A business plan for a coffee shop is a document that outlines the goals, strategies, and financial projections of a new or existing business. It can help you attract investors, secure loans, and plan for the future.
Some of the main components of a business plan for a coffee shop are:
- Executive summary: A brief overview of your coffee shop, its mission, vision, values, target market, competitive advantage, and goals.
- Company description: A detailed description of your coffee shop, its legal structure, location, ownership, history, and achievements.
- Market analysis: A thorough research of the coffee industry, the local market, the customer segments, the competitors, and the opportunities and threats.
- Marketing plan: A clear strategy for how you will promote your coffee shop, its products and services, its brand identity, its pricing, its distribution channels, and its customer loyalty programs.
- Operations plan: A description of how you will run your coffee shop, its equipment, supplies, inventory, staff, training, policies, procedures, and quality control.
- Financial plan: A projection of your coffee shop’s income statement, balance sheet, cash flow statement, break-even analysis, and funding requirements.
Executive summary:
The Coffee Corner is a new coffee shop that will offer high-quality coffee, tea, pastries, sandwiches, and salads in a cozy and friendly environment. The Coffee Corner’s mission is to provide customers with a satisfying and memorable coffee experience, while also supporting local farmers and suppliers. The Coffee Corner’s vision is to become the preferred coffee destination in Landskrona, and to expand to other locations in the future. The Coffee Corner’s values are excellence, sustainability, community, and innovation. The Coffee Corner’s target market is mainly young professionals, students, and families who live or work in the area, and who value quality, convenience, and social interaction. The Coffee Corner’s competitive advantage is its unique blend of coffee beans sourced from organic and fair-trade farms in Colombia, Ethiopia, and Indonesia, as well as its homemade pastries and sandwiches made with fresh and local ingredients. The Coffee Corner’s goals are to achieve a monthly sales volume of 1000 SEK in the first year, to reach a break-even point in the first six months, and to increase customer retention by 20% in the first year.
Company description:
The Coffee Corner is a sole proprietorship owned and operated by Anna Svensson, a passionate coffee lover and experienced barista. The Coffee Corner will be located at Storgatan 12, a prime spot in the city center with high foot traffic and visibility. The Coffee Corner will occupy a 50 square meter space that can accommodate up to 20 customers at a time. The space will be renovated and decorated with a modern and cozy style, featuring comfortable seating, warm lighting, plants, artwork, and free Wi-Fi. The Coffee Corner will also have a small outdoor patio for customers who want to enjoy the fresh air. The Coffee Corner was established in September 2023, after Anna received a grant from the Swedish Agency for Economic and Regional Growth (Tillväxtverket) to start her own business. Anna has also secured a loan from her bank to cover the initial costs of equipment, inventory, rent, and marketing. Anna has over five years of experience working as a barista at various coffee shops in Stockholm and Malmö, where she learned the skills and knowledge necessary to run a successful coffee business.
Market analysis:
The coffee industry in Sweden is one of the largest and most developed in the world, with an annual consumption of about 8.2 kg per capita. Sweden ranks third in the world in terms of coffee consumption per capita, after Finland and Norway. Coffee is an integral part of the Swedish culture and lifestyle, as people enjoy drinking coffee throughout the day, especially during the traditional fika break. The coffee market in Sweden is dominated by large chains such as Espresso House, Wayne’s Coffee, Starbucks, and Pressbyrån, which account for about 70% of the market share. However, there is also a growing demand for specialty coffee shops that offer more variety, quality, and personalization of coffee products and services. According to a survey conducted by YouGov in 2019, 44% of Swedish coffee drinkers prefer to buy their coffee from independent coffee shops rather than chains. The local market in Landskrona is relatively underserved by specialty coffee shops, as there are only two existing ones in the city: Kaffebar and Café Mocca. These two coffee shops have been operating for over 10 years each, and have loyal customer bases. However, they also have some weaknesses that can be exploited by The Coffee Corner: Kaffebar has a limited menu that only offers coffee and baked goods; Café Mocca has an outdated décor that does not appeal to younger customers; neither of them offers organic or fair-trade coffee options; neither of them has an online presence or delivery service. The customer segments that The Coffee Corner will target are mainly young professionals (aged 25-40), students (aged 18-24), and families (with children under 18). These segments represent about 60% of the population in Landskrona, according to Statistics Sweden (SCB). These segments have the following characteristics and needs: Young professionals are busy and career-oriented; they value convenience, quality, and efficiency; they are willing to pay more for premium products and services; they are active on social media and online platforms; they seek social interaction and networking opportunities; they are environmentally conscious and socially responsible. Students are budget-conscious and price-sensitive; they value affordability, variety, and customization; they are frequent coffee drinkers who need caffeine boosts throughout the day; they are tech-savvy and digitally connected; they seek fun and entertainment; they are adventurous and open-minded. Families are health and safety-conscious and quality-oriented; they value nutrition, freshness, and hygiene; they are loyal and repeat customers; they seek family-friendly and kid-friendly environments; they are influenced by word-of-mouth and recommendations.
