Starbucks turned coffee into a multi-million dollar industry and today small independent coffee shop businesses are reaping the windfall of the interest in coffee and related products. All business plans share key elements for startup and funding and this article provides the elements to develop your business plan and details to get your shop up and running.
All business plans have key planning elements that need to be addressed. The first element is an statement that puts together the overall theme and concepts for the business and a brief summary of what will come later in detail: the management plan, ideas for funding, projected costs and expenses, identification of the market and financial statements. This section should be a narrative that flows smoothly. Many potential funders will look only at this section to determine if they will continue to read the proposal, so craft this section with care. Hook the reader with the unique elements of your business proposal. What does your coffee shop offer that others don’t?
Mission and Vision:
Some businesses post their mission and vision plans in a public place to remind employees of the goals established by the owners. It tells the public what the business promises to do for them. Sketch out a vision or mission statement before completing the business plan. It will help focus the plan in one area. New businesses will frequently attempt to do too much in a plan. Do you plan on selling only coffee? What about other foods? Will your unique services be service and quality coffee or a complete line of coffee beans and brewing machines? Do you vision speedy drive-through service as your main asset or a quality relaxing experience where your clients can sit, read the paper, and enjoy their coffee in an atmosphere of comfort? Spend time on the mission and vision of your new shop.
What do you want people to imagine when they enter your store or repeat your company name? The name should reflect the theme of your restaurant. All printed materials, advertising, and decor should incorporate this theme. Spend time researching. Are their other businesses (not just coffee shops) that use a similar theme? If so, change. Uniqueness is important. Market test your theme. You might think a coffee shop based on The Munsters television show is a sure winner, but your customers might view it as a one-time visit oddity. Ask others, informally, to survey your potential customers. Remember your friends are your friends because they have similar interests. They might not be the most valuable for critical input. Seek out new people to review your ideas for themes. Spy on coffee shops when you travel. An idea from a shop halfway across the country may be a unique hit in your city.
Who will be responsible for the management of your shop? It may look fine on paper to self-manage all day, every day of the week, but that is not a practical plan. Identify management and potential employees. Where will you look to hire? How much will you pay? If you are hiring outside your family, be informed about what the labor law requires for salary and benefits. Who will keep the books for your business? Will you hire someone to keep records? If so, identify the firm and the price for the services. Where will your bank? Check out what services the local banks offer to small businesses. Open a business account, which may require proof of a local or state license, and complete the requirements for using the store name.
One of the biggest mistakes in planning for a new coffee shop venture is bringing in too many partners. List the costs and assets separately on two pieces of paper, then consider your funding options. Friends and family may be clambering to join your venture, but limit the number. The more investors, the less autonomy you will have in determining the direction of your business plan.
Consider federal, state, and local grants and loans for your new shop. Downtown redevelopment grants, loans for businesses opened in historic structures, and special loans for businesses operated by women and minorities are all areas of potential funding. Call city and county development offices to find out if loans, grants, or tax benefits are available to assist your new shop. Don’t be discouraged if the first office you call isn’t aware of any loans. Keep trying. In some areas, money is not available, but free assistance in planning is there for the asking. Many times this might be more helpful than a small grant!
Prepare a detailed plan for the first three, six, and twelve months. After that, chart where you think your business should be every year for five years. Be practical. This plan will be one that you will use to judge your success at each benchmark. If your business is not on track, list a course of action for each point in the plan.
These are the nitty-gritty details that anyone investing in your coffee shop will need to examine. Your careful planning here might make or break your new coffee shop! Make sure you have included all of the following: personal tax returns for the past three years, vendor agreements, employee agreements, incorporation papers, potential lease agreements, state and/or local licenses and permits, and resumes of investors and business management individuals.
Food businesses have the highest level of foreclosure, with over two-thirds of all starts failing to last a year, but with a detailed business plan, careful selection of your location and enough startup money to last the year, your coffee shop can be up and running. With a well-thought-out five-year plan, you can guide your shop for a lifetime of success!