how to start a coffee shop business plan

How To Start A Coffee Shop (2024 Guide)

Updated: May 1, 2024, 5:13pm

Table of Contents

How to prepare, 12 key steps to open a coffee shop, tips for success after opening a coffee shop, independent coffee shop vs. starting a franchise, frequently asked questions.

It’s no wonder you want to start a coffee shop. Coffee is one of the most popular and profitable beverages in the world. It is robust and delicate, flavorful and aromatic, stimulating and relaxing. It’s conversational, it brings people together and it jumpstarts the day. The coffee industry can be a lot of fun. If you want to know how to start a coffee shop, look no further—we’ve compiled the ultimate guide to get you on your way.

Before you truly launch into the process of starting a coffee shop, you should lay a solid foundation to build on.

Create a Business Plan

Having a business plan is important. It’s similar to a map, helping you get from point A to point B.It’s also essential if you are seeking a loan or investment. You want your lender to see what you intend to achieve and how you plan for success.

Creating a business plan helps you connect your investments with goals, have a business model, show your target market, sales strategy and overall potential for growth. It also helps you uncover any weak spots, honing in on things that could potentially go wrong. Try to map out the whole picture for the entire business including business structure, customers, location, pricing, cost, products, staff and financials.

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Choose Your Business Structure

When it comes to choosing your type of business structure , it is important to decide what structure best supports you and your business. This is something you will need to do before you register your business with the state. It is best to choose your business structure carefully, as it directly affects you and your business from personal liability, taxes, legal protection, bankruptcy, selling or even transferring ownership.

You could run your business as a sole proprietor, partnership, limited liability company (LLC) or corporation. LLCs and corporations provide protection against personal liability, but require filing forms with your state. Take some time to consider which option works best for you.

Consider Costs: Funding and Finances

Unless you already have the finances to start your coffee shop, you’ll need to calculate your startup costs. After you determine your startup expenses, you’ll need to decide where to request funding. You may have self-funding or investors as financial resources or you may need to contact banks and credit unions to request a small business loan . Another popular option is crowdfunding, which allows other people to support and contribute to the success of the business. Whichever way you decide, you need to have a good idea of what your budget is going into it. Consider costs such as renovations, buildouts, construction, machines, water systems, coffee grinders—these can add up. It’s inevitable for unforeseen things to come up, so it is better to be as accurate as you can and avoid underestimating.

1. Have a Vision

Passion with a vision is the driving force you need to move into action and succeed. Your desire will be the fuel to your success, and your customers will sense your love and dedication to the business. This vision and passion not only fulfills your personal dreams and desires, but it delivers an exceptional outcome and experience to your customers. When the going gets tough, you’ll need that fuel to get you through and when you put your heart and soul into something you love, the payoff is even greater.

“People with passion can change the world” —Steve Jobs

2. Do Your Research

Knowledge is power and it is a major contribution to your success. In order to gain knowledge, you must do your research. Start by learning the ins and outs of what makes a successful coffee shop.

There are many ways to do this, from hands-on experience to networking, asking other coffee shop owners with experience and educational tools such as books, classes and online content. This will provide you with important tools and information to move forward with confidence. Write a list of questions to help you gather the information you need. Some examples include:

• How do you roast your own coffee beans?
• What makes a great cup of coffee?
• What are the best machines to use?
• What are the coffee shop essentials?
• What is the competition like in the area?
• What are the health codes for a coffee shop?
• What other sources can help the business grow?

The more knowledge you have, the better your business will be. You’ll have more insight on how to run it, and you’ll be able to make good decisions. Your staff will trust in you and your customers will enjoy buying from you.

3. Identify Startup Cost and Equipment

No matter what, starting a coffee shop will have expenses, and these are essential for your operation. If you are choosing a brand-new retail location, it will be more costly to build and renovate than it will be to rent an existing location. Depending on the size and location of your coffee shop, cost can vary from $100,000 to $600,000. Determine what your budget is and what your limit is to spend on the necessities including renovations, furnishings, products and equipment. Some common startup costs that you’ll have include:

• Rental space
• Licenses and permits
• Advertising
• Staff wages
• Furnishing and equipment

To gain a full picture, separate your one-time costs, such as licenses and permits, equipment and renovations, from your monthly costs, such as utilities, advertising and employee wages.It’s better to overestimate than underestimate, and it’s important to have additional funding to cover operating costs until the business becomes profitable. This can take anywhere from six to 12 months.

4. Develop a Branding Strategy

Branding is much more than a logo. It not only represents the overall identity of your business, but the quality of your product, allowing customers to recognize, become familiar and trust your services. Think of it as the face and personality of your coffee shop and what makes your café unique and stand out.

Ask yourself, “How can I leave a lasting impression on the consumer and how do I want my customers to feel when they arrive?” You want your brand to activate their senses so they will automatically anticipate the full experience before they even walk through the door. This leaves a lasting impression on the consumer, encouraging them to talk about their experience with others and visit again.

Here are some helpful questions to ask yourself when developing your brand:

• What makes your coffee shop unique? For example, the coffee beans, the atmosphere, the environment, the services, the ingredients, etc.
• What kind of experience do you want to provide, and what is your overall theme for the shop?
• How can you create a sense of community, and how does it serve others as a gathering hub?
• Is your brand logo appealing, and does it translate well on packaging, social media and merchandise?
• How will your logo create a sense of familiarity and trust for consumers?

Once you’ve found the perfect design, don’t forget to trademark your logo and protect your creative assets.

5. Find a Location and Commercial Space

When starting a coffee shop, it’s important to choose a location and space that provides a wonderful experience for your customers. With that in mind, you’ll also need to consider other factors that will determine the success of your business, returning true profitable potential.

Pick a location that targets your ideal customers. You want to make sure there will be enough foot traffic in the area to provide your coffee shop with high volume and avid coffee drinkers—keeping your business steady year round. Get an idea of population density in your area by contacting the city or visiting census.gov census data by zip code.

Research other coffee shops in the area. It’s a good idea to research other coffee shops in the area to see if they compete with the products and services you provide. Some coffee shops target specific audiences or have limited hours of operation. This could help you determine whether or not you want to target customers who are early birds or night owls. Maybe you want to serve breakfast sandwiches in the morning or dessert and coffee in the evening.

Either way, it’s a good idea to make sure you’re not in competition with your neighbor—try to complement them instead.

Find a location that is easily accessible. Customers are drawn to locations that are easily accessible whether on foot or driving. Customers love the convenience of hassle-free parking and street visibility for those walking from one destination to another.

Find a commercial space. Finding a cozy coffee space is just one necessary component to an exceptional café experience but, unfortunately, not all commercial spaces will be able to accommodate more than that. Coffee shops require a unique set of accommodations, such as sufficient space to move around, room for espresso machines, couches and tables, kitchen space, gas, drain and water lines just to name a few. Remember to take all of it into consideration.

Find a commercial space you can afford. This falls in line with your budget as an ongoing cost, making it a commitment for the long haul. Consider the length of the lease, rent increases, renovations, insurance requirements, security deposit, maintenance and repairs. This not only plays a role in your coffee prices, but can directly affect any business loans.

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6. File for Permits and Licenses

Before you start firing up the espresso machine and filling the display case with baked goods, you’ll need to get approved for state and local licenses and permits. Make sure you’re prepared ahead of time and be aware that these licenses and permits take time to secure. Permits and license requirements vary from state, city and county so be sure to check with your area of operation in order to fully operate in compliance with state laws and regulations.

Here are some licenses and permits you’ll likely need to open a coffee shop:

• EIN (Employee Identification Number)
• Business license
• “Doing Business As” License (DBA)
• Retail Food Service License
• Resale License for Sales Tax
• Sign Permit
• Food Handler’s Permit
• Building Health Permit
• Live Entertainment License

Once these important documents are set in place, you’ll be well on your way to opening your doors.

7. Choose the Right Coffee Supplier

A successful coffee shop is one that brews quality coffee time after time. A delicious cup of coffee keeps your customers coming back for more, making the experience enjoyable and worth every penny. When sourcing coffee, you’ll want to offer a product you’re proud of and to do that you must partner with the right supplier.

Here are a few key pointers to consider when choosing your coffee supplier:

Coffee lovers can be picky so be prepared to brew a high-quality cup of joe. When scouting the right supplier, there are many factors to take into consideration. Learn about the origin, how the coffee is roasted and where they source the coffee beans. If possible, visit the supplier and sample the coffee firsthand or request samples by mail. Inquire how the coffee is stored—as heat and humidity can damage the flavor and quality. Look for a coffee roaster that offers a wide variety of coffee bean options and falls in alignment with the vision of your café.

Find a supplier that can support low minimums to higher-volume capacity and has a fast and reliable turnaround. Once you find a supplier that suits your needs, you’ll want to make sure the supplier is able to grow with you. You may want to purchase a wide variety of coffee beans or a minimum quantity to start and a larger quantity as you grow. Either way, make sure you choose a supplier you can rely on. Your business will have fluctuating needs and you want to make sure the supplier is consistent and can provide a steady supply.

Customer Service

Think of your supplier as someone you are forming a long-term relationship with. You’ll want them to be just as committed to your success as you are. A good supplier will provide great customer service and walk you through each step—from roasting to packaging, sampling, creating blends and making small to large orders.

There are a few important things to consider when finding a price that works for you, including quality, customer prices and profit. First, determine if the supplier offers quality beans for the price, Second, decide if the price is fair for your customers and what your profit margin will look like. Lastly, will this price allow you to turn a profit? Great coffee does not come cheap, but it should not break the bank either. Most importantly, the taste and price should be worth a return visit.

8. Design Layout and Workflow

Your coffee shop layout and workflow will play a critical role in attracting customers to your café. Not only is ambiance and environment important, but so is the customer flow, food flow and coffee flow.

Here are a few things to consider when designing a layout:

Create a first impression. From a marketing perspective, your first impression determines who will become your customers. Determine what message you want to convey and what type of experience you want your customers to have when they walk through the door. Is it cozy and quaint? Is there music, study areas or areas for conversation? Not only is ambiance important, but so are the little details—such as where your customer will stand in line, wait for their coffee and move comfortably from place to place.

Create a good workflow design. Keep in mind, you’ll want to provide great service to your customers and with great service, you’ll need to move quickly and efficiently. Coffee shops can get busy, so it’s important the layout allows your baristas to move gracefully and swiftly when under pressure. Create a layout that allows the barista to be in a good flow from taking orders to brewing, grinding, steaming and frothing.

Long before you sign any contracts, make sure the building can accommodate a good workflow and area design. Consider how you will arrange and place the essentials:

• Coffee machines, grinders, milk frothers and kitchen equipment
• Storage and supplies
• Food display
• Menus and signs
• Outdoor and indoor seating
• Food assembly
• Coffee assembly
• Customer and employee flow

9. Order Equipment and Supplies

Quality equipment is necessary for a good cup of coffee but, unfortunately, equipment is not cheap. It’s best to do your research when making big purchases and remember quality equipment is a long-term investment, essential for the growth and success of your business.

Here is a list of equipment essentials you’ll likely need for your café:

• Espresso and coffee machine
• Coffee grinder
• Water filtration system
• Refrigeration and freezers
• Hot food equipment
• Point-of-sale (POS) system
• Dine-in and take-out coffee containers
• Ice machine
• Bakery display

This is just a starter list of your standard equipment and supplies. Remember to do your research because every detail counts. Get ready to stock your shelves with blenders, stirrers, syrups, varieties of milk, condiments, containers and thermometers and more. Inventory management software is also a great tool for tracking and identifying these items, making it easy to know what’s in stock and what needs to be reordered.

10. Hire and Train Your Team

A good barista goes a long way, from the very first interaction with the customer to their coffee-making skills. Remember, the people you hire are the face of your café and they have the ability to make a positive difference to your customers’ day. Customer service is everything so hire staff who know the importance of building relationships with people and have strong communication skills. Customers love genuine interaction and it will help create a bond between the customer and the café.

You also want to train your employees properly so they can make a great cup of coffee with confidence. Make sure the barista is ready to learn and is fully equipped with all the essential tools and knowledge to succeed—even a skilled barista will benefit from a refresher.

Here are a few must-haves to look for when hiring and training a barista:

• Great customer service
• Strong communication skills
• Attention to details
• Ability to multitask
• Ability to work under pressure
• Responsible and reliable
• Willingness to learn
• Cleanliness
• A positive attitude

Overall, a great barista will not only have a love for coffee, but they will care about the success and reputation of your business. Learn more in our guide about how to hire employees.

11. Market Your Brand

It can be frustrating to gain exposure when first starting out, so having a marketing plan for your brand should be top priority. It’s also important you tailor your ads and promotional products in a way that attracts the right people. There are many influential ways to promote your brand, so make sure to utilize all avenues of marketing—whether it be through online web content, social media, storefront advertising or involvement in the community.

Let’s take a look at a few ways you can promote your brand:

• Create a website
• Search engine optimization (SEO)
• Social media
• YouTube, Instagram and Facebook
• Influencer marketing
• Community gatherings and pop up shops
• Giveaways and raffles
• Paid advertising

12. Open House

Hard work pays off and once the paperwork is signed, decor is in place and staff is on the schedule, it’s time to open your café. To do so, you’ll need to get people to walk through your doors on opening day.

Now is the time to create a buzz through your social networks. Plan a ribbon-cutting event to promote your business or welcome a few people to a soft opening for an exclusive firsthand experience. Post about opening day on social media, letting your target audience know you’ll be open for business. You can even offer discounts or freebies as an incentive; this will help build curiosity and entice people to visit.

During the open house, it’s a good idea to show the face behind the brand. Mingle with your customers and take the time to know your community as this helps to build good lasting relationships.

There is no secret formula to success but here are a few additional ways you can increase your chances of success and grow the business.

Invest in a Strong Point-of-Sale System

You can greatly improve your business through a point-of-sale (POS) system . POS systems are made up of hardware and software, working together to process sales and payment transactions at the point of purchase. This system is digital with an intuitive touchscreen and interface, replacing the traditional cash register.

Having a point-of-sale system will benefit every area of your business. It allows customers to use different payment types, which in turn increases your revenue. It improves accuracy with a touchscreen, allowing you to keep a close eye on sales, profits and expenses.

It shows real-time inventory data from tracking inventory, making reordering simple. It also includes time clock functionality for employees to clock in and clock out. You can print reports, customize receipts and so much more. A point-of-sale solution is a great addition, furthering the success of your business and keeping your business organized and running smoothly.

Stay Ahead of the Game

In a saturated market of coffee shops, it’s important your café stands out. Find ways to take your coffee shop to a whole new level, giving your customers a good reason to visit your café and not your competitors. This brings money in the door and profits up.

Create consistency with your customers so they know what to expect, giving them a reason to come back, which helps form a long-term relationship. Think of something you can include with their experience that they wouldn’t get anywhere else such as a free biscuit with purchase, rewards or loyalty programs. Another way is to create an environment that is warm and inviting. Have relaxing music playing, comfortable lounge areas and offer free Wi-Fi, this will help your customers feel at home.

If you’re considering opening a coffee shop, you may be wondering if it is better to start a franchise or an independent business. There are many differences between the two business models and the choice will ultimately depend on your personal vision and set of goals. Let’s briefly take a look at both sides of the coin.

Opening an Independent Coffee Shop

Independent small business ownership is for those who have a personal vision and want to follow their own passions. You decide how the business will run. You are your own boss and you call the shots in every area of operation. If you decide on opening an independent coffee shop, you’ll have the freedom and independence to fully create and market your own product and brand name.

On the other hand, you’ll have less exposure, and you’ll need to develop your own customer base. You are fully responsible for developing and maintaining the success of the business.

Opening a Franchise Coffee Shop

When you franchise a coffee shop, you buy the rights from a company to operate and do business under their brand name. They provide the blueprint to replicate a proven formula. There are many controlled elements when opening a franchise, ranging from hours of operation and marketing strategies to the type of equipment and ingredients used.

They define how the business will operate in every way and you gain the reputation of a brand that most people already know and trust. If you decide you want to open a franchise, you’ll be responsible for signing contracts and following many rules and regulations. Startup costs can be high and you will have to pay a continuous fee to keep using their name.

In a nutshell, both have pros and cons, and both have the potential for success. It’s important to do your research and consider all factors before making a decision.

Bottom Line

We all know coffee will never go out of style. Coffee shops are continuing to grow and are becoming more popular every day, offering a variety of flavors and styles. You will likely succeed as a coffee shop owner if you have an ongoing love for your business and a solid business plan. Stay committed to the journey, express your creative edge and be open to learning. All in all, owning a coffee shop can be a gratifying and profitable experience.

How profitable is a coffee shop?

The profit margin will all depend on a few major factors, such as volume of sales, location, price point, startup costs, operational cost and more. Every coffee shop will vary from person to person, but it is estimated that a coffee shop owner can make between $50,000 and $175,000 yearly.

Do I need any qualifications to run my own café?

There are no specific requirements or qualifications to start a coffee shop, but it is a good idea to learn general business skills. Although you do not have to have a lot of experience, you must have the motivation to learn and grow.

How do I write a simple business plan?

When you’re working on a business plan, make sure you have as much information as possible so that you can simplify it to the most relevant information. A simple business plan still needs all of the parts included in this article, but you can be very clear and direct.

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Natalie Cusson is a small business owner with over 15 years experience in the creative arts. She's worked on ad campaigns for many trusted brands such as Nike, Subaru, Polaris, Red Bull and Progressive Insurance, just to name a few. Beyond her professional accomplishments, Natalie is driven by her love for writing and research, and is committed to maintaining a growth mindset. Not only is she passionate about learning and growing, she believes in embracing a healthy lifestyle.

Cassie is a deputy editor collaborating with teams around the world while living in the beautiful hills of Kentucky. Focusing on bringing growth to small businesses, she is passionate about economic development and has held positions on the boards of directors of two non-profit organizations seeking to revitalize her former railroad town. Prior to joining the team at Forbes Advisor, Cassie was a content operations manager and copywriting manager.

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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. (Consider using a coffee shop name generator for more ideas).
• 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)

• Equipment: $30,000
• Renovations: $20,000
• Initial Stock: $10,000
• Licenses: $5,000
• Miscellaneous: $10,000
• 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.

Related Coffee Shop Resources

• How to start a coffee shop with no money
• How much do coffee shop owners make
• Coffee shop names
• Coffee shop name generator

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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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.

LLC Formation

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...

BUSINESS STRATEGIES

How to write a coffee shop business plan

• Nirit Braun
• Oct 30, 2023
• 14 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.