The competitors that The Coffee Corner will face are mainly the two existing specialty coffee shops in Landskrona: Kaffebar and Café Mocca. These competitors have the following strengths and weaknesses: Kaffebar’s strengths are its location, its reputation, its customer service, and its baked goods; its weaknesses are its limited menu, its lack of organic or fair-trade coffee options, its lack of online presence or delivery service, and its high prices. Café Mocca’s strengths are its menu variety, its customization options, its loyalty program, and its delivery service; its weaknesses are its location, its décor, its quality, and its lack of organic or fair-trade coffee options. The opportunities and threats that The Coffee Corner will face are as follows: Opportunities: increasing demand for specialty coffee in Sweden; growing awareness of environmental and social issues among consumers; rising disposable income and spending power among target segments; expanding online and delivery channels; potential partnerships with local businesses and organizations. Threats: high competition from large chains and existing specialty coffee shops; high costs of rent, equipment, inventory, and labor; high taxes and regulations; seasonal fluctuations in demand; changing consumer preferences and trends.
Marketing plan:
The Coffee Corner’s marketing plan will consist of four main elements: product, price, place, and promotion.
Product: The Coffee Corner will offer a range of coffee products, such as espresso, cappuccino, latte, americano, mocha, macchiato, and cold brew, as well as tea, hot chocolate, smoothies, and juices. The Coffee Corner will also offer pastries, sandwiches, salads, and soups, made with fresh and local ingredients. The Coffee Corner will differentiate itself from its competitors by offering organic and fair-trade coffee options, as well as vegan and gluten-free alternatives. The Coffee Corner will also allow customers to customize their orders according to their preferences and dietary needs.
Price: The Coffee Corner will adopt a value-based pricing strategy, which means that it will charge prices that reflect the perceived value and quality of its products and services. The Coffee Corner will set its prices slightly higher than its competitors, but still affordable for its target segments. The Coffee Corner will also offer discounts and coupons to attract new customers and reward loyal ones.
Place: The Coffee Corner will be located at Storgatan 12, a prime spot in the city center with high foot traffic and visibility. The Coffee Corner will have a modern and cozy interior design, featuring comfortable seating, warm lighting, plants, artwork, and free Wi-Fi. The Coffee Corner will also have a small outdoor patio for customers who want to enjoy the fresh air. The Coffee Corner will operate from 7 am to 7 pm on weekdays, and from 9 am to 5 pm on weekends. The Coffee Corner will also have an online presence, featuring a website and social media accounts on Facebook, Instagram, and Twitter. The website will provide information about the coffee shop, its products and services, its menu, its prices, its location, and its contact details. The website will also allow customers to place orders online and choose between delivery or pick-up options. The social media accounts will be used to communicate with customers, share news and updates, promote special offers and events, solicit feedback and reviews, and build a community around the coffee shop’s brand.
Promotion: The Coffee Corner will use a combination of online and offline methods to promote its coffee shop and increase its brand awareness and recognition. Online methods will include: creating and maintaining a website and social media accounts; launching an email marketing campaign; advertising on Google Ads and Facebook Ads; collaborating with influencers and bloggers; participating in online forums and groups; creating and sharing engaging content such as photos, videos, stories, quizzes, polls, etc.; encouraging user-generated content such as reviews, testimonials, ratings, comments, etc.; offering referral programs and rewards for sharing and inviting friends. Offline methods will include: distributing flyers and brochures; placing signs and banners; attending local events and festivals; sponsoring local causes and charities; hosting workshops and seminars; organizing contests and giveaways; offering samples and tastings; creating loyalty cards and gift cards.
Operations plan:
The Coffee Corner’s operations plan will describe how the coffee shop will run on a daily basis, covering the aspects of equipment, supplies, inventory, staff, training, policies, procedures, and quality control.
Equipment: The Coffee Corner will require the following equipment to operate: a coffee machine, a coffee grinder, a milk frother, a blender, a juicer, a toaster, a microwave, a refrigerator, a freezer, a dishwasher, a cash register, a computer, a printer, a phone, and a security system. The equipment will be purchased from reputable suppliers and maintained regularly.
Supplies: The Coffee Corner will require the following supplies to operate: coffee beans, tea leaves, milk, cream, sugar, syrups, spices, pastries, bread, cheese, ham, salad, soup, cups, lids, straws, napkins, utensils, plates, bowls, cleaning products, etc. The supplies will be sourced from local and organic farms and suppliers whenever possible. The supplies will be ordered weekly and stored properly.
