Posts Tagged ‘coffee shop business plans’
If you have enough passion in your business, do you still need a coffee shop business plan? As many people have fall in love with the taste of coffee, we are fast becoming a nation of coffee addict. However, a good coffee drinker does not automatically make you a good coffee shop owner. You have to operate the coffee shop like a business and to do that, you need a well thought out coffee shop business plan. After that, you need a well executed business operations.
Let’s cover what a coffee shop business plan is not first. It is not a mere slogan like “Customers are number 1!” It is not a corporate mission statement. It is not even a financial plan. In fact, it is a combination of a lot of things. To make things easy to understand, we shall break it down into a few simple parts. Another thing you may want to consider is not to just copy and paste some template and treat it like your own. When you put in some thoughts, the coffee shop business plan have power and you will make your business grows in accordance with the business plan.
With a good coffee shop business plan in hand, you immediately have three major advantages over coffee shop owners who do not have. First, you have clarity over which path to take your business over the next one year and in the next five years. Secondly, you banker will be more confident of your business acumen and will not hesitate to approve your loan. Lastly, the investors can see that you have done your homework in the coffee shop business plan and will be comfortable investing with somebody who understands risks and rewards.
Qualitatative factors in the coffee shop business plan
A. Your Target Market
You cannot hope to sell to every coffee drinker as they belong to different target markets. Before you even begin your marketing, you must understand your chosen target market and their needs. You must understand their buying habits, their hang out place and their demographics. Then, you position yourself to cater to that specific group you are interested to serve.
B. Your Unique Selling Proposition (USP)
Your business does not exist in a vacuum, so you need to research and understand your competition. Learn what they are doing that works and observe how they set up their coffee shop layouts, what kind of food they are serving, how it is served and their pricing strategy. In the initial estimate of the coffee shop business plan, you should know how big is the market share and how many coffee shop can serve this market profitably. If a new competitor lower the price, can you still maintain profitability?
After taking into account your interest target market and the competition, you will notice a gap in the marketplace. This gap is called the underserved market. When you have discovered a great way to serve this niche, you can come up with a different way to sell to and serve your customers better. This way is your USP. You must be able to communicate your USP well to your customers and they also must perceive that your USP is important to them.
C. Your coffee shop location and layout
When you know where your target customers are likely to hang out, you already narrow down the choice of locations. If you target students and metropolitan customers, you need to lease a place at a shopping mall and set up some Wiifi facilities. When you target the busy morning crowd, maybe a coffee stand is sufficient. The location is different again if you target people who wants to chill after work or for a special social event.
The coffee shop layout plan is also important in a coffee shop business plan to set up to suit the target customers. There are many decisions to make like how many tables are suitable to be set up, what kind of collection system to be used, how many kitchen utensils to order and so on. If the customers are the morning rush type, a small setup will do as they will most probably order and go. For those looking for a relaxing setting, you may want to make your renovation of your place as relaxing as possible.
D. Products
You need to test your product and get feedbacks from customers which one they like. Depending on your USP, the food you offered must be specially catered to the customers you targeted in your coffee shop business plan. Do not try to be all things to all people. Be a specialist in one particular niche so that you are knowledgeable about it. Then, you can make an informed recommendation to your customers. Above all, make your products high quality and value for money.
E. Equipment Needs
Again, I need to emphasize that it all begins with your target market. This includes the equipment needs. Please refer to the article on this for more details.
F. Marketing Strategies
The marketing strategy in your coffee shop business plan depends on your branding you want to invoke in your customers. The objective is to drive home that your coffee shop is the place to visit when they need their coffee breaks. You have to align your marketing message and materials to the USP you have chosen.
For upscale coffee shop, it may make marketing sense to make some heavy investments in renovation and eatery wares. You want to portray an upscale image, remember. As for promotion, you may want to try free method first. When you have created a story about your coffee shop, you can do a write up on your coffee shop business plan and send it to the media. They are also looking for contents, so it a win-win situation for both of you. Another method is to write postcards and personalized letters to invite your local patrons for special events like birthdays.
For morning rush market, you need to emphasize speed and quality. Your coffee shop may not need to be renovated in an upscale manner. The customers are interested in getting their coffee fast anyway. You marketing focus are different now. You need to place your signs and banners in places where the traffic is. This includes places like bus stops, mass transit stations and other visible public places. No need postcards as they will not be able to visit you leisurely.
Here are a few marketing methods that can be applied to any model you choose in your coffee shop business plan:-
a) Have a unique logo,
b) Have a website so that the local patrons can find you,
c) give away T-shirt to get free advertisements,
d) business cards with your contact details, and
e) word of mouth marketing
You need to allocate budget on the most effective marketing methods in the coffee shop business plan. The only way to go at the beginning is to implement a few ones first and then pour in the money into the ones that gives you the biggest bang for your buck.
G. Risk Factors
Lastly, you must think of all the possible worst case scenarios. Almost all things that can go wrong will eventually do. It is a matter of timing. You just need to anticipate them and come up with mitigation measure in the coffee shop business plan. The examples of risk factors are:
a) A big competition comes and wipe your coffee shop business
Have you thought of how to deal with a potentially powerful competitor? How about the one with better products and bigger financial muscles?
b) Change in coffee shop trends
When the consumer taste changes, can you adapt to them and still be profitable? In every change in strategy, there is a lot of risk of failure. Success hinges upon good execution of the strategy.
c) Fire that damages coffee shop equipments
A fire may disrupt your operation for a few hours or days. You need to come out with second equipment in case of emergency.
d) Staffs problems
Your staffs are the direct front lines that deal with customers. So, if there is a rude staff, it will drive away the customers. This is an unavoidable problem when you are employing people to run your business.
e) Changes in laws and regulations
Any changes in laws may potentially disrupt your business. You need to be aware of any changes to adapt yourself.
Conclusion for coffee shop business plan
These are some of the most important points you must include in your coffee shop business plan. It may take you a few drafts before coming up with a good one. You may also revise them with your staffs, investors or bankers to see if the existing one still makes any business sense. If not, you need to change them in accordance with market changes.
For figures on coffee shop business plan, please refer to part II.
Find out how you can start your own coffee shop using less than $25,000 or less and none from your own pocket. Check out this book on starting a coffee shop.
