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

• By Tam Nguyen

Table of Contents

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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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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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 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...

Coffee Shop Business Plan Ultimate Guide + Free Example

July 6, 2023

Adam Hoeksema

When it comes to starting a coffee shop, writing a business plan may not be your top priority. You're probably eager to dive into the exciting world of brewing aromatic coffee and serving delicious treats, rather than spending days crafting a detailed plan.

However, it's important to understand that potential lenders and investors often require a business plan before they consider supporting your venture. So, while it may not be your first choice, having a well-prepared business plan with realistic financial projections is crucial to securing the financial backing you need.

So if you have to do it, this article is going to help you walk through the following:

• What Should be Included in a Coffee Shop Business Plan?

Coffee Shop Business Plan Outline

• Conducting Market Research for Your Coffee Shop Business Plan
• Creating Financial Projections for Your Coffee Shop Business Plan

Example Coffee Shop Business Plan

• Free Coffee Shop Business Plan Template Download
• Coffee Shop Business Plan FAQs

With that in mind as the path forward, let’s dive in. 

A coffee shop business plan should effectively convey to investors and lenders why customers would prefer to frequent your coffee shop, why you or your team are the ideal individuals to manage the coffee shop, and how the financial projections are structured to ensure a worthwhile return on their investment. Below is a comprehensive layout of our complimentary coffee shop business plan template.

I. Executive Summary

Ii. market analysis, iii. business concept, iv. marketing strategy, v. operations plan, vi. financial plan, startup costs and use of funds, annual sales, gross profit and net profit, key financial ratios, financial summary, income statement annual summary, cash flow statement annual summary, balance sheet annual summary, vii. management team.

VII. Conclusion

How to do Market Research for a Coffee Shop Business Plan

Central to any coffee shop business plan is market research. You need to comprehend your position in the market and aim to validate that there is ample demand for your specific coffee shop concept, location, and pricing structure. You can explore more about our coffee shop market researc h approach here, but ultimately, you aim to understand your competition, gain insights into potential customer footfall, select an optimal location, and anticipate any seasonal trends that might influence your business. Here are some instruments and strategies for conducting market research for your proposed coffee shop.

What Will be the Cost to Advertise my Coffee Shop?

We recommend using Google Keyword Planner to assist you in determining which keywords to advertise for attracting customers to your coffee shop's website. The tool also provides an estimate of how much each click will cost when advertising for various keywords, as seen below:

What Keywords are Customers Using in Their Searches?

We utilize both Google Keyword Planner and Ahrefs to discover which keywords are channeling traffic to your competitors' websites. For instance, you can run a report on a competitor's website to see the keywords they rank for and the amount of organic traffic each keyword brings. This information can help streamline your SEO efforts.

How Seasonal are Coffee Shops?

We use Google Trends to identify how seasonal your coffee shop concept might be. As an example, you can see below that the search volume for “coffee shop near me” in the United States is somewhat seasonal in nature.   January is consistently the low point, with the summer and fall tending to be the high point of the season.

How Many Customers Do my Competitors Receive Each Month?

Lastly, we find it beneficial to generate foot traffic reports on your competitors to ascertain the typical number of customers they receive at their coffee shops. You can see an example below that indicates the number of visits per month for a specific location:

In the end, the potential customer base for your coffee shop will be a critical assumption that will form the backbone of your financial projections. Therefore, understanding the footfall of your competitors can aid you in estimating potential traffic to your coffee shop.

How to Create Financial Projections for a Coffee Shop Business Plan

Once you've conducted thorough market research, it's time to develop financial projections for your coffee shop. Our coffee shop financial projection template is designed to help you estimate revenue based on customer traffic, taking into account factors such as seating capacity and the efficiency of your kitchen operations. These projections serve two important purposes: demonstrating your ability to repay a loan and showcasing the potential return on investment for potential investors. To achieve this, consider the following steps:

• Estimate startup costs for your coffee shop
• Forecast revenue
• Project food and labor cost
• Estimate your operating expenses like rent and utilities
• Calculate how much investor or loan capital you will need to open

Our coffee shop projection template offers guidance in this process and provide a standardized format that meets the requirements of investors and lenders. Typically, a comprehensive set of projections for a startup coffee shop should include an integrated income statement, balance sheet, and cash flow forecast.

Remember, while writing a business plan and developing financial projections may seem daunting, they are essential steps in securing the necessary funding and creating a roadmap for your coffee shop's success. By following these guidelines and utilizing our templates, you'll be well-equipped to present a compelling case to potential investors and lenders.

Below is the content of our example coffee shop business plan. You can also access a Google Doc version of this coffee shop business plan template here , allowing you to personalize it to suit your needs. In addition, you can follow along with this video walkthrough designed to assist you in adapting the business plan to your specific coffee shop concept.

Coffee Shop Business Plan Template

Brewtopia is a specialty coffee shop located in the heart of downtown, offering customers a unique and elevated coffee experience. Our target market is young professionals and coffee connoisseurs who are looking for high-quality coffee and a comfortable, chic atmosphere. Our goal is to differentiate ourselves from other coffee shops in the area by offering a unique selection of specialty coffee drinks and a curated menu of pastries and small bites, made with locally-sourced ingredients. In addition to traditional espresso-based drinks, Brewtopia will offer Nitro cold brew on tap and a variety of flavored lattes made with natural syrups. With a focus on quality, customer service, and community involvement, Brewtopia aims to become a staple in the downtown community and to provide customers with a memorable coffee experience.

The coffee industry is a rapidly growing market, with revenue in the US estimated at $48 billion in 2021. Within the industry, the specialty coffee segment is growing even faster as consumers are willing to pay more for a premium experience. 

Our target market is young professionals, ages 25-40, who value convenience and quality in their coffee choices. The downtown area, where Brewtopia will be located, has several coffee shops, but none offer the same level of specialty drinks and baked goods that we will offer. With a focus on quality and a unique experience, Brewtopia is well-positioned to capture a significant share of the growing specialty coffee market in the downtown area.

Brewtopia's concept centers around providing customers with a unique and elevated coffee experience. 

Our menu will include a variety of specialty coffee drinks made with high-quality, responsibly-sourced beans, as well as a curated selection of pastries and small bites made fresh daily using locally-sourced ingredients. In addition to traditional espresso-based drinks, Brewtopia will offer Nitro cold brew on tap and a variety of flavored lattes made with natural syrups, differentiating ourselves from other coffee shops in the area. Our chic and modern decor will provide a comfortable and inviting atmosphere for customers to work, relax, and socialize.

Brewtopia's marketing strategy will focus on building brand awareness and attracting customers through a strong presence on social media, targeted advertising, and community involvement. We will maintain a strong presence on platforms like Instagram and Facebook, showcasing our products and connecting with customers. 

Our targeted advertising will focus on reaching young professionals in the downtown area through channels such as local publications and online ads. In addition, Brewtopia will be active in the community, hosting events and supporting local organizations, helping us to build relationships with our customers and establish ourselves as a part of the downtown community. 

We will also offer loyalty programs and special promotions to encourage repeat business. Our pricing strategy will be competitive with other specialty coffee shops in the area, but slightly higher to reflect the premium quality of our products.

Brewtopia will be open 7 days a week, from 7am to 7pm. Our team of baristas will be trained to provide exceptional customer service and to prepare a wide range of specialty coffee drinks. We will use a point-of-sale system to manage orders and track inventory, and all baked goods will be prepared fresh daily on-site. 

Brewtopia will occupy a 1,500 square foot space in the downtown area, which will include a kitchen for preparing food, a bar for coffee preparation, and seating for 20-25 customers. The space will be designed to be modern and chic, creating a welcoming atmosphere for customers.

The start-up costs for Brewtopia are estimated at $200,000, which includes the costs of leasing a space, equipment and supplies, marketing and advertising, and initial inventory. We plan to finance the startup costs through a combination of personal savings, a small business loan, and investments from friends and family.

All of the unique financial projections you see here were generated using ProjectionHub’s coffee shop financial projection template . Use PH20BP to enjoy a 20% discount on the template. 

Watch how to create financial projections for your very own coffee shop:

Brewtopia will be owned and operated by Jane Doe, a seasoned coffee professional with over 10 years of experience in the coffee industry. Jane will manage the daily operations of the business and provide exceptional customer service, while also training and supervising a team of baristas. Additionally, Jane will be responsible for the financial management of the business and the development of our marketing strategy.

VII. Conclusion 

Brewtopia is poised to fill a gap in the specialty coffee market in the downtown area. With a focus on quality, customer service, and community involvement, we aim to become a staple in the downtown community and provide customers with a memorable coffee experience. With a solid financial plan and a seasoned management team, Brewtopia is well-positioned for success in the growing specialty coffee market.

Coffee Shop Business Plan FAQs

What are the essential elements to include in a coffee shop business plan.

A coffee shop business plan should include sections on executive summary, company description, market analysis, target audience, menu and pricing, marketing and promotional strategies, location and facilities, staffing and management, and financial projections.

How can I determine the ideal location for my coffee shop?

When selecting a location for your coffee shop, consider factors such as foot traffic, proximity to offices or residential areas, competition in the area, parking availability, and visibility. A bustling area with a high concentration of your target customers can be an ideal location.

How can I estimate the financial projections for my coffee shop?

Financial projections for a coffee shop should include estimates for start-up costs, monthly expenses (such as rent, utilities, ingredients, and employee salaries), projected sales revenue based on customer traffic and average spending, and a break-even analysis to determine when your coffee shop will become profitable.

About the Author

Adam is the Co-founder of ProjectionHub which helps entrepreneurs create financial projections for potential investors, lenders and internal business planning. Since 2012, over 50,000 entrepreneurs from around the world have used ProjectionHub to help create financial projections.

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How to Write a Coffee Shop Business Plan + Free Sample Plan

Makenna Crocker

8 min. read

Updated February 7, 2024

Free Download:  Sample Coffee Shop Business Plan

Wake up and smell the business potential! In the US, 72% of adults reported drinking coffee in 2022 . Globally, coffee consumption rose to 175.6 million bags of coffee from 2021 to 2022 – that’s up 4.2%. In such a large, steadily growing industry, there are many possibilities for you to find a niche.

But all of that opportunity creates a heavily saturated market. Walk around your downtown and you’re likely to come across at least a few potential competitors. Starting a business in such a competitive space only adds to the risks you face by not being prepared.

So where should you begin? Start by creating a business plan. The planning process will ensure you understand the competitive landscape, price your coffee appropriately, and are ready to adapt to changing consumer preferences. This article will cover the steps necessary to write a business plan for your own coffee shop business.

Need more guidance? Download our free sample coffee shop business plan for a full business plan example that you can follow as you create your own.

• What should you include in a coffee shop business plan?

Your coffee shop business plan doesn’t need to be hundreds of pages—keep it as short and concise as you can. You’ll probably want to include each of these sections:

• Executive Summary
• Company Summary
• Market Analysis
• Unique Value Proposition
• Menu and Services
• Marketing and Promotion Strategies
• Operations Plan and Risk Mitigation
• Financial Plan and Forecasts

Here’s an example of a coffee shop business plan outline. Next, we’ll dive into each of the sections individually.

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• Carve out time for market research

Seeing cafes on every block is not uncommon in a lot of cities, so you will need to invest time in market research to identify your target customers and help your coffee shop business stand out. 

You can start simply by walking around your area. What do you notice about the other coffee shops? Where are they located in relation to traffic patterns, and how do they appeal from the outside? Then, go inside and take note of their customer service, menu offerings, and ambience. Keeping track of what others seem to be doing well and what could be better will ultimately help your coffee shop stand out.

Consider the neighborhood where you plan to open and what locals will want from your business. Are you located near a university? If so, what kind of drinks are most popular amongst young adults? Are people in your area typically on the go, or do they prefer more of a sit-down experience? 

To gather more insights, you can talk to customers and read industry publications to understand trends. You could even look into coffee shops in your town that have closed to try to figure out why they failed so you can avoid those same mistakes.

