The Coffee Shop Business Plan

The recent lockdown has made us value the time we spent outside to unwind, to meet friends and to relax post working hours. And the majority of this unwinding and catching up with friends was done at coffee shops, which were dearly missed in the last few months. But as things slowly get to normal, the coffee shop business too can open the door to the public, albeit keeping some essential safety measures in mind.

A coffee shop has always been a popular business choice, around the globe and is not a novel business idea. The popular ‘Central Perk’ from the sitcom F.R.I.E.N.D.S is proof of this fact and has almost given rise to similar coffee and hangout spots around the globe, and even in the country. But that should not deter entrepreneurs because the popularity of this rewarding business idea has continued to rise. And if the global rise in coffee consumption is something to go by, the coffee shop business is here to stay and even witness rise with new coffee flavours and types being introduced. 

Advantages Of A Coffee Shop

A coffee shop business plan has several benefits apart from it being a popular and rewarding business opportunity. 

• • Preferred Meeting Place – a coffee shop is a popular hangout and meeting place. It is a place where friends meet post work or to catch up over the weekend. Nowadays, even informal business meetings and networking takes place at coffee shops. 
  • Popular- a coffee shop is popular among all age groups and across demographics. 
  • Uplifting Community Spirit- given that a coffee shop is popular across all generations and the preferred meeting place too, it can help build and uplift the community. This can be achieved by making the coffee shop a common meeting place, especially for the neighborhood, as well as, employing people from the locality and community, therefore providing employment opportunities. The coffee shop encourages community level bonding in the neighborhood and on a larger scale too.
  • Apart from these, a coffee shop business plan, just like every other business, provides the entrepreneur an opportunity to be independent, and enjoy the freedom to explore their creativity and business skills. A coffee shop helps the entrepreneurs make a considerable profit while following their passions.

Coffee Shop Business Plan

If you are wondering how to start a coffee shop, there must be a business plan in action first. One of the essentials of every business, including the coffee shop business, is to have a business plan in place. A business plan is defined as a written document that mentions in detail the exact business idea, along with the goals of the business and how these goals will be achieved and within what time frame. 

Significance Of Business Plan

A business plan is vital for the business as it helps the business  identify its goals and revisit them from time to time to stay on track. Additionally, it helps establish loop-holes, if any, in the planning stage itself and work on a strategy to achieve the goals within a defined timeline. 

• • The essential factors to include in the coffee shop business plan include- 
    • • A detailed description of the business. 
        • This includes details such as what kind of a coffee shop will the business be- one that serves only coffee, or one that serves coffee and light refreshments or a cafe franchise. It also includes details such as where will the coffee shop be located, how big will it be, and other operational details of the business.
      • The structure of the organization
        • This includes information regarding which business entity will the coffee shop conform to. Along with this, the other details will include the number of employees to be employed at the coffee shop, their responsibilities, along with managerial duties and other structural details regarding the business.
      • The definition of the target audience and its analysis
        • This includes details about the market analysis carried out before starting the business. It can include the reasons why the entrepreneur decided to go ahead with the coffee shop business plan, why this business is the need of the audience, what are the customers looking for and how the coffee shop caters to them. 
      • The definition of your competitors and their analysis
        • This includes an analysis of the competitors in the market, what are they offering, what makes the customers go to them, pricing details, etc. The business plan can also include the business’s plan to beat the competition and create a niche for itself. 
      • A marketing plan
        • The marketing plan includes information regarding the advertising and marketing plans decided for the coffee shop plan. It can include ways of advertising (print ads, pamphlets, radio ads, etc), marketing strategies (like promotional offers, discounts, etc), and digital marketing plans (such as website and online delivery options).
      • A financial plan
        • This is the most important part of the business plan which elaborates on the funding required to start the coffee shop. Abd ways in which this capital requirement will be fulfilled- by bank loans or non-banking financial companies.

Apart from the above essential details to be included in the coffee shop business plan, there are certain important factors that need to be considered and mentioned in the business plan too. 

The most important is the details of the legalities regarding the business. Every business requires certain permits and registrations, and the same applies to the coffee shop business too. The information to be included in the coffee shop plan include-

Shop Act

• • The Shop Act Intimation is designed to regulate payment of wages, hours of work, leave, holidays, terms of service and other work conditions of people employed in shop and commercial establishments, including a coffee shop.
  • Shop Act is a mandatory registration which is necessary if the business premises are located in municipal limits.
  • Entrepreneurs planning to start a coffee shop can Download Shop Act intimation Checklist to find out the requirements and procedure to apply for Shop Act registration.

• • Alternatively, entrepreneurs can Get shop act for the coffee shop business by opting for Shop Act service provided by deAsra. 

Business Entity Registration

• • Along with the Shop Act, the coffee shop business also needs to choose a business entity such as a sole proprietorship or a partnership firm (or any other entity) to incorporate the business.
  • Other registrations needed for the business include GST registration and FSSAI registration.

The details of these registrations must be mentioned in the coffee shop business plan.

In addition to the essentials of a business plan and the necessary legal requirements that need to be included in the business plan, the coffee shop must also keep a requirement list handy in order to create a meticulous and comprehensive business plan. The list of equipment, typically needed to start a coffee shop business are mentioned here- 

Equipment Required

• • A list of all the equipment and materials required to start and operate the coffee shop effectively.
  • The list includes- 
    1. Coffee grinder
    2. Coffee makers
    3. Espresso machine
    4. Coffee brewer and iced tea brewer
    5. Decanters and satellite servers
    6. Blenders for frappes and smoothies
    7. Refrigerator
    8. Cooking equipment for cafes such as convection ovens, etc
    9. Display cases
    10. Dishwasher
    11. Sinker
    12. Crockery and cutlery
    13. Serve-ware
    14. Ingredients and materials needed to make different types and flavours of coffee and eatables
  • The average investment needed in order to purchase these equipment along with the cost of furniture and materials required for the shop need to be calculated and listed too. 
  • This costing, including the rent for the coffee shop space and miscellaneous expenses and salaries, helps the business calculate the exact capital requirement for the coffee shop plan. 
  • The entrepreneur can thus make arrangements accordingly and even present the coffee shop business plan, which includes capital requirement details, to banks or loan approval officers in order to arrange for funding for the business.

Other details that can be included in the planning of the coffee shop can be related to the marketing plan in order to make the coffee shop stand out from the crowd and create its own niche.

Creating A Concept Store

• • In order to create a concept coffee shop, the entrepreneurs must concentrate on the following aspects and include them in the coffee shop business plan too, to have a clear goal to follow in the future too.
  • Ambience- the ambience of the coffee shop must be inviting. There must be ample lighting and ventilation along with comfortable seating. It should reflect a comforting vibe for customers to feel relaxed immediately and for them to spend quality time at the coffee shop repeatedly.
  • Customer friendly- the coffee shop must be customer friendly with courteous staff and timely service. Attention must be paid to hygiene too. Also, the coffee shop can have certain additional features that can be offered to the customers such as free Wi-Fi, board games and juke box in order to keep the customers engaged in a non-intrusive manner. Offering home delivery services is also a way to be customer friendly and cater to a larger audience.
  • Offer Variety- Along with this the coffee shop can offer a variety of coffee types and options which are not run of the mill. 
  • Online Presence – having a website and/or presence on social media platforms is a must for coffee shop business in the digitally revolutionising times.

All of these essentials and details that must be included in the coffee shop business plan make the business more sound and well prepared to make a jump start. For any other difficulties faced, the entrepreneurs can always approach deAsra for their coffee shop business plan.