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How to create a business plan for a coffee shop

A simple coffee shop business plan can assist you in starting your business by following a standard layout consisting of a single document divided into several sections. It should include a description of the organization, market research, competitive analysis, sales strategies, capital requirements, and work and financial data.

Business plans can range from a few to hundreds of pages. It is best to be succinct and limit the business plan to 30 pages or less, especially if you intend to present it to bankers or investors for debt or equity financing. Potential investors seek concise presentations of solid research and analysis.

To make your plan more aesthetically pleasing, Include photographs, drawings, or floor plans of the future property to enhance the visual appeal of your plan. Moreover, charts and graphs facilitate the visualization of financial data, such as revenue projections.

Title page

Enter your business details, starting with the legal name. Include the addresses if you have identified a potential location or created a website. If you have a company logo, add it to the top or bottom of the title page. The title should also include a table of contents listing each section and the page number on which it begins.

Business plan

Section 1: Summary

Place the summary near the beginning of the outline. However, write it last. It should provide a brief, optimistic, and engaging overview of your business that piques the reader’s interest and makes them want to learn more. The abstract should not exceed two pages, with summaries of the other parts of the plan.

Our core products will be higher-margin gourmet coffee products such as espresso, cappuccino, latte, and various snacks, including healthy alternatives.

Strategically located within walking distance of the technical school, nursing schools, and various office complexes, we aim to cater to students and young office workers, providing ample seating space and superior customer service with a modern atmosphere.

We expect sales revenue to increase from $200,000 in the first year of operation to $250,000 by the end of the third year. In addition, to minimize operating expenses, both managers will be on-site full-time to reduce costs staff, supervise and maintain quality control. As a result, we expect net profits to increase from $50,000 to $100,000 by the third year.

Unit 2: Business/Industry Overview

Describe the coffee industry, the local market, and what makes your business special.

The coffee industry

According to a Pew Research analysis, millennials are now the largest generation in the United States. US statistics indicate:

  • Gourmet coffee is growing in popularity among various demographics.
  • Each day, Americans consume over 600 million cups of coffee.
  • Retail coffee sales exceed $47 billion annually.

The competition

Although there are currently two other coffee shops in the immediate area, neither offers outdoor seating or significant parking. In addition, one does not offer free wifi.

Unit 3: Market Analysis and Competition

Prove that you have thoroughly analyzed your target market and that there is enough demand for your products to make your coffee business viable. The competitive analysis involves evaluating and determining how your company will compete in the industry.

Given the proximity to schools and office buildings, our primary target market will consist of students and businesspeople. Both groups consume substantial quantities of coffee, tea, and snacks.

According to our customer surveys, there is a high demand for an upscale coffee shop in a central location that serves excellent coffee and has outdoor seating and parking. The three most frequent complaints regarding the existing competition in the region are:

  • Inconsistent product: Customers with discriminating tastes are hesitant to become regulars at a coffee shop that cannot consistently serve high-quality products.
  • Lack of patio seating: Many individuals prefer to consume their food and beverages outside on a sunny day.
  • Lack of parking space: Lack of parking spaces makes it difficult to attract vehicular commuters.

The local customer base consists of approximately:

  • 3,000 students from two post-secondary schools
  • 200 school staff
  • 1,000 businessmen and office workers

Both schools have stable enrollments and are expanding their student populations. In addition, the local business market is strong and relatively unaffected by previous economic downturns.

Compared to our competition, we expect our revenue to grow significantly as we build our customer base:

Section 4: Sales and Marketing Plan

Describe how you plan to attract customers to your coffee shop, including advertising, promotion, pricing strategy, sales, and service.


Pricing strategy

We plan to focus on specialty coffees such as espresso, cappuccino, mocha, etc., as the profit margins are much higher than regular coffee. Therefore, we will not use drip machines to charge a higher price for regular coffee. Instead, each cup it will only be served using a coffee press so that every cup is fresh and delicious.