• Focus on what sets you apart

To bring your coffee shop vision to life in a competitive landscape, you need to differentiate yourself in the market. Your business plan is where you focus on developing your coffee shop’s unique value proposition (UVP). You should not only understand, but be able to clearly explain what makes you different from your competitors.

Maybe you have stellar supplier relationships that will let you serve better tasting coffee for cheaper? Or maybe your coffee shop will double as a community gathering place?

Your unique value proposition explains what solves your customers’ problems, the benefits of your product or service, and why your target customers should choose to do business with you. Regardless of what sets you apart, you need to emphasize it across your business.

• Create an appealing menu

A compelling menu is crucial for any food and beverage establishment. Your business plan shouldoutline your beverage offerings, as well as food if you plan to provide it. And your description of menu offerings should connect to your target market: If you’re catering to busy commuters, you can emphasize quick meals like pastries and to-go options for each of your coffees. If families are your primary market, highlight kid-friendly options like hot chocolate. 

Maybe you can provide large amounts of coffee and pastries for community events or business meetings? If so, include a subsection about these additional services you can provide, since these may be part of your unique value proposition.

It’s also crucial to plan for the design aspect of your menu. If visual design isn’t your strength, mention in the plan the intention to hire a graphic designer for a professional and appealing prototype. Additionally, consider involving an editor for quality assurance – you may be able to find a trusted friend or business partner for this.

• Utilize marketing and promotion strategies

In a highly competitive space like the coffee business, creating a well-thought-out marketing and promotion strategy is arguably the most important part of planning. Along with reflecting your brand’s unique appeal, the  marketing plan should also be adaptable to your business’s growth over time. Consider including these key elements:

• Digital Platforms : Outline which social media platforms (like Instagram, Facebook, etc.) will be most effective for reaching your target audience. Include strategies for content, such as promotional posts or interactive engagement.
• Local Advertising : Discuss the use of physical signage in strategic locations to attract local foot traffic. Mention the design and messaging of these signs to ensure they align with your brand identity.
• Detail plans for a soft opening or launch event. Consider including community-oriented activities like live music or local collaborations to generate initial interest and goodwill.
• Describe potential programs for customer retention and engagement , such as loyalty programs or seasonal promotions. Mention the use of automated communication tools (like texts or emails) for keeping customers informed and engaged.
• Feedback and Evolution: Include a plan for gathering customer feedback and how this will inform future marketing and promotion strategies. Doing this shows adaptability and a commitment to continuous improvement.

Incorporating these elements into your business plan will not only provide an outline for your marketing efforts but also demonstrate to potential investors or partners how you intend to attract and retain customers.

Don’t neglect your operations plan

Just like having a strong marketing plan, staying on top of your day-to-day operations is crucial. That’s why your business plan should include a detailed operations plan .. The operations plan details all of the tasks you’ll need to manage as the owner to ensure you’re running a functional business. 

Who is responsible for each task, and what are your staffing and training requirements? Ensure that you have the right people for the job, the right amount of people to help run each task, and a delegated plan in order to keep your coffee shop business running smoothly.

Consider the potential for equipment breaking and running out of cups, plates, and other inventory. How might things need repaired, and how much inventory should you have on hand to be best prepared? 

Here, you will also want to factor in storage needs for supplies and a layout that supports quick and easy access for staff – proper layout and organization will encourage good customer flow and barista efficiency. Discuss the seating capacity, counter space, and equipment arrangement to ensure optimal service speed and customer comfort.

• Financial planning is essential

When setting up your coffee shop business, there will likely be more upfront costs. These could include:

• Coffee bean and food purchases
• Salaries 
• Coffee cups and silverware

With all of this in mind, you can create the start of your sales, expense, and cash flow forecasts . They will help give you some answers on how to price things in order to be profitable, and will ultimately tell you whether or not you have a viable business.

On top of startup costs , you will need to take into account recurring costs like recurring coffee beans and ingredient purchases, utility costs and Wi-Fi access for customers. Don’t forget the cost of paying yourself and your employees. Bucket these all into categories so that you can easily keep track of them.

You’ll also want to consider your revenue streams. Will you charge more for milk alternatives? If people want to rent out your space for work meetings or events, what is your rate? 

Going further, when do you anticipate you will break even? Don’t just consider when your revenue costs equal your startup costs, as this isn’t the most accurate. We recommend you do a break-even table twice – once with your assumptions and again with your actual results. We have a full writeup on this if you’d like to dive deeper.

If you’d like extra guidance with forecasting your financials, tools like LivePlan help you do just that.

Learn more: How to Forecast Expenses and Revenue in LivePlan  

• Understand risks and how to mitigate them

Just like with any business, challenges might arise. Issues with supply chain, service consistency, or poor quality products are just a few of the things that can unfortunately go wrong when running a coffee shop business. 

It’s important to have strategies for long-term sustainability that keep potential risks like these in mind. Documenting things like your training strategy and coffee bean storage protocol will help keep up with proper quality control of the drinks and service you provide. Strategic inventory management will also reduce the chance you run into supply chain or pricing issues.

• Download your free coffee shop business plan PDF

By anticipating potential challenges, your business plan prepares you for sustainable success. If you’d like some extra help, download our free sample coffee shop business plan – you’ll get a full business plan example that you can follow as you create your own for your successful coffee shop business.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Makenna Crocker is the Marketing Specialist at Richardson Sports. Her work focuses on market and social trends, crafting gripping and authentic content, and enhancing marketing strategy to foster stronger B2B and B2C relationships. With a master’s degree in Advertising and Brand Responsibility from the University of Oregon, she specializes in generating a strong and responsible brand presence through content that positively influences and inspires others.

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• Don’t neglect your operations plan

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How to Write a Coffee Shop Business Plan In 2024

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How to Write a Successful Coffee Shop Business Plan Template for 2024

Antonio Del Cueto, CPA

March 27, 2024

Embarking on the journey to open a coffee shop is akin to starting a new adventure in a vast coffee jungle, where the aroma of success lingers in the air, and each path leads to exciting possibilities. In this expedition, a coffee shop business plan template serves as your trusted map, guiding through the thickets of the coffee industry and unveiling the secrets to make your coffee shop a treasure trove of flavors and warmth.

This guide is designed for intrepid startup heroes, business owners with a dream in their heart, and baristas with magic in their hands. Those who want to open their own coffee haven will find the tools to navigate the complexities of payroll, understand the importance of a barista's qualification, and learn how to stand out in the bustling marketplace. Dive into this adventure with us, and let's brew success together.

Are you in the process of starting your own business? Download FREE our business plan template here.

How to Write a Coffee Shop Business Plan

Starting a coffee shop is exciting. Before you become the best coffee shop owner, you need a plan. This guide helps you write your coffee shop business plan easily. We cover everything from what to include to how to do your financial planning. Let's dive in!

Coffee Shop Business Plan Template

Need a coffee shop business plan? Use this free coffee shop business plan template. It's a starting point. The template helps you organize your ideas. It covers important parts like your coffee shop concept, the type of coffee you'll serve (like third-wave coffee), and more. Think of it as a map for your journey to opening your coffee shop.

Writing a Business Plan for Your Coffee Shop

Writing a business plan for your coffee shop might sound hard, but it's key to success. Start by describing the coffee shop you want to open. What makes it special? Will you have baristas making the best coffee? Include details about your location, the kind of shop you want to open, and your target customers. Your plan should also talk about marketing your coffee shop. This is how you tell people why they should come to your shop. A good business proposal shows your vision clearly.

Financial Planning for Your Coffee Shop

Every coffee shop owner must think about money. Financial planning is a big part of your business plan. You have to figure out how much money you need to start and keep your coffee shop running . This includes costs like renting a place, buying equipment, and paying your baristas. Also, think about how much money you expect to make from selling coffee and other items. Planning this well helps you keep your shop open for a long time.

Key Components for a Successful Coffee Shop Business

Opening a coffee shop is more than just selling cups of coffee. It's about creating a space where people want to come back. To make your coffee shop a success, you need a good plan. Here, we talk about important parts of your coffee shop’s business plan. Let's make it easy to understand what you need to do.

Defining Your Target Market

Knowing who will buy our coffee is the first step. This is about your target market. Think about who you’re opening your coffee shop for. Are they busy workers who need a quick coffee? Or maybe families who enjoy a cozy spot? Understanding this helps in creating a marketing plan. This section of the coffee shop business plan makes sure you know who you’re talking to.

Developing a Pricing Strategy

How much will your coffee cost? This question is about your pricing strategy. Your prices need to be fair so people feel good about buying your coffee. But, you also need to make money to keep your coffee shop running. Think about the cost of making a cup of coffee and how much people are willing to pay. This is a key part of your business operations section. It shows how your coffee business will make money.

Creating an Executive Summary

Every business plan starts with an executive summary. This part gives a quick overview of your whole plan. It talks about your coffee shop , what you want to do, and how you plan to succeed. Even though it's at the beginning of your business plan, you write it last. It sums up everything about your coffee shop’s plan in a few short paragraphs. This makes it easy for anyone to understand your business’ goal.

Steps to Starting a Coffee Shop

Starting a coffee shop is a journey. It's about creating a place where people love to be. This guide will show you the main steps you need to take. We will keep it simple and clear, so you know exactly what to do. Let’s start making your dream of opening a coffee shop come true.

Choosing the Right Location for Your Coffee Shop

Finding where your coffee shop should be is very important. You want a spot where lots of people pass by. Before you decide, conduct research. Look at where people spend time and what other shops are nearby. A good location can help your coffee shop become very popular. Remember, the place you pick is a big part of the experience you want to give your customers.

Building Your Management Team and Staff

Your coffee shop needs a great team. This includes everyone from managers to baristas. When you’re going, think about the skills you need. Your team should know how to make the best espresso and other drinks. They should also make customers feel welcome. Include details in your company overview about the team you want to build. This shows potential investors or lenders that you have a solid plan for your staff.

Understanding the Cash Flow Projection

Money matters a lot. You need to know how much does it cost to open and run your coffee shop. This is where cash flow projection comes in. It helps you see how money will come in and go out. Include information about costs like rent, supplies from your supplier, and paying your team. Also, add how much money you expect to make from selling coffee and food. Check the balance sheet and financials section of your business plan. This part is very important for lenders or investors. It shows them that you know how your coffee shop can succeed.

Each of these steps is part of the process of opening your coffee shop. They help you write the executive summary, create a sample menu, and choose the right POS (point of sale) system. Keep everything concise but informative. This way, everyone understands your plan and how your coffee shop will become a favorite spot.

Customizable Elements in a Coffee Shop Business Plan

Creating a coffee shop business plan is like drawing a map for an adventure. It shows you where you want to go and how to get there. But every coffee shop is unique. So, your plan should have parts that you can change to fit your dream. Let’s look at what you can customize to make your plan just right.

Including a Marketing Plan for Your Coffee Shop

Your marketing plan tells people why they should come to your coffee shop. It’s one section you can really make your own. Talk about using social media accounts to share photos and news. Think about email marketing to send special offers. Marketing also means having a clear idea of how to tell people about your shop, both online and in the real world. This way, more people drink your coffee and enjoy your place.

Developing a Unique Coffee Shop Concept

What makes your coffee shop different? This part is all about your idea. Maybe you want to create a place that also serves books and music. Or a spot where every cup of coffee comes with a story. Your concept should show what’s special about your place. This makes your coffee shop stand out and gives customers a reason to come back.

Integrating Pastry and Beverage Offerings

Food and drinks are the heart of your coffee shop. In this part, you decide what to serve alongside your coffee. Will you have pastries? What about other drinks? Maybe you want to offer food that has a special certification, like organic or gluten-free. This section helps you keep enough variety to make everyone happy and coming back for more.

