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How Do I Write a Cafe Business Plan?

Starting your own cafe business is an exciting journey to providing quality coffee to your local market. However, a new business idea like this does not just happen; it requires a lot of thought, care and significant planning.

A business plan seems simple yet boring, but ensuring your coffee shop gets up and running is vital. By writing down your thoughts and ideas, you can reflect and critique your plan as you go, ending up with a viable business plan.

We are providing a simple yet practical cafe business plan template that can be adapted to most small businesses. That way, you can get started on your coffee shop today.

Key Points

  • A business plan will encompass your goals, methods, materials and insights on how your cafe will begin and continue to grow.
  • This plan is necessary for your understanding of your business, but also so you can propose your cafe to potential investors and partners.
  • The template includes several key sections, which you can follow closely in this article.
  • You should not forget to prepare the physical cafe itself before opening, including integral aspects like interior design, your coffee beans, and even how you will pay.

Table of Contents

  • What is a business plan for a cafe?
  • Why do I need a business plan for my coffee shop?
  • How do I write a cafe business plan?
    • Executive summary
    • Company overview 
    • Services and products
    • Industry and market analysis
    • Marketing strategy
    • Management and ownership structure
  • What else do I need before opening a cafe?
  • How Smartpay can help your cafe reduce overheads

What is a Business Plan for a Cafe?

In its most simplistic terms, a business plan sets out your business idea and how it will be achieved. Your coffee shop will only be successful with a clear idea of the costs, materials and competitors involved with opening a business. The necessary information that is set out in a cafe business plan includes:

  • Operating expenses
  • How the business will be funded
  • How much money is projected to be made
  • The target marketThe business’ pricing structure

Information about any market competitorsA business plan benefits you by giving you a clear idea of how to proceed. The plan can also be presented to those that can help you open your coffee shop: bankers, investors, or even partners. It is a vital document to get the funding necessary to open up a shop, so you must approach writing up a business plan with your full attention and effort.

Why Do I Need a Business Plan for My Coffee Shop?

When choosing to open a coffee shop, it is important to weigh the benefits and risks of starting a new business. Creating a business overview allows you to explore these details in depth, and professional advice can be more easily directed towards the areas you require aid.

With a cafe business plan, you can have detailed information to decide upon successfully:

  • The location of the coffee shop and type of space you wish to create in it.
  • The type of foods and beverages you will sell, as well as the projected food and beverage sales revenue.
  • The customer demographic you want to target, as well as how you will provide superior customer service for them
  • Unique selling points
  • Strategic goals and milestones
  • How you want your personal experience and strength to be reflected in the venue
  • How you will overcome any potential weaknesses you believe you have

It takes significant time and energy to conduct market research, consolidate your ideas, and make the hard decisions that come with starting your own business. Bringing in potential investors and securing funding can also be difficult and risky.

Setting up your own business should be done with a full understanding of the start-up costs, time and effort you will be risking. Luckily, writing a business plan before starting your business means you can make educated decisions on how much you want to risk and the benefits you will pull in.

How Do I Write a Cafe Business Plan?

Choosing where to start researching and planning for your new coffee shop can be overwhelming, but there are some considerations you can make before getting started.

Referring to other business plans, especially those already used in coffee market research, can help you understand how your own plan should be structured. 

In any business plan for a cafe, you can expect to find the following elements:

  1. Executive summary
  2. Company overview 
  3. Services and products
  4. Industry and market analysis
  5. Marketing strategy
  6. Management and ownership structure

Below, we break down these elements and provide an explanation of what information you can expect to find in each section.

1. Executive Summary

The executive summary will be the first thing to draw any reader’s attention. It is the first thing displayed when you open the document, providing an overview of the sections included within your plan. It is written to draw in the interest of potential investors or partners, so keep that in mind when you summarise your motivations and visions for stepping foot into the coffee industry.

Your executive summary should include these key elements to draw in potential investors:

  • An overview of your budget.
  • Your business goals and values.
  • A detailed description of your brand.
  • The type of potential customers you intend to draw in.
  • The type of space you will be creating.
  • How your business will succeed.

Showcasing these elements, along with your experiences and skills pertinent to running a coffee business, in an appealing manner will help secure investment for your business.

