Coffee is a delicacy that’ll never get out of style because many people love it. The consumption of coffee is steadily and consistently growing and thus making a coffee shop business very lucrative. The beauty of the coffee shop business is that you can offer many remarkable coffee blends and associated food products that you don’t typically find in homes. This therefore means that as much as people might make coffee at home they would still prefer uniquely-made coffee from coffee shops. It’s also a common trend for people to meet-up for a business meeting or a date over coffee. So a coffee shop business is definitely a worthy undertaking that wields huge prospects. This article will outline how to start the coffee shop business, and the coffee shop business plan – PDF, Word and Excel.
The coffee shop business is basically a retail type of business. As such the most common business model for a coffee shop is direct sales. The common items sold in a coffee shop are coffee and certain food snacks. There is room of course to expand the product and service range. For instance, you can find juices, smoothies, and fast foods being served in a coffee shop. The thrust is always to have diverse offerings so as to draw in more customers.
Coffee consumption trends tend to be location-specific and highly segmented. There are even possible scenarios where introducing the idea of a coffee shop will be a very new idea to the target market in question. This all means that extensive research must be done to ascertain that a steady stream of customer inflows will be guaranteed. It’s very possible that after setting up a coffee shop you can fail to get substantial customer inflows so be diligent in research. You must study your competitors. Find out what products or services they’re offering, operating hours, niching approaches, marketing strategies and pricing strategies. You must study the target market to have an idea of their average income levels and coffee consumption habits. The failure to plan is the beginning of business failure. You should ensure that you have a detailed coffee shop business plan before you venture into this business.
Location And Premises
A coffee shop should ideally be located at a place that has high volumes of vehicle and human traffic. In your choice of a location, ensure that you factor in the size of the pool from which potential customers will come from. Be absolutely sure about the income levels of people in that pool. Coffee shops are best situated at shopping centres, in residential areas, shopping malls, central business districts or strategic standalone locations. A coffee shop must be clearly visible to anyone moving up and down in the vicinity.
Your premises must be spacious enough to have parking space that adequately accommodates your customers. The building should be large enough to accommodate all your equipment, offices, and space for customers. Staff and customers must be able to move around without any inconveniences. Your coffee shop business plan should cater for the costs of buying or leasing the premises.
The coffee shop is quite competitive in most places. There are numerous notable coffee shop brands you must consider. That does depend on where your coffee shop business will be located. In some parts of the world you might have to contend with the likes of Starbucks. You have to consider at least 3 significant coffee shops who are your direct competitors. Check out the type of services and products they offer. Study their customers and find out their preferences. Look into why they choose the locations they are using. Find out about their prices and payment options.
Study how they reach out to prospects and how they retain customers. You are doing all this to figure out your competitors’ strengths and weaknesses. It also helps to study the dynamics around those who make their coffee at home. Understanding that can inspire strategies you can employ to appeal to that pool. There are many people who make their coffee at home so it a competition element you must study. That is why conducting some poll or survey to better understand people’s needs, comes in handy.
Equipment for a Coffee Shop
If you want to run a cutting-edge coffee shop then there’s a wide range of specialized equipment that you’ll need. Your equipment plays a major role in how your coffee shop will perform. You’ll require things like drip coffee makers (preferably automatic ones), espresso machines, coffee grinders, freezers, refrigerators, storage containers, ovens, toasters, POS system, cooking and baking gadgets plus utensils and blenders, amongst other equipment. It’ll also be necessary to have cold counter displays or just basic display platforms or containers. So there’s a significant amount of money that’ll be required to purchase the equipment. Obviously tables, chairs, countertops, plates, saucers, spoons, cups, glasses and so on will be needed. The costs of purchasing the furniture and equipment should be included in the coffee shop business plan.
Permits/Licenses, Insurance & Business Bank Account
Start off with formally registering your coffee shop business. Get in touch with your local authorities to get guidance on applying for an operating license. Be prepared for some rigorous assessments which are typical when applying for a license to operate a food business. Contact reputable insurance providers to weigh your options in terms of getting the coffee shop business insured. It is financially prudent to open a separate business bank account for the coffee shop business. It is important that you separate your personal finances from the coffee shop business.
The major product of virtually any coffee shop is coffee or coffee-based beverages. There are also several other types of beverages and wide ranges of foods which are sold in coffee shops. A study of other players or your competitors will give you an idea of what products or services are popular in your area. Your menu has an effect on the number of customers that your coffee shop will attract, so you have to thoroughly research on this aspect. Some of the popular offerings are lattes, espressos, cappuccinos, americano, tea and different types of coffee (gourmet, flavoured, iced or specialties). There are other accompanying treats that can be included such as bread, cakes, bagels, cookies, sandwiches, donuts, croissant, pastries, salads, beverages, blended drinks (e.g. smoothies). The products that you will be offering should be included in your coffee shop business plan.
Staff And Management
Having expert baristas is vital for you to guarantee the production of high quality coffee. From the beginning you should have exceptional baristas working in your coffee shop. Focus on getting passionate and driven staff with hospitality and catering experience. The number of staff needed will depend on the size of your coffee shop and the range of services or products that you offer. Waiters plus cashiers will be needed – they must be passionate about customer care and service. Management size again depends on size of operations but to keep human resource costs low you can start with a lean management. Other required staff include accountants, supervisors, security team, stock controllers and managers, though this depends on the size of your coffee shop.
Your coffee shop should have sufficient number of well trained staff. This is because repeat purchases and ever-growing customer inflows are a product of swift and quality service from the staff. Having a small or skeletal staff makes it very difficult to provide swift service. Remember we are living in a fast-paced world where people don’t want to be kept waiting for too long. The salaries of all your employees must be catered for in the coffee shop business plan.