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How to Open A Coffee Shop

If you’re looking for the definitive guide to opening a coffee shop in 2020, this is it.

Our business is built entirely on the foundation of “Helping People Succeed in Specialty Coffee”. In short, this is what we do. We help people open coffee shops, and help people who own coffee shops run them to be more efficient and profitable. This is our niche. 

If you’re in the beginning phases of opening a coffee shop, or already own one and are looking for ways to improve it – you are our target audience. We exist solely to help YOU.

It’s what our company has been doing for over 30 years, and what we have done for thousands of coffee shops worldwide in that time span. 

We’re based out of Portland, Oregon. One of the most competitive coffee markets in the world. Within this market, we run two successful coffee shops and one of the top selling roasteries in the Pacific Northwest. In short, we walk the walk and talk the talk. 

Being cafe and roastery owners ourselves helps us to remain in touch with the needs of our customers, and gives us the understanding of what we need to do in order to serve them best. 

This guide is designed to help anybody looking for help with the question, “how to open a coffee shop and how to do it the right way, the first time.”

Before you spend another dollar on your business, we strongly encourage you to read this guide, take notes, and get back to us with anything you need clarified. We’re here to help.

Develop an Airtight Business Plan

One of the most common questions we get is: “Do I need a business plan?” 

The answer is usually… it depends.

Usually when someone asks this question, they’re talking about a fully fleshed out financially-deep, written business plan – the type that you’d take to a bank during the startup phase while securing investors or a loan. While that’s useful if you’re trying to secure a large loan from an investor (and wise to consider finances in the long-term), the type of business plan we believe to be most beneficial in the early stages of opening a coffee shop? It’s more of a general gameplan and guideline that helps you understand how you position yourself in a competitive market, what makes you stand out, the brand identity you need your employees to embody, and so on. 

All businesses start with an idea. Maybe your idea is entirely unique; you’ve never seen anything like it anywhere. Maybe your idea isn’t entirely unique, but it IS unique to your area. Whether you want to open a large cafe or a  coffee cart , you need a game plan.

Your business idea and plans can run the gamut, but without a plan, it will likely always be just that. An idea. A perfected business plan brings life to your ideas, and forces you to consider everything you need to consider in order to both show others how seriously you’re taking your dreams, but also to provide a roadmap to follow throughout the life of your business. A business plan shows that you’re serious about what you want to do, you’ve done your homework, and gives structure to an otherwise intangible idea. It’s the road map that gets you from A to Z. 

But where do you get started? Some people may have gone to business school to prepare for this moment, but a great majority of our customers haven’t. 

That’s where  our business plan  comes in. More than anything else, it is to keep you and anyone you work with organized and focused on your goals, understanding their role in the grand scheme of things. When starting a business, the best advice for starting out is that you always want to fill a niche. You need to fully understand the needs of your future customers. Are you positioned in a bustling downtown area full of people coming and going to work? Maybe you don’t need a large space with a lot of seating. But if you’re near a college, for example, you WILL need lots of tables, couches, and chairs (and outlets for people to charge their laptops at!). Keeping your business plan flexible allows you to address the unique needs of whatever location you decide to go for. Your location and ideal customer can’t be ignored even in the early planning phase. 

If you’re looking to be one of the first coffee shops in your area and without much competition, you might be able to get away without a structured plan. But if you’re looking to open a coffee shop in a competitive market – you will need to have a truly original idea, and to understand your audience as best as humanly possible. THAT is how you’ll get customers coming through your doors, day in and day out. A good business plan helps guide you towards success by forcing you to think about important details that may not be obvious at first. 

One tip – you may find your concept changing as you work through your business plan – that’s normal! You may even find out your idea just doesn’t make sense on paper. You can theoretically spend lots of time and effort on something only to find that your idea isn’t working out half way through – it can be demoralizing, but working through a business plan makes sure you’re not investing thousands of dollars in an idea that’s doomed from the start. At the end of the day, it’s better to lose a little bit of time and effort than potentially delve into a big, expensive business endeavor that never had much of a chance to begin with. Working through these things sets you up for success when you finally do have that winning idea and location.

The bonus of a business plan is you can use it to secure investors, create interest, and convince your family and friends that your idea isn’t just a pipe dream. It also functions as your basis for training and getting your employees as passionate about your shop as you are. Having a business plan conveys you’re serious about what you’re trying to do. 

Building a good business plan requires a lot of time and effort. In the early days of Bellissimo, one of our most popular services was creating business plans for coffee shops, much like ours. Over time, we began to realize there were a lot of consistencies showing up from coffee shop to coffee shop. Shop owners would routinely ask the same questions, or want the same things in theirs. We would charge multiple thousands of dollars for these business plans, and our business plans eventually grew to be such a unique item, we decided to pivot our strategy into the concept of “let’s templatize this business plan, make it more affordable, and make it available to a wider audience.” 

In doing this, we were able to utilize the internet in a way that we couldn’t before, and get our tried and true, battle tested coffee shop business plan in the hands of soon-to-be coffee shop entrepreneurs around the globe. By lowering the price to a meager $695 (rather than the thousands we used to charge for one-on-one plan writing), we have been able to expand our reach, and streamline the process for thousands on their way to coffee shop success. 

If your coffee shop does not currently possess a streamlined, developed business plan, we encourage you to check ours out. 

Find the Perfect Location

Finding the right location is possibly the most important thing a potential coffee shop owner can do. Without the right location, everything else you do is potentially wasted effort. After all, what good is excellent coffee, customer service, and an affordable lease if there are no people around to sell your beverages to?

What to look for

Traffic. Traffic and accessibility are your essential needs. Depending on the community that you serve, it can be vehicle traffic (namely if you’re opening a drive thru or have ample parking, but foot traffic is ideal). Through marketing and promotions, you may occasionally attract customers outside their immediate living and working areas, but you will almost never get regulars. That’s why you need to be near as many people as possible. Large office buildings, hospitals, and tourist areas are the most ideal centers to concentrate on. Apartment buildings are not bad either, but generally won’t lead to quite as much business. They sound great in theory, but remember that a majority of people brew their coffee at home, only going out occasionally. It’s unwise to limit your audience to only the people who live in a specific building and bank on them to come down every day.

Any location is a balancing act between cost and benefit. The best locations are usually much more expensive, and most coffee shops just have to justify extremely high rent costs. The exception to this is smaller spaces that may be more affordable. They also allow for more customer turnover, and can be a great option for coffee businesses. Namely if your clientele do not need lots of space to sit. Many coffee shops can be hugely successful in a small space due to low overhead and a constant flow of customers.

The last thing that can make or break a location is renovations. It’s tempting to look for a place that was already a restaurant or coffee shop, but that’s not always the best idea because a business already failed there once. At the very least, it’s important to figure out why that business failed and what you can do differently. When looking at locations that aren’t properly vented and plumbed, make sure to factor in that cost (or talk to the landlord about doing it) because it can quickly turn into a massive investment. 

Cafe Locations vs Coffee Cart Location

Both cafes and coffee carts want similar things out of a location. Foot traffic is essential, as well as visibility. However, because coffee carts are smaller and have less overhead, they are more flexible with where they can be placed. Mobile coffee carts also have he benefit of changing locations depending on where the best market is. Cafes are a bigger investment with a potentially bigger profit, but they have to be positioned well. Coffee carts are a little more forgiving when it comes to initial investment and location, so they are a popular entry point into the industry.

How to get your ideal location

Finding your ideal location is one thing, but actually getting it is a whole new challenge. The most important thing to remember is:  negotiate!  Be able to talk about your business what the benefits of it clearly. Data (even data that isn’t perfect) can help drive your point home. By opening a coffee shop in a space you’re inherently bringing value to whomever owns it, not the other way around. Leverage that idea when negotiating for price and buildout. Don’t forget that things like plumbing and counters are the landlord’s property, so your landlord may contribute to those expenses. Remember, a coffee shop almost ALWAYS brings up the value of a neighborhood and adds significant foot traffic to any shopping center. They are seen as valuable community meeting spaces, and homes within walking distance of a coffee shop are more desirable. The very nature of you bringing your business to a neighborhood should be seen as a huge plus to any landlord. However, don’t assume that every landlord will automatically understand the value your business can bring, so it’s up to you to help them understand what they stand to gain by leasing to your business and helping you with your buildout.

Develop Essential Skills

Barista skills.

Plenty of people with varied backgrounds or entrepreneurial spirits want to open a coffee shop even if they’ve never worked in one, and that’s fine! Strictly speaking, you don’t need to have been a barista to open a coffee shop, but it really helps. A part time barista job while you work on your coffee bar can at least get you started with the knowledge you’ll need. Not being able to jump behind the bar or train employees yourself can be a huge disadvantage when opening a new coffee business. You’re guaranteeing the need for a partner or a skilled manager, and then relying on their schedule for any other employees. You also won’t be as informed when it comes to the products you offer because you won’t have the firsthand knowledge of creating them and seeing how customers react. 

Certainly, you could work as a barista for a period of time; many people do. Working as a barista is a great method to see if a coffee shop environment is right for you. You learn the skills, get practice working with a team, and when it comes time to hire employees you have a better idea of what to look for, but if you want those skills without having to work for a few years,  we have a solution for you . 

By investing in your barista education and training, you naturally improve your ability to train your future employees. Remember, even your best baristas will likely not work for you forever. It is up to YOU to be able to train future employees to be able to provide consistently great products that keep your customers returning happily over and over again. 

Business Skills

Maybe you’re in the opposite position: you’ve been a barista and want to open up your own shop. Barista skills are vital, but a coffee shop needs a lot more than that to run well. Here are some of the business skills you’ll need to be confident in:

Negotiation

We talked about the importance of lease negotiation before, but that’s not the end of it. Opening a coffee shop is expensive, and paying sticker price for everything is often just not feasible. Negotiation doesn’t have to be hard and you don’t have to be pushy. These strategies are sometimes effective, but they sometimes aren’t. 

The most tried and true method of negotiation is being able to assess and communicate value. 

It might be your business’s value to someone else (like a landlord), or it might be a machine’s value to your business. In business, everyone is looking to get as much as they can, but everyone understands this. That’s why this value language is universal. Communicating benefits when talking about your own value and communicating challenges when buying are should help to get negotiations started off correctly.  

In day one of our  five day workshops  on how to start a coffee business, we spend a good amount of time teaching negotiation tactics and techniques for ways to convince landlords that your business is worth investing their time and resources in. With just a few simple techniques and concepts worth understanding, we have seen our students negotiate up to 3 years of free rent in a new building for their cafes, or negotiated with  landlords to do their entire buildout (saving them tens of thousands of dollars in renovations). The return on investment from one of our workshops often can pay off ten fold. 

Network early and network often. 

You never know who might become a valued partner or a customer. It’s no secret that a lot of people drink coffee. It’s also obvious that to many consumers who don’t have developed palettes, there are plenty of options for “good” coffee. It’s easy to pick out bitter, sour coffee, but identifying the subtle nuances of coffee beyond it just tasting better is beyond many people, so having a coffee shop that stands out for other reasons helps bring in customers. One way to stand out and start networking is by being present on the floor and in your community. Humans are communal creatures; we like seeing other humans. If we associate a face with a business instead of just a brand, we are far more likely to want to return to that business. 

Additionally, word of mouth is one of the most powerful means of getting new customers. By grabbing the attention of one person, you might also grab the attention of their friends and family. This goes a long way towards building up your shop as a real member of a community. Once you’ve attained that status, you know your networking is succeeding.

And never underestimate the power of reviews. They say that a negative review reaches five times the amount of people than a positive one. By being present in your business, you can drastically improve the amount of control you have in ensuring your customers have a positive experience (and your employees can learn from your example of how they should best interact with customers, a double win!)

Nearly every coffee business is going to need an employee at some point, so this is a skill you’ll need. The most important advice we can give when it comes to hiring is to focus on personality and attitude instead of skills. Ask  interview questions  like: 

• How would your supervisor and co-workers describe you?
• Give me an example of a time at work when you went above and beyond what was asked of you.
• Tell me about a difficult situation at work, how you got through it, and what you learned.

Bar skills can always be taught, but finding someone willing to go the extra mile with customers and for your business is nearly impossible to teach. Like we say above, good coffee is subjective to most customers, but good service is something they’ll remember. With every customer, you’re looking to make your coffee shop their coffee shop, and not everyone can do that. Of course, finding the right employees is only the first step. 

Unless your pockets are very deep, you likely will not be able to afford hiring a qualified manager in the beginning phases of your cafe. It is imperative that you possess management skills, or can learn. Good management is not as simple as “being the boss”. As a manager, respecting and valuing your employees is first and foremost. Just making demands is the fastest road to unhappy and underperforming employees. 

We all like to feel like we’re part of something, so give your employees opportunities to take part in your business. Encourage them to invent drinks, take pictures for social media, and anything else you can think of for them to take part in and feel valued. Most baristas are multi talented so find out what hobbies your employees have. An artist might be able to contribute to a unique menu while a photographer might be able to take pictures for your website. It’s important to remember that even your best employees will likely not be with your company many years down the road. (of course, if they are, then by all means you’ve struck gold. Be sure to reward them) – in general, however, being a barista is typically a pit stop in a persons journey through life and few make it a long term career. Remember that, and appreciate the humanity behind your employees. Let them flourish in ways that show that you respect them, and they’ll reward you by doing a great job of what you expect out of them.  Just be sure you make it clear what it is you need from them .

An unavoidable part of managing is conflict. Sometimes it’s employees in conflict with each other, sometimes it’s a conflict between you and an employee. Good management means not letting it get personal and keeping things focused on how to improve performance as an individual and in a team. 

Remember, YOUR performance might be what needs improving. Always try your best to stay objective and understand the needs of the business, see what other people see, listen to the feedback you receive even when it might be uncomfortable. Listen to what your employees have to say, or what they might seem unhappy about. Hold monthly meetings and encourage your staff to bring up anything they feel particularly excited or worried about. 

Assuming they want to do a good job (most people do), there is probably a reason for certain tasks not getting done right or at all. Listen and brainstorm ways to make processes easier or more streamlined. Help your employees feel heard and use their insight to improve your business. 

Treat meetings as a constructive experience, and not a place to allow for complaints. Create a process where everyone can feel like their complaints will be heard and addressed in a constructive way – but meetings are NOT that place. Lots of things can affect people’s performance, and you never know what someone will be going through on a given day. If it’s not personal, it might be something trivial that you can address quickly and easily. Be sure you’re present, and your employees know that you have an open door policy to hear what they have to say.

This doesn’t mean personal things can’t affect performance. Family or health issues are unfortunately common and often affect work performance. A sympathetic manager who makes an effort to understand those situations can mean a lot to an employee and talking through what’s happening can be all that’s needed to get things back on track.   

Budgeting & Inventory

Having an accountant in your corner can be a big help, but they can’t do everything for you. You also might not be able to fit an accountant into your own budget. What then?

Budgeting skills are vital in coffee where transactional profit is often low and inventory can make or break a business. Smart budgeting involves balancing past data with future assumptions to only spend as much money as you need. Budgets are seldom perfect, but being able to create one and develop it through observation is essential.   

A big thing that many coffee shop owners will forgo is keeping track of their cost of goods. It is easy to get in the habit of placing your orders and not looking at the invoices, but as your distributors raise their prices, you should too. If the cost of milk goes up, the cost of your lattes may need to go up as well. Otherwise, you’ll start to notice that your profits are quickly disappearing and you may not realize it until your profit is in jeopardy. 

We’ll cover marketing more in depth below, but it is an essential and unavoidable part of a successful business. Effective marketing starts with outreach, but also includes many more layers to actually bring paying customers in. A new drink, sales, etc. are all ineffective if not marketed well.  

“How am I supposed to learn all these things if I’m already working?” You could go to business school, but that path doesn’t make sense or is nearly impossible for many people who want to open a coffee shop. If you want to cut right to the important stuff while spending a fraction of what you’d spend on business school,  our 5-day bundle is perfect for you .

Stay Organized

Find good partners.

You’ll certainly need a good general contractor experienced in cafe/restaurant spaces (more on that later) but what about other partners? 

Step one is recognizing your weaknesses. As a business owner, you will have to be good at a lot of things, but no one can be good at everything. There are certain gaps that just can’t be ignored, and it might be wise to hire someone to help you in those areas. Here are four of the most common professionals you might want to look for:

Accountant or Bookkeeper 

Money is at the core of any business, so making sure everything is accounted for and accurate is essential. A good accountant/bookkeeper can alleviate a lot of the stress that comes with money and provide some recommendations based on experience. Coffee shop budgets can become complicated quickly, so hiring an accountant to help, even for a short time, is essential.

Business Attorney

You likely won’t need to put a lawyer on retainer, but developing and good working relationship with a business attorney is a worthwhile investment. There are certain things that you will just need a lawyer to look over. 

Human Resources Professional

Hiring an HR Professional is not as common as talking to a lawyer, but it should be. HR brings another perspective to your efforts that’s not just about what’s legal (though they can help with that too). By talking to an HR professional, you’re making sure all your employee policies are correct and lawful, and you can feel confident hiring and working correctly with your staff. 

Marketer 

Getting a good marketing plan early can be a game changer for new businesses. Asking someone with expertise to help you form a long term plan, make contacts, and execute strategies will pay off hugely in the long run. You may want to hire a marketer for a short time to get you started off and again down the line to scale your business up. 

Employee Handbook

Most coffee shops will need at least one employee even before they open, so we can not emphasize enough how significant it is to get this done early and correctly. Getting a thorough, clear employee handbook early on helps set expectations and procedures for anyone you work with. A good employee handbook must have the following: 

• Defining employees and their relationships with employers
• Standards of conduct for staff
• Team member communications
• Employment Policies
• Salary and Benefits Policies

Each of these sections needs to be carefully thought out and written. Once you have a completed handbook, you should also have it reviewed by an HR expert and a lawyer; your handbook can’t just be an afterthought. This document lays out everything you expect of employees and what employees can expect of you. It makes sure everyone is held accountable for what they agree to do. From a legal perspective, you need an employee handbook before one person works one hour for you. Ask any new employee to take time to read the handbook and initial every page. This simple process both makes sure everyone is on the same page as well as saves you from potentially spending thousands of dollars in legal fees. No business owner can afford to get their employee handbook wrong. However, getting this all right takes quite a bit of time and effort. To help new business owners focus on their business, we offer an  employee handbook template  that comes pre reviewed by legal and HR professionals and is designed to have you ready to go quickly. 

Operations Manual

Most prospective business owners know they need an employee handbook, but fewer know about the importance of an operations manual. 

Simply put: The employee handbook defines relationships and expectations, but the operations manual tells your employees how to actually do their jobs. 