We will offer counter service in a professionally designed, comfortable, and welcoming interior space. Indoor seating will mix smaller individual tables for intimacy and larger, bench-style tables for larger groups. Outdoor seating will consist of weather-resistant tables and chairs with umbrellas available. We plan to be open from 6:30 A.M. until 9 P.M. on weekdays and from 7 A.M. until 9 P.M. on the weekends.

In addition to cash, credit, and debit cards, we’ll also accept Apple Pay for purchases.

Advertising and promotion

Most of our advertising will be digital to minimize costs and connect with our customers. We plan to aggressively promote our products using the following methods:

  • Posters on local campus billboards
  • Our state-of-the-art website
  • Daily deals announced on Facebook, Instagram, and Twitter

Section 5: Ownership and Management Plan

Describe your business’ legal structure, ownership, and (if applicable) management and staffing requirements.

Section 6: Business plan

Describe the physical requirements of your business, such as retail space, equipment, inventory and supply needs, labor, etc. For example, for a business like a coffee shop that requires special facilities, supply chains, specialized equipment, and many employees, the business plan needs detail.


Two full-time and four to six part-time baristas will be hired at industry-standard wages. The baristas will be trained at a regional barista training academy. The two full-time employees are former employees of the owners. The part-time employees will be drawn from local post-secondary institutions.

The owners and staff will share the usual duties such as taking orders, making coffee/tea, cleaning tables, stocking, washing dishes, maintaining sanitary facilities, etc.

To increase employee loyalty, a bonus/profit-sharing system will be implemented.


The following equipment will be purchased:

  • La Marzocco Commercial Espresso Machine ($25,000)
  • Espresso Grinder ($1,500)

We are currently negotiating the purchase of used commercial equipment from the previous tenant, such as:

  • Glassdoor Fridge ($1,000)
  • Dishwasher ($1,500)
  • Microwave ($700)
  • Various shelves, storage bins, etc. ($500)

Equipment maintenance contracts will be negotiated with local suppliers.


We have agreed with Murphy’s Coffee Wholesalers to provide gourmet Colombian coffee/espresso beans with next-day delivery.

Muffins, scones, cookies, yogurt fruitcakes, and sandwiches will be provided daily by Jody’s Catering.

Section 7: Financial plan

This is the most crucial part of the business plan, especially if you need loan financing or want to attract investors. The financial plan must demonstrate that your business will grow and be profitable. To do this, you should create forecasted situations income statements, cash flow statements, and balance sheets. For a new business, these are projections, and a good rule of thumb is to understate revenues and overstate expenses.

Include these financial statements:

  • Income Statements: These show your projected income, expenses, and profits. Do this monthly for at least the first year for a start-up business.
  • Cash Flow Forecasts: These show monthly expected cash receipts and disbursements for expenses. This is essential for demonstrating that you can effectively manage your cash flow and pose a low credit risk.
  • Balance Sheet: This summarizes your business’s assets, liabilities, and equity at a specific time. For a start-up, this could be done on the day it starts operations. Note that a start-up will not has accounts receivable entries on the balance sheet. Also, note that the balance sheet is much simpler for businesses without legal staff. Income tax, pensions, medical care, etc., only apply to incorporated businesses, as do earnings/retained earnings.
  • Break-even analysis shows financiers or investors what level of sales you need to achieve to make a profit.

Section 8: Appendices and Exhibits

The “Appendices and Exhibits” section includes any supporting information required by other sections.

Possible annex/exhibit items include:

  • Credit history for business owners
  • Detailed market research and competitor analysis
  • Biographies of the owners and key employees
  • Information about your industry
  • Information about your products/services
  • Space/building/office plans
  • Marketing brochures and other materials
  • Recommendations from business colleagues
  • Links to your business website
  • Any other supporting material may impress potential lenders or investors if you seek funding.

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