2. Company Overview

A less attention-grabbing overview than the executive summary, the company overview section works as both a glossary and a guide for your business plan. 

It hones into the details of your coffee shop, providing readers with insight into and data for your business. This can include some of the more simplistic aspects of running a business, but each detail is integral to include:

  • Your business and its facilities require approvals and/or registration, including outdoor dining permits or development approvals.
  • The business structure you have chosen, whether it is a company, partnership or sole trader. 
  • The equipment needed for your business, whether it be chairs, espresso machines, coffee cups.
  • Trading hours.
  • Insurances you have chosen.
  • Your business’ opening date.
  • Logistics of your business brand and version, including conceptual designs, graphics, or even any community programs.

You will also need to explain what your target market is for your coffee house, including the type of environment you wish to create. A late-night venue for all hours or a pit-stop for people on the way to work? 

If you already have a location leased out, you can provide the details and dimensions of that building. Otherwise, you must describe what kind of location you are interested in, including the lease terms, to be best prepared.

By structuring your company overview and your executive summary, readers should get the full picture of your business plan template and where they need to look for more information.

3. Services and Products

Running a business entails providing customers with services and the products needed to fulfil them. Any investor needs to know what you will offer through your business and how you will manage these products.

Typically this section will include the following elements:

  • Product/Services Descriptions: An outline of your cafe’s products, including a description of them and how they will stand out in the market. 
  • Competitive Comparison: A comparison of your products with competitors to make them stand out more; this can be through detailing the exclusivity of your products or how environmentally friendly they are. 
  • Product/Service Sourcing: Any products sold require a detailed description of their sourcing, including importing/exporting and delivery costs. More exclusive products can set you aside from the competition, which should be emphasised to your readers.
  • Inventory Management: You must include your forecast on demand and decide on how much inventory to order for it and when it should be ordered. 
  • Warehousing and Fulfilment: How you will order and receive goods, including whether you require a warehouse or other storage facility for your products. You may also include how your products may even be specifically tailored to customers’ fulfilment. 
  • Future Products/Services: Indicate any potential products or services you may include in the future. This may indicate that you want to expand, but it could signal your excitement to conduct a great business.

4. Industry and Market Analysis

Your cafe business plan is intended to alleviate potential investors’ anxieties about partnering with your business and provide a marketing plan. By showcasing the research you have done into the local competitive market, and how you will draw your customers in, investors will be impressed by the effort you have gone through to pave the way for success.

  • Market Size: Including the number of potential customers your business is projected to draw in is integral as it indicates your capacity for both repeat business and success.
  • Main Competitors: Analyse the main competitors in the coffee shop business near you so you can make the case that there is a demand for your product.
  • Market Segments: This section should include a table that breaks down your estimated regular customers into segments. These segments should consist of: the weekday occasion for coming to the cafe, the time of day these customers come in, their age demographic, and the customers’ needs or noted opportunities to improve your provided services.
  • Market Needs/Trends/Growth: The in-depth research into the market trends of your area can help support your analysis of market segments. For example, by indicating a lack of coffee shops in the area and contrasting it with the higher traffic of office workers, you can claim that there is a need for caffeine. 
  • Target Market Segment Strategy: Create a strategy to target the needs of your regular customers. By writing out how you will draw these customers in and fulfil their needs, you can get a clearer idea of what your cafe should look like.
  • Market Tests: An optional choice of collecting feedback, competitor analysis and product testing to gauge customer interest in your business and its offerings. 
  • Positioning: The location of your business is also integral to its success. Your positioning with potential customer bases should be shown, especially if you have chosen a type of cafe that will target this market.

5. Marketing Strategy

A section that delves more into the comparison between your proposed business and the competition around you. You should write to showcase your business’ greatest strengths and the edge it will have over the other coffee shops; whether this is through its theme, products, or intended goals.