An operations manual is a supplement to on the job training and acts as a reference for employees. It limits your liability by making sure employees know how to consistently make drinks, maintain machinery, and interact with customers. It also provides you and your managers tools to make sure every employee is trained up the same way and to the same standards. No one can blame a barista for not following proper procedure if it was never taught, especially when it comes to complicated equipment maintenance. 

You should treat your operations manual as the textbook of your business. It might not be the most exciting or glamorous, but it is vital to making sure your employees feel equipped to do their jobs and consistently give great experiences to customers. An operations manual and an employee handbook work together to communicate policy and make sure your business objectives are clear. Like the handbook, any new hire should sign and date a copy of your operations manual to make sure it is understood. 

Want to save even more time? We also offer an  operations manual template  that has everything your business needs.

Begin Building

How much does it cost to open a coffee shop.

Budgets for new coffee shops can vary especially depending on the equipment you want. To get an idea for what opening a coffee shop costs, here are some general figures:

One of the biggest expenses in a coffee shop is your initial equipment. Here are some estimates for the big things that you’ll see in most shops.

It’s not cheap, but being  budget conscious  can keep things from getting out of control. Buying used equipment is always an option, but try to find out how well the equipment was maintained. Poorly maintained equipment can end up costing more than brand new, and in the long run it can mean terrible value. 

Find Funding

Whenever opening any business, doing it with as little debt as possible is ideal. That means your first funding strategy should always be saving your own money. Being frugal can be hard, but it’s a good test to make sure you really want to open a coffee shop. Even after saving money though, chances are you’ll need funding of some kind. Here are some of the safest ways to get startup capital:

A lot of businesses start off with a Small Business Association Loan.  sba.gov  makes connecting with lenders about as easy as it can be. These loans are still very much loans, with all the trappings and potential challenges, but they are usually more tailored to fit businesses like small coffee shops and might have more generous repayment terms. Still, we recommend taking the smallest loan you possibly can.  

Angel Investors

Angel Investors are becoming a more popular means of finding funding. They are investors who have specifically stated their interest in small business who might have a hard time finding other loans, hence the term angel. However, there are far fewer angel investors looking to invest in hospitality businesses, so this method can still be challenging for coffee shops. Usually, you’ll need some kind of unique hook beyond just good coffee, like extreme environmental sustainability or a focus on charity work. 

City Grants

Cities are often looking for certain kinds of businesses to open. Driving tourism and spending is always a value proposition, and sustainability is becoming increasingly important. Investigate your local government’s website for grants to see what you’d have to do for them. Applying for grants is often a somewhat time consuming process, but it can pay off greatly and put you on the map for your city. 

Fundraising

Fundraising has one major pro and major con. The con is fundraising usually does yield that much money, but the pro is that money doesn’t require you to repay it. Fundraising is always more effective if you are already well known in a community and fundraise through a community event. Putting on a party further cuts into your bottom line, but just asking for money cold will not net you anything. 

“Should I try crowdfunding?” 

Sites like Kickstarter and Indiegogo have popularized crowd funding, and a few coffee shops have had success using those platforms. We caution against it because of how difficult it is to deliver rewards while you’re opening. Managing a campaign is also incredibly time consuming during a period where your time is very precious. This is a recipe for upset backers and a bad reputation. A much better use of crowdfunding is for a specific event or addition once you are already open and have an established brand.

Coffee Shop Design

Coffee shop design is a  topic unto itself , but we’ll give you the two most important design considerations right here: flow and upselling. 

All products have a certain psychology to them, and coffee is no different. Don’t just think about who your ideal customer is, but also their state of mind. A lot of people getting coffee are tired or grumpy, sometimes both. That’s why it’s very important to your customer experience to make your shop easy to navigate, your menu understandable, and you offerings clear. Internal signage helps, but flow really starts with design. The path from walking through the door to coffee in hand should be immediately obvious and easy to navigate. A good contractor with cafe experience goes a long way towards helping you develop a good flow. 

Coffee is a high margin but low cost product. We’re being honest here, just selling coffee is often not financially wise. Most cafes need to  raise the average “ticket price”  of their customers to stay viable. You don’t need every customer to buy food, beans, or merchandise, but you need a number of them to. That’s why most coffee shops place their pastry/food case near the ordering station to make adding on food easy. Positioning other addon items like beans along the path to ordering is essential. As people walk in they are visually prompted by your additional offerings.

Plan to Open

Waiting until every minute detail is perfect will probably mean you’ll never get open. Things will be a little rough around the edges, but the sooner you can start getting customers through the door, the better. We recommend opening in 2-3 stages, starting with a soft open and ending with a grand opening. 

Opening Party

Your opening party might be your soft open, or you may want to separate them out. At your opening party, you should invite friends and anyone who helped with your business at any stage as well as potential business partners and promoters. Expect to give out a lot of coffee to thank these people and get them talking about your shop. The opening party is also a great place to see how your bar flow is working with a more forgiving audience. Some things will likely need to be reworked, and that’s normal.  

Soft Opening

A soft opening usually coincides with your opening party or comes shortly after when the wrinkles have been ironed out. This is the time to do a little marketing and a little promotion, to let business slowly start to build. There are still likely to be new issues and challenges to work out and this slower drip of customers helps really get your systems solidified. 

Grand Opening

About two weeks after your soft opening, you will want to hold a grand opening. This is your big party with as much marketing and promotion as your can muster. Make sure everyone is ready to go and provide the best possible service. 

After a grand opening, it’s normal to dip back down in customer count quite a bit. People are reluctant to change their routine. This dip is where your hard work on customer service and superior product will come in handy and the real marketing begins.

Develop Your Employees

Training new employees is a never ending responsibility that business owners can’t skimp on. By training employees well, you make sure they feel confident and ready to provide the experience you want customers to have. 

When first training employees, it can be beneficial to run through exercises that emphasize efficiency. For example, give a new barista 4-5 drink orders and task them with making the drinks as quickly as possible without rushing. Allow new baristas extra time to think it over, and talk through the process with them. Come up with a few of these exercises (even better if you come up with them based on real life scenarios specific to you shop) and work through them. Be encouraging when the barista gets things right and gently correct by explaining the reasoning behind doing things a certain way. The more your baristas understand the “why” of things, the more you can trust them to make good decisions independently. 

You can follow up with training by holding friendly contests among your staff or barista throwdowns with other cafes in the area. Baristas can compete on things like latte art, drink efficiency, and whatever else you might want. These should be fun above all else, and latte art throwdowns can be great publicity events. 

Attempt to make training fun, but if your coffee shop takes off, you or your manager might not have time to train. As a business owner you stretch yourself incredibly thin, so we offer a way to pick up the slack.  Online Barista Training  is a learning platform accessible from any computer that cuts your training time down by up to 80%. We supply informative videos, instructions, and quizzes to educate baristas on all the fundamentals, so they can hit the ground running on the bar. Normal training might take 10 hours on the floor, with Online Barista Training it can take 2.

Grow Your Business

The most straightforward way to grow is having a menu with popular staples and rotating specials. When creating specials, consider seasonal flavors and unique combinations. In the age of social media, the visual appeal of a drink also can’t be understated. A drink that looks fun and iconic and tastes good is a better marketing tool than a drink that tastes amazing and looks normal. Of course, an amazing looking and tasting drink is ideal, but if you have to make a sacrifice, don’t take visual appeal for granted.

Your menu should also take into consideration what your customers want and where you’re located. If you have a lot of parents with kids, consider offering some kid friendly options. If you have a lot of busy business people, consider offering subscription services or refills in your branded mug to make their daily coffee trip as easy as possible for them.   

Marketing for Coffee Shops

Marketing is a crucial part of owning a coffee shop that many business owners (understandably) don’t always devote enough time to. There are hundreds of ways to market your shop, but some are more useful than others. 

Don’t try to get by without  a website . A few businesses manage to do it, but they are the exception. You want a site that is above all easy to navigate. 90% of your visitors are there to see your menu, you address, your hours, or your contact information, so make those things easy to find. If you want to add more info about your story, staff, or anything else, do it! Having several pages on your site is generally a good idea, but you just need to make sure your most important info is easily accessible. 

Social Media

Everyone wants a good social media presence, but how important is it to your specific business? 

Do you have a lot of customers in their teens to mid 20s? An aesthetically pleasing instagram feed and a snapchat geotag are probably worthwhile investments. 

Are your customers just a little older? Don’t neglect Instagram, but it doesn’t need to be as big of a focus. Instead, encourage customers to leave Google reviews and consider investing in some targeted paid advertising. 

Are your customers middle aged and older? Maintaining your Facebook page becomes a little more important, and good service is a huge focus. 

It’s important to try out different social media platforms and methods to see what sticks. A lot of baristas are younger and probably more invested and up to date with current social media, so ask for their opinions. If you have a barista who is particularly skilled at social media, let them take the reigns for a while. It’s a great experience and frees up your time a little.  

Traditional Advertising

Are newspaper, radio, or TV ads worth it?

Maybe, it depends on your market. Newspaper ads are great for smaller, hyper local communities. Radio ads can be surprisingly effective among older demographics in a slightly wider range. The only avenue we seldom recommend is TV ads because of their expense. The other challenge with traditional advertising is that it can be difficult to track exactly how useful they are while digital ads can tell you exactly what your budget is returning.   

Whatever marketing you do, consider asking customers what brought them in and regulars why they like coming back. Their answers are the best way to actually figure out what works. As you find your niche, reinvest even more into marketing.   

Opening another location sounds like it would be easier than opening your first location, but really it is just as complicated if not moreso. Unless your brand is incredibly strong, there’s no guarantee of success in one area leading to success in another. A bad expansion move can sink not just the new location, but the original location as well. 

When looking to expand, it is vitally important to take the same steps as opening your first coffee shop. Finding a good location, doing market research, developing your menu, etc. are all steps that can’t be taken for granted. Also, consider that your time will now be split between two places. A good manager at each who can run things when you’re not there is paramount.

Coffee Roasting

Coffee roasting is a topic many coffee shop owners consider at one point or another. Roasting simultaneously has a lot of competition, yet a lot of room for growth. Much like the beer industry, more and more micro roasters are becoming popular, and home roasting has been on a steady incline. With that mind, we recommend business owners start small if at all. Roasting is an entirely different business model than running a coffee bar and can be a huge financial drain if not done carefully. We recommend waiting until at least your second year in business to consider expanding to roasting. 

If you do decide to move into roasting, it can be a very rewarding field. The roast can affect so much about the coffee experience, and from a business perspective it can be a great way to diversify. A lot of coffee shops aren’t interested in moving into roasting, and that’s completely understandable. Roasting is only one way to grow your business, not the only way. That being said, Bellissimo’s roastery has been HIGHLY successful in getting our beans in the homes of people within the Pacific Northwest. Water Avenue coffee is the 2nd highest grossing roastery in the Portland area and we’re not slowing down – there’s good money to be made in roasting! (not to mention, you get to work directly with coffee farmers all over the globe). 

We see more and more people interested in roasting, so we offer a  1-day Intensive Roasting workshop  where we teach you all about the roasting process and provide a good base for you to start exploring on your own or communicate with your local roaster more effectively. Whether for home or commercial roasting, learn all about the equipment and process behind coffee. (fun fact – most people are surprised to find out that light roast coffee has MORE caffeine in it than dark roast because it’s spent less time in the roaster, and thus, has had less of the caffeine cooked out of it!)

The coffee industry is a fascinating and rewarding place. Coffee professionals get to meet all kinds of people, and building your own space is a totally unique feeling. We hope this article is a great starting point for taking your first steps into this amazing industry. If you have any more questions, we have a variety of resources, workshops, and expertise to help you through any stage of owning your own business. Once again, we’re here to help.

You can email us direct at [email protected]

We look forward to hear from you!

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

• Templates & Guides

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.

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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 Start a Coffee Shop

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15 Steps To Start a Coffee Shop Business

How big is the coffee shop industry.

• What are the Key Segments of the Coffee Shop industry?
• What External Factors affect the Coffee Shop market?
• Who are the Key Competitors in the Coffee Shop industry?
• What are the Key Customer Segments in the Coffee Shop industry?

What are the Key Costs in the Coffee Shop industry?

What are the typical startup costs for a new coffee shop, keys to coffee shop success, helpful videos.

• Additional resources in the Coffee Shop industry

If you’re looking to start a Coffee Shop, you’ve come to the right place. Since we’re going to show you exactly how to do it.

We’ll start with key Coffee Shop industry fundamentals like how big the market is, what the key segments are, and how revenues and profits are generated.

Then we’ll discuss keys to not only starting a Coffee Shop business, but succeeding in it!

And don’t forget to look at our coffee shop business plan template if you need a plan to start or grow your coffee shop.

Download our Ultimate Coffee Shop Business Plan Template here

Starting a coffee shop can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful coffee shop.

1. Choose the Name for Your Coffee Shop Business

The first step to starting a coffee shop is to choose your business’ name.

This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your coffee shop:

• Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also, check to see if a suitable domain name is available.
• Keep it simple. The best names are usually ones that are easy to remember, pronounce, and spell.
• Think about marketing. Come up with a name that reflects the desired brand and/or focus of your coffee shop.

2. Determine the Type of Coffee Shop Business You Will Launch

When determining the type of coffee shop you will launch, consider factors like your interests, target market, location, and the atmosphere you want to create.

Here are several types of coffee shops you can consider:

• Traditional Coffee Shop/Café: A classic coffee shop that serves a variety of coffee beverages, pastries, and light snacks. It offers a cozy and relaxed atmosphere for customers to enjoy their coffee.
• Espresso Bar: Specializes in serving high-quality espresso-based beverages like lattes, cappuccinos, and macchiatos. Emphasizes the art of coffee making.
• Specialty Coffee Shop: Focuses on sourcing and brewing specialty coffee beans, often from specific regions or single origins. Educates customers about coffee quality and flavor profiles.
• Drive-Thru Coffee Stand: A convenient option for customers on the go. Offers quick service with a limited menu, catering to those who want to grab coffee without leaving their vehicle.
• Coffee Truck or Mobile Coffee Shop: A mobile coffee business that can move to different locations, such as events, festivals, or busy street corners. It’s versatile and can reach a variety of customers.
• Coffeehouse and Bakery: Combines coffee offerings with a selection of baked goods like muffins, croissants, and pastries. Appeals to those seeking both coffee and snacks.
• Coffee and Bookstore: Integrates a coffee shop with a bookstore, creating a relaxing environment for customers to read, study, or socialize.

3. Develop Your Coffee Shop Business Plan

One of the most important steps in starting a coffee shop is to develop your business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.

To enhance your planning process, incorporating insights from a  sample coffee shop business plan  can be beneficial. This can provide you with a clearer perspective on industry standards and effective strategies, helping to solidify your own business approach.

Your business plan should include the following sections:

• Executive Summary: This section should summarize your entire business plan so readers can quickly understand the key details of your coffee shop.
• Company Overview: This section tells the reader about the history of your coffee shop and what type of coffee shop you operate. For example, are you a traditional coffee shop, espresso coffee shop, or coffee and bookstore business.
• Industry Analysis: Here you will document key information about the coffee shop industry. Conduct market research and document how big the industry is and what trends are affecting it.
• Customer Analysis: In this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing products or services like the ones you will offer?
• Competitive Analysis: Here you will document the key direct and indirect competitors you will face and how you will build a competitive advantage.
• Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
• Product: Determine and document what products/services you will offer
• Prices: Document the prices of your products/services
• Place: Where will your business be located and how will that location help you increase sales?
• Promotions: What promotional methods will you use to attract customers to your coffee shop? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
• Operations Plan – Determine the key processes you will need to run your day-to-day operations. Determine your staffing needs. Create a projected growth timeline showing the milestones you hope to achieve in the coming years.
• Management Team – this section details the background of your company’s management team.
• Financial Plan – finally, the financial plan answers questions including the following:
• What startup costs will you incur?
• How will your coffee shop make money?
• What are your projected sales and expenses for the next five years?
• Do you need to raise funding to launch your business?

Finish Your Business Plan Today!

4. choose the legal structure for your coffee shop business.

Next you need to choose a legal structure for your coffee shop and register it and your business name with the Secretary of State in each state where you operate your business.

Below are the five most common legal structures:

1) Sole proprietorship

A sole proprietorship is a business entity in which the owner of the coffee shop and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.

2) Partnerships

A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a coffee shop together. The partners share in the profits and losses of the business. The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.

3) Limited Liability Company (LLC)

A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a coffee shop include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.

4) C Corporation

A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a coffee shop is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.

5) S Corporation

An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.

Once you register your coffee shop, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.

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5. Secure Startup Funding for Your Coffee Shop Business (If Needed)

In developing your coffee shop business plan, you might have determined that you need to raise funding to launch your business.

If so, the main sources of funding for a coffee shop to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a coffee shop that they believe has high potential for growth.  

6. Secure a Location for Your Business

Finding the right space for your coffee shop is crucial to its success. When considering potential locations, take the following factors into account:

• Foot Traffic: Assess the volume of foot traffic in the area. A location with high foot traffic, such as a busy street or near a transit station, can attract more customers.
• Proximity to Other Businesses: Consider nearby businesses, offices, schools, and residential areas. Being close to complementary businesses, like bookstores or boutiques, can help drive traffic to your coffee shop.
• Competition: Research existing coffee shops and cafes in the vicinity. Determine if there is room in the market for your coffee shop concept and whether you can differentiate yourself.
• Visibility and Signage: Ensure your coffee shop is visible from the street. Effective signage can attract passersby and make it easier for customers to find you.
• Parking Availability: Assess the availability of parking for your customers. Having nearby parking options can be a significant advantage, especially in areas with limited street parking.

7. Register Your Coffee Shop Business with the IRS

Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).

Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.

Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.  

8. Open a Business Bank Account

It is important to establish a bank account in your coffee shop’s name. This process is fairly simple and involves the following steps:

• Identify and contact the bank you want to use
• Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
• Complete the bank’s application form and provide all relevant information
• Meet with a banker to discuss your business needs and establish a relationship with them

9. Get a Business Credit Card

You should get a business credit card for your coffee shop to help you separate personal and business expenses.

You can either apply for a business credit card through your bank or apply for one through a credit card company.

When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.

Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.  