Free Coffee Shop Business Plan Templates in 2024

Starting a coffee shop in 2024? Great! There are free b usiness plan templates that can help. These templates give you a structure. Then, you add your own details. Let’s see how to use these templates to your advantage.

Utilizing a Free Coffee Shop Business Plan Template

A free template is a great tool during the writing process. It shows you what sections your plan needs. For example, it has spots for your marketing plan, your concept, and your menu. Using a template means you don’t forget anything important. It’s a good base that you can add to and change as needed.

Personalizing Your Coffee Shop Business Plan

Even with a template, your plan should show who you are. Add your style to every part. If you’re great at digital marketing, highlight that. If your foodservice is going to be amazing, talk about it a lot. Make sure every section reflects your vision and goals.

Adapting the Business Plan for Different Types of Coffee Shops

Not all coffee shops are the same. Maybe you’re opening a cozy corner spot or a drive-thru. Your business plan should fit your type of shop. Change the template to match your needs. Think about what makes your coffee shop special and make sure your plan shows that. The final section should leave readers excited about what you’re creating.

Key Takeaways:

• Location : Where your coffee shop will be. Think of it as choosing the best spot in the park for your lemonade stand.
• Menu : What drinks and snacks you'll sell, like planning a snack bar for your friends.
• Target Customers : Who you want to visit your coffee shop, such as people who love reading books or using laptops in cozy places.
• Budget : How much money you need to open and keep the shop running, like planning your allowance for new games and snacks.
• Marketing Strategies : Ways to make people excited about your coffee shop, like inviting friends to your birthday party.

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Coffee Shop Business Plan Template

Written by Dave Lavinsky

Business Plan Outline

• Coffee Shop Business Plan Home
• 1. Executive Summary
• 2. Company Overview
• 3. Industry Analysis
• 4. Customer Analysis
• 5. Competitive Analysis
• 6. Marketing Plan
• 7. Operations Plan
• 8. Management Team
• 9. Financial Plan

Coffee Shop Business Plan

Whether you are planning to start a new business or grow your existing coffee shop, you’ve come to the right place to create your coffee shop business plan.

We have helped over 100,000 entrepreneurs and business owners create business plans and many have used them to start or grow their coffee shops.

A coffee shop business plan is used to start and/or grow your business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

Coffee Shop Business Plan Sample

Below are links to each section of our coffee shop business plan example:

Next Section: Executive Summary >

Coffee Shop Business Plan FAQs

What is a coffee shop business plan.

A business plan for a coffee shop is a plan to start and/or grow your business. Among other things, it includes your company overview, allows you to conduct a market analysis to identify your target market, includes a sample menu, presents your marketing plan and pricing strategy to attract your local customer base, details your sales forecasts, and provides the income statement, balance sheet and cash flow statement for your coffee shop.

You can  easily complete your coffee shop business plan using our Business Plan Template for a Coffee Shop here .

What Are the Main Types of Coffee Shops?

The different types of coffee shops include cafes, coffee bars and coffeehouses that sell coffee drinks and other snacks. Some coffee shops offer lunch and dinner menus and are close to being full-service restaurants. There are also coffee shops that are more accessible for people on the go or those who want to make their own coffee. These are retail coffee shops, drive thru coffee shops, coffee carts and trucks, and roasters or retailers.

What Are the Main Sources of Revenue and Operating Expenses for a Coffee Shop?

The primary source of revenue for many coffee shops come from its food and drink sales, which includes brewed coffee, coffee beans, seasonal drinks and refreshments, and baked goods. Gift card and merchandise sales like tumblers, mugs, and coffee makers also contribute to a coffee shop’s revenue stream.

The expected expenses for a coffee shop are the cost of coffee and food products, salaries and wages, rent, and advertising costs. 

How Much Does it Cost to Start a Coffee Shop?

Opening a coffee shop business can cost anywhere from $40,000 to $100,000 depending on the size and location of the business. Additional costs such as inventory, employee salaries, and marketing expenses can range from $5,000 to $15,000 per month.

How Do You Get Funding for Your Coffee Shop Business?

The best way to get funding for a coffee shop business is through a bank loan or utilizing your personal savings, business credit cards or borrowing from friends and family. You can also look into government grants or loans, or try to find a partner who is willing to invest in your business. Whatever route you choose, be sure to have a solid coffee shop business plan for potential investors including a sales and marketing plan as well as a realistic idea of how much money you need to get started.

How to Start a Coffee Shop?

• Determine the type of coffee shop business you want to open . There are many different types of coffee shops, from small mom-and-pop shops to large chains.
• Create a coffee shop business plan. This will outline your plans for starting and running your coffee shop. 
• Secure funding . You will need money to start and run a coffee shop, so you'll need to find investors or borrow money from a bank or other lending institution.
• Find a location for your coffee shop. This can be tricky, as you'll need to find a space that is affordable and has good foot traffic.
• Equip your coffee shop . You'll need to buy or lease equipment such as espresso machines, coffee brewers, and furniture in addition to the coffee beans and other food products you plan to sell.
• Hire staff . You'll need employees to run your coffee shop, so post job ads and interview potential candidates.

Learn more about how to start a successful coffee shop business:

• How to Start a Coffee Shop Business

Where Can I Get a Coffee Shop Business Plan PDF?

You can download our free coffee shop business plan template PDF here . This is a sample coffee shop business plan template you can use in PDF format.

• Get Started

Home >> #realtalk Blog >> Manage a business >> How to Write a Coffe…

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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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

Download a sample coffee shop business plan

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.

The Quickest Way to turn a Business Idea into a Business Plan

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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

About the Author

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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How To Write a Coffee Shop Business Plan: Step by Step

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Want to open a coffee shop of your very own? Give it the best chance for success by writing a coffee shop business plan.

But, what exactly is a business plan, why do you need one, and what’s the best way to make such a plan?

In this article, we discuss the answers to those questions and how the right technology can help you run things smoothly once your coffee shop business plan becomes a reality.

Table of contents

What is a coffee shop business plan, do you need a coffee shop business plan, creating a coffee shop business plan.

A coffee shop business plan is a written document that describes:

• The nature of the business
• How the business is organized
• The business’s financial projections
• Goals the business would like to reach
• Strategies for reaching those goals
• The time frame for reaching those goals

In essence, a coffee shop business plan is a roadmap that provides structure and direction to an as-yet unformed operation.

Many first-time, prospective entrepreneurs wonder if they really need a business plan to get started. The answer is yes .

Without a business plan, it will be very difficult — some would say impossible — to get a loan from a bank or funding from an investor.

But, even if funding isn’t a major concern right now, a business plan provides clear direction on how you intend to get where you’re going and how to make your new endeavor a success .

Sure, we’ve all taken a road trip (or gone traveling) without a map or a plan, and sometimes that can be fun.

Starting a new business, though, demands much more of an investment than just picking a direction and heading out. Starting a new business can occupy all of your time, money, and energy for years to come, so you don’t want to commit yourself without a plan.

That’s what the coffee shop business plan is: a map to help you keep moving in the right direction when things are going smoothly and to show you how to get back on track when they aren’t.

As you get started writing your very own business plan, keep in mind that the document you produce doesn’t have to be the final draft right away, nor does it have to include every single detail about your business.

Yes, some business plans are hundreds of pages long. Yours may reach that level in the end, but don’t allow that fact to overwhelm you now or stop you from getting started.

Get the information on the page to the best of your ability, and then go back and edit as needed to make it the best it can be. A business plan is a living document that may change as your business grows. But it and your business can’t go anywhere until you write your first draft.

Here’s how to get started.

Step #1: Ask and answer questions

As we mentioned, some business plans can be chock-full of details and facts about the business itself, and many first-time owners wonder where all that information comes from.

The answer is simple: The details in your business plan are basically answers to questions you and anyone else may have about how to go about transforming your idea into reality.

Before you write one word, sit down and consider all of the questions you have about what you’re getting into.

For example, you may ask yourself:

• Who will run the business?
• What makes that person qualified to do so?
• What niche will the business fill?
• Who are the business’s target customers ?
• How will the business market and sell its food and beverage to them?
• What is the size of the market you intend to sell to?
• What is the business model for the business?
• How will the business make money?
• Who are the competitors?
• How will the business compete?
• Will the business have an advantage over the competition?
• How does the business plan to manage growth?
• What are the risks and threats confronting the business?
• What can you do to mitigate those risks and threats?
• What are the business’s financial requirements?

Go through the list and answer as many of those questions as you can in whatever level of detail you can muster.

The nice thing about starting with this step (instead of jumping right into word one of the main sections of the plan) is that you can use the answers you generate as the basis for what comes next.

Step #2: Write an executive summary

While the other sections in your coffee shop business plan can go in any order you choose, the first section should always be the Executive Summary.

This section gives a brief overview of the main elements of the coffee shop you plan on running, including:

• Overhead costs
• Labor costs
• Return on investment (ROI)

Keep in mind that this information is here at the start to give readers a quick introduction to the plan. If they want more detail, they can read on.

It’s also important to remember that you’ll likely repeat much of the information in the executive summary later on in your business plan.

That’s OK. You won’t be penalized if a reader finds the exact same details elsewhere in your document.

Step #3: Describe your company

Next, write a description of your company. More specifically, write about the who, what, why, where, and how of your coffee shop.

View the Business Description section as the physical details about the business you intend to run, including:

• Business name
• Your experience
• Contact information
• Partners involved (if any)
• The tax status of the business (e.g., sole proprietor, LLC/LLP, S-Corp)
• Intended or existing location of your coffee shop

It can also be helpful to include a brief mention of your coffee shop’s short- and long-term goals as well as your plan for achieving those goals.

Step #4: Conduct a market analysis

The next section to include in your coffee shop business plan is Market Analysis.

Most market analyses describe three distinct views of the business:

• The industry as a whole (in this case, the coffee shop industry)
• The competition your coffee shop will face (e.g. other shops in the area)
• The marketing you’ll execute to bring in customers

As with the previous two sections, the Market Analysis section can be a relatively brief discussion of these three concepts.

As your coffee shop business grows, you can add sections that address those concepts in more detail later on.

Step #5: Explain your coffee shop’s financials

Both you and your investors are going to want to know how much money it’s going to take to get the coffee shop set up, running, and turning a profit. That’s where the Financials section comes in.

While brevity is important (if not mandatory) in the first few sections on this list, when you explain your coffee shop’s financials, you want to be as detailed as possible.

This is especially true if you hope to secure bank funding or get involved with investors.

To provide the level of detail you need to make the Financials section as complete as possible, consider hiring an accountant to help you prepare this section so that it will be as accurate as possible.

Taking advantage of technology

As you research and write your coffee shop business plan, include information about the technology you’ll use to help run your business.

More specifically, find a software suite that makes it easier to manage and optimize your team.

The Sling app , for example, includes a long list of tools to help make your workforce management as efficient and productive as possible, including:

• Advanced employee scheduling
• Integrated time clock
• Comprehensive communication
• Flexible task management
• And much more

Try Sling for free today to get a better idea of the many ways it can help you once your coffee shop business plan becomes a reality.

Then, for further business management resources, help scheduling your employees, and tips for getting the most out of your team, visit GetSling.com today.

See Here For Last Updated Dates: Link

This content is for informational purposes and is not intended as legal, tax, HR, or any other professional advice. Please contact an attorney or other professional for specific advice.

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How to Plan a Coffee Shop Business: Effective Strategies for Success

Starting a coffee shop business can be an exciting venture for those passionate about creating a unique experience for customers in the bustling world of specialty coffee. As with any business endeavor, careful planning and preparation are essential for success. This article aims to provide helpful insights and guidance on how to plan a coffee shop business that meets your goals and satisfies the needs of your target audience.

A focused understanding of the coffee shop industry, target market identification, and creating a comprehensive business plan serve as crucial foundational steps. Additionally, scouting an ideal location, planning a delightful and diverse menu, designing the layout of your coffee shop, hiring a skilled staff, and implementing effective marketing and operational strategies will all contribute to the overall growth and sustainability of your business.

