Simple Coffee Shop Business Plan - Key Aspects

The coffee industry continues to grow, with a huge interest in high-quality coffee, freshly ground beans, and supporting local artisan coffee shops from generations young and old.

With the growing popularity of coffee, now is a great time to consider opening your own coffee shop or cafe and become our customer if you want to buy paper coffee cups!

If you are thinking about opening a coffee shop but don’t know where to start, use our recommendations and advice to successfully launch your business. We tried to describe all the recommendations step by step, presenting them in the form of specific points-steps.

By following them, you will certainly follow a constructive direction that will be able to properly build a business, save time and resources, and with a high probability - achieve excellent results. 

1. Choose a coffee shop concept

The concept is the foundation of your establishment’s brand and can give your business a competitive advantage in the local market. Consider aspects such as the name, menu, selection of coffee beans, service style, decor, and business model.

Possible business models:

1. Franchise. Joining a coffee franchise network provides you with a proven business model, brand recognition, and support from the franchisor. While you will have less freedom in management, this approach provides a structured process for running a business.
2. Independent Business: If you want more independence, an independent coffee shop is the perfect choice. It focuses on local customers, which allows you to create a unique brand and build customer loyalty.
3. Mobile Coffee Shop. Coffee vans and carts offer flexibility and the ability to stand out from the competition. This format allows you to reach different target audiences, locations, and events, which opens up additional opportunities for growth.
4. Catering. If you want to work with events, celebrations and corporate orders, consider coffee catering. This approach allows you to tailor services to the format of the event, which can be an exciting challenge for those who enjoy new challenges.
5. Conduct research on the area and target audience

Before choosing a suitable concept, study the competition and the preferences of your future customers. Pay attention to successful cafes with regular customers to understand what makes them popular. 

Key aspects of the study:

• Target audience. Find out who your potential customers are. For example, Generation Z, who works remotely, may prefer high-quality coffee, spacious halls with comfortable seats and fast Wi-Fi. In areas with a large number of offices, it is important to emphasize fast service and a simple menu.
• Pricing policy. You may dream of a premium coffee shop, but it will be difficult to attract customers if the area is inhabited by people with limited budgets who are not ready to pay 200 rubles for a cup.
• Food on the menu. If you plan to include dishes on the menu, decide whether to prepare them on-site or purchase them from suppliers. This choice should be based not only on costs, but also on the preferences of your audience.

3. Write a business plan for a coffee shop

Creating a quality business plan is a key step to the success of any food service company. It will help you clarify your coffee shop concept, plan your ownership structure, forecast finances, develop your menu, and document your competitor analysis.

A well-written plan will also make it easier to secure funding and make informed decisions before launching.

A standard business plan includes 8 sections:

1. Summary: A brief overview of the coffee shop, including its mission, goals, and key points.
2. Company Overview: A detailed description of the coffee shop, including its legal structure, location, and ownership.
3. Concept and menu. Description of products: types of coffee, drinks, dishes, unique offers and competitive advantages.
4. Management and Ownership Structure: An organizational structure of the business, outlining key roles and responsibilities.
5. Staff and hiring needs. Description of staff needs: managers, baristas, cooks, waiters and others.
6. Marketing and competitor analysis. Target audience analysis: demographics, preferences and consumer behavior.
7. Advertising and Marketing Strategies. Plan for promoting a coffee shop through online and offline channels.
8. Financial forecasts. Detailed forecasts of sales, expenses, risks and profits.
9. Get funding for a coffee shop

Opening a coffee shop requires a significant investment. You will need funds for equipment, furniture, labor, and other expenses. Keep in mind that it may take 6 to 12 months for a new coffee shop to become profitable. Your start-up capital should cover operating expenses for that period.

Financing options:

• Small Business Loan
• Traditional commercial credit
• Line of credit. A flexible financial option that allows you to borrow funds as needed.
• Crowdfunding: An online method of raising funds through platforms where your business is supported by groups of investors.