10. Get the Required Business Licenses and Permits

Starting a coffee shop involves obtaining various licenses and permits to operate legally and serve food and beverages. The specific requirements can vary depending on your location and the scope of your coffee shop, but here are common licenses and permits you may need:

• Business License: Obtain a general business license from your city or county government to legally operate any type of business, including a coffee shop.
• Food Service Permit: A food service permit, also known as a food handler’s permit or food establishment permit, is typically required for preparing and serving food and beverages to the public.
• Health Department Permit: Comply with local health department regulations by obtaining a permit that ensures your coffee shop meets food safety and sanitation standards.
• Zoning Approval: Verify that your chosen location is properly zoned for a coffee shop or restaurant business. Check with your local zoning department for compliance.
• Signage Permit: If you plan to display signs or banners advertising your coffee shop, you may need a signage permit from your local government.
• Outdoor Seating Permit (if offering outdoor seating): If you plan to have outdoor seating on a sidewalk or patio, obtain a permit to comply with local regulations.
• Sidewalk Cafe Permit (if applicable): Some areas require a separate permit for sidewalk cafes or outdoor seating.
• Fire Department Permit: If your coffee shop uses open flames (e.g., candles), you may need a fire department permit to ensure safety compliance.

Depending on the type of coffee shop you launch, you will have to obtain the necessary state, county and/or city licenses.  

11. Get Business Insurance for Your Coffee Shop Business

Other business insurance policies that you should consider for your coffee shop include:

• General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
• Product Liability Insurance: If your coffee shop sells food items or products, consider product liability insurance to protect against claims related to foodborne illnesses or product defects.
• Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
• Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
• Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
• Professional liability insurance: This protects your business against claims of professional negligence.

Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.  

12. Buy or Lease the Right Coffee Shop Business Equipment

To run a coffee shop successfully, you’ll need a variety of equipment to prepare and serve coffee and related products.

Here’s a list of essential equipment for your coffee shop:

• Espresso Machine: This is the heart of your coffee shop. Choose a high-quality espresso machine to make espresso shots and espresso-based drinks like lattes, cappuccinos, and Americanos.
• Coffee Grinder: Invest in a burr grinder to ensure consistency in coffee particle size for espresso and drip coffee. Consider having a separate grinder for decaffeinated coffee.
• Coffee Brewers: Choose coffee brewers suitable for your desired coffee offerings, such as pour-over coffee makers, drip brewers, or batch brewers for large quantities.
• Steam Wand: Essential for frothing milk for lattes and cappuccinos. Espresso machines typically come with built-in steam wands.
• Coffee Beans Storage: Use airtight containers to store coffee beans and keep them fresh. Consider clear containers to showcase your coffee beans.
• Coffee Filters: Stock a supply of appropriate coffee filters for your brewing equipment, whether it’s drip, pour-over, or a specific brewing method.
• Water Filtration System: Ensure your water is of high quality and free from impurities that can affect the taste of your coffee.
• Refrigeration Units: Invest in refrigerators for storing milk, creamers, syrups, and other perishable coffee shop items. Consider separate units for dairy and non-dairy options.
• Ice Machine: If you offer iced coffee or blended beverages, you’ll need a reliable ice machine.
• Blenders: Blenders are necessary for making smoothies, frappes, and other blended drinks.

13. Develop Your Coffee Shop Business Marketing Materials

Marketing materials will be required to attract and retain customers to your coffee shop.

The key marketing materials you will need are as follows:

• Logo: Spend some time developing a good logo for your coffee shop. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
• Website: Likewise, a professional coffee shop website provides potential customers with information about the products and/or services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
• Social Media Accounts: Establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn, and/or other social media networks will help customers and others find and interact with your coffee shop.

14. Purchase and Setup the Software Needed to Run Your Coffee Shop Business

Running a coffee shop efficiently and effectively often involves using various software tools and platforms to manage orders, inventory, customer relationships, and finances.

Here are some essential software types for your coffee shop:

• Point of Sale (POS) System: A reliable POS system is essential for managing customer orders, processing payments, and tracking sales. Modern POS systems may also include inventory management, customer loyalty programs, and reporting features.
• Inventory Management Software: Inventory management software helps you track coffee beans, supplies, and food items in real-time. It can optimize inventory levels, generate purchase orders, and minimize waste.
• Accounting Software: Use accounting software like QuickBooks or Xero to manage your coffee shop’s finances, including payroll, expenses, and revenue tracking.
• Employee Scheduling Software: Employee scheduling software simplifies the process of creating staff schedules, managing shift changes, and tracking labor costs.
• Customer Relationship Management (CRM) Software: CRM software helps you build and maintain customer relationships by tracking customer preferences, sending marketing emails, and managing loyalty programs.
• Online Ordering and Delivery Software: If you offer online ordering and delivery services, use software or platforms to manage orders, track delivery routes, and process payments.

Choose software that aligns with your coffee shop’s specific needs, budget, and operational requirements. Many software options offer free trials or have different pricing plans, so you can explore and select the ones that best suit your coffee shop’s requirements.  

15. Open for Business

You are now ready to open your coffee shop. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.  

The Coffee Shop industry has grown at a rate of 4.3% over the past five years. The industry’s 74,267 establishments are expected to collectively bring in $39.4 billion this year.

What are the Key Segments of the Coffee Shop Industry?

Sales in the Coffee Shop industry are dominated by coffee beverages. At over half of industry revenue, this is the largest product segment. Other beverages and food items make up another 45% of revenue, and other items such as mugs and packaged coffee round out the remainder of industry revenue.

What External Factors affect the Coffee Shop Industry?

A number of factors affect the performance of the Coffee Shop industry. These drivers include:

Consumer spending – Like any business in the food service industry, coffee shops depend on consumers’ willingness to spend discretionary cash. As such, times of economic growth tend to benefit the industry.

Healthy eating index – Consumers are becoming more aware of the health issues associated with a poor diet. Therefore, coffee shops that offer healthier alternatives alongside other menu items will benefit.

Per capita coffee consumption – Coffee shops depend on coffee drinkers. Per capita coffee consumption in the US has remained fairly steady over the past five years, and is expected to rise slightly in the next five years.

Who are the Key Competitors in the Coffee Shop Industry?

Starbucks leads the Coffee Shop industry, with a 39.8% market share. In second place, Dunkin’ Brands has captured a 21.9% market share.

What are the Key Customer Segments in the Coffee Shop Industry?

The key customer segments in the Coffee Shop industry are Households with the highest income quintile and Households in the three middle income quintiles (>50%)

Purchases – The greatest expense for Coffee Shops is the purchase of food and beverages, and account for over 1/3 of revenue.

Wages – Wages are the second-largest expense for the industry. This is due in large part to the labor-intensive nature of the business.

Other expenses include equipment depreciation, rent, advertising, and sometimes franchise royalties.

One-time costs:

• Lease deposit
• Building upgrade
• Equipment purchase – including espresso machine, brewing equipment, refrigerator, POS system, etc.
• Permits and licenses
• Starting inventory

Ongoing costs:

• Equipment maintenance
• Inventory replacement
• Utilities – including wireless internet

Coffee Shop Business Plan Example PDF

Download our coffee shop business plan pdf here. This is a free coffee shop business plan example to help you get started on your own coffee shop plan.  

Additional resources in the Coffee Shop Industry

For additional information on the Coffee Shop market, consider these industry resources:

• National Restaurant Association:  www.restaurant.org
• National Coffee Association USA:  www.ncausa.org
• US Bureau of Labor Statistics:  www.bls.gov
• Specialty Coffee Association of America:  www.scaa.org

How to Finish Your Coffee Business Plan in 1 Day!

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With Growthink’s Ultimate Coffee Shop Business Plan Template you can finish your plan in just 8 hours or less!

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.

Click here to see how Growthink business plan consulting can create your business plan for you.  

Other Helpful Business Plan Articles & Templates

• Business Ideas
• Registered Agents

How to Start a Coffee Shop in 14 Steps (In-Depth Guide)

Updated:   February 22, 2024

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The global coffee market is estimated to hit $112.8 billion by 2030. According to a report by Market Research Future, the industry will climb at a compound annual growth rate (CAGR) of 5.12%. From drip coffee to cold brew to flavored lattes, the market continues to climb.

In this guide, we’ll talk about how to start a coffee shop. Topics include market research, competitive analysis, registering an EIN, sourcing coffee beans and equipment, coffee shop startup costs, and more. Here’s everything you need to know about starting a coffee shop location.

1. Conduct Coffee Shop Market Research

Market research is an important part of any solid business plan. It accounts for a plethora of information you should know before you open a coffee kiosk.

Market research includes things like:

• Market information: Over 40% of American adults now own a single-cup brewer.
• Specialty products: An increase in specialty coffee presents an opportunity for shops focused on premium beans, roasting, brewing techniques, and beverage customization.
• Target demographic: Millennials and Gen Z now represent the largest customer segments, seeking out coffee shops that align with their preferences for premium products and sustainability.
• Ways to stand out: Independent shops can thrive by becoming a neighborhood gathering spot and promoting their local roots. Mobile ordering and delivery integration can also help corner the on-the-go market.

Despite the opportunities, the coffee shop industry does face challenges. Real estate and rental costs can be prohibitively high, especially in urban markets. Careful financial planning and differentiating your concept will be key to succeeding in this lucrative $21 billion industry.

2. Analyze the Competition

Thoroughly analyzing your competition is crucial when starting a coffee shop. Seeing what other coffee shops are doing with marketing, pricing, and services helps you plan your own.

Here are some ways to implement competitive analysis into your coffee shop business plan.

• Identify direct competitors like cafés and coffee houses within a half-mile radius of your proposed coffee shop location.
• Visit each in person and as an anonymous customer.
• Evaluate their menu options, brewing methods, prices, staff, ambiance, and service style.
• Take notes on what they do well and any gaps you can fill.
• Research sales volumes and traffic patterns. Tools like SafeGraph provide foot traffic data to estimate competitors’ customer counts.
• Analyze their digital presence and local SEO. Research their website traffic volumes on SimilarWeb .
• Regularly check their prices on menus and delivery apps for items like brewed coffee, espresso drinks, baked goods, and snacks.

Ongoing market research helps you spot unmet consumer needs to win business. Use competitor analysis findings to craft your unique value proposition, service style, and menu. Differentiating while delivering quality is the key to competing.

3. Costs to Start a Coffee Shop Business

Starting a coffee shop requires significant upfront capital. Total start-up costs often range from $80,000 to $250,000. Coffee shop owners also pay ongoing coffee business expenses as the company progresses.

Start-up Costs

• Lease Deposit – $5,000 to $20,000 for first/last months’ rent and security deposit. Depends on the location and landlord.
• Construction/Renovation – $10,000 to $100,000 if the lease is for unimproved space. Includes costs for flooring, lighting, counters, paint, bathrooms, ADA compliance, HVAC, etc.
• Espresso Machine – $8,000 to $18,000 for a quality commercial machine with 2 to 4 groups. La Marzocco and Nuova Simonelli are top brands.
• Coffee Brewing Equipment – $3,000 to $6,000 for commercial batch brewers, grinders, drippers, air pots, pour-over stands.
• Refrigeration – $2,000 to $5,000 for under-counter fridges, freezers, and display cases to store milk, food, and desserts.
• Counter/Display Cases – $3,000 to $12,000 for front counter, pastry case, merchandising racks, and other furnishings.
• POS System – $1,000 to $3,500 for hardware/software for automated point of sale, inventory, and accounting. Square and Lightspeed are popular systems.
• Initial Inventory – $2,000 to $5,000 for initial food/beverage ingredients like coffee beans, milk, baked goods, paper cups, coffee sleeves, syrups, etc.
• Smallwares – $2,000 to $5,000 including utensils, pitchers, blenders, thermometers, dishwashers, and cleaning supplies.
• Branding/Marketing – $3,000 to $8,000 may be needed for branding design, signage, website, and initial ads/promotions.
• Licenses/Permits – $1,000 to $3,000 for business licenses, food permits, liquor licenses, environmental impact reports, etc.
• Insurance – $1,000 to $5,000 annually for property, liability, workers’ comp, and food spoilage policies.

Ongoing Costs

• Rent – Typically $3 to $8 per square foot monthly, or 5% to 10% of gross sales.
• Labor – $200,000 annually for staff salaries/wages plus payroll taxes and benefits.
• Coffee/Ingredients – Maybe 15% to 25% of beverage/food sales. Fluctuates based on menu prices.
• Utilities – Gas, electric, water, trash removal. Can be $2,000 to $7,000 per month depending on location.
• Merchant Fees – 1.5% to 3.5% on credit/debit sales.
• Repairs/Maintenance – $2,000 to $10,000 annually for equipment upkeep and facilities maintenance.
• Marketing – $2,500 to $5,000 per month for advertising, social media, and promotions.

Careful startup planning and cost control will be essential for any new coffee shop to succeed and thrive over the long term. This overview provides an idea of typical costs, but a detailed budget tailored to your specific concept and market is key.

4. Form a Legal Business Entity

When starting a coffee shop, one of the first legal steps is choosing your business structure. There are four main options, each with pros and cons to consider:

Sole Proprietorship

A sole proprietorship is owned and operated by one person. It’s the simplest and most common structure for small businesses. Pros are easy setup with minimal legal paperwork. Cons are unlimited personal liability so your assets are at risk, and limited options for raising investment capital.

Partnership

A partnership is owned by two or more people. You can divvy up ownership, responsibilities, and profit shares. Pros are easy to establish and additional owners provide more startup capital. Cons are equally shared unlimited liability along with the potential for disagreements between partners.

Limited Liability Company (LLC)

A Limited Liability Company (LLC) combines the benefits of partnerships with the liability protections of a corporation. It limits owners’ personal liability and allows more flexibility in management and profit-sharing than a corporation. Startup costs are low and operating costs are few. Most small businesses today form an LLC to shield personal assets from debts/lawsuits that may arise.

Corporation

A corporation is the most complex structure offering the strongest liability protection. The business is its legal entity separate from its owners. Corporations can sell stock and raise substantial capital. But they require substantial legal paperwork, record-keeping, tax documentation, and annual fees. Unless capital raising is needed, an LLC provides liability benefits without burdensome corporate formalities.

5. Register Your Business For Taxes

Once you’ve chosen your business structure, you must register for an Employer Identification Number (EIN) from the IRS. An EIN is essentially your business’s Social Security Number and is required to open business bank accounts, apply for licenses, hire employees, and file taxes.

Acquiring an EIN is free and easy through the IRS website .

Here’s a quick 3-step walkthrough for applying online:

• First, navigate to the EIN Assistant page and select “View Additional Types, Including LLC” under Apply Online Now.
• Next, answer the short questionnaire about your LLC’s structure and ownership. Have your LLC formation documents handy.
• Finally, provide contact details and submit the form. Once submitted, your EIN will be provided immediately. Print and save this page for your records.

The entire process takes under 10 minutes. There are no fees to obtain your EIN. You can also apply by fax, mail, or phone but online is the fastest.

You’ll also need to register with your state revenue department to collect and file sales tax. Requirements vary by state but often include obtaining a sales permit/license, filing periodic sales tax returns, and paying sales tax to the state.

6. Setup Your Accounting

As a coffee shop owner, meticulous bookkeeping and accounting right from the start is crucial. With substantial revenues, inventory, payroll, taxes, and daily financial transactions, you need to implement systems to track every dollar coming in and going out.

Accounting Software

Cloud-based solutions like QuickBooks allow you to sync data between your POS system, bank accounts, and credit cards so your books are automatically updated in real-time. You gain visibility into sales, profitability, taxes, vendor payments, and more with automated categorization and reporting. Having accurate, up-to-date reporting will help make more informed business decisions.

Hire an Accountant

An accountant can optimize your tax strategy, analyze financial statements to identify issues and opportunities, ensure proper payroll/sales tax compliance, and help select your business structure and appropriate accounting methods. Expect to invest at least $2,000 to $7,000 annually for an accountant depending on your needs.

Open a Business Bank Account

Separating personal and business finances is a must. Keep business income and expenses running through a dedicated small business checking account and credit card. When intertwined, your assets are at risk if the business is sued.

Apply For Business Credit Card

Applying for a small business credit card also helps track expenditures. Business cards don’t use your credit score but rather rely on your business revenue and credit profile. Capital One Spark Cards are a popular choice with no annual fee.

7. Obtain Licenses and Permits

Before serving your first latte, proper licensing from federal, state, and local agencies is crucial. Check the U.S. Small Business Administration website for federal requirements. The SBA offers a local search tool for state and city permits.

• Food Service Permit – This is required to commercially handle and serve food. Fees range from $200 to $500.
• Food Handler’s Card – Employees who handle food typically must obtain a food handler card by passing an approved food safety course. Courses cost $10 to $50 per employee.
• Liquor License – If you wish to serve beer, wine, or cocktails, a liquor license specifically for restaurants/bars is required. Fees range from $500 to over $10,000 for the initial license.
• Music/TV License – To play music or broadcast TV legally in your shop, you need public performance licensing from BMI and ASCAP costing $300 annually.
• Fire Inspections – Your local fire marshal will do an inspection and issue any required occupancy operation permits.
• Building Permits – If doing major renovations, you’ll need permits for electrical, plumbing, construction, handicap accessibility, etc.
• Business License – Most cities require an annual business license with a small fee based on your gross revenues – typically $25 to $100 per year.
• Zoning Approval – Confirm the property is zoned for dining/retail use. If not, rezoning authorization from the city will be required. Rezoning costs around $2,000 to $6,000.

The list may seem daunting but obtaining required licenses before opening avoids fines and even forced closures until you comply. Work with your contractor and local agencies to identify and secure every license critical for your coffee shop concept and municipality.

8. Get Business Insurance

Carrying adequate insurance is crucial to protect your coffee shop’s financial future. The right policies shield your business from potentially massive liability costs and losses. Commonly recommended coverages include:

• General liability insurance covers costs if a customer is injured on your premises and sues. This protects your personal and business assets.
• Property insurance covers damage to your space, equipment, and inventory from perils like fire, storms, flooding, theft and vandalism. This prevents catastrophic loss.
• Workers compensation insurance is mandatory to provide medical and lost wage benefits to employees injured on the job. This prevents company bankruptcy.

Going without coverage puts your livelihood at risk. A few scenarios:

• A customer slips on a wet floor and sustains serious injuries requiring hospitalization and extended treatment. Without liability insurance, you must pay their claim out-of-pocket, draining business funds.
• A negligent employee fails to lock up properly and thieves break in overnight, stealing your espresso machine and POS systems. Lack of property insurance means you must replace the expensive stolen equipment.
• An employee gets burned by hot steam from your espresso machine. Without worker’s compensation, you pay their medical bills personally rather than the insurer paying.

The good news is obtaining coverage is straightforward through major insurers like The Hartford and State Farm . You’ll need to provide details on your business operations, location, equipment, payroll, and more. Quotes are available online or from a local agent.

