Having had a lifetime interest in all-things-coffee may be your inspiration for wanting to open a coffee house of your own. But, having an interest in coffee alone is not enough: you also need to build your new venture upon a foundation of solid business principles.
When undertaking any type of business venture, it is smart to start with a solid business plan. Opening a coffee house is no different. A business plan accomplishes two things:
a. it provides you, the business owner, with an opportunity to lay everything out on the table in order to get a clear view into how the business will be set up, what is required to get things going, and what may still be missing from your current plans.
b. it can give potential investors, partners, and vendors a view into the heart of how your new business will be structured.
If you are interested in created a coffee house business plan, here are the 7 essential elements to include:
1. Executive summary:
This introductory section of your business plan should take up no more than two pages. It should highlight the most essential elements of your plan. Put a bit of salesmanship into the executive summary: remember, some of those who read it may be potential investors. Your goal in this section is to inform the reader - while at the same time encouraging them to finish reading the rest of the plan.
2. Company summary:
In the company summary section of your coffee house business plan, feature a nuts-and-bolts description of your company. Include all of the facts, such as proposed name of the coffee house, the owner's or owners' names, and any information that describes events that led up to the idea for the business.
3. Management team overview:
The credibility of a new business always hinges upon the credibility of its management team. The goal of this section of your plan should be to impress upon the reader the trustworthiness and credibility of your team. Include information on the background and experience of each member, and highlight their main accomplishments in this (or related) businesses up to this point in their careers.
4. Product and customer targeting strategy:
Every coffee house serves a slightly different group of people. Are you going after the commuter crowd? Book-loving, lounging types? Stay-at-home moms? Write out the details of how your choice of a target market will influence your choice of products. Be sure to list out how your products will differ from those of other competing coffee houses in the area.
5. Store design ideas, equipment choices and overall ambiance:
In this section, write in detail about the theme you are going for in your new venture. For example, will it be ultra-modern, contemporary, old-fashioned, European, bohemian, etc.? Describe the type of customer you will be targeting (see #4 above) and weave that into your ideas about the design and overall ambiance of your coffee house. One of the biggest factors to consider is your choice of equipment; the wrong equipment can really look out of place if it does not fit in with your intended ambiance.
6. Proposed location and market analysis:
Successful coffee house owners know that location is especially important in this business. Your coffee house will need to be located near a major thoroughfare, business park, residential area or shopping center. Propose a handful of specific proposed locations for your new business. Also, do some research into factors such as market size of the area and the area's projected growth over the next 5 to 10 years.
7. Financial plan:
A successful business is one that is able to ramp up sales fairly quickly, with the goal of bringing in more revenue than it requires to keep the business running. In other words: it needs to be able to turn a profit. Sit down with a good spreadsheet software program and make educated guesses about items such as number of customers per day, average profit per sale, and the amount of each overhead (or fixed) expense. Then, write up your results in this section.
Hint: if you are numbers-challenged, that's okay: just write out your assumptions and then ask a friend, family member or paid consultant to help you do the math. While you are at it, be sure to make sales and profit projections for 6 months, 1 year, 3 years and 5 years.
Take these 7 essential elements into account as you put together your coffee house business plan.
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