The cost of opening a coffee shop depends on many factors, mainly the location. The average budget can vary from 1 to 30 million rubles, depending on the size and location.

5. Choose a location for your coffee shop

Choosing the right commercial space is a critical success factor. Make sure the kitchen has enough space for equipment and the main space matches your brand aesthetic and the expectations of your target audience. If the building requires major changes, consider another option or adapt the concept.

What to consider when choosing a location:

• Demography
• Proximity to the target audience
• Pedestrian flow, parking and visibility
• Distance to suppliers
• Competition
• Regulation and zoning

Once you find a suitable location, hire a lawyer to help you negotiate and complete all necessary paperwork.

6. Obtain licenses and permits

Operating in the food service industry requires obtaining licenses and permits. These requirements vary by region, so check with your local authorities for details. The process can take time, so start the paperwork early.

Typical licenses and permits:

• Business License
• License for the provision of food services
• Building permit
• Certificate for food handlers

7. Design a coffee shop layout

Creating the optimal design of a coffee shop is important to increase its efficiency and ensure the comfort of customers. Consider each zone from the point of view of its users to create a comfortable and attractive layout.

Front-of-House Design

The atmosphere of your coffee shop should match the expectations of your target audience. For example, open and bright spaces are suitable for meeting with friends, while private areas are important for those who work over a cup of coffee.

• Furniture: choose the color and style of furniture according to the desired atmosphere. Dark colors create coziness, light colors visually expand the space, bright colors stimulate the appetite.
• Maximize Space: Consider room dimensions and table arrangements to accommodate more customers without compromising comfort.
• Comfort: Provide different types of furniture - tables for work, chairs for relaxation.

Back-of-House Design

The work area behind the counter is often cramped, so it is important to think about its ergonomics. Consider the sequence of work: from taking an order to preparing, serving and cleaning equipment. If you plan to prepare food, take this into account when designing.

7. Buy equipment for a coffee shop

Quality equipment plays a key role in the success of a coffee shop. Below is a list of the necessary equipment and materials.

Equipment

• Coffee makers
• Espresso machines
• Coffee grinders
• Coffee Roasting Rotor
• Hot water dispensers
• Refrigerators
• Ice makers
• Sinks

Materials

• Milk frother jugs
• Thermometers
• Cups and mugs
• Temperas
• Storage containers
• Syrup pumps

Coffee beans

Your coffee choice determines your brand. Consider the following factors: taste, quality and origin.

Add-ons and consumables

• Syrups, tea, milk and its alternatives, sugar and sweeteners.
• Paper cups, lids, napkins, cup holders.

8. Recruitment of staff

Quality customer service is the key to success. Decide on the level of experience you expect from your staff. Experienced baristas will allow you to focus on other aspects of the business.

• Training: Provide barista training covering the preparation of all drinks and the characteristics of selected coffee varieties. If necessary, invite a professional to improve the skills of employees.
• Friendliness is a powerful weapon in creating a loyal customer base, your staff should remember this first and foremost!

9. Promotion

Effective advertising is essential to quickly reach profitability. Use a combination of traditional and digital marketing methods.

Promotion methods: 

• Traditional marketing: advertising materials, cooperation with local businesses, participation in events.
• Social networks: content for Instagram, Facebook, Twitter.
• Online presence: Create a website with menu, contact information, and a locator. Add your coffee shop to Google My Business, Yelp, and TripAdvisor.
• Loyalty programs: offer bonuses for repeat visits.
• Word of mouth: Organize events that will generate interest and a desire to share them.

10. Test run

A trial launch, or in other words a “soft entry into the market,” will help test processes and create initial interest:

• Discounts: Offer free or discounted drinks to attract early customers.
• Guest list: Invite local influencers and local business people.
• Feedback: Collect feedback on menu, quality, prices and atmosphere.

Instead of a conclusion

Opening a coffee shop may seem like a daunting process, but with careful planning and determination, you can succeed. Follow your business plan to confidently move towards opening and long-term development, and you will surely succeed!