Expect to budget approximately $1,000 to $6,000 annually based on your coverages, limits, and deductibles. Insurance provides peace of mind and is a standard business expense for coffee shops. Don’t leave yourself unprotected.

9. Create an Office Space

Having a dedicated office space can be beneficial for a coffee shop owner to handle administrative tasks, hold meetings, manage accounting, and more. Here are some potential options to consider along with estimated costs:

Home Office

A home office Conversion of an extra bedroom or basement into a home office typically costs $500 to $2,000 for basic furnishings and equipment. While convenient, working from home can be distracting. But it’s a cost-effective option for very small businesses.

Retail Office

A retail office If your shop has excess space, adding a small back office for $1,000 per $5,000 can let you handle paperwork onsite when needed. However, this takes away customer seating space.

Coworking Office

A co-working space from WeWork provides an affordable office option starting around $300 per month. You gain access to shared workspaces, conference rooms, equipment, amenities, and networking. But less privacy.

Commercial Office

A commercial office Leasing dedicated office space averages $20 to $35 per square foot annually. This provides privacy and room for staff to work. However, leasing full-time space you only use part-time can be pricey if open hours limit accessibility.

10. Source Your Coffee Shop Equipment

A coffee shop requires specialized coffee shop equipment to brew, prepare, and serve coffee drinks and food.

Here are some options to acquire the necessary gear:

Purchasing brand-new coffee shop equipment from a restaurant supply company like KaTom ensures full warranties and performance guarantees. However, costs are highest for shiny new appliances. Expect to invest $30,000 to $100,000 outfitting a full coffee bar and kitchen.

Buying gently used equipment can offer major cost savings. Check restaurant auction sites like BidOnEquipment and Webstaurant Store . Also, browse Craigslist and Facebook Marketplace for local sellers. Inspect carefully for defects and test performance before purchasing. Factor in any repair costs.

Renting equipment through a company like BlueLine lets you acquire higher-grade gear for lower monthly payments rather than a large one-time capital expense. But long-term this can be pricier than buying outright.

Leasing via equipment finance companies like Marlin provides an affordable way to get premium equipment via fixed monthly payments over a set term. Leasing often has high rates and added fees. Ownership transfers only after the full lease term.

11. Establish Your Brand Assets

Defining your coffee shop’s brand and creating professional assets helps attract loyal customers who resonate with your vision.

Get a Business Phone Number

First, acquire a unique business phone number through a provider like RingCentral to project legitimacy and allow customers to easily reach you. Expect costs starting at $30 per month.

Design a Logo

Next, design a logo that encapsulates your brand identity. Given coffee shops offer an energetic yet comfortable vibe, consider a font-based logo, abstract mark, or mascot logo. Looka makes DIY logo design easy starting at $20.

With a logo, generate complementary brand assets like a brand guide, packaging, menus, employee uniforms, and interior signage. This visual consistency boosts brand recognition.

Print Business Cards and Signage

Business cards containing your logo, phone, address, and website are vital for networking and promotions. Vistaprint offers basic cards for under $20.

An exterior sign above your store also builds awareness. Back-lit LED signs tend to cost $1,000. Vistaprint has lower-cost temporary options like banners and window decals to get started.

Buy a Domain Name

Purchase a domain name that matches your coffee shop name whenever possible. Short, simple domains like YourShopName are best. Use Namecheap for domains at just $9/year.

Build a Website

Next, build a one-page website to share your story, menu, events, and online ordering links. Use an easy DIY platform like Wix . Try hiring a freelancer from Fiverr to custom design your site starting at $150.

12. Join Associations and Groups

Joining relevant local organizations and online communities can provide invaluable connections and insights as a new coffee shop owner.

Local Associations

Seek out your city or state’s restaurant and coffee shop associations which offer guidance, networking, and discounted services for members. For example, your branch of the National Coffee Association and Washington Restaurant Association . Expect $100 to $500 in annual membership fees.

Local Meetups

Attending local food and beverage meetups helps you regularly connect face-to-face with others in your industry. Use sites like Meetup to find upcoming events near you. Listen and learn from their experiences operating cafes and coffee houses.

Facebook Groups

For broader connections, join industry-specific Facebook Groups like Coffee Business Owner Group and Coffee Shop Business Owners – Tips and Guidance which have thousands of members. Seek advice on issues your shop is facing and read how others solved similar challenges.

13. How to Market a Coffee Shop Business

Implementing ongoing marketing is essential for attracting new customers and growing your coffee shop. Here are some ways to advertise a successful coffee shop.

Your Network

Leverage your network and existing customers. Offering incentives for referrals and stellar service that keeps patrons coming back provides free word-of-mouth promotion. Satisfied customers will rave about their experience on social media and invite friends to join them at your shop.

Digital Marketing

• Run Google/Facebook ads targeting local demographics and interests like coffee lovers, professionals, and students. Target a 2-mile radius around your shop location.
• Claim and optimize your Google My Business and Facebook Business pages to drive local visibility.
• Start an email list to send promotions and updates to subscribers. Offer a free drink for signing up. Mailchimp makes beautiful, simple emails.
• Post daily on Instagram showcasing your space, baristas, and beverages. Hashtag your city and engage with coffee influencers.
• Launch a TikTok channel with cute behind-the-scenes barista videos, trending sounds, coffee facts, etc.
• Host free coffee tastings and workshops then livestream on Facebook to humanize your brand.

Traditional Marketing

• Print window decals, banners, posters, and merchandise for in-store displays and giveaways.
• Distribute menus and coupons to nearby offices, colleges, and apartment buildings.
• Sponsor a local event or charity drive to get community visibility.
• Run radio ads on local stations before 9 AM when commuters tune in.
• Advertise in neighborhood newspapers and magazines.

The ideal strategy combines digital marketing for online visibility and conversions with select traditional tactics to hit key demographics in your locale. Continue testing new marketing initiatives while refining those delivering the highest return on investment. Soon your shop will be the talk of the town!

14. Focus on the Customer

Providing an exceptional customer experience is crucial to open a coffee shop. With so many cafes competing for business, customer service is how you stand out.

Here are a few suggestions for better customer focus.

• Focus on speedy yet friendly service, even during busy rushes. Hire warm, polite staff who remember regulars’ names and orders. Make the coffee-buying process fast and pleasant.
• Keep your shop spotless and bathrooms clean at all times. Cluttered napkin bins and dirty floors detract from the experience. Tidy spaces feel welcoming.
• Bake goods and brew coffee fresh throughout the day. Stale, bitter coffee turns customers away. Schedule baking so shelves are always stocked with fresh treats.
• If mistakes happen, apologize sincerely and remake the order quickly. Refund unsatisfied customers graciously. A sincere apology and fix can turn frustrations into loyalty.
• Invite customer feedback regularly. Monitor online reviews and remedy any consistent complaints. Show you value opinions.

Delivering consistent, thoughtful service earns customer trust. In turn, delighted patrons become brand advocates who refer friends or leave glowing online reviews. Positive word-of-mouth is the most valuable marketing for a new coffee shop.

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April 9, 2024

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How to Start a Coffee Shop: 9 Steps to Success

Nearly 90% of Americans consume caffeine on a daily basis , whether its a cup of coffee, a shot of espresso, or an energy drink. For many, a cup of coffee is their preferred choice, and some even have multiple cups per day. A coffee shop offers people a place where they can quickly grab a coffee, a pastry, or another specialty drink, and also provides customers an inviting space to work, relax, or socialize. If you want to find out how to start a successful coffee shop, this article covers the basics you'll need to know, from crafting a business plan, to startup costs, to common business licenses required in the coffee industry.

Inspired by coffee professionals, our coffee shop business guides  will steer you through the necessary steps to make your coffee dreams real, from  picking a location  to  buying equipment , sourcing beans ,  hiring baristas , choosing a POS system ,  forming an actual company , and everything in between.

Ready to turn your business idea into a reality? We recommend forming an LLC as it is the most affordable way to protect your personal assets. You can do this yourself or with our trusted partner for a small fee. Northwest ($29 + State Fees) DIY: How to Start an LLC

Start a coffee shop by following these 10 steps:

• Plan your Coffee Shop
• Form your Coffee Shop into a Legal Entity
• Register your Coffee Shop for Taxes
• Open a Business Bank Account & Credit Card
• Set up Accounting for your Coffee Shop
• Get the Necessary Permits & Licenses for your Coffee Shop
• Get Coffee Shop Insurance
• Define your Coffee Shop Brand
• Create your Coffee Shop Website
• Set up your Business Phone System

We have put together this simple guide to starting your coffee shop. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas .

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

What will you name your business?

• What are the startup and ongoing costs?
• Who is your target market?

How much can you charge customers?

Luckily we have done a lot of this research for you.

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Coffee Shop Name Generator

If you operate a sole proprietorship , you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name , we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability .

It's very important to secure your domain name before someone else does.

Find a Domain Now

Powered by godaddy.com, what are the costs involved in opening a coffee shop.

The startup costs for a coffee shop business can vary widely, depending on the size and type of coffee shop you want to open. Your expenses will depend largely on the type of coffee business you want to start, the specific equipment you need, your location , if you want to include space for a bakery , etc. For instance, a small kiosk in the corner of an existing building can be opened for as little as $5,000, although many cost between $25,000 and $75,000. Free-standing drive-thrus can cost between $80,000 and $200,000 to start up, and shops with their own seating can be more than $200,000. The main expenses that contribute to these costs include rent , staffing costs , taxes , and equipment , such as Point-of-Sale (POS) systems, espresso machines, and so on. Espresso equipment alone can run up to $20,000.

There are several ways to minimize startup costs. Running a small kiosk yourself will keep rent low and eliminate any staffing costs. Focusing solely on high-quality brewed coffee, rather than espresso, will eliminate the need for expensive espresso equipment and reduce how much milk you use.

Read our coffee shop purchasing guide to learn about the materials and equipment you'll need to start a coffee shop, how much to budget, and where to make purchases.

What are the ongoing expenses for a coffee shop?

The ongoing expenses of a coffee shop are labor, which shouldn’t exceed 35 percent of sales, rent, which should be kept below 15 percent of sales, utilities, and the costs of good sold. Costs of goods sold includes the costs for coffee (~$7.50 per pound), milk (~$3.00 per gallon), syrups ($4.50 per 25.4 ounces), and cups, lids and sleeves ($0.20 per beverage served).

Who is the target market?

An ideal customer is someone who has discretionary income and enjoys food and beverages. Customers with little discretionary income are less likely to purchase higher-priced beverages and food items.

How does a coffee shop make money?

Coffee shops charge their customers based on what beverages and food items a customer orders. Some coffee shops have problems with people “camping out.” These customers may purchase one beverage, but then remain at the shop (typically on a computer) for several hours without spending any additional money. To combat this, a few coffee shops in higher-traffic areas ask customers to make a purchase every hour or two. Other coffee shops don’t offer Wi-Fi, but this can also deter customers from coming at all.

The average cost of a cup of plain, brewed coffee at a coffee shop is $2.70. Brewed coffee accounts for 51.5 percent of the beverages sold in coffee shops. Espresso-based beverages, such as americanos, cappuccinos and lattes have an average price ranging from $2.62 to $3.94. The food products sold at coffee shops often are in a similar price range.

How many customers can you expect your business to serve in a week?

How many customers a coffee shop will serve in a week or day varies widely. Busy shops centrally located in cities may serve more than a thousand in just one day, while shops in rural areas may see only a few hundred a week.

How much profit can a coffee shop make?

A coffee shop's net profits are directly tied to how many cups of coffee and pastries a shop sells. A shop that is in a higher-traffic area and sells more coffee will usually have higher profits than one with little traffic. When run well, a coffee shop's profits are typically between 10 and 18 percent of its gross revenue. To see how much volume increases profits, consider coffee shops that are open every day of the year and have average tickets of $3.00. A shop that sells 100 beverages a day would grow $109,500 annually, and hopefully bring in a profit of $10,950 to $19,710. One that sold 300 cups a day would gross $328,500, and hopefully have an annual profit between $32,850 and $59,130.

How can you make your business more profitable?

Upselling customers is the easiest way to increase the profitability of a coffee shop. Customers can be offered larger sizes, additional shots of espresso, flavored syrups or baked goods

Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!

STEP 2: Form a legal entity

One crucial aspect that cannot be overlooked when starting your coffee shop is the importance of establishing a solid business foundation. While sole proprietorships and partnerships are the most common entity types for small businesses, they're a far less stable and advantageous option than LLCs.

This is because unincorporated business structures (i.e., sole proprietorships and partnerships) expose you as an owner to personal liability for your business's debts and legal actions, while LLCs protect you by keeping your personal assets separate from your business's liabilities.

In practice, this means that if your coffee shop were to face a lawsuit or incur any debts, your savings, home, and other personal assets could not be used to cover these costs. On top of this, forming your business as an LLC also helps it to appear more legitimate and trustworthy.

More than 84% of our readers opt to collaborate with a professional LLC formation service to kickstart their venture. We've negotiated a tailored discount for our readers, bringing the total down to just $29.

Form Your LLC Now

Note: If you're interested in more information before getting started, we recommend having a look at our state-specific How to Start an LLC guide (DIY) or our in-depth Best LLC Services review (for those opting for a professional service).

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

You can acquire your EIN through the IRS website . If you would like to learn more about EINs, read our article, What is an EIN?

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil .

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history , which can be useful to raise money later on.

Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a coffee shop business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

In particular, most states require a coffee shop businesses to obtain a seller’s permit. A seller’s permit allows states to record and collect taxes from the sale of goods and services.

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses .

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance . This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance . If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

FInd out what types of insurance your Coffee Shop needs and how much it will cost you by reading our guide Business Insurance for Coffee Shop.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners , we'll give you helpful tips and advice for creating the best unique logo for your business.

Recommended : Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker .

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator . Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market a coffee shop

Coffee shops serve a small area, and marketing efforts should be focused on reaching the people who live and work in the neighborhood. Signs can help attract attention, but going out into the community with freebies is often a much more effective way to initially get customers in the door. You can hand out free samples or coupons for free beverages at local schools, fire stations, police stations, businesses or churches. Even if an establishment doesn't want you soliciting the establishment's patrons, many organizations and businesses will be happy to share coupons for free coffees with their volunteers or employees.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business .

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

• All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
• Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
• Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Recommended : Get started today using our recommended website builder or check out our review of the Best Website Builders .

Other popular website builders are: WordPress , WIX , Weebly , Squarespace , and Shopify .

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: Phone.com

Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

Is this Business Right For You?

People who love coffee, food and other people are well-suited for working in or owning a coffee shop. The business involves plenty of hands-on work making beverages, and business owners regularly interact with both employees and customers. Most people drink coffee in the morning, so most coffee shops are open during morning hours. Shops can also be open the afternoon or evening, but owners should at least expect to be working almost all mornings. Some owners close their shop one day a week so they can have a day off, and many either close their shops or have limited hours on holidays.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

Entrepreneurship Quiz

What happens during a typical day at a coffee shop?

In a coffee shop, day-to-day activities center around making and serving customers coffee. When not brewing coffee and ringing up customers, downtime is filled by restocking supplies and ordering more inventory (e.g. milk, coffee and cups), scheduling employees (if a shop has multiple employees), washing dishes, cleaning, and prepping more coffee and food for sale.

What are some skills and experiences that will help you build a successful coffee shop?

First and foremost, coffee shop owners should be familiar with coffee. They need to know much more than the average drinker. In addition to knowing about coffees and coffee beverages, owners also need to be proficient in inventory management and managing employees.

Many coffee shop owners get the initial skills and knowledge they need by working in a coffee shop for several months before opening their own shop.

Alternatively, coffee expertise can be learned in just a few days by hiring an experienced barista or coffee roaster to serve as a consultant. Managing inventory and employees can be learned on the job, although not having these skills will make the startup phase much more hectic.

What is the growth potential for a coffee shop?

A coffee shop business can be as small as a single drive-thru or as large as a national, or even international, chain. Starbucks, for example, has more than 24,000 stores around the world. Many successful coffee shops are local or regional, having a few locations in a relatively small area.

Should you consider joining a franchise?

Joining a coffee shop franchise can be a good option for entrepreneurs who prefer to use a proven model rather than start from scratch. While joining one can mean slightly higher initial costs and less control, a quality franchise offers great benefits such as initial and ongoing support, marketing assistance, and brand recognition.

Opening a coffee shop franchise typically requires $200,000-$700,000. Larger coffee shop franchises like Biggby Coffee and Dunkin' Donuts typically cost more, while more niche favorites like Sertino's and Classic Rock Coffee often have lower startup costs.

Interested in joining a coffee shop franchise? Check out our favorites .

TRUiC's YouTube Channel

For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe to view later.

Take the Next Step

Find a business mentor.

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

How and when to build a team

While running a coffee shop yourself will keep operating expenses low, hiring at least one employee as soon as the business can afford it has multiple benefits. With an employee, you can take an occasional day off and focus on marketing efforts that grow the business. You’ll also be able to serve customers faster during peak times when working with someone.

Depending on how big your coffee shop is and how many customers it serves, you may want to hire additional employees. Coffee shops may have anywhere from one to a couple dozen employees who work on rotating shifts.

Coffee shop employees are called baristas. Baristas earn an average annual salary of $22,000, which includes tips. Hourly wages tend to be between $8.80 and $13.20 per hour.

Read our coffee shop hiring guide to learn about the different roles a coffee shop typically fills, how much to budget for employee salaries, and how to build your team exactly how you want it.

Useful Links

Truic resources.

• TRUiC's Coffee Shop Hiring Guide
• TRUiC's Coffee Shop Purchasing Guide
• TRUiC's Coffee Shop Franchising Guide

Industry Opportunities

• Scotter's Coffee — franchise opportunity
• Find more  Business Ideas  perfect for Small Towns!
• Franchise Opportunities

Real World Examples

• Bearclaw Coffee Co.

Further Reading

• Starbucks Coffee International
• The Economics of Owning a Coffee Shop
• States Where You Can Find the Cheapest Cup of Coffee
• Gettin’ Paid: The Results From Our International Barista Income Survey

Have a Question? Leave a Comment!

Type above and press Enter to search. Press Esc to cancel.

How to Write a Business Plan for Opening a Cafe

• by Lightspeed

minute read

So you’re thinking of opening a cafe. We salute you. A well-crafted cafe is a bedrock of your community, a welcome stop in any big city, an oasis in your town and a second home for your regular customers. Before you can open a cafe, though, you have to create a cafe business plan.

Think of your plan as a roadmap for your entrepreneurial adventure—one that’s easier to create than you might think! In this article, we’ll show you how to write a business plan that will set your cafe up for success.

