Planning your business before you start is not simply a requirement for presenting to banks and investors. It’s also an excellent way to fully understand your business before you start, and to anticipate potential risks, challenges and costs, as well as opportunities and alternate strategies that may not be readily apparent. Instead of simply downloading a standard business plan template, which is designed to apply to all sorts of industries, create your own plan that’s based on the most important aspects of your unique business.
Outline your business plan. The most important aspects of a coffee shop are its location, the number and income level of the customers that live or work nearby, and the expenses related to operating it. Therefore you’ll need sections for business description, target market and operations plan, as well as marketing, business environment and financials.
Write the business description section. This should include a full description of the location or potential location for the business, with pictures and maps if possible, as well as an introduction to the owners and managers of the business and why they’re passionate about coffee.
Research and describe the target market. A good business is one with a growing customer base, so describe how fast your coffee shop’s neighborhood is growing, or what factors are increasing your customers’ level of discretionary spending. Demographic data is important to creating tailored services and marketing, but the most important information in this section is how much money your customers spend on coffee, and how much more they’re likely to spend in the future.
Describe your operating plans. This includes how many employees you'll have, your hours (and why those are the most advantageous hours to be open), where you'll get your supply of coffee beans, whether you'll also sell home espresso makers and coffee accouterments, and how you'll ensure quality control.
Investigate laws and competition, and include this in your business environment section. This part of the planning covers anything beyond your control that will affect your business. For instance, describe how often health department inspections happen, what types of insurance you’re required to carry, how many Starbucks cafes are located in your immediate vicinity, how much a food and beverage vending license costs in your area, and so on.
Describe your marketing message as well as your advertising plan. Marketing includes the look and feel of your store and how this appeals to your customers, as well as the types of messages that you want to convey and how you’ll do that. For instance, you may want to deliver an eco-friendly message to your customers, and will thus carry fair trade organic coffee and biodegradable cups and spoons. Advertising is a specific activity designed to get your marketing message out to your customer. You may plan to put up a billboard nearby that tells customers about your free wi-fi.
Calculate your financial plans. Include three years’ worth of financial statements, either historical data if your business has been operating for awhile or “pro forma” statements that estimate future revenue and costs. Also include a break-even analysis and profitability analysis that determines how many customers you will need to serve before your company makes back all of its start-up costs, and before your business is self-sustaining.
Take your completed business plan to an experienced adviser for feedback and revision.
- Take your completed business plan to an experienced adviser for feedback and revision.
Evangeline Marzec is a management consultant to small high-tech companies, and has been in the video games industry since 2004. As a published writer since 1998, she has contributed articles and short stories to web and print media, including eHow and Timewinder. She holds a Master of Business Adminstration from Thunderbird School of Global Management.