Sample Coffee Shop Business Plan

A sample business plan for a coffee shop which can be used to create your own business plan or help you assess the risks and benefits of opening a coffee shop or similar business.

If you are planning to open a coffee shop, the very first thing you need to do is write a business plan. This is useful in many ways: it will allow you time to consider all your options before committing as well as put down on paper your goals and ideas. But, most importantly it will provide an analysis of your idea and give you a clue as to whether it will be a viable business venture.

Below is a sample business plan for a fictional coffee shop. You may use this plan to formulate your own. Use your own objectives and revenue figures to work out your business plan.

The Perfect Cup

Business Plan for the Period

Starting January 2005

Business Overview

Business History

The Perfect Cup is a new restaurant venture with an expected opening date in March of 2005 in Somewhereville, Texas. The business is a coffee shop located in Old Town, a newly renovated section of town, with antique shops and galleries along the main street. We will specialize in coffee, tea, cappuccino, frozen cappuccino, and homemade cookies and brownies. There are no other shops that only serve coffee in Old Town, the nearest being over five miles away. Our target audience is intellectuals/artists/writers. Currently, there are no places in the surrounding area that cater to artists and writers. The Perfect Cup will serve this area well.

Vision and Mission Statement

The Perfect Cup will become the foremost coffee shop in the area. We will serve a perfect product at a very reasonable price. We will also be a meeting place for artists and writers and a place for them to show off their work. We will create an atmosphere conducive to creative expression and promote the creative process.

Objectives

Our primary goals over the next year are:

1. Secure financing for start-up of at least $30,000 for space and equipment.

2. Renovate our space in Old Town.

3. Acquire equipment necessary for business, i.e. coffee pots, cappuccino machines, blenders, etc.

4. Make agreement with coffee distributors, and bakery vendors.

5. Create a cozy, artist friendly environment (i.e. choice of colors, choice of music, decor)

6. Open for business and become the foremost coffeehouse in the area.

Ownership

The Perfect Cup is a general partnership between Arlene and April Mason. Each partner is equally involved in operation and management of the shop, each to her own abilities.

Location and Facilities

The Perfect Cup is located in the Old Town section of Somewhereville, Texas. We currently own the building we will occupy, though painting and renovation are sorely needed.

Products and Services

Description of Products and Services

The Perfect Cup will offer high quality coffee, tea, hot coca, and cappuccino, at a very reasonable price.

We will also sell homemade cookies, brownies, and doughnuts, also reasonably priced.

Key Features of the Products and Services

All drinks will be made with filtered water and the highest quality ingredients we can get.

Frozen drinks will have caramel or chocolate syrup drizzled in the glass and over the drink. Cappuccino and hot coca will have whipped cream toppings as well as the option for candy sprinkles. Cookies will have the option of a chocolate or caramel dip and sprinkles.

We will offer designer flavored cream and five kinds of sweetener, i.e. sugar, honey, Equal, Splenda, and Sweet-n-Low. Cream and sweetener is at no extra charge.

Production of Products and Services

We will use only filtered water and will brew our coffee in commercial coffeepots that will be thoroughly cleaned between uses.

We will bake cookies and brownies in our own on-site oven from proven recipes, daily.

Future Products and Services

Within the next three to five years we expect to branch out into catering and offer homemade pies, whole or by the slice.

Comparative Advantages in Production

Our low overhead and cheaper pricing will be the key to our success.

Industry Overview

Market Research

There are no other businesses that serve only coffee in Old Town.

Size of the Industry

Nationally, the coffee shop industry is quite large, but in Somewhereville, there are only three. The nearest one to Old Town is more than 5 miles away.

Key Industry Trends

This industry is booming at the present time, there is a trend toward small cozy places and away from the large generic chain.

Industry Outlook

The coffee business does not show signs of slowing down. With new innovations such as flavorings and additives, it should continue for some time.

Marketing Strategy

Target Markets

Our target market is artists and writers who need a nice quite cozy place to think and do their work.

Description of Key Competitors

Of the three coffee shops in the area, one is a large chain with a very expensive product, one is really a homestyle restaurant, the last one, and our biggest competitor is an antique store with a "tea room".

Analysis of Competitive Position

Our pricing strategy and comfortable atmosphere will be the key to our success. None of the other shops in the area can offer this.

Pricing Strategy

We will offer three sizes of drinks, small $1.00, medium $1.50 and large $2.00.

Our cookies and brownies will sell for $1.00 each.

Promotion Strategy

We intend to advertise in the local newspapers and offer a "frequent drinkers club" discount to our best customers. We will also send out ads via direct mail, which will include cents off coupons.

Management and Staffing

Organizational Structure

Our organizational structure will be a simple pyramid style with the owners putting in as much work as the employees.

Management Team

April and Arlene will share management and supervisory responsibilities equally. Arlene for the morning shift. April for the afternoon shift.

Staffing

We will hire two busboys and two waitresses, these will be recruited from the local high school.

Labor Market Issues

In this area there are many high school students looking for work, part time or full time, we want to fill that need.

Regulatory Issues

Somewhereville and the state of Texas both have regulations regarding food service establishments. We have already obtained the appropriate business permits.

Risks

Market Risks

The main risk is monetary. The area may not be ready for a place like ours and we may not do a great business.

Implementation Plan

Implementation Activities and Dates

1. Begin building renovation 12/05

2. Complete renovation 2/15/05

3. Begin preliminary advertising 2/15/05

4. Purchase and setup equipment 2/15/05

5. Open for business 3/1/05

Financial Plan

Beginning Balance Sheet

This will be a listing of all of your assets and liabilities, before you open for business. You may want to use a spreadsheet program to make this go easier.

Balance Sheet

Current Assets:

Building $150,000

Computer $1,500

Sound System $2,000

Furnishings $5,000

Equipment $3,000

Cash

Arlene $5,000

April $4,500

Accounts Receivable

None

Inventory

Coffee $1,000

Tea $500

Other Assets

Cups $3,000

Total Current Assets

$175,500

Liabilities:

Accounts Payable (monthly)

Water $200

Phone $150

Electric $500

Donut Vendor $1,000

Warehouse Club $1,000

Coffee Distributor $1,000

Wages $5,000

Advertising $1,000

Taxes Payable

Property Taxes $500

Employee Taxes $2,000

Operating Loans Payable

Startup Loan $500

Total Liabilities

$12,850 on going per month

Projected Income

This will be a listing by month of your projected income. List the projected income each month for each product, this way you can compare actual sales to projected sales at the end of the year to determine what products to concentrate on. (below is a sample month)

March 05

Coffee $6,000

Tea $2,000

Cookies $1,500

Donuts $2,500

Misc. $4,000

Total Income for March

$16,000

Total Projected Net Profit (Cost/Benefit)

$3,150 for March

This would assume 20 pots of coffee sold a day, plus an assortment of other items. This also assumes the market will not increase or decrease due to weather or economics. This would be an average month.

This of course would be adjusted monthly once you start business. Then based on the adjustments and actual sales, you can build a new balance sheet at the beginning of next year.

Conclusions

After you have created the business plan and examined the cash flow estimation you may find that your net profits are not what you would like them to be. In this case you may have to revise your pricing strategy to fit with your expectations or change your expectations. A coffee shop is not a get rich quick idea, it takes lots of hard work and long hours to realize your dream. But, in the long run, careful planning will make it all worth it.

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