How to write a business plan for opening a cafe

What is a cafe business plan, start with your vision, study other business plans, building your business plan template, section 1: the executive summary, section 2: how will your cafe business succeed, section 3: study your competition, section 4: analyze your target market, section 5: tell us what you’ll sell and how you’ll sell it, section 6: create a marketing plan, section 7: ownership structure, section 8: your operations plan.

• Section 9: Financial planning

Section 10: Plans for growth

Finally, we’ll end with an example business plan to show you what it looks like in action. 

Streamline your cafe’s workflow with the right technology

Watch the free demo to see how Lightspeed’s restaurant POS can optimize and adapt to your cafe’s specific operations.

  Want a quick summary of what to include in your cafe business plan? Consult this handy table. 

At its core, a cafe or coffee shop business plan is a document that explains what your business idea is and how it will succeed. It answers questions like how much it costs to set up shop, how those costs will be funded and how much money you expect to make from your cafe. A coffee shop business plan includes information about your competitors, target market and pricing structure.

When it’s finished, your business plan can be shown to potential investors, bankers, partners and anybody else who will help you open your cafe. As you can probably tell, it’s an extremely important document, so it’s worth your time and effort to get it right. First, you’ll learn about all the different pieces of information that will go into your business plan and then we’ll help you pull the pieces together.

A business plan is the first step in making your cafe-ownership dream a reality, so take time to dream by laying out your vision for your future cafe or coffee shop. What will your cafe look like? How will it be decorated? Where will it be located? Which items will you sell? Who will frequent it? How will your customers navigate your cafe, from the moment they walk through the door to the moment they swip e or tap their credit card to check out?

Pull inspiration from cafes you love, images you’ve seen, your favorite films or books, even your travels. Then write it all down or post pictures on a wall to create an inspirational mood board . As you spend hours working on your business plan, it will be incredibly motivating to glance up at your initial vision and be reminded of the finish line.

Before you pen your masterpiece, look at business plan examples from your industry: cafes, coffee shops and quick-serve restaurants. Study how they planned their business and make sure that your cafe is on the right track.

Real-world examples from business owners are also invaluable. Seek out current or former coffee shop owners or even franchise owners in your town and ask them how they succeeded and what they would have done differently. While you’re at it, you can seek recommendations for, say, an accountant who can help you write your business plan. Even if local business owners are your future competition, they might be willing to share their experiences.

A blank page can be overwhelming, but there are countless business plan templates available online to help get your started. We’ve outlined the basic sections you should include in your business plan below, as well as further tips on how to build out each one. 

At the end of the day, your template doesn’t have to be fancy or include imagery. The most important thing is that it contains all the necessary information and is logically organized so it’s digestible to anyone reading it.

When a reader opens your business plan, they will see the executive summary first. This gives a high-lev el overview of all the sections in your business plan. A well-written executive summary will get your foot in the door, so be sure to read examples to get a feel for how the summary is worded and to see how all the information is presented.

Just as you thought about the customers who will visit your soon-to-be-open cafe, consider who will read your business plan and tailor the opening paragraphs to your audience. As you’re preparing to open your cafe, your executive summary is the most important marketing tool your cafe has.

It’s designed to capture the attention of your reader, and give them an overview that’s brief and compelling. Here are some tips on writing a strong executive summary:

• Clearly state the purpose and unique value proposition of your business at the start
• Highlight what sets you apart from competitors
• Take your audience and potential investors into consideration as you write
• Summarize the business opportunity you’re presenting

The second section answers questions like, “What problem does your cafe solve?” and “How will your cafe be the solution?” Maybe there is no coffee house or cafe in a busy retail center near you. Or maybe a restaurant just closed downtown.

This summary provides a brief overview of your industry, mentions where your cafe will be located and describes how it will stand out. Will your shop specialize in breakfast sandwiches near an airport? Sell your locally famous pie? You’ve envisioned how your future cafe will be a success. Make sure the readers of your business plan understand that too.

You can talk about the following in this section:

• Your cafe’s unique selling points (these could relate to your menu, brand, other offerings, etc.)
• Your location strategy (how will you maximize foot traffic? What factors were involved in your decision?)
• What your menu will look like compared to competitors 
• A sneak peek into your marketing strategy (more on that later, though)
• How you’ll optimize your operations for efficiency, cost-effectiveness, etc.

The next part of your business plan is usually referred to as the competitive analysis . It explains how your cafe will compete with similar food and beverage businesses—including big coffee chains like Starbucks and fast food giants like McDonald’s. Nearby restaurants, coffee shops and even public gathering areas like movie theaters are all your competition. So now is the time to do the research of visiting your potential competitors and making a note of who their customers are, as well as what’s for sale and how much it costs.

By understanding the pricing strategy for similar businesses, you’ll know how much you need to charge for your coffee, pastries, sandwiches and whatever else you’re selling in order to remain competitive in your particular market. Gross margins (the amount of money you make based on what you sell) for cafes and coffee shops can be high, but small cafes have notoriously small operating incomes (read: profits) due to the high cost of overhead.

However, if you put in the time to undertake a thorough analysis of your competition, your cafe has a higher chance of being successful. By writing down how your cafe will compete against similar businesses, you will convince your reader (and, most importantly, yourself) that your goal of opening a restaurant or cozy cafe is realistic and sustainable.

In order for your cafe to succeed, it needs a steady flow of customers. Unfortunately, attracting foot traffic is not quite as easy as “if you build it, they will come.” In your business plan, your future customers are known as your market , the number of potential customers is your market size and how you’ll reach them is your marketing plan. 

In your cafe or restaurant business plan, you’ll then take your market and divide it further into market segments . For example, if your coffee shop or cafe is close to an elementary school, a market segment might be parents or caretakers who stop by for high-end coffee after dropping their children off at school. Or college students studying for exams as they swig espresso. 

Now that you know what the competition charges, it’s time to create a pricing strategy for your cafe. 

When creating your menu and prices , be smart. You’ll be buying ingredients in bulk, so try to use the same ingredients in many different dishes. Are you thinking of selling wine at your cafe? Liquor, like coffee, offers some of the largest profit margins in the industry, but a liquor license will cost you money and there may be a waiting period, so you might want to start with non-alcoholic beverages.

Don’t be afraid to get creative. If you charge less for a croissant and coffee combination than you do for those items alone, you’ll encourage customers to buy more and cut down on food waste . Once you open for business, you’ll probably end up making changes to your menu. But for the purpose of a business plan, you’ll need to know how much you will charge for the coffee or soup you plan to sell, which you’ll determine by breaking down the ingredients needed to make each item and researching your competition.

Take Toronto cafe and bakery Le Beau , for instance. They’re known for their freshly baked croissants, which come in many different flavors. People go to the cafe specifically for their famous croissants, and of course usually end up buying other items as well. If you want to cultivate this type of loyalty, you’ll have to start early. 

Your marketing plan can be part of your sales plan or it can be a separate section. Will you advertise your specials every morning on social media ? Will you partner with another local business for special promotions? In addition to marketing, this is also a great section to explain your plans for retaining your customers. Will you offer loyalty programs or have your employees give your top customers a free cookie on their birthday? With a cafe point of sale system , it’s easier than ever to reward—and keep—the customers who will frequent your cafe. 

It’s also important to create a strong brand identity. Allow this to guide your marketing plan so that the reader is confident that your business will be able to create more successful marketing campaigns. 

You can also include information about:

• Using your online presence to market your business
• Whether you’ll implement customer loyalty programs 
• Events you plan to host to boost your business profile
• The programs and tools you’ll use to monitor the progress of your marketing initiatives

Your business plan will include the ownership structure of your business. Explain how much experience you and your partners bring to the table and why you’re the right person (or people) to go into business.

Clearly outline the legal structure of your business and what form that will take. That could be an LLC, corporation, sole proprietorship or partnership. To further legitimize your business plan, identify the roles and responsibilities that each owner or partner will take on. Explain how you’ll work together to ensure effective management and decision-making. 

You could even include any plans or contingencies for future ownership, as well as the governance structure of your business and how decisions will be made. 

In this section, you’ll include information about your facilities, employees, equipment and supplies. Think about the direct costs of rent, barista wages, ingredients like coffee beans and technology. Try to get many services out of individual tools, like a POS system that lets your customers check out, your part-time employees clock in and also manages the inventory of your cafe. This will maximize your efficiency and allow you to run your business from one platform, which your employees and customers will also benefit from. 

Approximate how often you’ll need to reorder ingredients like flour and eggs. Carefully considering your operating costs during the business planning stage pays off. For instance, a coffee roaster is an upfront start-up cost, but roasting your own coffee at your cafe can save you operating costs in the long run. Save money where you can (secondhand chairs, anyone?) and don’t scrimp where it’s important, like your espresso machine.

Section 9: Financial planning 

Now you’re ready to craft a financial plan for your cafe. This is usually the most time-consuming and important section of your business plan, especially for lenders and investors. It should include an overview of your start-up costs, an income statement, projected cash flow, a balance sheet and a break-even analysis .

Startup costs

You’ve heard the adage that it takes money to make money, and this is because most businesses need initial funding to get them off the ground. A major reason you might be writing a business plan in the first place is to secure funding, like a business loan, for your cafe, but remember that your start-up funds can come from anywhere. How much money do you need to borrow? Will you dip into your savings? Crowdfund from your fans? No matter where you find your initial financing, a business plan lays out how your cafe will be funded and how that money will cover your business start-up costs.

Income statement

Once you know your start-up costs, operating costs, pricing strategy and target market, you are ready to lay out all this information into an easy-to-digest income statement . Take all of your expenses (mainly operating costs) and your projected sales volume (the amount that you are selling each month based on your pricing strategy and market research) to prove that your cafe business will turn a profit. In your case, create a projected monthly income statement for the first year your cafe will be in business. Explore some examples of income statements to see what your final analysis will look like.

Looking ahead to the future

A big part of writing a business plan for your cafe is figuring out the projected cash flow your cafe will earn over time. Depending on the audience for your business plan, you may have to project your cafe’s cash flow up to five years in advance, broken up into months or quarters. Though this exercise might seem difficult, it’s not impossible. You’ve already completed most of the financial legwork.

Combine those crunched numbers with your personal experience as a customer and a worker to project how much money your cafe will make in the future. Consider seasonal differences, like a spike in business around the holidays if you’re in a busy shopping district, or a lull in business during the summer if your cafe caters to college students. Just like your income statement, these cash flow projections will go into your business plan as easy-to-view statements.

Balance sheet

A balance sheet details the assets, liabilities and equity of your cafe business on the day it opens. It’s generally used to determine how much money a business has to work with. For a small cafe, it’s not as important as the income statement, but it’s useful as a realistic snapshot of the financial health of your restaurant.

Breaking even

Now that you’ve detailed how you will make a profit and you know how much money you are working with, you can approximate how long it will take your cafe to turn a profit. This is called the break-even point.

Section 10: Planning for growth

Include a section that discusses potential avenues for expansion in the future. This will show important stakeholders you’ve already started thinking about the future direction of your business.

Review the scalability of your business model and operations to support expansion efforts effectively. Determine whether the infrastructure, systems, and processes you’ll start with can support your visions of growth.

The opportunities you mention could include opening additional cafe locations in new neighborhoods or cities, expanding your product offerings to include catering services or packaged goods, or diversifying into related businesses such as coffee roasting or wholesale distribution.

Example business plan

We’ve created a business plan for a hypothetical cafe called Sip & Savor Café. Keep in mind that it’s shorter than is typical. 

Section 1: Executive summary

Sip & Savor Café is a quaint yet vibrant coffee shop nestled in the bustling downtown district. Our vision is to create a welcoming space where patrons can indulge in artisanal coffee, delectable pastries, and light bites while fostering connections and savoring moments of tranquility amid the urban hustle. With a dedication to exceptional service and a commitment to community engagement, Sip & Savor Café aims to become the preferred destination for coffee enthusiasts and locals seeking a reprieve from the daily grind.

Section 2: How Sip & Savor will succeed

Sip & Savor Café will differentiate itself by offering a curated selection of specialty coffees, locally sourced ingredients, and unique menu offerings that reflect the diverse tastes and preferences of our customers. Our prime downtown location, near office buildings and shopping centers, will maximize foot traffic and visibility. We will optimize our operations for efficiency and cost-effectiveness by selecting suppliers carefully and using a streamlined tech solution while maintaining a strong emphasis on quality and customer satisfaction.

Section 3: Competitive analysis

Through a comprehensive competitive analysis, we have identified key competitors in the area, including national coffee chains and independent cafes. By offering personalized service, a welcoming atmosphere, and distinctive menu items, Sip & Savor Café will differentiate itself from competitors and attract a loyal customer base. We’ll also create a strong loyalty program for our customers to rival the likes of big chains.

Section 4: Our target market

Our target market includes urban professionals, students and local residents seeking a convenient and comfortable place to enjoy coffee and light meals. We’ll create a space that encourages people to sit, stay and work. By understanding the preferences and behaviors of our target market segments, we will tailor our offerings and marketing efforts to effectively reach and engage with our customers. 

Section 5: What we’ll sell

Sip & Savor Café will offer a diverse menu of specialty coffees, teas, and seasonal beverages, accompanied by a selection of freshly baked pastries and sandwiches. We will implement a smart pricing strategy, utilizing high-quality ingredients and creative combinations to maximize value for our customers. Our menu will evolve based on customer feedback and seasonal trends, ensuring a dynamic and appealing selection of offerings.

Section 6: Our marketing strategy

Our marketing plan will focus on building brand awareness, driving foot traffic, and fostering customer loyalty. Strategies include social media campaigns, local partnerships, community events, and loyalty programs to engage customers and generate buzz around Sip & Savor Café. We will also prioritize customer retention through personalized service and rewards programs.

Sip & Savor Café is structured as a partnership between founders Emma and Liam, who collectively bring over 20 years of experience in the hospitality industry. Each partner holds a 50% ownership stake and shares responsibility for day-to-day operations, strategic decision-making and financial management.

Section 8: Operations plan

Our operations plan outlines efficient workflows, staffing requirements, inventory management systems, and quality control measures to ensure smooth and consistent operations. We will invest in modern equipment, staff training, and technology to optimize efficiency and deliver a superior customer experience.

Section 9: Financial plan

Sip & Savor Café will require initial funding to cover startup costs, including leasehold improvements, equipment purchases, and initial inventory. We have secured financing through a combination of personal savings, small business loans, and investor contributions. Our financial projections indicate steady revenue growth and profitability over the first three years of operation, supported by growing customer traffic and cost-effective operations.

As Sip & Savor Café establishes itself as a local favorite, we plan to explore opportunities for expansion, including additional locations and new menu offerings. By maintaining a focus on quality, customer satisfaction, and community engagement, we aim to sustain long-term growth and success in the competitive cafe market.

Keeping the restaurant dream alive

Though creating a business plan can seem complicated, remember that it’s an important step you should take before starting a cafe. A thoughtful business plan proves to others (and yourself) that your cafe can be successful. 

Looking to invest in the right tools for your cafe? Chat with one of our experts to see how cloud software can make your day-to-day more efficient.

1. How profitable is owning a cafe?

Profitability varies, but successful cafes can generate healthy profits with the right management, location, and business model.

2. How do I start a cafe business?

Start by creating a solid business plan, securing financing, finding a suitable location, obtaining necessary permits/licenses, hiring staff, sourcing suppliers, and marketing your cafe.

3. Is a cafe a successful business?

Cafes can be successful if managed effectively, offering quality products, good customer service, and a welcoming atmosphere.

4. How do I write a business proposal for a cafe?

Include sections on your concept, target market, location analysis, marketing strategy, financial projections, and management plan.

5. What is the failure rate of coffee shops?

Failure rates vary, but some studies suggest around 60% of new coffee shops close within the first five years due to various factors like location, competition, and mismanagement.

6. How much do small cafe owners make?

Earnings vary greatly depending on factors like location, size, and business model, but small cafe owners may make anywhere from modest incomes to substantial profits.

7. How much does it cost to run a coffee shop per month?

Costs can vary widely based on factors like rent, utilities, staff wages, inventory, and marketing expenses, but estimates range from several thousand to tens of thousands of dollars per month.

8. Are cafes a good investment?

Cafes can be a good investment if carefully planned and managed, offering opportunities for profitability and growth in the food and beverage industry.

9. Are cafes more profitable than restaurants?

Profitability depends on various factors including location, target market, and operating expenses. While cafes may have lower overhead costs than full-service restaurants, profitability can vary widely between individual establishments.

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Lightspeed is a cloud-based commerce platform powering small and medium-sized businesses in over 100 countries around the world. With smart, scalable and dependable point of sale systems, it's an all-in-one solution that helps restaurants and retailers sell across channels, manage operations, engage with consumers, accept payments and grow their business.

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How to Open a Café Business

How to Open a Café Business – Ultimate Beginner's Guide PDF

Successfully Opening a Café Business

Opening a café business can be an exciting opportunity for aspiring entrepreneurs. The sound of steaming espresso machines, delicious food being served, and the lively chattering of customers can pique the interest of any new business owner.

A café is one of many different coffee shop concepts that could work in your community. Finding the right concept for the right location to serve the appropriate target market will be a significant part of your café planning.

In today's post, we'll deep dive into the steps you'll want to take to open a café successfully.

How much does a café business cost?

Several main factors impact the cost of a café, which requires two specific budget breakdowns .

The first budget would be your café startup budget . The second cost breakdown would be your operational budget .

Your coffee shop startup budget will be the money you need to get from Square One to your grand opening. This budget includes your research, planning, legal, and administrative costs. Additionally, your startup budget includes your initial space lease, café buildout, equipment costs, furniture and fixtures, and training.

Your operational costs are centered on the day-to-day or monthly cost of operating your café. This includes your lease, insurance, labor, inventory, taxes, and other expenses.

Since a café often has a more extensive menu and offers indoor seating, the costs of a traditional café are often higher than that of a conventional coffee shop.

These costs will fluctuate depending on the location, size of the kitchen, menu offerings, real-estate, and buildout costs.

For more information, read our post, How Much Does it Cost to Start a Coffee Shop?

Beginner's Guide

Opening a Café Business (Easy Steps)

• pick a cafe concept
• choose a cafe menu
• determine what will make you stand out
• define your branding
• determine your cafe budget
• understand who your cafe customers will be
• setup your business structure
• choose your cafe location
• pick your cafe equipment
• write a cafe business plan
• determine your cafe funding
• choose your cafe roaster
• build out your cafe
• get a cafe license and permits
• develop a coffee brand and marketing strategy
• hire amazing baristas
• always deliver excellence

Trending Articles on Coffee Shop Startups:

Steps Open a Café Business

Pick a café concept..