Inventory: The Coffee Corner will keep track of its inventory using an inventory management software that will monitor the stock levels and alert when replenishment is needed. The Coffee Corner will also conduct periodic physical counts and audits to ensure accuracy and prevent theft or loss.
Staff: The Coffee Corner will employ four full-time staff and two part-time staff. The full-time staff will consist of Anna Svensson (the owner and manager), two baristas, and one cook. The part-time staff will consist of two servers. The staff will work in shifts and rotate their roles according to the schedule and demand.
Training: The Coffee Corner will provide comprehensive training to its staff before opening and on an ongoing basis. The training will cover the topics of customer service, product knowledge, hygiene and safety, equipment operation, cash handling, inventory management, and emergency procedures. The training will be delivered by Anna Svensson or external experts as needed.
Policies: The Coffee Corner will establish clear policies for its staff and customers to ensure a smooth and pleasant operation. The policies will include the following: dress code, attendance, breaks, tips, complaints, refunds, loyalty program, delivery service, etc. The policies will be communicated to the staff and customers through the employee handbook, the website, the social media accounts, and the signage in the coffee shop.
Procedures: The Coffee Corner will follow standard procedures for its daily operations such as opening and closing, cleaning and sanitizing, ordering and receiving, preparing and serving, billing and collecting, etc. The procedures will be documented in manuals and checklists that will be available for the staff to consult at any time.
Quality control: The Coffee Corner will ensure the quality of its products and services by implementing quality control measures such as testing and tasting, inspecting and verifying, surveying and reviewing, etc. The Coffee Corner will also comply with all the relevant laws and regulations regarding food safety, health inspection, taxation, licensing, etc.
Financial plan:
The Coffee Corner’s financial plan will provide a detailed projection of the coffee shop’s income and expenses, as well as its sources and uses of funds. The financial plan will consist of three main components: startup costs, income statement, and cash flow statement.
Startup costs: The Coffee Corner will require a total of 500,000 SEK to start its business. The breakdown of the startup costs is as follows: Equipment: 150,000 SEK; Supplies: 50,000 SEK; Rent: 100,000 SEK (deposit and first month); Marketing: 50,000 SEK; Legal and accounting: 20,000 SEK; Licenses and permits: 10,000 SEK; Insurance: 10,000 SEK; Contingency: 10,000 SEK. The sources of funds for the startup costs are as follows: Owner’s equity: 200,000 SEK; Bank loan: 300,000 SEK (10% interest rate, 5-year term).
Income statement: The Coffee Corner expects to generate revenue from two main sources: sales of coffee and other beverages, and sales of food items. The Coffee Corner estimates that it will sell an average of 200 cups of coffee per day at an average price of 30 SEK per cup, and an average of 100 food items per day at an average price of 40 SEK per item. The Coffee Corner projects that its revenue will grow by 10% annually. The Coffee Corner anticipates that its cost of goods sold will be 40% of its revenue, which includes the cost of coffee beans, tea leaves, milk, cream, sugar, syrups, spices, pastries, bread, cheese, ham, salad, soup, etc. The Coffee Corner forecasts that its operating expenses will be 300,000 SEK per year, which includes the cost of rent, utilities, salaries, marketing, legal and accounting, licenses and permits, insurance, loan repayment, etc. The Coffee Corner expects to break even in the first year of operation and make a profit in the following years.
The projected income statement for the first three years is shown below:
| Year | Revenue | Cost of Goods Sold | Gross Profit | Operating Expenses | Net Profit |
|---|---|---|---|---|---|
| 1 | 2,190,000 SEK | 876,000 SEK | 1,314,000 SEK | 1,300,000 SEK | 14,000 SEK |
| 2 | 2,409,000 SEK | 963,600 SEK | 1,445,400 SEK | 1,320,000 SEK | 125,400 SEK |
| 3 | 2,649,900 SEK | 1,059,960 SEK | 1,589,940 SEK | 1,340,000 SEK | 249,940 SEK |
Cash flow statement: The Coffee Corner expects to have a positive cash flow from its operations, as well as from its financing activities (bank loan). The Coffee Corner projects that its cash flow from investing activities will be negative in the first year due to the purchase of equipment and supplies, but positive in the following years due to the depreciation of equipment.
The projected cash flow statement for the first three years is shown below:
| Year | Cash Flow from Operations | Cash Flow from Investing | Cash Flow from Financing | Net Cash Flow |
|---|---|---|---|---|
| 1 | 224,000 SEK | -200,000 SEK | 300,000 SEK | 324,000 SEK |
| 2 | 335,400 SEK | -30,000 SEK | -72.000 SEK | 233.400 SEK |
| 3 | 459.940 SEK | -30.000 SEK | -72.000 SEK | 357.940SEK |