A sample business plan for a coffee shop which can be used to create your own business plan or help you assess the risks and benefits of opening a coffee shop or similar business.
If you are planning to open a coffee shop, the very first thing you need to do is write a business plan. This is useful in many ways: it will allow you time to consider all your options before committing as well as put down on paper your goals and ideas. But, most importantly it will provide an analysis of your idea and give you a clue as to whether it will be a viable business venture.
Below is a sample business plan for a fictional coffee shop. You may use this plan to formulate your own. Use your own objectives and revenue figures to work out your business plan.
The Perfect Cup
Business Plan for the Period
Starting January 2005
The Perfect Cup is a new restaurant venture with an expected opening date in March of 2005 in Somewhereville, Texas. The business is a coffee shop located in Old Town, a newly renovated section of town, with antique shops and galleries along the main street. We will specialize in coffee, tea, cappuccino, frozen cappuccino, and homemade cookies and brownies. There are no other shops that only serve coffee in Old Town, the nearest being over five miles away. Our target audience is intellectuals/artists/writers. Currently, there are no places in the surrounding area that cater to artists and writers. The Perfect Cup will serve this area well.
Vision and Mission Statement
The Perfect Cup will become the foremost coffee shop in the area. We will serve a perfect product at a very reasonable price. We will also be a meeting place for artists and writers and a place for them to show off their work. We will create an atmosphere conducive to creative expression and promote the creative process.
Our primary goals over the next year are:
1. Secure financing for start-up of at least $30,000 for space and equipment.
2. Renovate our space in Old Town.
3. Acquire equipment necessary for business, i.e. coffee pots, cappuccino machines, blenders, etc.
4. Make agreement with coffee distributors, and bakery vendors.
5. Create a cozy, artist friendly environment (i.e. choice of colors, choice of music, decor)
6. Open for business and become the foremost coffeehouse in the area.
The Perfect Cup is a general partnership between Arlene and April Mason. Each partner is equally involved in operation and management of the shop, each to her own abilities.
Location and Facilities
The Perfect Cup is located in the Old Town section of Somewhereville, Texas. We currently own the building we will occupy, though painting and renovation are sorely needed.
Products and Services
Description of Products and Services
The Perfect Cup will offer high quality coffee, tea, hot coca, and cappuccino, at a very reasonable price.
We will also sell homemade cookies, brownies, and doughnuts, also reasonably priced.
Key Features of the Products and Services
All drinks will be made with filtered water and the highest quality ingredients we can get.
Frozen drinks will have caramel or chocolate syrup drizzled in the glass and over the drink. Cappuccino and hot coca will have whipped cream toppings as well as the option for candy sprinkles. Cookies will have the option of a chocolate or caramel dip and sprinkles.
We will offer designer flavored cream and five kinds of sweetener, i.e. sugar, honey, Equal, Splenda, and Sweet-n-Low. Cream and sweetener is at no extra charge.
Production of Products and Services
We will use only filtered water and will brew our coffee in commercial coffeepots that will be thoroughly cleaned between uses.
We will bake cookies and brownies in our own on-site oven from proven recipes, daily.
Future Products and Services
Within the next three to five years we expect to branch out into catering and offer homemade pies, whole or by the slice.
Comparative Advantages in Production
Our low overhead and cheaper pricing will be the key to our success.
There are no other businesses that serve only coffee in Old Town.
Size of the Industry
Nationally, the coffee shop industry is quite large, but in Somewhereville, there are only three. The nearest one to Old Town is more than 5 miles away.
Key Industry Trends
This industry is booming at the present time, there is a trend toward small cozy places and away from the large generic chain.
The coffee business does not show signs of slowing down. With new innovations such as flavorings and additives, it should continue for some time.
Our target market is artists and writers who need a nice quite cozy place to think and do their work.
Description of Key Competitors
Of the three coffee shops in the area, one is a large chain with a very expensive product, one is really a homestyle restaurant, the last one, and our biggest competitor is an antique store with a "tea room".
Analysis of Competitive Position
Our pricing strategy and comfortable atmosphere will be the key to our success. None of the other shops in the area can offer this.
We will offer three sizes of drinks, small $1.00, medium $1.50 and large $2.00.
Our cookies and brownies will sell for $1.00 each.
We intend to advertise in the local newspapers and offer a "frequent drinkers club" discount to our best customers. We will also send out ads via direct mail, which will include cents off coupons.
Management and Staffing
Our organizational structure will be a simple pyramid style with the owners putting in as much work as the employees.
April and Arlene will share management and supervisory responsibilities equally. Arlene for the morning shift. April for the afternoon shift.
We will hire two busboys and two waitresses, these will be recruited from the local high school.
Labor Market Issues
In this area there are many high school students looking for work, part time or full time, we want to fill that need.
Somewhereville and the state of Texas both have regulations regarding food service establishments. We have already obtained the appropriate business permits.
The main risk is monetary. The area may not be ready for a place like ours and we may not do a great business.
Implementation Activities and Dates
1. Begin building renovation 12/05
2. Complete renovation 2/15/05
3. Begin preliminary advertising 2/15/05
4. Purchase and setup equipment 2/15/05
5. Open for business 3/1/05
Beginning Balance Sheet
This will be a listing of all of your assets and liabilities, before you open for business. You may want to use a spreadsheet program to make this go easier.
Sound System $2,000
Total Current Assets
Accounts Payable (monthly)
Donut Vendor $1,000
Warehouse Club $1,000
Coffee Distributor $1,000
Property Taxes $500
Employee Taxes $2,000
Operating Loans Payable
Startup Loan $500
$12,850 on going per month
This will be a listing by month of your projected income. List the projected income each month for each product, this way you can compare actual sales to projected sales at the end of the year to determine what products to concentrate on. (below is a sample month)
Total Income for March
Total Projected Net Profit (Cost/Benefit)
$3,150 for March
This would assume 20 pots of coffee sold a day, plus an assortment of other items. This also assumes the market will not increase or decrease due to weather or economics. This would be an average month.
This of course would be adjusted monthly once you start business. Then based on the adjustments and actual sales, you can build a new balance sheet at the beginning of next year.
After you have created the business plan and examined the cash flow estimation you may find that your net profits are not what you would like them to be. In this case you may have to revise your pricing strategy to fit with your expectations or change your expectations. A coffee shop is not a get rich quick idea, it takes lots of hard work and long hours to realize your dream. But, in the long run, careful planning will make it all worth it.