Cafés come in all shapes, sizes, and themes. Even café concepts can vary among other cafés.

What type of café do you wish to have? Perhaps, more clearly, what kind of experience would you want your café customers to have?

Choosing the right café concept to fit your customers in a specific location will be vital to driving sales and keeping your business humming strong.

You will want to settle on a specific niche in the marketplace that offers a unique experience and a different menu. This will help side-step competitors and appeal to customers. 

Choose your café menu.

Cafés are often more than just traditional coffee shops and differ in various ways. For example, cafes often have a more extensive menu than traditional drive-thru coffee stands or coffee shops. Some cafes even can have a full kitchen, a large bakery operation, and a coffee roastery. Of course, many cafes also serve alcohol as well. Serving alcohol at your café may require additional permits and licenses, so check with your state's alcohol board.

These are significant undertakings, cost additional money, and require a greater startup budget and operational budget to maintain. But, of course, the benefits of having these operations in-house can improve your sales and increase your profit margin.

Choosing your café menu will play a big part in other big decisions you'll be making. Everything from your space needs, permit requirements, employee wages, and cafe equipment needs will be determined by your café's menu.

Deciding on your menu requires you to grasp what your customers want at the price they are willing to pay.

Determine what's going to make you stand out

Now that you are honing in on a concept and menu, this might be an excellent time to determine how your café will stand out from the competition.

The “special thing” that makes you different will often give you a competitive advantage in the marketplace and separate you from the rest of the choices available.

Perhaps it will be your special soup your rotating business lunches, or your in-house roasted organic coffee. It could be your decadent pastries or special cakes made by your award-winning baker. It might be the collection of art on your walls, your panoramic view, or the music you offer every night. All these elements and more have the potential to be a unique feature that only your café offers.

We often refer to this particular thing as your Unique Sales Proposition or USP.

Coming up with a winning USP will better position you among competitors and provide you with a solid foothold to make other decisions. This will include your branding, messaging, and marketing efforts. It will also help improve your sales and training and give you a competitive edge. 

Define your cafe branding.

As you begin to outline what type of café you will be in, you will also want to develop your café brand and messaging behind it.

Your café branding will include, among other things, your logo, name of business, your use of colors, menu choices, uniforms, etc.

Your branding may be reinforced by your décor, design, and layout, among other things.

Additionally, your messaging – the use of language, slogans, and energy that you communicate via all of your channels (website, social media, signage) – plays a role in what type of café you have chosen.

Your messaging has to appeal and trigger action among your target market to maximize your success and drive sales. So, as you move forward with your business planning, start crafting and refining your logo and overall messaging. If you need help, there are affordable branding experts online who can help design your logo, signs, and other items.

Yet, there are plenty of things you can do yourself before hiring an expert, so keep reading!

Determine your cafe budget.

In the early stages of your planning, you will want to sketch out your café startup budget . Of course, the easiest way is to start listing the things you need to get your café up and running.

Your cafe budget will be central to answering the question: How much will your café cost?

This final estimate and budget will take a little planning, realistic estimates, and adjusting.

As you plan out your café business, your budget may naturally increase. Keep a running list and include this budgeting effort in your cafe business plan .

You will also need to create an operational budget. This operational budget will itemize the costs of being open and running your café daily. These two estimated budgets (your startup budget and operational budget) will be essential to understand before you launch your business.

My recommendation is that you don't create and act on your budget in “real-time” or as you go. Instead, determine your café budget first – analyze it against your business plan, then move forward with securing the funds needed to get your café operational – and then spend the money.

Opening a café business

Understand who your café customers will be.

There is no secret that your customers play a significant role in your café's success. From generating sales and repeat business to being your most prominent marketers – your customers are the foundation of your profit and continued success.

Start with determining who your customers are. It should be among the first necessary steps you'll need to take. Afterward, you can start molding your entire business to serve them.

Your target market is the general market to which your café will appeal, often based on your geographic convenience, accessibility, and business concept.

If you dig a little deeper – you will also know who your target customers are – or those customers that are most likely willing to buy from you.

Set up your business structure.

To operate your café legally, you will have to set up an appropriate business structure. Often, your business structure is created in the state in which you plan on operating your business. This is done through your specific state's secretary of state office.

Keep in mind that you can still operate your business in other states and regions as long as you have the appropriate business licenses and health permits and complete other requirements for those areas. For example, you might decide to open a coffee business in New York but decide to operate a second coffee shop located in Los Angeles .

Your business structure is an essential part of your café startup process. You'll have several business structures to choose from – such as a sole proprietorship, corporation, limited liability company (LLC) , etc.

Choose your cafe location.

Choosing the best location for your café will be the cornerstone of your success. The perfect location can determine your sales strengths and position you to maximize exposure.

There are a few essential elements that revolve around your café's location. Your location should be easily accessible to your target market, and have parking and lighting, among others.

You will have to factor in neighboring businesses, competition, and other essential elements in your prospective location. These include neighboring points of interest, parks, farmers' markets, theaters, etc.

Additionally, your location's lease will be critical in moving forward with the location. A poor lease or a lease that makes business difficult may hamper your progress and sales.

For more information, read our post, How to Choose the Best Location for Your Café .

Pick your cafe equipment.

Now that you've picked out the concept and your menu and you're settling on a location, you'll want to start choosing the café equipment pieces you'll need.

Detail items such as ovens, stoves, and refrigerators. You will also need an espresso machine, commercial coffee grinders, and brewing devices.

Your café equipment will be a significant part of your budget and requires some thoughtful budgeting and comparison shopping. You may also want to include your café displays, menu boards, furniture, and fixtures in your calculations here as well.

For more information on choosing your coffee shop, please read   The Coffee Shop Equipment You Need

Write a café business plan

Writing a café business plan will help get all your thoughts, ideas, and plans on paper. In addition, your business plan will play a key role in helping you organize your thoughts and ensure that all elements of your business are addressed.

A café business plan is written for a small and significant audience. First, your business plan will be read by your potential investors, partners, and bank lenders. Next, your café business plan will also be read by property managers. Most property managers will expect to see a business plan which allows them to understand the nature of your business and operations thoroughly.

For help getting started, please read   How to Start and Write Your Cafe Business Plan.

Determine your café funding.

After you've developed your business plan, you will want to secure your funding. Before getting the financing, you will need to establish a café funding mix. Your mix will detail the pools of capital you will utilize to get the money to fund your café startup fully. It will also provide a guidepost to strategize accessing funds from each pool.

Your funding mix will help you prioritize your efforts to secure the funds you need to get your business self-sustaining. 

For a more detailed look at developing your café funding mix, please read our post, Developing Your Café Funding Mix.

Choose your café roaster and vendors.

If you decide not to roast your beans, you will need to work with a wholesale coffee roaster .

Choosing a coffee roaster is a big decision. After all, you are banking on their expertise, quality, reliability, and their ability to provide you with as much roasted coffee as needed. Some cafes run through hundreds of pounds of coffee in a week, so your wholesale roaster will need to be able to fulfill those orders.

You may decide to roast your coffee beans yourself, but this decision comes with added costs and other considerations.

In addition to your coffee roaster, you should consider looking at any vendors you might need to work with to fulfill your menu items.

For further reading, please read   How to Choose a Wholesale Coffee Roaster .

Build Out Your Café.

After securing your café location and signing your lease, you will probably need to remodel or build out your café. This may require some permitting, and it certainly requires some research to understand what codes and regulations you'll need to adhere to.

My recommendation is that you start early in the cafe design and layout process. Even though you may not have a location yet, you can still understand what is required for you to pass the inevitable health and building inspections. Establish contacts with your various departments. Never start working on your café without first checking with the agencies that will need to approve your design and layout.

Get your cafe license and permits.

You will need to get your health department permit, building permit, and business license to serve your first customer. Additionally, you may also need to have a fire department permit.

Each of these permits requires you to work with different governmental agencies before opening your café. The good news is that most of these agencies have worked with many café businesses in the past, so they would help you answer any questions you have.

Some agencies, like the building department, might be at the state level. In comparison, other agencies like the health department will be at the county or city level.

Develop a coffee brand & marketing strategy.

Setting your café apart from the rest of the field, in most cases, will be what allows your café to grow into the business you want it to.

You will want to create a brand – everything from your name, logo, slogan, and colors you use.

Your brand will be your banner symbol with which you, your employees, and your customers understand and develop a connection.

As you develop your café brand, you will also want to market your café business. Never believe that your café will succeed on its own simply with the fact that it exists.

Successful cafés figure out ways to effectively market to their target market. By understanding your target market and what you intend to do well, you can craft an effective marketing strategy.

Hire amazing baristas.

One of the best things you can do as a café owner is to hire amazing baristas and staff.

Reliable, honest, and skilled staff are hard to come by, so start looking for them early.

Once you hire your staff, do whatever it takes to keep morale high, pay fair wages, offer the opportunity for gratuity sharing, and provide regular barista training. Regular coffee education and barista training will improve your turnover rates.

Deliver excellence every time

Consistently deliver your best. If you have come this far to open your café, you will want to exceed your customers' expectations every time. I acknowledge that delivery consistency every time is hard, but it is necessary when your competitors are hoping you fail.

As a café owner and manager, you will want to offer high-quality products and services by constantly improving, continuously training, adapting, and listening to your customers. Treat your employees well, take steps to show how valuable they are to your business, and go the extra mile for your customers.

Further Reading : How to Start a Coffee Shop Successfully

Opening a Café Business

Additional Questions:

Is it hard to open a café.

Starting a café is not necessarily hard. Instead, it requires devotion and tenacity. There are several steps to owning and operating a café, and they all need to be completed before you can open your doors.

It will be challenging to have the patience, knowledge, and money to get you to the Grand opening. However, many successful café owners who started with less skill, less money, and less understanding than you, have succeeded because they had the motivation and devotion to follow through. Following through is the hardest part about starting a cafe.

How much money do café owners make?

Café revenue and income vary across the board. However, factors that determine café income and revenue aren't different from those of other retail businesses and restaurants.

To determine income, you'll need to determine how many sales you have per day, week, or month. Additionally, the number of sales needs to be multiplied by the average cost per ticket.

For example, let's take a tiny café open from 7 am to 7 pm, which sells 120 coffees per day, averaging $5 per receipt. That comes out to $600 per day or $4200 per week for coffee. So, this would come out to $16,800 per month.

Of course, this includes coffee alone and not muffins, pastries, soups, or other menu items. Additionally, you will want to subtract the operational costs to give you your café's net income and profits.

We take a deeper dive into the revenue and income that is generated by a coffee shop in our article, How Much Does a Coffee Shop Owner Make?

What is the difference between a cafe and a coffee shop?

A cafe is typically larger and offers indoor (and possibly outdoor) seating. Cafes may also offer waiting services and have a deeper menu. The menu may offer full-kitchen options for breakfast, lunch, and dinner. There are often different hybrid cafes that also offer walk-up or drive-thru options, but typically, you'll find a place for customers to sit, look at a menu, order from their items, and wait for their plates to be brought to them. A cafe may often be open later into the evening, serve alcohol , and offer live music.

Should I open up a low-cost coffee business instead?

If you would like to open a café but aren't sure you can manage the cost or secure funding, there may be a variety of other low-cost café options for you to consider.

Options include starting a mobile coffee business, an espresso catering business, or a drive-thru coffee stand . Additionally, you may also consider selling coffee online. Selling coffee online can help you establish your brand, help you target your customers, and provide you with the experience and funding you need to get your café started.

For more information, read Low-cost Ideas for Starting a Coffee Shop with No Money.

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13 Tips to Open a Successful Coffee Shop

Candice Landau

12 min. read

Updated May 10, 2024

Free Download:  Sample Coffee Shop Business Plan Templates

Worldwide, experts estimate that people drink about 2.5 billion cups of coffee a day. Sales in the ready-to-drink market—which includes coffee shops—are forecast to grow by 67 percent between now and 2022.

Additionally, coffee and other ready-to-drink shops show incredible resilience in volatile markets, helping to eliminate some of the uncertainty associated with small business ownership.

If you’ve been thinking of combining your love of coffee with your entrepreneurial spirit, you may want to open a coffee shop.

• What You Need to Open a Coffee Shop

Aside from a love of that sweet java, you’ll want to get a few things in order to get your shop up and running. To help with this, Jack Wilson, owner of Radio Coffee and Beer in Austin, Texas, and Marc Renson, owner of Ambition Bistro in Schenectady, New York, stepped away from brewing and serving to offer 13 tips to prospective owners. Here’s what they recommend you consider when starting a coffee shop:

• Write a business plan
• Find the right location
• Develop a floor plan
• Hire an accountant
• Find local funding options
• Save money for your personal expenses
• Compare prices and quality on everything
• Network with lenders and other coffee makers
• Develop your marketing plan
• Focus on the Exterior
• Remain positive
• Hire slowly
• Set high standards

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• 1. Write a business plan for your coffee shop

One of the most vital steps you’ll take toward starting your coffee shop is to write a business plan. This document spells out:

• What your business is and who it serves
• How it will be profitable
• Your target market (primary customer demographics)
• Your competitors
• Sales and revenue projections
• Milestones and goals

Keep your business plan lean

Before you dive into creating a traditional, long-form business plan, we recommend creating a one-page pitch. This will allow you to quickly validate your business idea and get a good sense of who your market is, how you’re going to reach them, and find ways to differentiate yourself from your competitors. Will you serve pour-overs exclusively? Will you only use high-end coffee grinders and bean varieties? Will you include baked goods on your menu as well?

Similar to a thorough executive summary, this one-page pitch or plan  is a faster, more efficient way to plan your business.

Browse our free coffee shop sample business plans

Need help getting started? Check out our business plan templates for guidance. They’re free real-world examples for you to work from and are available to download and edit as Word documents. Whether you’re starting a little coffee and internet café or a coffee house bistro, there’s a business plan template—a sample business plan—to suit your coffee shop needs.

Coffee Kiosk Business Plan

Read how The Daily Perc opened drive-thru and mobile coffee stands, serving coffee drinks and other beverages to their target market: daily commuters and captive consumers.

Coffeehouse Business Plan

This sample business plan describes how Dark Roast Java attracted a diverse clientele with its Mediterranean art glass decor.

Internet Cafe Business Plan

The JavaNet Internet Cafe was a true visionary business sample plan when it was written, and with most coffee houses adopting some form of this plan, it’s obvious that it was an idea ahead of its time.

Cafe Bistro Coffeehouse Business Plan

The Watertower Cafe sample business plan describes how the cafe will establish itself as a “destination” of choice to the many residents of the greater Atlanta metropolitan area, as well as numerous out-of-town visitors by providing affordable high-quality food, coffee-based products, and entertainment.

Coffee Roaster Business Plan

Beanisimo Coffee is a startup coffee roaster in Salem, Oregon. Founder Frank Jones aims to bring old-world Italian traditions and recipes to meet the market need for premium coffees. His target market is coffee houses, restaurants, and grocery stores.

The key to making a sample business plan useful is to take the time to modify it so it’s right for your business. A lot of the benefit of creating a business plan is in the process of thinking through each part of the plan. Not sure if you need a plan? Check out this article on reasons why having a business plan is important.

• 2. Find the best location for your coffee shop

To be successful, you need the right location for your coffee shop. You want something that fits the following parameters:

• Centrally located and easy to access
• Highly visible and experiences consistent foot traffic
• A space that fits your vision

Jack Wilson, the owner of Radio Coffee and Beer, warns that finding this dream spot won’t happen overnight.

His team scoured city after city, scouting each location, even going so far as to count pedestrian traffic by hand. He was looking for a former restaurant space, so he didn’t have to remodel everything from scratch. Finally, one day when he dropped his keys on the sidewalk he noticed a tiny “for sale” sign in a former tavern window. After months of searching, he’d found his spot.

Keep in mind that effective restaurant spaces are highly sought after and difficult to find. It may take a while to find just the right spot, but for a business type that benefits from ease of access and casual traffic, it’s worth taking your time to find the right spot.

• 3. Create a floor plan

A solid and welcoming floor plan is vital for a coffee shop. You want customers to have space to form a line, employees to have the materials they need within reach for quick access and a comfortable seating area. As with finding a location, it will take some time to produce a good floor plan.

According to Wilson you should, “walk yourself through every scenario you can think of,” he says. “If you’re making coffee, what needs to be near you? If you’re a customer, what do you want in a seating area? Visualize everything you can and start putting those ideas down on paper.”

Design your cafe floor plan online

Here are a few free websites you can use to kickstart your planning process. Once you’ve drawn up an initial sketch on paper, get online and make it a reality.

Autodesk Homestyler (free): This is probably my favorite option. You can either start designing your floor from scratch or choose from a gallery of designs to personalize with your own look and feel. In fact, there’s even an option to experiment with real-world products and brands. When you’re done, you’ll be able to share the design as part of your planning process. It can even be used as part of your pitch to potential investors.

Floorplanner: This software is clean and simple to use, with plenty of drag-and-drop furniture and other items to fill out your design. It allows for both 2-D and 3-D visualization of your designs and can be easily printed out if needed.

Gliffy: While it may not be the go-to floor plan solution, I’ve included Gliffy on this list anyway, due to it being a well-known diagram and flowchart application. If you’ve used it before, you may want to give it a try to minimize the learning curve and jump right into designing. While you’re at it, you can even plot out your SWOT analysis.

• 4. Hire an accountant

One of the best pieces of advice Wilson says he can offer a new coffee shop owner is to turn your books over to an accountant. Aside from taking valuable time away from the business, having a numbers expert works in your favor.

“You won’t be as hard on yourself as you sometimes might need to be,” Wilson says. “Plus, you will make assumptions that an accountant wouldn’t make.”

In reality, your accountant is really your small business consultant. Make sure you find someone who believes in you and can help accomplish your business goals. If you’re unable to hire an accountant right away, you can also look to an online option like QuickBooks . The benefit of online accounting software is that you’ll have direct visibility into the day-to-day finances of your business.

Both are great options for managing your finances, and the decision fully depends on your situation and level of expertise.

• 5. Attain funding from local sources

Finding startup funds for a coffee shop can be difficult. Renson suggests talking with friends and family about investing in your coffee shop first. Present a solid business plan to them and ask them to invest in your business.

If funding via your family isn’t an option, or if you need more cash than your family can provide, Renson suggests looking into local loan options. In some cases, cities offer business assistance programs to offset costs. Consider an SBA-backed loan or see if a local bank or credit union is an option. Keep in mind that any bank loan will require you to show evidence that your business has some traction already. They want to know you’re a reasonable risk. So if you’re not up and running yet, there are other options for bootstrapping your business that you might consider.

