One day, you will think, “Wow, I love coffee! Why can’t I just start my own coffee shop? Do I need a Coffee Shop Business Plan?”
We’ve recently worked with a client who is killing it in that area. He had two things in mind:
- He loved coffee.
- He knew his target segment more than anyone.
So he created Gothrider Coffee and is succeeding pretty well! Additionally, I am a coffee lover and understand where you are coming from. Recently, I was fascinated by trying an amazing coffee cup from a place in Zurich that goes by the name of MAME.
I entered the shop and wanted a cup of coffee, but the barista asked me which flavor of coffee do I feel like trying. I thought she meant some sort of sweetener. Then she explained that she was referring to the beans and showed me this awesome coffee wheel.
Even though they did not have all those exact flavors. They had a handful. It’s quite an unusual request for someone who always has Starbucks coffee. So then I chose, tried, loved it, returned, tried, loved it, and I have been doing this for a couple of years.
Do you know what they did? They won a returning customer because of their coffee quality. That’s the first thing you should write down in your plan. If you want people to return, which you definitely need in that industry, then you ought to create an amazing quality and experience.
So let’s get to it. As a business consultant, I’d be honored to give you my advice on how to start this wonderful journey!
Table of contents for you, the soon-to-be entrepreneur.
- Research and Planning
- Market Research
- Business Plan
- Financial Model
- Supplier Network (Or Plant Your Own?)
- Roast, Roast, Roast your boat. (Roasting Options)
- Medium of sales
- As a coffee shop owner, you demand loyalty from your customers!
- Secret: It’s not just about the coffee.
- Sell Your Beans!
- Too Lazy? Then Follow the Whitelabel Option.
- Find A Place To Rent or Go Online (Or better yet, both!)
- Website Templates + Links
- Who do you need on your team?
- Brand it! (Fiverr or Upwork Freelancer)
- Secret 2: Coffee Competitions
- Don’t forget them vegans – milk options
- Nothing beats summer like an iced cappuccino.
- Equipment Needed!
- Latte Art Tutorials
- Vibe and Music
Research and Planning is the first step in starting your coffee shop business plan.
Let’s do this! Gather your energy and go make a cup of coffee. (Yes, I said that.)
A coffee shop business plan is not only a document, but also methodology.
The first thing you need to do is to draft some writing. Initially, you will need to conduct extensive market research. You need to know the answers to your questions that can be found online. For example,
- Do people in your town like coffee?
- What do they like about the coffee? Is it the sugar, or is it purely the espresso? Maybe it’s the vibe?
- Is Starbucks growing where you live? Is it losing? Who’s winning? Why?
Add to those three questions above another ten or so, then start looking for online answers from legit sources. There are tons of governmental websites that provide statistics that will be very helpful.
Additionally, do not forget to ask the question, “How much will a rental cost? How much does it cost to import coffee?” (Literally, anything you could think of.)
From there, you have your stage 1. Take your time with it, even if it lasts a couple of weeks. Each answer to any question will prove very helpful.
Then you need to put this in a killer business plan. You do not really NEED to. But it’s recommended for two reasons.
- You will have an idea of the timeline ahead, your research, and an operational plan of what to do.
- You might need to use it if you ask for a bank loan or an investment in a year or so.
Finally, a financial plan is extremely necessary for your business. It should project all the possible costs so that you would know how much it will cost you to open a cafe.
Supplier Network (Or Plant Your Own?)
You must decide whether you want to buy coffee beans from a supplier or plant your own. If your budget is tight, then buying from a supplier will be the best option. You can also partner with other cafes that already have their own plantations.
As far as I know, planting your own coffee takes more than 5 years. Hence, it might not be your best option. So you need to find more than one supplier in case one of them drops out.
Roast, Roast, Roast your boat. (Roasting Options)
You also need to decide whether you want to roast your coffee beans or buy them already roasted. If you have the budget and time, then roasting your own is a good option. Otherwise, buying pre-roasted beans will be cheaper and faster because importing them is much easier than exporting roasted ones.
Now, I noticed speaking to many people in this industry. Roasting a coffee bean is as much of a challenge as growing it. Hence, you need to find the perfect roastery to help you with this. It will be one of your strong, unique selling points.
Testing your product
Once you have your beans roasted, you need to test them. This is where the real work starts. Through this testing process, you will find out if your coffee is of high quality. You will have numerous failed batches. By failing, I mean not super perfect. Remember, a customer will not remember an average cup of coffee. They will remember an exceptional experience and taste.
Hence, you must test your beans with all combinations you are serving. For example:
- Filter Coffee
Medium of sales (Do you want people to enter an open cafe? or an online shop?)
Are you selling in your shop? Or are you going entirely online? Maybe you’re doing both? Remember, during covid, having a coffee shop physically was not an option. But online sales were booming!
You need to be able to sell your coffee online. And you also need to be able to offer an exceptional experience in your physical shop. This is because you preferably need both mediums of sales working together.
As a coffee shop owner, you demand loyalty from your customers!
In order to do this, you need to provide them with an exceptional experience. And one way to achieve this is by having great customer service. You may not be able to offer the best coffee in town, but if your customers are always happy with what they get from you, then they will keep coming back.
