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Executive Summary

Your executive summary is the first part of your business plan, but you usually write it last because it’s a summary of all the important parts.

The purpose of your Executive Summary is to quickly grab the reader’s attention. Tell them what kind of coffee shop you have and what its status is. For example, are you a new business, do you want to grow your coffee shop, or do you run a chain of coffee shops? Next, give a quick summary of each part of your plan. For instance, you could briefly talk about the coffee business. Talk about the kind of coffee shop you have. Detail your direct competitors. Describe your ideal customers. Briefly describe your marketing plan. Find the key players on your team. And tell us how you plan to handle your money.

Company Overview

In your business analysis, you will talk about what kind of coffee shop you run.

For example, you might be responsible for one of the following:

  1. Take-out or drive-through: Most people who go to this type of coffee shop are on their way to work or somewhere else and just want a cup of coffee quickly.
  2. Cafe: This type of coffee shop is usually more formal and serves pancakes, baguette sandwiches, pastries, and sweets along with coffee.
  3. Hipster coffe shop: Most of the people who go to this type of coffee shop are locals who want to relax in a place with music, WiFi, and good coffee.
  4. Traditional Coffee Shop: The traditional coffee shop has a calm, cool atmosphere and serves baked goods and many different kinds of coffee drinks.

In the Company Analysis section of your business plan, you need to explain what kind of coffee shop you run and give some background on the business.

Include answers to questions such as:

  1. When did you start this business, and why?
  1. Which important steps have you taken so far? Some examples of milestones are reaching your sales goal or opening a new store.
  1. Your legal structure. Is your business set up as an S-Corp? An LLC? A single-person business? Tell us about how your law system works.

Industry Analysis

In your analysis of the coffee business, you need to describe the business as a whole.

This might seem useless, but there are more than one way to use it.

First, knowing how coffee shops work makes you smarter. It helps you understand the market better.

Second, market research can help you come up with a better plan, especially if it shows you market trends. For example, if there was a trend toward drinking decaffeinated coffee, it would be helpful to make sure your plan has a lot of decaffeinated options.

Doing market research is also a good way to show your readers that you know what you are talking about. This is what you do by doing your research and putting it in your plan.

In the industry analysis section of your coffee shop business plan, you should answer the following questions:

  • How much does the coffee shop make each year?
  • Is the market getting smaller or bigger?
  • Who are your biggest market competitors?
  • Who are the most important suppliers in the market?
  • What kinds of changes are happening in business?
  • How do you think the business will grow over the next 5–10 years?
  • How large should the market be? That is, how many people could visit your coffee shop? Find out how big the market is in the whole country and then use that number to figure out how many people live in your area.

Customer Analysis

In the section of your coffee shop plan called “Customer Analysis,” you must describe the customers you serve and/or expect to serve.

College students, sports fans, soccer moms, techies, teens, baby boomers, etc. are all examples of customer segments.

As you might expect, the type of coffee shop you run will depend a lot on the customer segment(s) you choose. Obviously, baby boomers would want a different atmosphere, different prices, and a different range of products than teens, and they would also respond to different marketing campaigns.

Try to figure out who your ideal customers are based on their demographics and how they think and feel. In terms of demographics, talk about the ages, genders, locations, and levels of income of the customers you want to serve. Because most coffee shops mostly serve people who live in the same city or town, it’s easy to find this kind of demographic information on government websites.

Psychographic profiles tell you what your customers want and need. The better you can understand and describe these needs, the easier it will be to find new customers and keep the ones you already have.

Competitive Analysis

You should figure out who your direct competitors are and then focus on them when you look at the competition.

Their main rivals are other coffee shops.

Indirect competitors are other things customers can buy from you that aren’t your direct competitors. This includes restaurants, groceries stores, and people who make their own coffee at home. You should talk about this competition to show that you know not all coffee drinkers go to coffee shops every day.

In terms of direct competition, you should list the other coffee shops you are in direct competition with. Most likely, your biggest rivals will be the coffee shops right next to you.

Give an overview of each of their businesses and a list of their strengths and weaknesses. You won’t know everything about your competitors unless you have worked for one of them. But you should be able to learn important facts about them, like:

  • What kind of clients do they work with?
  • What kinds of goods do they sell?
  • What is the price range (high, low, etc.)?
  • What are their strengths?
  • What do they not do well?

Try to answer the last two questions from the point of view of your customers. And don’t be afraid to stand outside of your competitors’ stores and ask customers as they leave what they like and don’t like about them.

The last part of your competitive analysis is to list the ways you are better than your competitors. For example:

  • Will you sell coffee that is of a high quality?
  • Will you sell types of coffee that your competitors do not?
  • Will you make it easier or faster for customers to get your products?
  • Will you give your customers better service?
  • Your prices will be better, right?