Key Takeaways

• A solid foundation, including industry knowledge and a comprehensive business plan, is essential for success.
• Thoughtfully selecting a location, designing your space, and crafting a menu cater to your target audience.
• Efficient management of daily operations and marketing strategies contribute to business growth and sustainability.

Understanding the Coffee Shop Industry

The coffee shop industry is a popular and continually growing sector, attracting a wide range of consumers and entrepreneurs. In order to plan a successful coffee shop business, it is crucial to understand the industry and its current market trends, as well as the key players that shape this competitive landscape.

Current Market Trends

In the coffee shop industry, several market trends have emerged in recent years:

• Consumer Preferences: Nowadays, customers are seeking unique coffee experiences, specialty drinks, and locally sourced beans. Offering a diverse menu and ethically sourced products can help meet these expectations.
• Healthy Options: As more consumers prioritize their health and wellness, integrating healthy and alternative food options into the menu is becoming increasingly important.
• Technology and Convenience: Online and mobile orders, along with contactless payment options, are becoming standard features in coffee shops. Utilizing technology to improve the customer experience is essential to remain competitive.
• Sustainability: Environmentally friendly practices and sustainable sourcing are gaining traction. Implementing eco-friendly methods and materials in your coffee shop will resonate with environmentally-conscious consumers.

Key Players

Understanding the key players in the industry allows new coffee shop owners to identify opportunities for distinguishing themselves from existing competition. Some major players in the coffee shop industry include:

• Large Chains: Companies such as Starbucks, Costa Coffee, and Dunkin' are leading chains in the industry. These corporations have established strong brand recognition and extensive global footprints.
• Franchise Models: Java Detour, Caribou Coffee, and The Human Bean are examples of franchises. Franchise opportunities provide prospective business owners with a proven model and support structure.
• Independent Coffee Shops: Smaller, local, and independent coffee shops enjoy a loyal customer base due to their unique offerings and personal connections to the community. Although they lack the resources and reach of larger corporations, they can differentiate themselves by offering a more intimate and authentic coffee experience.

By examining current market trends and recognizing the key players in the coffee shop industry, aspiring business owners can better position themselves in the market and create a solid foundation for success.

Creating a Business Plan

When planning a coffee shop business, the first step is to create a comprehensive business plan. This document will serve as a roadmap, detailing essential aspects of the business, from the mission statement to financial projections.

Mission Statement

The mission statement outlines the core purpose and vision of the coffee shop. It should be concise and clearly convey what the business stands for and its values. Some aspects to consider when crafting the mission statement include the target market, the unique selling proposition (USP), and the desired customer experience.

Financial Projections

It is crucial to estimate the costs and potential revenues for a coffee shop business. Financial projections should include:

• Startup costs : These are the initial expenses required to establish the business, such as acquiring equipment, renovation, permits, and initial inventory.
• Operating costs : These are ongoing expenses such as staff salaries, rent, utilities, and supplies.
• Sales projections : Estimate expected revenues by forecasting the number of customers, average transaction value, and anticipated growth rate.
• Break-even analysis : Calculate the point at which revenues equal costs, providing an estimate of when the business will become profitable.

When creating financial projections, it is essential to be realistic and conservative in assumptions, ensuring that the business can withstand variations in the market and unforeseen challenges.

In summary, a well-organized and comprehensive business plan will provide a solid foundation for building a successful coffee shop. By defining the mission statement and preparing realistic financial projections, entrepreneurs can set clear goals and better anticipate future challenges and opportunities.

Identifying Target Audience

When planning a coffee shop business, it's essential to recognize the target audience. An optimal understanding of the target audience enables the development of marketing and product strategies that cater to the customers' preferences. In this section, we will be discussing the significance of demographic research and customer preferences when identifying the target audience.

Demographic Research

Conducting demographic research ensures a deeper understanding of the potential customer base. These demographics include things like age, gender, income, and occupation. Demographic patterns may help you discover potential customer base pockets in your proposed location.

To conduct demographic research:

• Evaluate the population density and types present in the area where the coffee shop will be located
• Identify your target customer's age bracket, and gender preferences
• Look into income levels and occupation trends

Armed with this demographic information, you can craft marketing and product strategies tailored to your target audience.

Customer Preferences

Understanding customer preferences is equally crucial for setting up a successful coffee shop. Gather information on the types of drinks, food items, and atmospheres customers in your target market prefer.

Some key factors to consider when determining customer preferences:

• Preferred types of coffee drinks (espresso, cappuccino, drip coffee, etc.)
• Popular food offerings (pastries, sandwiches, salads, etc.)
• Atmosphere preferences (quiet and cozy, modern and minimalist, or lively and energetic)
• Interest in additional services (free Wi-Fi, loyalty programs, live music, etc.)

Analyzing demographic research and customer preferences ensures that you create a coffee shop tailored to satisfy your target audience's wants and needs. By doing so, you'll increase the likelihood of establishing a loyal customer base and reaching your business milestones.

Scouting Location

When planning a coffee shop business, finding the perfect location is essential for success. The right location can help bring in more customers and build a more profitable business. This section will discuss the importance of demographics and accessibility when selecting a location for a coffee shop.

Demographics Influence on Location

Understanding the demographics of an area plays a crucial role in determining the success of a coffee shop. Identify your target market, such as young professionals, students, or families, and make sure the neighborhood can cater to their needs. Find a location with your target audience already present, making it more likely your coffee shop will not only appeal to them but also develop a loyal customer base.

• Students : Look for locations near universities, colleges, or academic institutions.
• Young professionals : Stay near office areas, business parks, or city centers with a high concentration of companies.
• Families : Target residential neighborhoods with schools, parks, and community centers nearby.

Accessibility

Another crucial aspect to consider when choosing a location is accessibility. Your coffee shop should be easily reachable, either by foot, car, or public transportation. A visible and easy-to-find location will draw in more customers on their way to work, school, or shopping.

Some key factors to assess when evaluating accessibility include:

• Foot traffic : Select a location on a busy street or near popular landmarks, attracting customers passing by.
• Parking : If many customers are likely to drive, make sure there's sufficient parking nearby or consider a location with onsite parking.
• Public transportation : Proximity to bus, tram, or train stations can significantly increase foot traffic.

Selecting the right location for a coffee shop business is a significant step in ensuring business success. Pay attention to demographics and accessibility to improve your possibilities of becoming the go-to coffee shop in your neighborhood.

Menu Planning

When planning a coffee shop business, it is crucial to develop a well-rounded menu that will appeal to a wide range of customers.

Beverage Selection

Begin by selecting a range of core coffee offerings, including espresso-based drinks, such as lattes, cappuccinos, and Americanos, as well as drip coffee. Keep in mind that offering a variety of brewing methods, such as pour-over and French press, can elevate the perceived quality of your coffee shop. Don't forget to include non-coffee options like tea, hot chocolate, and specialty drinks like chai lattes for customers who may not be coffee drinkers. Additionally, offering a mix of dairy and non-dairy milk alternatives will cater to a wider audience.

Here's an example of a basic coffee shop beverage menu:

Espresso-Based Drinks

Non-Espresso Beverages

• Drip Coffee
• Pour-Over Coffee
• French Press Coffee
• Hot Chocolate

Food Pairings

Complement your beverage offerings with a selection of pastries and snacks that enhance the overall customer experience. Popular coffee shop accompaniments include:

• Danish pastries

Savory Items

For each item, consider offering a mix of classic and unique flavor options to create a memorable menu. Additionally, including a variety of options that cater to dietary restrictions, such as gluten-free, dairy-free, and vegan options, will ensure you serve a diverse clientele. Developing a menu that intuitively pairs well with your coffee and other beverage offerings will contribute to the overall appeal and success of your coffee shop.

Designing Your Coffee Shop

Interior design.

When planning the interior design of your coffee shop, it's crucial to consider both aesthetics and functionality. You'll want to create a welcoming and comfortable atmosphere for customers while ensuring an efficient work environment for your staff.

• Color scheme: Choose a color palette that aligns with your brand identity and feels inviting. You can use neutral tones for a cozy feel or bolder colors to make a statement.
• Seating: Provide a variety of seating options, such as chairs, booths, or bar stools, to accommodate different customer preferences. Ensure that your seating layout allows for easy movement between tables and conforms to local regulations for accessibility.
• Lighting: Implement a mix of natural and artificial lighting sources, prioritizing energy efficiency and creating an ambiance that matches your brand image. For example, pendant lights or chandeliers can add style while providing adequate illumination.

Outdoor Setup

If your location permits, setting up an outdoor seating area can increase your coffee shop's appeal and capacity. However, you must consider the following aspects:

• Space allocation: Assess the available outdoor space and determine the appropriate seating arrangement. Ensure you have enough room for walkways, accessibility, and compliance with local regulations.
• Weather protection: Invest in pergolas, umbrellas, or awnings to provide shade and shelter from the elements. This will ensure comfort for your customers and prolong the life of your outdoor furniture.
• Furniture: Select durable and attractive outdoor furniture that complements your interior design. Materials such as aluminum or synthetic wicker are able to withstand varying weather conditions while maintaining their appearance.

Remember, the design of your coffee shop should reflect your brand while providing a pleasant and efficient environment for both your customers and your team. By considering these design aspects, you can create a space that encourages customers to return and bring others with them.

Hiring Staff

Training programs.

When starting a coffee shop business, it's crucial to establish effective training programs for your staff. This includes training on coffee brewing techniques, food handling, equipment usage, and safety procedures. By providing comprehensive training, you ensure that your employees are well-prepared to serve customers with high-quality products and services.

Consider implementing the following elements in your training programs:

• Hands-on training : Allow employees to practice their skills under the supervision of experienced staff members.
• Training videos : Create informative and engaging videos to teach important concepts and procedures.
• Regular evaluations : Assess the progress and competency of your staff on a consistent basis, providing feedback and additional guidance when needed.

Customer Service Expectations

Set clear customer service expectations for your employees to maintain a high level of satisfaction among your patrons. Your staff should be knowledgeable about the products offered and able to assist customers in making informed decisions. Additionally, they should remain friendly, welcoming, and attentive to the needs of your clientele.

To uphold customer service expectations, implement the following strategies:

• Role-playing exercises : Encourage employees to practice handling various customer interactions, including addressing complaints and special requests.
• Emphasize communication : Strengthen your team's communication skills through regular team meetings and open discussions.
• Reward exceptional service : Acknowledge and reward employees who consistently provide exceptional customer service, fostering a positive work environment and setting a high standard for all staff members.

Marketing and Promotion

A well-planned marketing and promotion strategy is essential for a successful coffee shop business. It helps to increase brand awareness, drive foot traffic, and build a loyal customer base.

Social Media Marketing

Social media platforms like Facebook, Instagram, and Twitter offer an effective way to promote a coffee shop. By creating engaging content and regularly updating the business's social media profiles, owners can connect with their target audience and showcase what sets their coffee shop apart from competitors:

• Visual content : Share high-quality images and videos of coffee drinks, food items, and the shop's ambiance to entice potential customers.
• Special offers : Attract new and returning customers by promoting discounts, deals, or happy hour specials.
• Events : Announce upcoming events, such as live music performances, art exhibitions, or themed nights.
• Customer interaction : Engage with customers by responding to comments, questions, and reviews on social media platforms.

Local Partnerships

Forming local partnerships can be a mutually beneficial way to increase the coffee shop's visibility and strengthen its ties to the community:

• Collaborations with other businesses : Partner with nearby businesses, such as bakeries, bookstores, or coworking spaces, for cross-promotion or sharing resources. For example, sell pastries from a local bakery or display and sell books from a local bookstore.
• Community involvement : Sponsor events or participate in local initiatives, like charity fundraisers, cultural festivals, or neighborhood clean-ups. This can improve the coffee shop's reputation and help to attract socially-conscious customers.
• Local suppliers : Source coffee beans, ingredients, or merchandise from local suppliers to support the local economy and create a unique selling point for the coffee shop.