This is the game changer in this industry. As long as you have recurring customers who love your coffee and your shop, you are winning!
Secret: It’s not just about the coffee.
I’ve published an article about this on Medium.
Starbucks, the lead coffee company, is not really just in the coffee business. Even MAME, from my understanding, rely on other products to improve their financials. After all, how many cups of coffee can one drink? and how much you can increase its pricing?
The secret lies in the cake that you order with the coffee. Hence, think of other complementary products.
Sell Your Beans in your coffee shop!
Selling a cup of coffee alone will get you nowhere. You need to be able to get into your customers’ homes. You can only do this by knocking on their doors and inviting yourself in…
I’m kidding. The only way is to sell them your beans. That way, even if they do not come to your open cafe, they will have your cup of coffee at home.
Too Lazy? Then Follow the Whitelabel Option.
Ughh sounds too exhausting! Well, for that, you can also do a simple trick. You can ignore almost everything above and talk to a white label company. What they do is simply:
- You send them your logo and branding
- They print it on the coffee bag that they roast (and grind if you want.)
- They send it to you and charge you possibly $10 per bag.
The challenge has now changed from you wanting to have an open cafe to marketing for your cafe.
In your coffee shop business plan, you must clarify whether you will go offline or online (Or better yet, both!)
The website could sound like an exhausting task that would take months. So here’s my advice. Buy a template from one of these websites.
Then let a freelancer install it for you. Here’s an example.
What should your team include in your coffee shop business plan?
Optimally, You need a designer, a developer, and an SEO expert. The designer will help you with the branding of your cafe. They’ll do things like create logos for you and design your website. The developer will build your website to look good on all devices.
You will need a barista with experience to help in the open cafe. Additionally, an accountant must ensure you’re following the plan. Do not forget to hire a cleaning company, which is essential in the F&B industry.
Brand your open cafe! (Fiverr or Upwork Freelancer)
Your coffee branding is your story. It’s your story on a cup of coffee. It’s how you tell people about yourself and why they should care. The most important thing when it comes to branding is consistency. If you want people to trust in your brand, make sure that everything from the logo design down to the latte art looks like an extension of each other.
Secret 2: Coffee Competitions For Every Open Cafe
When you enter a coffee shop of a place that won a number of coffee competitions, you automatically have a feeling that the coffee will be good. Get into those competitions and compete! First, second, third, and even fourth place is a huge win. It shows that you know what you are doing.
Research coffee competitions near your area to find the perfect one and get started!
Don’t forget them vegans in your coffee shop business plan!
“Oh, you do not have oat or soy milk? I am sorry, I do not drink cow milk. Goodbye!”
That’s how you will lose a customer who could have been a recurring customer. Instead of them getting inside your open cafe, they will go to Starbucks. Hence, do not forget to add options like Oats, Soy, and Rice milk. Whatever your research shows. Maybe you are in a carnivorous town that only eats animal products. In this case, those kinds of milk might be a useless added cost.
Nothing beats summer like an iced cappuccino.
Heat is something you can not control. But you know what you can control? Your coffee. Even if you believe that coffee should be consumed hot (I believe that too.), many people prefer a cold iced coffee in summer. It’s not difficult to make; just add some ice cubes to your freezer. It could be a game changer, especially if your advertisement shows a sweating cold cup of coffee in a 40-degree environment.
Your coffee shop business plan equipment for operations!
Typically, you will need:
- Espresso Machine
- Filter Machine
- Pitcher and Tamper
- Fridge and Freezer (For ice.)
- Measure to know the exact quantity of beans.
- Cool Mugs
This could initially get you started. Yet, the more you understand your customers, the more you will add. Also, a smart idea is offering your cool mugs for sale too. People could enter your open cafe and buy any association with your amazing cup of coffee.
Latte Art Tutorials
You want them to take pictures for Instagram and Tiktok. When a Latte or a cappuccino looks bland, it’s not the most trending picture. But when it has the letter of the person’s name, then you get yourself a free word-of-mouth promotional campaign. Explore some youtube tutorials on how to do so! Better now than later.
An Open Cafe’s Vibe and Music determine a lot!
Finally, you know how when you enter Starbucks, you feel a specific aura? It’s the smell of the beans. You need to create that rather than having the smell of cheese, for example, from your cheesecakes. Also, a very important aspect is the background music you have. If you’re playing death metal, you’ll appeal to a specific niche but not to everyone. Music curation for businesses is an entire industry based on this. Try to create the perfect atmosphere for the perfect cup of coffee.
That’s a Wrap! You are now ready to draft your coffee shop business plan.
Remember to keep listening to customers. If they have a complaint, they’re telling you how to improve. You might divert from the plan, but as long as your target and motivation remain, you have nothing to be afraid of. You’ve got this!
Meet The Author Of This Article
I’m Al Anany, the founder and CEO of Albusi.
Writing in the business industry has shifted my mentality toward entrepreneurship. I started on Medium in 2021 and ended up being a Top Writer of more than 4 categories and had my content viewed more than 213k times.
I always have a single goal while writing: focus on entertaining while adding value.
Also, if you need help planning your business, I recommend checking out some of our freelancer’s business plans or pitch decks!