Marketing And Sales Strategies
Build A Digital Footprint
This entails setting up a website and social media accounts. Then you have to actively post and engage with your audience. Your content must be characterised by alluring food visuals. You also have to incorporate online ordering and online payment options. You also have to include delivery options. This will go a long way in driving sales for your business. Regularly hold online contests meant to generate leads. Get notable social media influencers associated with your coffee shop business.
You can offer a service where people can pay to host events at your coffee shop. This would entail them paying to use the venue and also paying for your food services. You can realize more money in a shorter time this way. Examples of events you can host can be luncheons, parties, weddings, presentations, and the like. Especially if your coffee shop is big and or has a big backyard, you can cash in on this. At the same time, this will put your coffee shop business’ name out there.
Attending Strategic Events
There are a number of events you can attend to showcase your coffee shop business. Such events serve a dual purpose i.e. brand awareness and revenue generation. For example, you can attend trade fairs, expos, entertainment events, and so on. Whilst marketing your coffee shop business you will also be generating revenue.
The market for coffee is huge and ever increasing. Demand for coffee continues to be dominated by instant coffee supported by consumers’ changing lifestyles, particularly amongst the younger generation, which is increasingly opting for convenience to suit their busy lives. More consumers are drinking coffee and spending time and money in restaurants and coffee shops. Some professionals and businesspeople make use of coffee shops for their meetings whilst some like to hang out in coffee shops during their breaks. You should invest lots of time and effort in marketing your business especially on the internet and social media. A proper marketing strategy should be included in the coffee shop business plan.
Keys To Profitability
Personalization Or Customization Is Key
Customers prefer coffee shops that tailor their products or services to their needs. Coffee shops which are rigid and provide generic offerings will not cut it. Make it possible for customers to specify their needs and you should be able to provide them. Nowadays customers are keen on getting personalized or customized services. This is especially so for a coffee business so ensure you can provide that. Build a system that enables data collection and analysis. For instance, having an electronic point of sale system (EPOS) helps in this. This make is easier to know customer preferences and buying patterns informed by data. It will also be essential to inventory management which is pivotal in the coffee shop business.
Customer Loyalty Programme
Customer loyalty can be a huge driver of brand awareness for your coffee shop business. Customer loyalty needs to be encouraged and rewarded. Once customers know their loyalty gets rewarded they will actively spread word of mouth. They will work towards making referrals. The rewards you can offer can be discounts or certain goodies they can win. This marketing strategy is highly effective since most people prefer to try a food service recommended by someone. Customer loyalty programmes are also much cheaper than other marketing strategies. Profitability is boosted by effectively setting up a customer loyalty programme for your coffee shop business.
It is important to appreciate that niching in vital for a coffee business. Your coffee shop business must have a clear brand identity that appeals to a specific niche. Quality, convenience, and speed are core aspects you must ensure in your coffee shop business.
Pre-Written Coffee Shop Business Plan (PDF, Word And Excel): Comprehensive Version, Short Funding/Bank Loan Version and Automated Financial Statements
For an in-depth analysis of the coffee shop business, we encourage you to purchase our well-researched and comprehensive coffee shop business plan. We introduced the business plans after discovering that many were venturing into the coffee shop business without enough knowledge and understanding of how to run the business, lack of understanding of the financial side of the business, lack of understanding of : the industry, the risks involved , costs and profitability of the business; which often leads to disastrous losses.
The StartupBiz Global coffee shop business plan will make it easier for you to launch and run your coffee shop business successfully, fully knowing what you are going into, and what’s needed to succeed in the business. This is a complete business plan for a coffee shop. It will be easier to plan and budget as you will be aware of all the costs involved in setting up and running the coffee shop business.
Uses of the Coffee Shop Business Plan (PDF, Word And Excel)
The coffee shop business plan can be used for many purposes including:
- Raising capital from investors/friends/relatives
- Applying for a bank loan
- Start-up guide to launch your coffee shop business
- As a coffee shop business proposal
- Assessing profitability of the coffee shop business
- Finding a business partner
- Assessing the initial start-up costs so that you know how much to save
- Manual for current business owners to help in business and strategy formulation
Contents of the Coffee Shop Business Plan (PDF, Word And Excel)
The business plan for coffee shop includes, but not limited to:
- Marketing Strategy
- Financial Statements (monthly cash flow projections, income statements, cash flow statements, balance sheets, break even analysis, payback period analysis, start-up costs, financial graphs, revenue and expenses, Bank Loan Amortization)
- Industry Analysis
- Market Analysis
- Risk Analysis
- SWOT & PEST Analysis
- Operational Requirements
- Operational Strategy
- Why some people in the coffee shop business fail, so that you can avoid their mistakes
- Ways to raise capital to start your coffee shop business
The coffee shop business plan package consists of 4 files
- Coffee Shop Business Plan – PDF file (Comprehensive Version – 85 Pages)
- Coffee Shop Business Plan – Editable Word File (Comprehensive Version – 85 Pages)
- Coffee Shop Business Plan Funding/Bank Loan Version- Editable Word File (Short version for applying for a loan/funding – 42 pages)
- Coffee Shop Business Plan Automated Financial Statements – (Editable Excel File)
The business plan can be used in any country and can be easily edited. The financial statements are automated. This implies that you can change eg the markup, salaries etc, and all the other financial statements will automatically adjust to reflect the change.
Click below to download the Contents Page of the Coffee Shop Business Plan (PDF)
Get the Coffee Shop Business Plan (PDF, Word And Excel)
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We wish you the best in your coffee shop business! Check out our collection of business plans , and more business ideas.