By combining both social media marketing and local partnerships, coffee shop owners can create a comprehensive marketing and promotion plan that boosts their business's visibility and builds genuine connections with customers and the community.

Managing Operations

Managing operations is a crucial aspect of running a successful coffee shop. In this section, we will discuss two important sub-sections: Supply Chain Management and Quality Control.

Supply Chain Management

Effective management of the supply chain is necessary to ensure a steady flow of inventory and maintain cost efficiency. Here are a few essential aspects of coffee shop supply chain management:

• Supplier selection: Identify the right suppliers for your coffee shop, considering factors like quality, price, reliability, and delivery times.
• Inventory management: Maintain an optimal level of inventory by establishing reliable systems to track usage and reorder supplies as needed.
• Cost control: Regularly review the cost of goods and negotiate pricing with suppliers to maintain profit margins.

Quality Control

Quality control is paramount in a coffee shop business, as it directly impacts customer satisfaction and repeat business. Here are some key areas to address:

• Regular tasting: Schedule routine tastings with your employees to ensure all coffee products meet the desired taste and quality standards.
• Training: Invest in employee training and skill development to ensure consistent preparation and presentation of menu items.
• Equipment maintenance: Regularly maintain and service coffee machines and other equipment to avoid malfunction and ensure consistent product quality.

In summary, effectively managing operations is essential for the growth and success of any coffee shop business. Prioritize supply chain management and quality control to ensure a seamless customer experience and maintain a healthy bottom line.

Frequently Asked Questions

What equipment is essential for starting a coffee shop.

Starting a coffee shop requires various essential equipment to ensure efficient operations and high-quality drinks. Key items include commercial espresso machines, coffee grinders, brewing equipment like pour-over stands and drip coffee makers, refrigeration units, and display cases. Additionally, sinks, ice machines, blenders, and hot water dispensers are crucial for offering a diverse menu. Upgrade your coffee shop or restaurant today by investing in high-quality machines to serve delicious cappuccinos, lattes, and flat whites.

How to choose the perfect name for a coffee shop?

Choosing the perfect name for a coffee shop involves understanding your target audience, incorporating your shop's identity and theme, and considering wordplay or puns. Research your competition and brainstorm names that represent your coffee shop experience, menu offerings, and location. Once you have a list, test your options among potential customers and seek feedback to make an informed decision.

Which licenses and permits are required to open a coffee shop?

Licenses and permits can vary based on location, but generally, the following are required to open a coffee shop: a business license, food service license, health department permit, building and zoning permits, fire department permits, and signage permits. Some areas may also require additional permits for outdoor seating, music, or alcohol sales. It's crucial to research local regulations to ensure compliance before opening.

What are the key steps in an opening a cafe checklist?

A cafe opening checklist should include the following key steps: creating a business plan, securing funding, finding the ideal location, obtaining necessary licenses and permits, negotiating a lease agreement, selecting and purchasing high-quality equipment, designing your cafe layout, hiring and training staff, establishing supplier relationships, and conducting marketing campaigns to attract customers.

What factors make a coffee shop a profitable business?

A profitable coffee shop focuses on providing top-notch customer service, offering a diverse and high-quality menu, maintaining a unique and inviting atmosphere, and optimizing operational efficiency. Factors contributing to coffee shop profitability include location, strong brand identity, cost management, efficient workforce management, and local market conditions.

What are some unique and innovative coffee shop business ideas?

Unique and innovative coffee shop business ideas include offering specialty and single-origin coffees, incorporating sustainability and green practices, integrating technology like touchless ordering systems, hosting community events and workshops, and providing a shared workspace for freelancers and professionals. Menu innovations like gourmet food offerings, signature cold brew concoctions, and non-dairy milk alternatives can also set your coffee shop apart.

Tony Barlow

Tony Barlow, with over a decade of experience in the coffee industry, is the go-to technical sales expert at Majesty Coffee. He's passionate about helping businesses find the right espresso equipment for their needs.

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MajestyCoffee Verified Customer Testomonials

I have been loving my new espresso machine! It is taking some time to dial in, but it has been a fun process.

My experience with Majesty Coffee was highly personalized. I had 8-9 emails with them about different color combinations, changing my mind as we went. They were service oriented every step of the way. They were out of the Elizabeth, so they offered a Bianca v3 which has ended years of frustration trying to get excellent shots and silky milk. It is spoiling me to a degree that I won’t be able to get coffee from a cafe without thinking that I could do so much better at home.

I ordered equipment for a coffee shop from the guys. Nuova Simonelli coffee machine and Fiorenzato coffee grinder. Everything was delivered on time, we were in touch all the time. Thank you so much! I will continue to order equipment from Majesty Coffee.

My X54 arrived with the translucent silicone-like backflow preventer bent into the lower grinding wheel and particles of it came out into my grind… I called and talked with Tony at Majesty and he gave me the Malkonig direct number and they in turn mentioned what had happened while in shipment that had brought on this issue and has sent to me a factory fresh replacement that is quite easy to remedy and this prompt customer support from both the merchant and manufacturer have been spot on… I love this little grinder

I received this particular item (Malkonig X54) quite promptly from Majesty and it was very well packaged… I have used it for only four (4) times… a single cup per day after running approximately 15 grams of roasted whole beans through it on its initial use for a “clean-out run” and found the grind, once the adjusting wheel was set, to be very consistent in my selection for a French press cup: HOWEVER, on this, the fourth day, two (2) fairly large chunks of a silicone-like substance that was used downline from the grinding portion of this grinder came out of the spout of which the manufacturer must have used to seal the discharge channel and into the spout discharge they came… I have minimally used this grinder for I only grind for one (1) cup per day… about 18 grams per time. I am awaiting to see what options that may come to me from Majesty in remedying this particular machine’s defect… Otherwise, it’s a great home machine except for this one particular shortcut that Malkonig took to channel the grind from the grinding portion of the machine… and, hopefully, this is the only X54 that this has had this issue but….

Majesty coffee is a great distributor and the Baratza grinder is a great product and the sound of the machine is a little loud but overstated in other reviews.

I did extensive research on the Eureka Mignon Specialita Espresso Grinder, and I am very pleased to share that this grinder has exceeded my expectations for build quality, quietness and producing precise espresso grind for my home cafe.

I had a La Pavoni in the past, so I knew what I was getting into. It’s not a machine for the casual user. But if you spend the time and effort learning how to use it, you will be rewarded. Majesty Coffee’s tutorial is very good. You will need a good espresso grinder, and a gram scale is also handy.

I have had Juras and other brands and this Saeco by far makes the best coffee of all as well as super easy to clean! Love it

I have been using this Espresso machine for 4+ years. It is very robust. Steam wands deliver consistently and with good control (handles let the steam out gradually and not abruptly). Two espresso groups have dispencing buttons that are programmable (for each button you can decide how much pull you want), and let me tell you, it is consistent - every time you pull, it delivers pretty much the same amount. Water dispencer in the center of the machine is very hot - water comes out heated by steam so it is boiling. Easy to heat up cups and also make tea.

Maintenance-wise - machine is very simple inside, and is well designed. Of course if you use no filters on the feeding line to the machine, you will have calcification of the pipes on the inside according to the water harness in your area. But even then it is not that difficult to clean it - the service technician should not charge you over the top for it since it is not of high complecity.

In 4 years I had to service it 3 times. Once the water meter had to be replaced ($200). Once the o-ring on water solenoid needed to be replaced ($3.00). Once cleaning of the line from calcification - this is by the hour charge unless you have someone who can service it for free. Decalcification of the line took about 2 hours.

Of course you have to change the rubber rings on group heads and also the mesh - but you also can clean the mesh to a like new condition - that is up to you. Rubber rings are about $12.00 to replace. So as you can see this machine is not so high costs in maintenance due to being very simple. Yet it is a work horse.

This is the second espresso machine that I have bought from Majesty coffee, and they are great! I will never use another equipment supplier!

We have hoped to replace our aging La Pavoni lever, but there were supply issues, and the Majesty sales rep recommended this machine. For us it was a major improvement in espresso quality, and we would certainly recommend the machine. Others with a lever maching might find the reasons useful:

1. The biggest effect is that this machine has precision temperature control via a PID - that dramatically improved quality vs a lever machine where the water is always very hot.

2. Pressure can be precisely controlled (in the Pavoni one has to take the bottom off the machine, and the adjustment is much cruder).

3. There is timer so shot amounts can be precisely timed.

4. To get steam one has to turn up the temperature which can take a bit of time, but we found that doing coffee and then the steam is pretty efficient. The insulated steam wand is really nice - easy to clean. On the Pavoni one needs to scrape of the milk that scales up the wand due to the heat.

5. A nice thing about the Pavoni is that it is easy to fix. Since the quick mill is mainly manual, there number parts is less than an automatic double boiler, so we expect it to be reliable. Parts seem easily available, so for a DIY person it should be self maintainable. The E61 group head is not only nicer, but also parts are widely available.

In conclusion, we are very happy with the move from a La Pavoni lever to the QM Alexia Evo. Time will tell re reliability. and we will report back if there is news on that front.

Great tasting coffee! Absolutely going to order more

Great espresso machine! Very quick and efficient delivery.

I needed the grinder for my bar in a fixed date, I was not sure it would arrive on time so I contacted the Majesty team and they made everything in their power to fulfill the order! I got a shipping label next day, they truly went above and beyond plus the prices were lower due to their sales and coupons. The grinder was new and well packaged. Will definitely buy again from them! Thanks guys!!

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Can not get it to grind at the finest setting, it starts and stops never finishing your programmed grind settings! Anything above this setting the grinder works fine. I have been using my sette 270 wi since November 2016.

Sounds like the grinder has been working well for almost 8 years now. Sorry you're disappointed, it sounds like it may need to be deep cleaned. If that doesn't work, you can contact [email protected] with your serial # I'm sure they can advise on if there's anything that can be done or if it's time for a new grinder.

- The Majesty Coffee Team

The Best Coffee Shop Business Strategy To Success

Are you looking for the best coffee shop business strategy to reach your goals? We’ll make sure you understand the steps to success.

New data shows that 66% of Americans drink coffee more than any beverage every day – even water. Coffee shops also experienced an 8% increase in coffee consumption since January 2021 – a significant recovery and growth since the COVID-19 pandemic. This growth is excellent news if you’re planning to start your coffee shop. 

However, how can you make your business stand out among the US’s 65,410 coffee and snack shops ? Continue reading below to know what you need to start a coffee shop, including tips and strategies to help you run your first café.

A Brief History Of Coffee Shops

Kiva Han is considered the first coffee shop in the world; it opened in 1475 in the Turkish city of Constantinople. During that time, coffee was a vital part of Turkish culture; wives were allowed to divorce their husbands if they didn’t get enough coffee . When people recognized the stimulating effects of coffee in the Middle East, more coffee shops started opening, eventually reaching European countries like Italy, Paris, and Germany.

However, coffee wasn’t popular with Americans until the late 19th to early 20th century, when big brands like Starbucks, Caribou, and Dunkin’ Donuts were founded.

Developing A Business Plan

Before you can jump to molding strategies to market your product, you must first build your business’s structure. You can do this by creating a business plan.

Research And Identify Your Market

Market research is one of the most important things to do in starting a business. This is where you identify your target market, competitors, and your USP or Unique Selling Proposition that makes you stand out from other cafés. 

Ignoring research at the first stage of your business planning equates to risking yourself and your business by blindly entering a big market without proper knowledge and audience.

Check out our explainer on is selling coffee online profitable?

Pay Attention To The Company Brand

A “company brand” isn’t only your business name and logo. It also encompasses the colors, story, shop type, vibe, location, floorplan, menu, and even the process of roasting your beans. 

Remember that first impression lasts, so your brand should attract people the first time they see your website or social media . You should also find a way to make the visitors want to keep coming to the café through excellent services and high- quality products.