• 6. Save money for your personal expenses

When identifying startup costs , don’t forget that you need to consider your own personal expenses alongside your business. All of your time and energy will be devoted to your new business, which potentially won’t be profitable for around six-months, even if you start bringing in revenue immediately.

So, plan ahead. Renson suggests making sure you set aside enough money to cover your personal expenses for at least six months if not longer. You’ll need to decide whether it’s possible to run your coffee shop while working another job or side gig or if you’ll be able to solely focus on your new business.

You will also want to understand the concept of cash flow . Considering that over half of the businesses that fail are profitable on paper when they fail, you’ll want to be sure you understand how much cash you’ll need on hand.

• 7. Shop around for everything

While you’re in the planning and funding stages and working through your finances,  keep a list or spreadsheet of all the startup expenses you’re looking at so you can compare prices.

Before you buy, try to get at least two price quotes for every item so you’re not losing money on basic necessities or recurring costs. Use the internet to your advantage and look for the best prices on everything from comfy chairs to espresso machines.

• 8. Network your heart out

Having a hot location and brewing superior coffee will only get you so far. You need to network to maintain a connection to the area and to attract more customers. Look into joining the local chamber of commerce, a business association, or partner with a local charity. Be visible in your local community and get dedicated partners long before you open your doors.

9. Develop your marketing plan — before you open

If you start marketing the day you open, you’re already behind. On opening day , you want people excited to come in. You’ll want to develop your marketing strategy and begin advertising to potential customers several months before opening.

Affordable marketing options to consider:

• Partner with other local businesses by providing free coffee in exchange for on-site advertising.
• Leverage social media as direct communication with your customers.
• Participate in local events, providing free specialty coffee samples leading up to your grand opening.
• Do a small direct mail or email campaign that sends coupons to local residents or businesses.
• Call everyone, including the media, to tell them about your plans to open the shop.

10. Don’t just focus on the interior of the building

It’s likely that you’ll stress over every little detail of your shop, from what paintings to hang on the wall to the point of sale system (POS System) you’ll use. That being said, it can be very easy to ignore the exterior of your shop or coffee cart which directly contrasts with choosing a location with heavy foot traffic.

According to Wilson, you’ll want to “pay attention to the landscaping, signage, and exterior appearance because that’s the first thing people see.” Some people decide whether or not to come in based on their first impression of the building, so make it count.

By creating a clean and unique exterior, you’ll begin to create a buzz in your community. People will start to wonder, who is setting up shop there? Every little thing you can do to attract attention to your coffee shop can serve as a marketing tool.

• 11. Have a positive attitude

Like every business, you’ll face challenges to get your shop off the ground. Renson says keeping a positive attitude when things aren’t going your way is a must. Not only does it benefit your outlook, but it showcases strong leadership to your employees and a welcoming presence for customers.

Fake it if you have to. If you get in the habit of keeping an optimistic attitude, even if it’s less than genuine to start, you’ll eventually teach yourself to stay upbeat and will keep those around you optimistic and ready to work.

• 12. Hire slowly

You need help manning the register, waiting on customers, and making drinks, but don’t hire too many people too fast. Renson suggests hiring a few friends, or neighbors who will volunteer to help you out for the first few weeks. Slowly, bring on staff as needed.

Hiring trusted staff can be tough. No matter how well someone does in an interview, you don’t know how well he or she fits until they’re on the floor. Keep a close eye on the register, Renson suggests, and don’t be afraid to let people go if they are hurting the business.

• 13. Set high standards

It’s okay to set high standards for your employees and overall business. That’s not to say that you should micromanage your employees. You’ll want to focus on effectively training your staff at the start and building an effective workflow that encourages collaboration and high-quality work. Their ability to make good coffee drinks quickly will have an impact on customer loyalty and satisfaction.

Starting an independent coffee shop is hard work, but that doesn’t mean it has to be a long-term struggle. If you focus on establishing these core pieces while developing your coffee shop business plan, you’ll set yourself up for success early on.

Candice Landau is a marketing consultant with a background in web design and copywriting. She specializes in content strategy, copywriting, website design, and digital marketing for a wide-range of clients including digital marketing agencies and nonprofits.

Table of Contents

• 9. Develop your marketing plan — before you open
• 10. Don’t just focus on the interior of the building

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How to Write a Coffee Shop Business Plan

By Homebase Team

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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Learning center series

Free coffee shop business plan template for 2025

• Published on September 6, 2024
• by Oguzhan Uyar
• Last updated: 3 days ago

Opening a coffee shop is an exciting venture, but it requires careful planning and execution to succeed in a competitive market.

A well-crafted business plan is your roadmap to turning your coffee shop dream into a thriving reality.

In this comprehensive guide, we’ll walk you through the essential components of a winning coffee shop business plan, complete with examples and free templates to help you get started.

From crafting a compelling executive summary to designing the perfect layout, we’ve got you covered every step of the way.

Whether you’re a seasoned entrepreneur or a first-time business owner with many coffee shops, this article will provide you with the insights and tools you need to create a solid foundation for your coffee shop’s success in 2024 and beyond.

Let’s dive in and start brewing up your dream business!

Metrobi has been a game changer for coffee industry.

With Metrobi, you can save 23% on delivery costs, save 80% of the time from managing deliveries, and delight your customers with delivery notifications & tracking.

Coffee Shop Business Plan Template: Comprehensive Examples to Kickstart Your Venture

Coffee shop business plan example.

To help you kickstart your coffee shop venture, we’ve created a comprehensive business plan template outline that you can adapt to your unique vision and goals. This sample covers all the essential components of a winning coffee shop business plan, with placeholders for you to fill in your specific details and ideas.

The key components of a successful coffee shop business plan include:

Executive Summary

Company Overview

Market Analysis

Organizational Structure and Management

Product or Service Offerings

Marketing and Sales Strategy

Funding Requirements

Financial Projections

How to Develop a Coffee Shop Business Plan

A coffee shop business plan is a meticulously crafted document that lays out the vital elements involved in starting and running a coffee-centric business. It offers a thorough exploration of the coffee business’s objectives, target audience, competitive landscape, marketing strategies, financial forecasts, and operational procedures. This plan serves as a strategic guide, helping entrepreneurs navigate the different phases of establishing and operating their coffee shop, ensuring a clear path toward success. This document is your roadmap to launching a successful coffee enterprise, intimately detailing the necessary steps to ensure your coffee shop blossoms into a flourishing and profitable coffee venture .

In the highly competitive coffee industry, creating a comprehensive and clear business plan is crucial.

Why a Coffee Shop Business Plan is Essential

Creating a detailed business plan helps entrepreneurs define their business objectives, whether it’s offering unique coffee blends, various food products, creating a welcoming atmosphere, or promoting sustainable practices. A well-prepared plan also necessitates a deep understanding of the target audience, allowing for customized marketing strategies, menu offerings, and customer experiences that align with customer preferences. Explore the depths of crafting a business strategy for your coffee roasting venture , detailing essential elements such as competitive analysis, sustainability efforts, and financial forecasts.

Key Benefits of a Coffee Shop Business Plan

Securing Investment and Funding: A well-organized business plan can be a persuasive tool when seeking investors or securing funding. It demonstrates your in-depth understanding of the coffee industry, market trends, and strategic approach, thereby increasing credibility and attracting potential investors.

Resource Planning: Drafting a business plan helps you identify the essential resources, supplies, and staff needed to start and run your coffee shop, from coffee beans and brewing equipment to furniture and décor.

Financial Strategy: A comprehensive plan outlines financial projections, startup costs, operating expenses, and revenue forecasts, guiding you in determining the required funding, pricing strategies, and cash flow management.

Market Insight and Differentiation: Through detailed market research, the business plan provides insights into your target audience’s preferences and behaviors, enabling you to tailor your offerings, ambiance, and marketing efforts to attract and retain customers effectively.

Risk Management: Developing a business plan encourages you to recognize potential risks and challenges, allowing you to create contingency plans to mitigate their impact.

Operational Efficiency: The plan details the operational processes needed to run your coffee shop smoothly, including staffing, inventory management, and quality control measures, ensuring consistent customer satisfaction.

Goal Setting and Monitoring: Your business plan serves as a benchmark for measuring your coffee shop’s performance over time, helping you track progress and make adjustments as needed to stay on track toward your goals.

The Outline of the Plan

Business concept: Briefly describe your coffee shop’s concept, theme, and atmosphere.

Target market: Identify your ideal customers and how your coffee shop will cater to their needs and preferences.

Unique selling proposition: Highlight what sets your coffee shop apart from competitors and why customers should choose your establishment.

Financial snapshot: Provide a brief overview of your projected revenue, expenses, and profitability for the first few years of operation.

Funding requirements: State the amount of funding you are seeking and how it will be utilized to launch and grow your coffee shop.

Company Description

Coffee shop concept: Provide a detailed description of your coffee shop’s theme, atmosphere, and overall vibe. Will it be a cozy, rustic retreat or a sleek, modern hub for remote workers?

Mission statement: Craft a compelling mission statement that encapsulates your coffee shop’s purpose, values, and commitment to customers and the community.

Core values: Outline the guiding principles that will shape your business decisions, customer service, and employee culture.

Management team: Introduce your coffee shop’s owners, managers, and key team members, highlighting their expertise, experience, and passion for the industry.

Location and facilities: Describe your chosen location, size of the establishment, seating capacity, and any unique features or amenities that will enhance the customer experience.

Target market: Provide a detailed profile of your ideal customers, including demographics, psychographics, and buying behaviors. Consider factors such as age, income, lifestyle, and coffee preferences.

Market trends: Identify current and emerging trends in the coffee industry, such as the growing demand for specialty coffee, sustainable sourcing, or mobile ordering and delivery.

Competitor analysis: Conduct a comprehensive analysis of your direct and indirect competitors, assessing their strengths, weaknesses, market share, and pricing strategies. Identify gaps in the market that your coffee shop can fill.

Market size and growth potential: Estimate the size of your local coffee market and its projected growth rate, based on industry reports, economic indicators, and demographic trends.

SWOT analysis: Perform a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis to evaluate your coffee shop’s internal and external factors that may impact its success.

Marketing plan: Innovative approaches to attract and retain customers, ensuring a steady flow of coffee enthusiasts through your doors.

Roadmap to success: A detailed timeline outlining key milestones and objectives from launch day through your first year of operation.

Management: Spotlight on your management team, showcasing their expertise and defining their pivotal roles in driving the business forward.

Long-Term Financial Outlook: Comprehensive 5-year financial projections, including revenue forecasts, expense breakdowns, and projected profitability, giving investors a clear picture of your coffee shop’s economic potential.

By using this outline as a starting point and adapting it to your needs, you’ll be well on your way to crafting a winning coffee shop business plan that will guide you through the exciting journey of bringing your dream to life.

When to Use a Coffee Shop Business Plan

Securing Financial Support: When approaching financial institutions for loans, applying for small business grants, or pitching brewed coffee itself to potential investors, your business plan is your golden ticket. It’s the tangible representation of your coffee shop’s potential, translating your vision into hard facts and figures that financial backers require.

Attracting Business Partners: If you’re looking to bring a partner on board, your business plan serves as a comprehensive overview of your venture, helping potential collaborators understand and buy into your vision.

Decision-Making Compass: Your business plan acts as a invaluable guide when facing tough choices. By forcing you to articulate every aspect of your business plans in detail, it helps eliminate grey areas and provides a clear framework for decision-making. This process of committing your ideas to paper often reveals insights and helps solidify your strategy.

Remember, a well-prepared coffee shop business plan isn’t just a document – it’s a powerful tool that can open doors, attract support, and steer your business towards success. Whether you’re presenting to stakeholders or refining your own strategy, your business plan is the foundation upon which your coffee shop dream will be built.

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Coffee Shop Business Plan Samples and Templates: Learning from Successful Examples

When crafting your coffee shop business plan, it’s essential to examine successful local establishments and identify the factors that contribute to their success. By studying their business model, strategies, and customer experience, you can gain valuable insights to incorporate into your own plan. To assist you in this process, we’ve gathered coffee shop business plan templates crafted by industry experts.

1. PandaDoc’s Coffee Shop Business Plan Template

PandaDoc offers a comprehensive coffee shop business plan template that serves as an excellent starting point for aspiring cafe or coffee shop or owners. This template provides a structured framework to help you organize your thoughts and present your business idea professionally. It covers all the essential sections of a business plan, including the executive summary, company description, market analysis, products and services, marketing strategy, financial projections, and more.

The template is customizable, allowing you to tailor it to your specific coffee shop concept. Whether you’re planning a cozy neighborhood cafe or a trendy specialty coffee bar, PandaDoc’s template can be adapted to suit your needs. It also includes helpful prompts and guidance throughout, making it easier for even first-time entrepreneurs to craft a compelling business plan.

Use PandaDoc’s template for your coffee shop

2. Venngage’s Coffee Shop Business Plan Template

Venngage offers a user-friendly and visually appealing coffee shop business plan template that’s perfect for entrepreneurs who want to create a professional-looking plan without design experience. This template provides a comprehensive framework for outlining your coffee shop concept, including sections for market research, operational procedures, location analysis, and financial projections.

Key features of Venngage’s template include:

Easy customization: The template is fully editable, allowing you to tailor it to your specific coffee shop vision.

Rich icon library: Access a variety of icon styles, including coffee-themed sets, to enhance your visual presentation.

Flexible design options: Easily adjust the layout, add pages, or extend dimensions to fit your content needs.

Multiple export formats: Download your plan as a PNG, HD PNG, or PDF, or embed it in emails for easy sharing with potential investors.

Real-time charts: Incorporate dynamic visuals to represent your financial projections and market data.

The template streamlines the process of creating a coffee shop business plan, helping you focus on content while ensuring a professional and visually engaging presentation. Whether you’re seeking investors or simply organizing your ideas, Venngage’s template offers a practical solution for crafting an impressive coffee shop business plan.

Use Venngage’s template for your coffee shop

3. Business in a Box’s Coffee Shop Business Plan Template

For aspiring coffee shop owners looking to make a strong impression on potential partners and investors, this professional yet creative Coffee Shop Business Plan Template offers a comprehensive solution. It is available for immediate download, allowing you to start working on your business plan right away and move one step closer to realizing your entrepreneurial dreams.

Key features of this template include:

Professional design: Utilizes standard business fonts and portrait orientation for a clean, authoritative look.

Comprehensive content: Includes detailed information sheets to guide you through all essential aspects of your business plan.

This template streamlines the process of creating a thorough, professional-looking business plan, helping you focus on articulating your unique vision while ensuring you cover all necessary details. By using this tool, you can save time and present your coffee shop concept with confidence, potentially giving your business proposal an edge in competitive situations.

Use Business in a Box’s template for your coffee shop

4. DojoBusiness’ Coffee Shop Business Plan Template

Elevate your coffee shop dreams with DojoBusiness’s comprehensive Coffee Shop Business Plan Template. This meticulously crafted document is your secret weapon in the competitive world of café entrepreneurship.

Key features of this powerhouse template include:

Comprehensive Coverage: Spanning 35 pages, this template leaves no aspect of your coffee shop business unexplored.

Expert-Crafted Content: The result of 80 hours of intensive research and analysis by the DojoBusiness team, ensuring you have access to the most current industry insights.

Funding-Ready: Specifically designed to meet the rigorous standards of potential investors and lenders, helping you make a compelling case for funding.

Fully Customizable: Tailor every section to reflect your unique vision and business model.

Cutting-Edge Strategies: Packed with proven techniques to help your coffee shop thrive in today’s market.

Regular Updates: Stay ahead of the curve with semester updates, keeping your plan aligned with the latest industry trends.

Expert Guidance: Benefit from free consultation with DojoBusiness experts, providing you with personalized advice to refine your plan.

Future-Proofed: Receive all future updates at no additional cost, ensuring your business plan remains relevant.

Whether you’re planning a quaint neighborhood café or a trendy specialty coffee bar, this template provides the robust foundation you need to turn your coffee shop vision into a well-planned, investment-worthy reality.

Use DojoBusiness’ template for your coffee shop

5. TouchBistro’s Coffee Shop Business Plan Template

Brew up success with TouchBistro’s Free Coffee Shop Business Plan Template – a robust tool designed to help aspiring café owners turn their existing coffee shop dreams into a well-structured reality. This template is more than just a document; it’s your first step toward creating a compelling case for your coffee shop venture.

Key features of this free template include:

User-Friendly Format: Compatible with both Microsoft Word and Apple Pages, making it accessible for users across different platforms.

Comprehensive Structure: The template covers 8 essential sections, providing a thorough framework for your business plan.

Customizable Content: Each section is fully editable, allowing you to infuse your unique vision and local market insights.

Guided Approach: Comes with helpful instructions and tips, making the planning process smoother even for first-time entrepreneurs.

Investor-Ready Design: Structured to address key points that potential investors look for, helping you make a strong impression.

Cost-Effective Solution: Offered completely free, allowing you to allocate your resources to other aspects of your startup.

Whether you’re planning a cozy neighborhood café, a bustling downtown coffee bar, or a specialty roastery, this template provides the flexibility to capture your unique business model. It’s designed to help you articulate your passion for coffee and food products while demonstrating a clear understanding of the business side of running a successful café.

Use TouchBistor’s template for your coffee shop

Bringing Your Coffee Shop Dreams to Life

Launching a successful coffee shop in 2024 requires careful planning and execution. By crafting a comprehensive business plan, you lay the foundation for a thriving venture that has a local customer base and stands out in a competitive market. Explore the intricacies of a business plan for a coffee roaster , covering essential aspects like strategic planning, market analysis, distinctive value propositions, and financial forecasts to ensure your coffee shop’s success.

Remember, a well-structured business plan is your roadmap to success. It helps you define your unique identity, understand your target audience, and secure the necessary funding to bring your vision to life.

Are you ready to turn your passion for coffee drinks into a profitable food service business?

Take the first step by downloading our free coffee shop business plan templates. Use it as a guide to develop your own personalized free business plan template, tailoring it to your specific goals and market conditions.

As you embark on this exciting journey, don’t hesitate to seek inspiration from successful coffee bars and shops in your area and beyond. Learn from their strategies, adapt their best practices, and create a coffee shop experience that truly resonates with your customers.

What unique twist other coffee shops will you bring to the coffee shop scene in 2024? Share your innovative ideas and let’s brew up a conversation!

What makes a good coffee roaster business plan?

How to establish a profitable coffee business

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