businesses. Investors are very interested in knowing how you plan to market your brand, products and services to your intended market. In this section, you must include every detail related to your marketing strategies and plans. |
Location | If you already have a location in mind, include it in this section. What if you have two or more locations in mind? Include every location you have in mind, whether two, three or any amount. Just make sure the locations are in tandem with your coffee shop business goals and objectives. |
Market Research | Market research in this context is what you have found out about your product and service offerings, as well as their prices from your competitors. This should be done as early as possible, and included in this section. Note that market research is to be carried out for each of your products and services. |
Competition | The truth is that your coffee shop won’t be the first in the world, and most likely not the first in your vicinity. Whether you want it or not, some competitions will welcome you to the market. In this section, you must pen down how you will deal with your competition, and how you perceive your competitions will take your penetration into the market. |
Coffee Equipment | Before you can decide which coffee equipment that you need, you have to first decide what your menu offerings will be. Once this is decided, you can now go ahead to make a list of every coffee equipment that you need. |
Financials (Budget Details) | In the financial section, you will reveal your financial plans, including the financing options that you are considering. These may include a soft loan from friends or family members, a bank loan, or money from investors. You will also make a highlight of some of your financial documents including, an income statement, cash flow statements and break-even analysis. |
Sales Projections | The sales projections of your coffee shop depend on important variables such as your products, your pricing, as well as the expected flow of customers. |
Net Income Projections | Unlike sales projections, net income projections depend on variables such as fixed costs, variable costs, average customer purchases. Once all these are determined, you can then decide your projected coffee shop net income. |
Statement of Financial Position (Balance Sheet) | The statement of financial position section will contain details about all your assets and liabilities. Remember that a balance sheet usually has two parts, i.e., the assets part and the liability part, in that order. |
Permits and Regulatory Concerns | This section will include all regulatory permits that are required to open your coffee shop. |
Your Timeline | This includes the date you have set aside for opening your coffee shop, beginning operation, etc. |
Risks | This section details all the risks your coffee business faces. Make sure you write every one of them down, as well as how you plan to tackle them. |
Exit Strategy | While a business is expected to run into the foreseeable future, it is still expected of every business owner to have an exit plan. Include your exit plan in this section. |
Frequently Asked Questions
No, you don’t need to be a certified professional to be able to develop a coffee shop business plan. All you need to do is to get your thoughts, visions and missions together. Jot them down, and organize them later. You can take inspirations and ideas from already written business plans. One or two questions to businessmen in your neighborhood would go a long way too. So, the short answer is no.
Every business is unique, and so is its business plan. There’s no such thing as a conventional or traditional business plan.
Sure, you can. But you have to be ready to work with whoever you pay for the job. This is because only you know what you want from your coffee shop, and no one else will know until you reveal it.
If you don’t have a coffee shop business plan, you can liken yourself to a pilot flying a plane without a compass. It’s hard to tell where he is headed.
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