Know Your Equipment And Products 

Now that you know what type of café you want, including the floor plan and menu, it’s time to complete it. Expect durable and superior equipment to be expensive. If your budget is limited, choose the pieces you know you’ll use or things with multiple functions. 

For example, you can pick products like De’Longhi All-in-One Combination Coffee Maker & Espresso Machine that can create more than one drink. It’s best to pick equipment you use for products you’re an expert at making.

Moreover, finding trusted suppliers is crucial if you buy pre-roasted coffee beans. You must get proper training if you want to roast beans.

Create An Effective Marketing Strategy

The first step in creating any plan is to set goals and objectives. Combine and convert all the gathered information from your market research and brand to create an effective strategy to market your business and its products. 

Remember that marketing strategy and tactics are different. Tactics refer to the specific actions you take to put your strategy in place, such as expanding your marketing channels to reach more potential customers.

Read our guide on how to create a coffee shop business plan if you need a step-by-step guide to an effective business plan.

Top Tips And Strategies To A Successful Coffee Shop

There are many ways to attract customers to your coffee shop . Below are the best coffee shop strategies to help you be competitive in the industry.

Prioritize Coffee And Service Quality

Remember that even if you use the best coffee beans to brew the perfect cup of Joe and sell it at an affordable price, customers will not return if you have poor service. Don’t just focus on making the perfect coffee when training your staff. They also need to know how to serve the customers properly.

Always be consistent if you want your patrons to keep visiting your café.

Create The Shop’s Ambiance

Besides coffee and service, a warm and inviting environment is also important to coffee lovers. A welcoming environment will also persuade customers to stay, increasing the chance of them purchasing more products. 

Invest in your interior to give your customers a great place to work, study, etc. Ensure that the ordering area displays the products with the highest profit margin, including your specialties. 

Expand Your Services

Beyond dine-in and take-out, you can broaden your services and add drive-thru and delivery. Coffee shops with drive-thru are trendy these days as coffee lovers find it convenient to order without needing to leave their cars. It’s also a great option when the shop is at full capacity. 

Consider opening delivery service through phone, website, company app, and third-party apps to reach more customers.

Train Your Staff Continuously

Hiring experienced employees is better, but these people expect a high salary. You can hire inexperienced people and grow the shop with them. In this way, you’re also helping your staff improve their skills, which will benefit both parties. 

Other than skills training, teach them how to do suggestive selling to use every opportunity to ask the customer if they want to add more to their original order, thereby increasing sales.

Don’t Ignore Traditional Promotions

Basic business strategies like regular and seasonal promotions, loyalty rewards, coupons, posters, videos, and social media advertising are all coffee shops’ tried and tested effective strategies. 

Try each of them and see what’s the most effective for your café. Identify how, when, and why you gain more sales than regular days. However, there is no need to stick to basic promos and use them repeatedly. 

Be innovative, creative, and open to new ways to reach your goals. 

FAQs About Coffee Shop Business Strategy 

What is the best strategy for a coffee shop.

Always start with developing a good business plan. Then, pick your goals and objectives and how you can achieve them. For example, you can look for the best bean supplier or buy the most efficient machine.  You should also research your rivals to make sure you can compete with them. 

What Is The Marketing Strategy Of A Café Business?

The best marketing strategy is to focus on products and services. High-quality coffee and excellent customer service always make for a great recommendation. Through word-of-mouth, you’ll have effective and free advertising.

How Do Coffee Shops Attract Customers?

Coffee shops usually attract customers by making their coffee’s price affordable, offering promos such as loyalty rewards, and creating a great ambiance. They are also constantly on social media and design competitions to get more engagement and reach more potential customers.

What Is The Key To Success For Coffee Shops?

Other than a wide selection of high-quality coffee and other products, the coffee shop’s atmosphere and customer service are essential for success. Invest in the exterior and interior design of your café and provide training to your staff to improve their service and knowledge.

Writer and coffee lover, Maria Caballero, is fond of visiting new cafes and trying current trends involving caffeine. She shares amusing experiences to fellow coffee enthusiasts who wants to explore the world of coffee.

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Restaurants | How To

How to Start a Coffee Shop in 11 Steps

Published April 4, 2023

Published Apr 4, 2023

REVIEWED BY: Meaghan Brophy

WRITTEN BY: Mary King

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This article is part of a larger series on Restaurant .

Starting A Business?

Step 1: Research the Market

Step 2: design your concept, step 3: source beans, step 4: find a location.

• Step 5: File Business Paperwork
• Step 6: Open a Bank Account & Raise Funds
• Step 7: Purchase FF&E
• Step 8: Obtain Permits & Licenses
• Step 9: Hire & Train Staff

Step 10: Order Opening Inventory

Step 11: advertise, bottom line.

Opening a coffee shop is a great way to combine the strengths of a food service and a retail business. Six to 12 months and a $50,000 to $300,000 budget are all it takes to start a coffee shop in most locations. We’ll walk you through the steps you need to take to open an independent or franchise coffee shop and offer options for smaller footprint businesses like coffee kiosks, coffee trucks, and coffee carts.

The first step to launching your coffee shop is familiarizing yourself with the market where you plan to open your shop. The more you know about the coffee scene in your area, the better. Here are some general trends to keep in mind as you begin your coffee shop journey.

To get a handle on your local coffee community, follow these steps:

Identify Local Coffee Shops to Visit

One of the best ways to do research in your market is to visit all types of coffee shops and take great care in noting how they operate. At this stage in your research, you want to learn from anyone who is in the business. Spend some time checking out their online presence, too; websites and social channels offer a wealth of information.

When you’re conducting your competitive research, the goal is to look for ideas you might want to employ in your business. It’s important to be a keen observer of what’s happening throughout each coffee shop visit—from the impression you get before you enter to your overall satisfaction as you leave.

Observe & Evaluate Local Coffee Shops

You’ll want to visit a dozen or more coffeehouses before starting your business. Vary your research so you visit both large, moderate, and small shops. Don’t be afraid to strike up casual conversations with managers and employees, as many are willing to share their knowledge with you. Take thorough notes at each stop along the way, as they’ll be invaluable as you move forward.

Visit each shop during peak and non-peak times to get a feel for the flow of business. A few things you’ll want to note when visiting competitor coffee shops include:

• What menu items are offered?
• What is the price for each menu item?
• What items are made in-house, and which are bought-in?
• What promotions and special offers are currently running?
• How is the shop laid out?
• How many employees are working and what are they doing?
• What are customers ordering?
• How long are customers waiting for their orders?
• How many customers stay in the shop after getting their order? What do they do if they stay?
• What are the general ages and demographics of the customers?
• What type of decor, furnishings, and music set the tone?
• Is the shop active on social media? Which platforms?
• Does the shop have a website?

At this stage, it’s most helpful to take literal notes. Have a notebook or a spreadsheet for recording your observations. After you’ve visited several shops, look through your notes to identify trends. These trends will help you make the best decisions about everything from your menu items to your name and location.

After you’ve done your market research, it’s time to figure out what niche your coffee shop will fill in your community. You’ll need to pick a name, decide what style of beverages and food—if any—you’ll serve, and come up with branding. It helps to start by precisely pinpointing your ideal customer. The research you completed in the previous step will help you do this.

Identify the most likely customer type in your location, and design your coffee shop to cater to their tastes. A coffee shop catering to college students will have a different name, branding, and operating hours than a shop that supplies caffeine to workers in a downtown office tower. But before you get too far down the road, you need to answer one question: will you open an independent coffee shop or a franchise shop?

What is a coffee shop “concept?” In the food service business, the word “concept” is a popular catch-all term that describes a business’s service style, cuisine, decor, menu design, and name.

Once you’ve decided what type of customer your coffee shop will most likely cater to, you’ll have another important question to answer: Should you open an independent coffee shop or a franchise shop? Like many food service businesses, a coffee shop might be an independent business or operate as an outpost of a franchise. There are many popular coffee shop franchises to choose from, including one of America’s favorites, Dunkin’ (formerly Dunkin’ Donuts). Let’s take a look at the pros and cons of each below.

Independent vs Franchise Coffee Shops

Independent shop, franchise shop, popular franchises.

There are dozens of coffee shop franchises to choose from. The selection listed below are good jumping-off points to begin your research for various types of coffee shops.

If you want the stability that comes from working with an established brand with a proven business model, you’ll probably want to start a franchise coffee shop. If the idea of creating your own store from scratch excites you, starting an independent coffee shop is likely the best route for you.

Each coffee franchise has its own approval process and investment requirements. If opening a coffee shop franchise interests you, it is best to reach out to the franchisor directly to request more information. Read our guide to financing a franchise to learn more about getting the funds you need to get started.

Name Your Coffee Shop

You want to ensure your coffee shop’s name is memorable, aligns with the overall feeling of your brand, and isn’t already trademarked.

Here are a few techniques you can use when naming your coffee shop :

• Focus on coffee: Include the word coffee in your name—or a “coffee-related” term such as bean, espresso, perks, grounds, or grind—so that people instantly recognize what you’re selling.
• Be playful: Puns and rhyming names are often both fun and memorable.
• Focus on why your customers are buying: Many people are buying coffee to wake up or recharge, so you can work that theme into your coffee shop name by using words like octane, boost, or wired.
• Add your name to the shop : Some successful coffee shop names include the first name of the owner, which typically evokes a friendly and casual vibe. You could also use your last name, which may evoke a more upscale or formal vibe.
• Reference a trait of your location: Think about the special traits of the area you serve. For example, if you’re near a courthouse, incorporate the word court or justice into your name. If you’re near mountains, you may want to add peaks or sky-high or another mountain reference to your name.
• Focus on your shop’s key feature: Use words that convey the vibe of your shop, such as express, if you focus on quick service, or hangout, if you’re going for a casual place to relax and chill with your friends.

You might choose to name your shop using one of the methods above, or you can go an entirely different route. That’s what Starbucks did to get its name . “Starbucks” comes from a character in Herman Melville’s classic novel “Moby Dick.” Starbuck was the name of the first mate.

Before finalizing your coffee shop’s name you must make sure the name you select is not trademarked. You can search the US patent and trademark database to find registered trademarks.

If you prefer, you can also consult with an attorney directly about trademark status for your coffee shop name. If you don’t have an attorney, you may want to search a site like LegalZoom to find a lawyer that specializes in business development and trademarks. The last thing you want to do is invest in branded signage , advertising, cups, employee uniforms, and menus only to find out you can’t use the name you selected.

Visit LegalZoom

Design Your Coffee Shop Menu

Creating a menu plan involves taking great care to have the right mix of items, at acceptable profit margins, that your clientele will buy. By now, you’ve done your research and visited several coffee shops. You have a sense of the types of items offered by coffeehouses in your area and the range of prices you can charge.

When launching your shop, be sure to include items that you know are in demand based on your market research. You’ll also want to include other items that are unique to your coffee shop; these may help you differentiate your shop from the crowd.

• Choose a brewing style: Espresso beverages are a coffee shop classic, but you can expand your offerings with specialty drip brewing techniques like pour-overs, French press coffee, or house-made cold brew.
• Change offerings seasonally: Starbucks created the model for this with their seasonal flavors like pumpkin spice and peppermint mocha. Create a rotating list of specialties that you roll out seasonally to keep customers coming back.
• Offer non-coffee options: Tea is an obvious companion for coffee beverages, but don’t forget ready-to-drink (RTD) options like bottled water, juices, and soft drinks. These RTD beverages have the added benefit of driving sales without increasing your labor.
• Don’t forget food: You don’t have to have a full-service kitchen to serve food in your coffee shop. You can complete your food menu with baked goods from local bakeries to stand out from your competitors. Create a mouthwatering list of all your food offerings to drive add-on sales.

This step will likely overlap with your menu development phase—but beans are such an important part of a coffee shop operation that bean selection deserves its own step.