In this part of your plan, you should think of ways you can do better than your competitors and write them down.

Marketing Plan

Usually, a marketing plan has four parts: the product, its price, where it will be sold, and how it will be promoted. In your business plan for a coffee shop, you should include the following in your marketing plan:

Product: In the part about the product, you should write again about the type of coffee shop you wrote about in your Company Analysis. Then, explain in detail what you will be selling. For example, in addition to regular coffee, will you sell things like café latte, cappuccino, espresso, or macchiato?

Also keep track of any food or drinks you sell that are not coffee.

Price: List your prices and how they compare to those of your competitors. In your marketing plan, you list what’s on the menu and how much each item costs in the “Products” and “Prices” sections.

Place: This word means the address of your coffee shop. Write down where you are and how your position will affect your success. For example, is your coffee shop near a gym, a busy office building, etc.? Talk about how people could keep coming to your place. Also, if you have kiosks or plan to have kiosks, explain where they are.

Promotions: The section on promotions is the last part of your marketing plan for your coffee shop. Here, you’ll list how you’ll bring customers to your business (s). Here are some ideas for how to promote your business:

  • You can bring in more customers by making the front of your coffee shop more appealing.
  • Giving out samples of coffee outside of the coffee shop
  • Putting up ads in newspapers and magazines in the area
  • Trying to get in contact with local blogs and websites
  • Flyers
  • Collaboration with local groups (e.g., gym members get a free cup of coffee with each pastry they purchase)
  • Local radio advertising
  • Banner ads at local venues

Operations Plan

You wrote about your goals in other parts of your business plan. In the operations plan, you talk about how you’ll reach those goals. There should be two different parts to your operations plan.

Everyday short-term processes include serving customers, buying supplies, keeping the store clean, and so on.

Long-term goals are the steps you’ll want to take to get there. Some of these dates could be when you hope to have served your 10,000th customer or made X dollars in sales. It could also be when you plan to hire your Xth worker or open a new location.

Management Team

If you want to show that your coffee shop can work as a business, you need a good management team. Show the backgrounds of your key players, focusing on the skills and experiences that prove they can help a business grow.

You or someone on your team should have worked in a coffee shop in the past. If so, talk about your knowledge and experience. But you should also talk about any experiences you have that you think will help your business do well. If your team isn’t strong enough, you might want to get an advisory board together. There could be anywhere from 2 to 8 people on an advisory board. These people would act as guides for your business. They’d help answer questions and give advice about how to plan. If you have to, look for advisory board members who have worked in coffee shops or run retail and small businesses successfully.

Financial Plan

Your 5-year financial plan should include your 5-year financial statement. For the first year, it should be broken down monthly or quarterlyly, and after that, it should be done annually. Your financial statements include your income statement, your balance sheet, and your cash flow statement.

Income Statement: Most people call an income statement a P&L, which stands for profit and loss. It shows how much money you made and how much it cost you, so you can see if you made a profit.

When making your income statement, you have to make some assumptions. For example, how many people do you plan to serve each day: 100 or 200? How much will sales increase each year? 2% or 10%? As you might expect, the assumptions you make will have a big impact on your business’s financial projections. Do as much research as you can to try to find facts that support what you think.

Balance Sheets:Balance sheets have a lot of information on them, but the most important thing to know is that they list your assets and your debts. For instance, if you put $100,000 into building out your coffee shop, you won’t start making money right away. Instead, it’s an asset that you hope will bring in money for years to come. In the same way, you don’t have to pay back a $100,000 check right away. You’ll have to pay that back over time instead.

Cash Flow Statement: Your cash flow statement will help you figure out how much money you need to start or grow your business and make sure that you never run out of money. Most business owners and entrepreneurs don’t know that you can make money and still go bankrupt if you run out of cash. For example, let’s say a company came to you with a huge catering contract worth $100,000 that would cost you $50,000 to carry out. Well, in most cases, you’d have to pay that $50,000 now for things like supplies, equipment rentals, employee salaries, etc. But imagine that it took the company 180 days to pay you. During that period of 180 days, you may run out of money.

When making your Income Statement and Balance Sheet, be sure to include some of the most important costs of starting or growing a coffee shop, such as:

  • Location Build-Out, which includes design, building, and other costs.
  • Costs of things like coffee grinders, espresso machines, blenders, and refrigerators
  • Cost of ingredients and making sure there are enough supplies
  • Payroll or salaries paid to staff
  • A business needs insurance.
  • Charges and permits
  • Legal expenses