Coffee Shop Business Plan Template
If you want to start a Coffee Shop or expand your current Coffee Shop, you need a business plan.
The following Coffee Shop business plan template gives you the key elements to include in a winning Coffee Shop business plan.
Coffee Shop Business Plan Sample
I. Executive Summary
Business Overview
[Company Name], located at [insert location here] is a new, hip coffee shop focusing on providing a variety of high-quality coffee drinks and teas, locally-made pastries, and snacks. Our product line fits nicely for those who seek a snack and drink to take to go or to sit in our seating area.
Services
[Company Name] will offer a wide range of coffees and coffee drinks, teas, and a selection of food items. A small seating area will allow social meetings within the coffee shop. Several products on the menu will be highlighted as being our specialties, using recipes developed by the coffee shop’s founders.
Customer Focus
[Company Name] will primarily serve the residents who live within a 2-mile radius of our coffee shop and workers within a quarter mile radius. The demographics of these customers are as follows:
- 27,827 residents
- 1,750 workers (who do not live the neighborhood)
- Average income of $54,700
- 38.9% married
- 49.6% in Mgt./Professional occupations
- Median age: 34 years
Management Team
[Company Name]is led by [Founder’s Name] who has been in the food service business for 20 years. While [Founder] has never run a coffee shop himself, he has waited at area restaurants for 5 years, been a cook for 5 years, and taught cooking classes at the local culinary institute for 5 years. As such [Founder] has an in-depth knowledge of the food service business including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).
Success Factors
[Company Name] is uniquely qualified to succeed due to the following reasons:
- There is currently no hip coffee shop targeting the younger demographic in the community we are entering. In addition, we have surveyed the local population and received extremely positive feedback saying that they explicitly want to frequent our business when launched.
- Our location is in a high-volume area with little direct traffic, and will thus be highly convenient to significant numbers of passersby each day.
- The management team has a track record of success in the restaurant business.
- The coffee shop business is a proven business and has succeeded in communities throughout the United States.
- Market trends such as the growth in coffee as an American drink spearheaded by Starbucks support our business opportunity.
Financial Highlights
[Company Name] is currently seeking $360,000 to launch. Specifically, these funds will be used as follows:
- Coffee shop design/build: $180,000
- Working capital: $180,000 to pay for marketing, salaries, and land costs until [Company Name] reaches break-even.
II. Company Overview
Who is [Company Name]?
[Company Name] located at [insert location here] is a new, hip coffee shop focusing on providing a variety of high-quality coffee drinks and teas, locally-made pastries, and snacks. Our product line fits nicely for those who seek a snack and drink to take to go or to sit in our seating area.
[Company Name] was founded by [Founder’s Name]. While [Founder’s Name] has been in the foodservice business for some time, it was in [month, date] that he decided to launch [Company Name]. Specifically, during this time, [Founder] took a trip to Fort Lauderdale, FL. During his trip, [Founder’s Name] frequented an independently-owned coffee shopthat enjoyed tremendous success, even in the neighborhood of a Starbucks. After several discussions with the owner of the restaurant, [Founder’s Name] clearly understood that a similar business would enjoy significant success in his hometown.
Specifically the customer demographics and competitive situations in the Fort Lauderdale location and in [insert location here] were so similar that he knew it would work. Furthermore, after surveying the local population, this theory was proven.
[Company Name]’s History
Upon returning from Fort Lauderdale, surveying the local customer base, and finding a potential retail location, [Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation].
[Founder’s Name] has selected three initial locations and is currently undergoing due diligence on each property and the local market to assess which will be the most desirable location for the coffee shop.
Since incorporation, the company has achieved the following milestones:
- Developed the company’s name, logo and website located at www…
- Created the menu
- Determined equipment and inventory requirements
- Began building relationships with coffee, tea, and pastry suppliers to the local region
[Company Name]’s Services
Below is [Company Name]’s initial menu. As you can see all items are classified under the following five main categories:
1. Coffee & Espresso
2. Tea
3. Pastries
III. Industry Analysis
You can download the Coffee Shop business plan template (including a full, customizable financial model) to your computer here.
[Company Name]directly or indirectly competes with all foodservice providers nearby our coffee shop that offer similar dining experiences. Competition will come from supermarkets, restaurants, coffee shops, bakeries and other retail establishments. Direct competition will come from companies offering brewed coffee and grab n’ go food products similar to [Company Name].
Industry Statistics& Trends
The following industry size facts and statistics bode well for [Company Name].
- According to CoffeeResearch.org, there are over 108 million coffee consumers in the United States who spend an average of $164.71 per year on coffee.