If you choose a coffee shop franchise, this step will be done for you, so you can skip ahead. However, deciding what type of coffee to serve at your shop is the most consequential decision you’ll make as an independent coffee shop owner. You can either purchase roasted coffee beans from a wholesaler or roaster or purchase unroasted ”green” coffee beans to roast yourself.

Roasting Your Own Beans

Green coffee beans tend to be about one-third the cost of roasted coffee beans, but the equipment you need to roast beans is pricey. So, you don’t save much upfront, but over time, the cost savings could be considerable. Roasting your own beans also has cachet and offers you more control over your end product.

There are two major reasons you might want to roast your own beans:

• You are a coffee aficionado who is passionate about coffee roasting and knows how to do it well.
• You intend to sell your house-roasted beans to other businesses as an additional revenue stream.

If neither of these reasons is relevant to your business, you’re better off buying pre-roasted beans from a wholesale roaster. You can always start by buying roasted beans from a wholesaler and build an in-house roasting operation as your business grows.

If you want to learn how to roast coffee, the Coffee Skills Program , offered through the Specialty Coffee Association, is a popular program for those looking for comprehensive, hands-on coffee roasting training.

Purchasing Wholesale Beans

If you want to purchase roasted coffee beans wholesale, you have a few options. You can purchase through a mainline distributor like US Foods. Most independent coffee shops strike up a relationship directly with a wholesale roaster. This gives you the opportunity to proudly tout the reputation of the coffee brand in your shop. Wholesale roasters also typically provide some training materials to ensure that you and your staff prepare their coffee perfectly.

Popular Wholesale Coffee Roasters

You’ll pay more for roasted beans than for green ones, but you get a lot for the investment. Wholesale roasters have a vested interest in preserving their brand quality, so they tend to provide complimentary barista training and may even help you source brewing equipment and consult on your overall menu and coffee shop layout. If you are new to the coffee industry, working with a wholesale coffee roaster will be the best move for your business.

The type of coffee you serve can be a major selling point, so we recommend you determine your coffee source before writing your business plan or raising funds. You’ll want to include your roaster—or your on-site roasting plan—in your business documents. This information can help you raise funds and show banks and investors that you are organized.

Now that you know what style of shop you want to run and what type of coffee you’ll serve, you need a location. This step and the following one—filing business paperwork and writing your business plan—typically happen simultaneously because the costs of your location will become part of your business plan.

You want your business to be in the path of your ideal customers, as it’s imperative that your customers can easily find and access your shop. You should also consider the physical characteristics of the space. Will it meet your plumbing and electrical needs, or will you need to renovate? Will the landlord share the cost of renovations, or are you entirely on your own?

If this is your first time renting a commercial property, familiarize yourself with the ins and outs of leasing commercial real estate by reading our guide to commercial real estate leases before you begin your location search.

Step 5: Complete Business Paperwork & Business Plan

Whether you plan to be an independent or franchise coffee shop, you’ll need to file your business with the state—and typically the city—where you will operate. Since incorporating your business is a bit of paperwork, it makes sense to combine all the administrative tasks and write your business plan at the same time. You’ll need all of your paperwork in order before you can move on to the next step, raising funds.

Incorporate Your Business

Most coffee shops—even franchises—will need to incorporate as a business entity to do business in their state. You can typically find all the forms you need from your state’s Secretary of State’s office. Your Secretary of State’s office is usually happy to answer any questions you may have, or you can get free assistance from a Small Business Development Center (SDBC) if there is one nearby.

SBDC offices are partially funded by the United States Congress and affiliated with the Small Business Administration. Their primary purpose is to assist independent entrepreneurs with starting and operating small businesses. You can find your nearest SBDC chapter on The America’s SBDC website .

Filing fees for business licenses vary by state and business type. Costs tend to be less than $500. Most coffee shops register as a limited liability company (LLC), though certain franchises may advise you to register a different type of legal entity—like a partnership or corporation—depending on your franchise arrangements. If you plan to operate a multi-unit coffee shop enterprise or a multi-unit franchise, you should consult with an attorney and CPA to determine the best legal entity for your business.

Learn more about different types of legal entities for your business in our guide to LLC vs S-Corp vs C-Corp .

Write Your Business Plan

Your business plan will include an executive summary of your business objectives, where you plan to launch your coffee shop, types of products you’ll offer and anticipated profitability for each, a marketing plan, and a thorough financial plan along with financial projections. For your convenience, you can download the Coffee Shop Business Plan template that is provided below.

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Coffee Shop Business Plan

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If you struggle with various aspects of creating your business plan—such as coming up with sound financial projections—contact your local SBDC as they can help with this, too.

Step 6: Open a Bank Account & Raise Funds

With your business plan in hand, you can start raising funds. Before you raise a penny, though, you should open a business bank account so your business funds remain separate from your personal funds.

Open a Business Bank Account

This bank account is separate from your personal bank account. It is the account where you will receive investment funds and the account you will use to make your business purchases. When your shop is up and running, this is the account that will receive payments from your credit card processor and from which you will pay vendors and staff.

See our guides to the best small business bank accounts and top-recommended free business checking accounts to find the best bank for your business.

Raise Funds

You’ll need between $50,000 and $300,000 to open a coffee shop. The biggest variables are the size of your shop and the market where you are located. Shops in busy urban centers will spend a lot more on rent than a coffee kiosk on a college campus.

This is where you flex your business plan. Pull that plan out to present to bank loan officers or prospective investors. The word “investors” might sound intimidating. But investors for independent coffee shops tend to be friends, family, and community members. Depending on your shop size, you may also be able to fund your business entirely with small business loans or business credit cards.

It is common to see coffee shop campaigns on crowdfunding sites like Kickstarter. (Source: Kickstarter)

Another alternative is crowdfunding . Crowdfunding is very popular for coffee shops. They are a good fit because coffee shops tend to have lower startup costs than a full-service restaurant. Coffee shops also have a reputation for becoming part of their communities, and your crowdfunding contributors can easily become your first regular customers.

Franchise coffee shops don’t do well on crowdfunding sites, though. If you’re planning to open a franchise, you’re better off requesting funding advice from your franchisor and seeking small business loans.

Our expert-written guides to getting a small business loan , the best easy business loans , and leading small business credit cards will help you apply for the funds you need to start your business.

Step 7: Purchase FF&E

Furniture, fixtures, and equipment is commonly referred to by the catch-all acronym “FF&E.” Once your coffee shop is open, you’ll see FF&E on all your monthly profit and loss statements; it’s a term that might haunt you. But now is the time to purchase all of those items. Coffee shop FF&E includes everything from your espresso machines and refrigerators to light fixtures and countertops.

Coffee Shop Equipment & Supplies Checklist

There are several key types of FF&E that are uniquely important to coffee shops, like point-of-sale (POS) equipment and espresso machines. We’ll explore those in more detail in the expandable sections below.

Coffee Shop Point of Sale (POS)

The best coffee shop POS systems help you accept cash and credit cards, track cost of goods sold (COGS), help you manage inventory, and assist with employee scheduling. Most also include loyalty tools that collect customer information and track order history so you can send highly relevant email promotions to spark return visits. Loyalty tools frequently come at an additional cost, but for coffee shops, the extra money is well worth it.

There has never been a better time to buy a POS system. Many cloud-based systems compete aggressively for customers, so it’s not hard to find a good deal. For example, popular food service POS providers Toast and Square for Restaurants both offer a baseline POS with no monthly software fees. Toast also gives you the option to pay as you go for hardware, so you can get started for $0 upfront.

Popular Coffee Shop POS Systems

There are, of course, many more options for a food service POS . You shouldn’t be surprised to spend $0 to $99 per month for software and from $300 to $600 for a full POS hardware setup, including a touchscreen display, cash drawer, receipt printer, and card reader. Your costs will vary based on whether the system operates on consumer-grade tablets or industry-grade terminals. You’ll also pay higher monthly fees if you need additional software functions like drive-thru management.

Because of the relatively low average sale per customer—which for a single coffee drink is around $3 to $4 , depending on the order—coffee shops rely on repeat business. So make sure your POS system offers strong loyalty tools.

Coffee Equipment

You’ll need a lot of standard food preparation equipment like walk-in and reach-in refrigerators, a dishwasher, and handwash sinks. You’ll also need coffee-specific equipment like grinders, brewers, and espresso machines. It’s best to purchase standard equipment from restaurant suppliers like Webstaurant Store, Sysco, and others.

We recommend buying new equipment when your budget allows since new equipment comes with manufacturers’ and suppliers’ warranties. Equipment that tends to need a lot of maintenance, like ice machines and dishwashers, is commonly leased. These items typically come with regular service visits to ensure they are properly calibrated and in good working order.

The La Marzocco Linea espresso machine—one of the most popular commercial espresso machines on the market—retails for $14,000 to $20,000, depending on how many group heads you need. (Source: La Marzocco)

Group head: The group head is the part of the espresso machine that forces the hot water through the espresso puck to extract the coffee. The more group heads your machine contains, the more espresso shots you can pull in a short time. Espresso machines with more heads are generally more expensive.

Espresso machines, grinders, and brewing equipment will be major purchases. As with ice machines, you may prefer to lease your espresso machine rather than purchase upfront. Espresso machines can be pricey, and they are also temperamental. So, leasing can be a good deal because a lease typically comes with an on-call technician to help if you need repairs.

Though with solid training (typically available from a wholesale roaster), purchasing a new espresso machine outright is also a good bet. New machines will have manufacturer’s warranties, and you won’t have to worry about any previous damage impacting the machine’s performance (a major concern with used espresso machines). Your roasting partner is typically eager to advise you on the best equipment, so you don’t need to look far for help making a decision.

Step 8: Obtain Permits, Licenses & Insurance

In addition to the general business documents that you filed in previous steps, you’ll need several permits and licenses before you can sell food and beverages to the public. Many permits cover general business functions, like sales tax permits (also called a “vendor’s license”) resale licenses that excuse you from paying taxes on items you plan to resell. You’ll also need health and safety licenses from your local health department. Click through the tabs below for a detailed list of the permits and insurance you’ll need to obtain.

General Business Licenses

Food service licenses.

• Doing Business As (DBA) Registration: If you operate your coffee shop under a different name than the LLC you registered with the state, you’ll need a DBA to document the fictitious name.
• Employer Identification Number (EIN): This number is your business’s identification for federal tax purposes. You can register for free on the IRS website ; you’ll typically be assigned a number within 48 hours.
• State tax ID: You’ll also need a state tax identification number to file sales and payroll taxes with your state. This is also typically free, and in some states, called a state tax license.
• Business license: Some states roll the business license process with registering an LLC. Others have a separate process for business licenses. Check with your local Secretary of State’s office for more information about your location.
• Reseller’s license: This is the license you need to excuse you from paying sales tax on wholesale purchases. Your vendors will need a copy of it.
• Certificate of Occupancy: This is typically issued by the local fire safety authority and allows you to open your premises to the public. If you are moving into a space that has already operated as a coffee shop and you don’t make substantial changes to it, then you may be covered by the previously existing certificate of occupancy. But this can vary state to state; some require a new certificate any time a new tenant takes occupancy of a retail space.

Food service licenses are issued by the health department in your city, county, or state. In some places—like California—you’ll need a license that covers your space and separate food safety licenses for each of your employees.

Food service licenses include:

• Health permit: This permit covers your location, enabling you to sell food and drink to the public. Prices can vary widely from state to state but if you budget at least $1,000 for this, you’ll rarely be surprised. This permit always requires a physical inspection of your premises, where you are typically awarded a letter grade. In many locations, you’ll be required to prominently display this grade in your front entrance.
• Food Safety Manager’s Certification: Most locations require at least one staff member to have a food safety manager’s certificate. Typically the certificate is held by the owner or general manager. To get one, you need to pass a food safety test, typically offered through ServSafe . Prices range from $99 to $179 depending on whether you need to take the food safety class and whether you take the assessment online or in-person.
• Food handler permit for employees: Several states, like California, Texas, and Illinois, require all food service workers to have their own food handler’s permit. Your staff can obtain these for $15 to $20 through ServSafe, though some states offer a lower-priced course through their health departments.