  • SWOT Analysis: Analysing your business’ SWOT (Strengths, Weaknesses, Opportunities, Threats) allows you to reflect and strategise on how to address the strengths and weaknesses of your business in the market and what opportunities or threats are provided by competitors. Including a SWOT analysis in your business plan gives you a clearer idea of the market and how you will compare it with your business.
  • Strategy Pyramid: Those who understand concepts best visually can choose to include a strategy pyramid in their business plan template. This visual tool helps you set out your business goals concisely. The most important goal at the tip trickles down to more broad yet not less foundational ones at the bottom. 
  • Unique Selling Proposition (USP): Your USP will provide you with a niche in which you can draw regular customers and secure other patrons who have an avid interest in your niche. For example, coffee shops with plenty of outdoor seating and an open invitation to bring your dogs will appeal to young families.
  • Competitive Edge: Drawing upon your business’ strengths and USP, you can claim what kind of edge you have over the competition. Backing up this claim with your previously gathered data and market research can make your business’ success seem like a surety.
  • Marketing Strategy and Positioning: Your positioning and market strategy should influence customers’ perceptions of your business by communicating your brand’s competitive advantage. This can be done through marketing, advertisements, deal offerings, or promotions of the venue’s style and environment.
  • Positioning Statement: Following your marketing strategy, you must state how your business and its products fulfil customers’ needs in a way other competitors do not. 
  • Pricing Strategy: You must determine the prices set for your products and services, with your chosen pricing strategy showing how you value your products, brand and customers.
  • Promotion and Advertising Strategy: To draw in customers, you need an advertising strategy to reach your intended audience. You may promote on social media, partner with another local business, put up fliers, and offer special promotions to the public. 
  • Website: A website indicates your intent to be in the public domain and be accessible to any potential customer. For those offering pick up or delivery, a website already being set up shows you are making progress towards making your business a reality.
  • Marketing Programs: The act of campaigning to draw in customers, it can include: loyalty programs and special deals in-store, or email marketing or a brand awareness campaign to keep customers informed of your business’s offer.
  • Sales Strategy/Forecast/Programs: Your expected sales revenue, the forecast of these sales can be concluded through programs like trend analysis, projections and qualitative techniques. 
  • Legal: The legal structure may also be included in this section if you still need to outline what type of structure you intend your coffee shop to be. That is, you need to detail whether it will be part of a corporation, a limited liability company, or something else.
  • Milestones: Expand upon your goals by setting up milestones to reach. By setting up a time frame and providing evidence on how you will reach these milestones, you can provide investors with a clear trajectory for your business’ success.
  • Exit Strategy: By indicating whether you will be looking to sell the business after a certain point or if you will be expanding, your partners will get an idea of what they will be in for.

6. Management and Ownership Structure

The last part of organising your business involves outlining how you will structure it. This involves what employees you will be hiring, what roles need to be filled, and how the business will be managed.

  • Organisational Structures: How your business will be organised, including the roles, communication systems, responsibilities, and power dynamics your employees will follow.
  • Management Team: This section should discuss who will be the business owner, the head manager and the menu designer. After which, you should go into further detail on the staffing, like how large the team will be, how you will staff for regular or peak times, and how you will recruit.
  • Management Team Gaps: If you left employee gaps, you should write about how you will fulfil these roles in the future to show your commitment.
  • Personnel Plan: You should include your proposed budget for current and future employees in this section, but it also helps you map out who you should hire and when.
  • Financial Plan: Your start-up costs, important assumptions, source and use of funds, break-even analysis projections, projected profit and loss, projected cash flow/balance sheet, and business ratios.

What Else Do I Need Before Opening a Cafe

Once your business plan has been accepted, you can look into actually getting your coffee shop open. This means choosing kitchen equipment, the interior design, espresso machine, possible catering companies, or even the cups you will use for your coffee. Every part is important to making your dream business come true, and you should take your time designing what your coffee house will look like so you are truly happy with the finished product.

How Smartpay Can Help Your Cafe Succeed

While it may not be your first thought, no cafe can operate without a means of accepting money. You may elect to include your ideas for accepting your business’ cash flow within your business plan, but you can also look to Smartpay as your one-stop for your cafe’s payment needs.

Our EFTPOS services provide various features that suit any cafe, including contactless payment and mobile machines. With Smartpay Zero Cost™ EFTPOS, you can eliminate merchant fees in your cafe, whether you’re a new or established business.

Get your cafe started with a Smartpay EFTPOS machine by contacting a Smartpay Payment Specialist today.

Want to know more about surcharging?

If you’re keen to learn more about how surcharging on EFTPOS works, or what you could save, find out more about SmartCharge. To talk about how surcharging could work for your business get in touch with the team at Smartpay.