- 54% of the adult population in the United States drinks coffee daily.
- An additional 25% of Americans drink coffee occasionally, but not daily. This represents a $9.2 billion retail industry.
- Among coffee drinkers, coffee consumption in the US is 3.1 cups of coffee per day
- Men drink 1.9 cups per day on average and women drink 1.4 cups per day on average
- 17% of adult U.S. population consumes a gourmet beverage on a daily basis
- Consumption of iced coffee has risen significantly in recent years
- 61% of coffee drinkers believe coffee improves their mental acuity
IV.Customer Analysis
Demographic Profile of Target Market
[Company Name]will serve the residents of [company location] and the immediately surrounding areas as well as those who work in [company location].
The area residents and workers we serve are affluent and hard-working and are expected to drink coffee more often and regularly than the national averages.
The precise demographics of the town in which our retail location resides is as follows:
| Wilmette | Winnetka | |
|---|---|---|
| Total Population | 26,097 | 10,725 |
| Square Miles | 6.89 | 3.96 |
| Population Density | 3,789.20 | 2,710.80 |
| Population Male | 48.04% | 48.84% |
| Population Female | 51.96% | 51.16% |
| Target Population by Age Group | ||
| Age 18-24 | 3.68% | 3.52% |
| Age 25-34 | 5.22% | 4.50% |
| Age 35-44 | 13.80% | 13.91% |
| Age 45-54 | 18.09% | 18.22% |
| Target Population by Income | ||
| Income $50,000 to $74,999 | 11.16% | 6.00% |
| Income $75,000 to $99,999 | 10.91% | 4.41% |
| Income $100,000 to $124,999 | 9.07% | 6.40% |
| Income $125,000 to $149,999 | 9.95% | 8.02% |
| Income $150,000 to $199,999 | 12.20% | 11.11% |
| Income $200,000 and Over | 32.48% | 54.99% |
Customer Segmentation
We will primarily target the following three customer segments:
- Couples: The restaurant will attract couples looking for a spot to meet between and before meal times.
- Local workers: Approximately 1,750 individuals work in offices or stores within a quarter mile of our location and we expect a fair portion of these individuals to frequent us before starting in the morning, on lunch breaks, and after leaving work.
- Shoppers: Due to our location on a traditional main street, visiting shoppers from the town and beyond will visit when they tire from walking or are in need of a snack while window shopping.
V.Competitive Analysis
Direct & Indirect Competitors
The following coffee shops are located within a 2 mile radius of [Company Name], thus providing either direct or indirect competition:
Joe’s Coffee Shop
Joe’s Coffee Shop is described by local press reviews as “a working man’s coffee shop” and has been in business for 32 years. Joe’s offers basic options for coffee and drinks, as well as sandwich options.
Joe’s offers lunch which encourages those on a meal break or taking a meal for the day at work, but has limited beverage options. Joe’s is also located on the outskirts of town and caters primarily to commuters who enter the town for work. It is not characterized as a sit-down establishment, with a focus on to-go service from the counter.
Old Time Organic Café
Old Time Organic Café has been in business for 5 years. Old Time offers a variety of baked goods, organic teas and coffees, and sandwiches served to-go.
While Old Time Organics’ food is entirely organic, they have a very limited selection of items. The location only has four sit down tables and is thus targeting to-go customers that are either stopping for a quick breakfast or picking up baked goods and coffee for work.
Starbucks
Starbucks opened a location in the shopping district of [Company location] one year ago. Starbucks has been successful, especially with visitors from out-of-town, but is also victim of a backlash. There was a high level of controversy when it moved to town, with a large and vocal group of townspeople condemning it moving into town.
[Company Name] has several advantages over Starbucks including:
- Starbucks does not offer as extensive a rotating menu of flavored coffees
- Starbucks’ specialty coffees will not be as high quality as [Company Name]’s house blends
- Starbucks is avoided by a growing number of townspeople who hate the idea of chain establishments moving into their town.
We expect that Starbucks will continue to thrive based on its location and excitement about a recognizable chain among some townspeople and most visitors. However, we expect that more and more customers will frequent [Company Name] based on the high-quality ingredients we use, product selection, and the fact that we are independently owned and operated.
Competitive Advantage
[Company Name] enjoys several advantages over other coffee shops. These advantages include:
- High Quality Ingredients: [Company Name] will work with the best local suppliers for its coffees, teas, and pastries, and take special care to create and market test its own house blends which will be appreciated by gourmet coffee drinkers.
- Management: Our management team has years of business and marketing experience that allows us to market and serve customers in a much more sophisticated manner than our competitors.