You’ll need a few types of insurance to cover your coffee shop. First, you’ll need to cover the property itself, plus a policy to cover your business liability. Since most coffee shops have employees, you’ll also need workers’ compensation insurance.

• General Business Liability: This policy protects your business from common business risks like bodily injuries and property damage. General liability is especially important for food service businesses that serve customers on their premises. It’s only a matter of time before an employee spills hot coffee on a customer (or their laptop) or you have a foodborne illness claim.
• Commercial Property: You may prefer to combine your general liability with commercial property in what is called a Business Owner’s Policy (BOP). Your insurance broker will be able to advise you if a BOP is a better fit for your location and business size.
• Equipment Coverage: This is an additional, optional policy that covers your highly used and most expensive equipment. It is especially useful if you spent a few thousand dollars on a brand-new espresso machine.
• Workers’ Compensation: If you have employees, you need workers’ compensation insurance. Most states set minimum workers’ comp limits. So, check with your local labor department for requirements and your insurance broker for guidance.
• Commercial Property: This covers You may prefer to combine your general liability with commercial property in what is called a Business Owner’s Policy (BOP). Your insurance broker will be able to advise you if a BOP is a better fit for your location and business size.
• Worker’s Compensation: If you have employees, you need worker’s compensation insurance. Most states set minimum worker’s comp limits. So, check with your local labor department for requirements and your insurance broker for guidance.

Step 9: Hire & Train Staff

The startup staffing stage of running your coffee shop can be difficult. Exceptional service is a must so you want to make great hires. You also want to be smart about how many people you hire. Labor will likely account for 30% or more of your costs; hire too many people, and costs balloon, hire too few, and service could suffer.

Write Manuals & Standard Operating Procedures (SOPs)

Before you bring any employees on board, you need to create basic procedures for preparing and serving various menu items. Since the quality of your coffee is so essential to your business, the most important procedures you create are those for safe and correct beverage preparation. If you work directly with a preferred wholesale coffee roaster, they can likely provide you with excellent training information for your team.

You’ll also want to create SOPs for less glamorous procedures like cleaning the espresso machine, using the POS, and calling in sick or requesting time off.

Our human resources experts have written comprehensive guides (and free templates) for everything from creating your time off policy , to writing an employee handbook and setting up employee benefits .

Write Job Postings

Most coffee shops have at least two to 10 employees, besides the owner. The number of employees you need depends on your hours of operation. The longer you are open, the more staff you will need.

Coffee shops tend to be busiest during the morning rush from 6 a.m. to 10 a.m. But if you have the staff, you can also boost your sales with a later afternoon hit when customers get out of school and work between 3  p.m. and 6 p.m. With opening and closing duties, that could mean you need staff from 5 a.m. to 7 p.m.; too long a day for a single person.

Click through below for a look at the most common coffee shop employees:

Baristas prepare all types of coffee drinks and are familiar with all types of coffee brewing equipment, from espresso machines to drip brewers, pour-overs, and French presses. In most coffee shops, every single staff member—regardless of seniority or additional duties—is trained as a barista. Even you, the owner, should train as a barista if you don’t already have those skills. Pay for baristas ranges from $12 to $22 per hour, plus tips. Wages vary based on location and experience.

An experienced barista keeps business moving during a rush, which can greatly increase your sales. Coffee lovers in busy city locations are also known to follow their favorite baristas from shop to shop. So, it is definitely worth it to pay for experience, even if an experienced barista costs you twice as much per hour.

Busy coffee shops might have some non-barista cashiers. Cashiers tend to be extremely entry-level and are typically paid minimum wage plus a share of tips. Cashiers are a good option if your shop is busy and you want to save some money on labor costs. But it’s generally a good idea to treat this role as a barista trainee; eventually, you want all of your staff to be able to turn out excellent coffees and espresso drinks. It makes scheduling and shift coverage much easier when all of your team members can perform any assigned task.

Drive-thru Attendant

If your shop has a drive-thru, you may also have a drive-thru attendant. This position is similar to a cashier, but they have the added skill of keeping orders organized and managing the queue of waiting cars. Like a cashier, a drive-thru attendant typically earns minimum wage plus tips, unless they are also a trained barista, in which case the pay scale is from $12 to $22 per hour, plus tips.

Shift Supervisor

A shift supervisor is a good idea if you need to cover some simple managerial tasks when you can’t be in the shop yourself. Shift supervisors are typically expert baristas who take on tasks like managing cash drawers and delegating tasks to other hourly employees. Shift supervisors are different from managers in that they are typically hourly employees that do not have the power to hire or fire other staff members. They also do not control the schedule.

So in most locations, shift supervisors can participate in tip pools. But you should check your local labor laws to be sure.

If you do not plan to actively work in your coffee shop, you’ll need at least one manager. The manager is typically paid an annual salary. According to ZipRecruiter, coffee shop manager salaries ranged from $32,000 to $55,500 in 2023, with the average manager earning $42,450 annually.

In addition to being a skilled barista, your coffee shop manager should order supplies, verify payroll records, hire, train, coach, and terminate employees and write schedules. They should also maintain daily, weekly, and monthly reports, communicate profits and losses to ownership, and develop ideas to expand or improve the business. Managers cannot participate in tip pools.

See our guides to advertising a job and writing job descriptions to help you staff up your coffee shop. And learn how to distribute shared tips among hourly employees in our guide to tipping methods ; the hours-based tip pool is the method used by most coffee shops.

Train Staff

Staff training is another place your roasting partner or franchisor can be a big help. If you opted to open a coffee franchise, your franchisor will provide training materials and sometimes even send a training manager to assist with training your team. Roasters want to ensure that their coffee is prepared correctly, and they also tend to provide a wealth of training options, from in-person training at your shop, to written manuals and training videos. Some roasters, like Intelligentsia, even have training classrooms in several major cities to provide in-depth training.

It’s helpful to create a new hire checklist when training is fresh in your mind. So each time you bring new employees on board, you’ll remember exactly what information you need to cover.

To get your supplies ahead of opening to the public, you’ll need to open vendor accounts with food and beverage suppliers. You should already have your coffee supplies locked in, but you’ll also need a supplier for all your milks, flavorings, sweeteners, and paper goods. If you don’t plan to cook food in-house you’ll also want to buy baked goods that are popular with coffee drinkers, like bagels, scones, muffins, and more. Read our guide to food suppliers for details on finding suppliers and opening accounts.

To ensure that you have enough supplies on hand before you open to the public, you should plan to create your accounts about a month before your opening date. Place your first orders at least two weeks ahead of your opening date so you can get a sense of all the logistics involved. Larger suppliers may only deliver to your area once a week, so you’ll need to plan ahead to ensure you never run out of stock.

Don’t forget an account with a linen service. You won’t need linen napkins and tablecloths, but coffee shops do go through hundreds of side towels and mop heads every week. You’ll likely find it less expensive to lease these items than to manage cleaning and restocking them yourself. Look for a linen service that also provides aprons; that way, you ensure your staff always looks presentable.

Success won’t happen by chance; it’s imperative that you develop effective promotional and advertising campaigns for your coffee shop. Promotions don’t necessarily have to be costly to work. What’s important is getting the word out about your business. This will be an ongoing task that requires regular investments of time, attention, and effort. A little creativity doesn’t hurt either. In addition to the traditional channels of buying an ad in the local paper, you should try:

• Social media: Coffee lovers tend to find local spots on Instagram and TikTok. Younger consumers like to get a sense of the “vibe” of a space before going, so take lots of pictures and videos of your pre-opening process—featuring your coffee drinks, of course—to get customers excited about your opening.
• Community outreach: Moreso than any other food business, coffee shops have reputation as community hubs. Partner with a local nonprofit ahead of your opening, or host a booth a community happening like a street fair, farmers market, or 5K run to get some face time in your community.
• Events: Poetry readings, art showings, and live acoustic music are classic coffee shop tropes for a reason. Connect with local artists or literary groups to liven up your space. Just be careful about music; some locations will require you get a cabaret license before hosting live performances.
• Classes and contests: Host a coffee tasting, coffee brewing class, or a latte art class and contest. These are great ways to build a fan base (and increase customer knowledge and respect for your offerings).
• Email and text marketing: Leverage your POS system’s customer profiles to send targeted messages. Most systems these days let you create filtered lists of customers with upcoming birthdays, frequent guests, or those that haven’t made a recent purchase. Compose some deals and messages to bring those customers back in your doors.

Starting a Coffee Shop Frequently Asked Questions (FAQs)

How much does it cost to start a coffee shop.

In most locations, you can start a coffee shop for $50,000 to $300,000. The costs vary by the size of your shop, the favorability of your lease terms, and the size of your staff. In a major market like New York City, where real estate is at a premium, your start-up costs can go much higher, though.

How profitable is a coffee shop?

Like most food businesses, coffee shops have pretty tight margins. You can expect to earn a 5% to 7% profit margin most of the time. But you’re only likely to hit this if you keep a close eye on your costs. A good point-of-sale (POS) system is your friend here; most will alert you to lost stock or employees that are getting close to hitting overtime.

If you can keep your sales flowing and your costs down, you can expect to regularly turn a profit on your shop. The owner of a well-run coffee shop can expect to earn $50,000 to $175,000 annually.

Can I run a coffee shop with no experience?

It is not a good idea to run a coffee shop with no experience. But your coffee roaster (or franchising partner if you go that route) can help you get the experience you need quickly. Every coffee roasting company wants to ensure that their coffees are presented perfectly. And because your business is their client, they have vested interest in your success. So you can typically get everything from barista training to marketing advice from your wholesale coffee roaster.

As a coffee shop owner, your education will be ongoing; you also need to keep your eye on changing trends and customer preferences. Understanding what your customers want—and don’t want—as well as how buying behaviors change over time is key to operating a thriving business.

The most successful shop owners keep their pulse on what’s happening as new coffee products, equipment, and marketing strategies emerge on a regular basis. There are many industry resources available to expand your knowledge about coffee and the coffee shop industry.

Here are a few popular resources and associations:

• The Specialty Coffee Association : The association offers a variety of memberships, starting at $70. It also publishes the “SCA 25 Magazine,” has its own podcast, and hosts a variety of live events. As an SCA member, you’ll also automatically gain membership to the Barista Guild of America.
• Fresh Cup Magazine : This monthly magazine features timely conversations and ideas for coffee shop owners. A subscription costs $48 per year.
• Barista Magazine : A one-year subscription for this leading trade magazine costs $30.
• Coffee Talk Magazine : Keep up on the world of coffee by signing up for this quarterly magazine, available for free in both print and digital formats.
• National Coffee Association : This trade association for the coffee industry offers a wealth of industry resources and training, as well as coffee-related news.
• Roasters Guild : If you want to stay up to date on coffee roasting techniques and news, you may want to join the Roasters Guild. Annual membership dues are $200. The Guild also offers training as well as a Roaster Certificate program.

Starting a coffee shop is a pretty straightforward process with a ton of room for creativity. A coffee shop has great potential as a money-making business, whether you open an independent shop or opt to work with a franchisor. With a budget of $50,000 to $150,000, well-roasted beans, and well-trained baristas, you’ll be on your way to creating a business that is vital to your surrounding community. And all the coffee you can drink is a pretty good fringe benefit.

About the Author

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Mary King is an expert restaurant and small business contributor at Fit Small Business. With more than a decade of small business experience, Mary has worked with some of the best restaurants in the world, and some of the most forward-thinking hospitality programs in the country. Mary’s firsthand operational experience ranges from independent food trucks to the grand scale of Michelin-starred restaurants, from small trades-based businesses to cutting-edge co-working spaces.

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Cafés in elektrostal, establishment type, traveller rating, dietary restrictions, restaurant features.