How To Write a Coffee Shop Business Plan

If you’re a caffeine connoisseur, your heart is in hospitality, and you love the sound of bean grinders and espresso steamers thrumming over background music and light chatter, you might be a fit for the coffee business. 

A well-crafted coffee shop business plan is your road map to turning your coffee dreams into a profitable reality. It forces you to think through every detail, from your target customers and competitive landscape to your daily operations and long-term growth strategy. Here’s how to create a business plan that sets your coffee shop up for success.

Why you need a business plan for your coffee shop

Whether your café or coffee shop will pay homage to the provenance of each bean varietal or simply be a relaxed place to hang out with reliable brews, you will need a business plan to build out your vision.

A business plan serves as both proof of concept when seeking financial support from lenders or investors and as a road map to share with any co-owners and partners to keep everyone aligned. Like any business, many things happen either concurrently or in a specific order before the doors open; a business plan helps you track the intersecting tasks you need to complete, helping lay the foundation for successful sales, operations, and marketing strategies. 

Understanding your place in the coffee landscape is crucial before you start developing your business plan. Coffee culture in the US falls into three distinct waves, each representing a different approach:

• First-wave coffee refers to the initial rise of commodity coffee in the US in the early 1900s. Think mass-produced ground coffee, or the no-frills pot of coffee you can still see in a diner.

• Second-wave coffee places an emphasis on ambiance, espresso-based drinks, and proprietary beverage creations—think Starbucks, Peet’s Coffee & Tea, or similar chains—and introduced consumers to a new genre of coffee experiences beginning in the 1960s and 1970s. 

• Third-wave coffee focuses on single-source beans, harvest and production methods, and brewing techniques that highlight the nuances of each roast. Manual brewing methods like pour-overs and French presses are third-wave shop signatures, and treat coffee like a craft beverage.

Elements of a coffee shop business plan

1. Executive summary
2. Company overview
3. Menu overview
4. Market analysis
5. Organization and management
6. Financial plan
7. Marketing plan

This coffee shop business plan template can help you map out each element of your vision—everything from sourcing beans and creating a welcoming atmosphere for customers to marketing, business financing, and management structure. 

1. Executive summary

Your executive summary provides a high-level look at your plan and hooks your reader with compelling details about your particular vision. A strong executive summary covers the basics you would include in a concise elevator pitch with all the flair of a highlight reel—who you are, what’s included in your master plan, how you’ll pull it off, and why your audience should care or help you. Aim to summarize all the important details and sell people on what makes your business idea uniquely valuable. The world is full of coffee shops; your job is to convince folks that yours is worth adding to the list.

Some business owners like to write their executive summary once they have wrestled with all the details of their plan and an actionable strategy has emerged. Others draft the executive summary first, then get the basics of the business plan down before updating or finessing the summary language as needed. 

2. Company overview

Your company overview should illustrate how your coffee shop will operate and specify how many employees you plan to hire. 

This overview section might also capture the look and feel of your shop. Successful coffee shop businesses incorporate many best practices from the hospitality industry, like attentive customer service, artful plating, and a design-forward ambiance. You can arrange comfortable furnishings to invite lingering conversation, or, if your shop is in a neighborhood full of remote workers looking for a place away from home, include plenty of easy-to-reach outlets and private nooks. 

Maybe you have a distinct philosophy, theme, mission, or sourcing story that you want people to know about. If so, include it here, and explain the practical ways you’ll implement those ideas.

3. Menu overview 

What does your proposed menu look like? Maybe it contains alternatives for customers who may not drink caffeine—kids, for example, or tea-drinkers visiting with coffee-loving friends. If you’re looking to attract serious coffee enthusiasts, you need a thoughtful menu to match.

Consider these key questions:

• Will you serve espresso drinks? Tea? Fresh juices? Primarily pour-overs and French presses? Coffee during the day and wine at night? 
• Will you partner with a coffee roaster to create a proprietary blend, roast beans on site, or order from a wholesaler?
• Will you serve food? If so, what kind? Will pastries or simple breakfast and lunch fare, like toasts or sandwiches, be prepared in-house, sourced from a neighboring bakery, or ordered from a restaurant supplier? 

Your menu overview should also include a rough pricing model. It doesn’t need to list exact prices, but it should indicate whether you will position yourself as a premium coffee-drinking experience priced to reflect the high-quality product and expert insight, or a more affordable model aimed at a wider market.

4. Market analysis

Your market analysis should show that you understand coffee industry trends, your target market, and your unique selling proposition. You can do your own market research or use a framework like a SWOT analysis that tracks your strengths, weaknesses, opportunities, and competitive threats.

Focus on understanding consumer expectations for the type of shop you want to open, and explore the neighborhood where you hope to set up shop. How much foot traffic is there? Will other coffee shops or cafés compete with yours? Are there other thriving small businesses that attract customers to the area, or will you be the primary destination? 

If you have a space in mind, is it near office buildings where a predictable flow of workers will arrive at the same time every day? Or will you cater to local residents in a neighborhood setting? These considerations can affect everything from your operating hours to the type of marketing you execute.

5. Organization and management

Describe the organizational hierarchy and your staffing needs, alongside your business structure. Limited liability companies (LLCs) protect the business owners’ personal assets from company-related obligations or debt, are relatively simpler to set up, and enjoy pass-through taxation. Structuring your business as a corporation allows you to sell shares to raise capital, though it is harder to set up and subject to two levels of taxation—first on corporate taxes, and then on shareholder dividends. An attorney or tax professional can help you understand the best entity type for your business. 

This section of your business plan may also cover day-to-day management details. If you plan on hosting regular barista training on brewing and pulling shots at the espresso bar, varietal sourcing and production information, and regular guided team tastings, include that information here.

6. Financial plan

Each aspect of the coffee shop experience comes with its own overhead costs: high-quality employees, equipment, servingware, furniture, and other design elements like lighting, plants, and artwork. Outline your financial projections and funding needs to cover overhead costs, expected operating costs, and any other fixed and variable costs, such as required business licenses or certifications.

Don’t forget to capture diverse revenue streams in your analysis. Although a coffee shop is primarily a brick-and-mortar business, you may decide to maintain an ecommerce website where you sell proprietary bean blends, branded merchandise, or gift cards alongside a blog or event calendar.

7. Marketing plan

Great coffee shops don’t just serve outstanding brews; they become members of the local community and destinations for visitors who have discovered the menu or ambiance via social media and want to experience it for themselves. A strong social media marketing strategy helps attract potential new customers and retain existing ones with regular, consistent posts and behind-the-scenes content (like the punchy, colorful beverage shots and staff photos from Be Bright Coffee or the origin stories from Seattle roaster Fulcrum Coffee) that highlight your brand personality.

Plan to invest in high-quality visuals that capture the feel of your shop and the appeal of your menu, and weave customer engagement into your overall strategy by regularly reposting images your shop is tagged in or responding to comments. Partnering with like-minded brands or businesses to host events or collaborate on menus can boost your brand awareness through exposure to similar audiences.