- Relationships: Having lived in the community for 25 years, [Founder’s Name] knows all of the local leaders, newspapers and other influencers, including the local leaders who fought the Starbucks opening two years ago. As such, it will be relatively easy for us to build branding and awareness of our coffee shop.
VI.Marketing Plan
The Marketing Plan describes the type of brand [Company Name] seeks to create and the Company’s planned promotions and pricing strategies.
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition:
- Offering high-quality beverage and food items including coffee, teas, iced drinks, pastries, and more
- Offering a unique and wonderful house coffee blend
- Offering a convenient location that offers both eat-in or take-out options
- Providing excellent customer service
Promotions Strategy
[Company Name] expects its target market to be individuals working within a quarter mile radius and living within a 2-mile radius of its café. The Company’s promotions strategy to reach these individuals includes:
Direct Mail
[Company Name] will blanket neighborhoods surrounding its locations with direct mail pieces. These pieces will provide general information on [Company Name], offer discounts and/or provide other inducements for people to frequent the restaurant.
Public Relations
We will contact all local and area newspapers and television stations and send them a press release describing the opening and unique value proposition of [Company Name].
Advertising
[Company Name] will initially advertise in local newspapers and sponsor community events in order to gain awareness.
Sampling
[Company Name] employees will initially give free coffee samples to passersby to enable them to taste the quality of our house blend and learn about us.
Ongoing Customer Communications
[Company Name] will maintain a website and publish a monthly email newsletter to tell customers about new events, products, and more.
Pre-Opening Events
Before opening the restaurant, [Company Name] will organize pre-opening events designed for prospective customers, local merchants and press contacts. These events will create buzz and awareness for [Company Name] in the area.
Pricing Strategy
[Company Name]pricing will be moderate so customers feel they receive great value when patronizing the restaurant. Pricing will be higher than Joe’s Coffee Shop, and on par with Starbucks and Old Time Organics Café.
VII.Operations Plan
Functional Roles
In order to execute on [Company Name]’s business model, the Company needs to perform many functions including the following:
Administrative Functions
- General & administrative functions including legal, marketing, bookkeeping, etc.
- Sourcing and storing ingredients
- Hiring and training staff
Kitchen Functions
- Food preparation
- Coffee brewing and blending
Retail Functions
- Order taking and fulfillment (for take-out and eat-in)
- Customer service
- Janitor/maintenance personnel to keep the coffee shop clean
Milestones
[Company Name] expects to achieve the following milestones in the following [] months:
| Date | Milestone |
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name]coffee shop |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Launch [Company Name]coffee shop |
| [Date 5] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name]is led by [Founder’s Name] who has been in the foodservice business for 20 years.
While [Founder] has never run a coffee shop himself, he has taught cooking classes as the local culinary institute for 5 years. Two courses that he taught included:
- How To Cook for Everyday Eating
- This course was designed to give students an overall understanding of basic dishes that could be cooked for everyday healthy home-style meals
- Coffee Blending for Connoisseurs
- This course was designed to give students an overall understanding of how to grind and blend coffee beans to create distinctive flavors
[Founder] has also worked part-time at restaurants throughout the region. Specifically, he has worked for Gianna’s Patisserie and Mike’s Place, where he was responsible for overseeing kitchen quality.
[Founder] graduated from the University of ABC where he majored in Communications and from the local culinary institute with a certificate in foodservice management.
Hiring Plan
[Founder] will serve as the coffee shop manager. In order to launch the coffee shop, we need to hire the following personnel:
- Wait staff (3 full-time equivalents to start)
- Busboy (1 to start)
- Part-Time Bookkeeper (will manage accounts payable, create statements, and execute other administrative functions)
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come from the sale of drinks and food to its customers.
The Company will have eat-in and takeout systems to cater to a broad spectrum of customers in its target market.
The major costs for the company will be food and drink supply costs, salaries of the staff, and rent for a small, but prime location. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market.
Capital Requirements and Use of Funds
[Company Name] is seeking a total funding of $360,000 to launch its coffee shop. The capital will be used for funding capital expenditures, manpower costs, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Coffee shop design/build: approximately $180,000
- Working capital: approximately $180,000 to pay for Marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions& Forecasts
Below please find the key assumptions that went into the financial forecast and a summary of the financial projections over the next five years. Please see the Appendix for more detailed financial forecasting information.
| Number of customers per day | Per location |
|---|---|
| FY 1 | 100 |
| FY 2 | 150 |
| FY 3 | 180 |
| FY 4 | 220 |
| FY 5 | 300 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRETAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
