Coffee shops are a go-to nowadays for socializing and informal business meetings. You can see a group of students having discussions or doing projects, business people in their informal meetings, friends catching up, and those who want to chill and relax in a café.

Opening a coffee shop is more than offering a cup of coffee. Serving quality coffee, good ambiance, excellent customer service, and customer experience are major factors why customers return.

Before you decide to invest in a coffee shop business, you need to do thorough planning. It's where a business plan comes in. You might be asking, who writes and reads business plans nowadays? Well, determined and prepared entrepreneurs do. Aside from the output itself, the process of creating the business plan will make you go through in-depth analysis and evaluation about your plans and the steps to be taken. Documenting every step helps you assessing different scenarios that can occur. Undesirable outcomes will be prevented or handle with ease when they arrive.

12 Factors in Creating a Coffee Shop Business Plan

1.Identify your Target Market

Knowing your target market helps you plan out other aspects of your business, such as the menus, branding, prices, and storefronts. Are you targeting students, millennials, or career professionals? What are their demographics, disposable income, and social status? It will lead you to create more specific menus and services.

2.Know your Competitors

Conduct some environmental scanning and identify your competitors. Some aspects to look at with your competitors are:

• Who are they catering to?
• What are their product offerings?
• How they present their products?
• How about their pricing?

Learn how they operate and identify in which aspect you can be unique. This way, you have a competitive advantage and survive and flourish in your café business.

3.Create your Menu

Rather than offering almost everything you can think of as a café, focus on identifying menus, which you can offer best based on your target customers. Sourcing out baked goods on a wholesale in addition to your drink offerings can also boost your sales.

4. Select a Good Location

For café businesses, a good location can significantly influence the success of your business. It should be in a central business area with a lot of foot traffic. Adequate parking is also a plus. Customers will transfer to another café if they are having a hard time parking in your location.

5.Carefully Prepare a Floor Plan

Put yourself in the situation of your customers and staff. What would your customer want to see upon entering the store? Is it clear for them where to go to put their orders? Is it easy for the staff to workaround? What should be near them when taking orders, preparing coffee? If you are not very confident about these kinds of stuff, hiring an interior designer to do the job for you. A conducive place can attract more customers and efficiency for your staff.

6.Hiring your Staff

Hire your staff slowly as you are starting, then hire more once your café business takes off. It is crucial to prepare a recruitment plan for future budget allocation. Spend for training and skills improvement.

Finding experienced staff is essential, especially when you are starting. However, it would help if you considered looking for staff with values aligned with your business goals.

7.Find Suppliers

Finding excellent and trustworthy suppliers of quality coffee beans is a critical factor for your café. Do your research and ask for recommendations for coffee beans suppliers /roasters. A good business relationship with your suppliers will contribute to your success.

8.Source Out Equipment

Know where to source out equipment for your café. From an espresso machine to automatic coffee makers, blenders, toasters, POS, and security systems. All these procurements would require a large sum of money. Consider if you can lease some equipment from your roaster or other leasers. Or maybe you want to acquire your equipment.

9.Process Business Legalities

Deciding what type of business structure you want to establish (sole proprietorship, partnership, limited liability, or corporation) should be plan out well. A sole proprietorship is easier to register, but your assets are tied to your business. If you want to separate your business from your assets, establishing a limited liability company or corporation can be an option for you.

Secure all the business permits and licenses needed to operate to avoid having issues when you start the operation.

10. Compute the Initial Investment Needed

Compute how much you will need until the business is up and running. It can be a few months or up to a year. It includes building improvement, lease, purchase of equipment, staff salaries, supplies, and other set-up costs.

11. Sources of Funds

Bootstrapping is one way to do it. But if you don't have enough resources to do it alone, you can consider finding investors or apply for a business loan. When you pitch your business, you need a business plan to present to your prospect partners, investors, and banks. Showing them you know the ins and out of your business and how you can pay their money back will help you gain their trust.

12. Assess Financial Feasibility

Prepare financial statements projection to assess financial feasibility. The income statement (profit & loss), cash flow statement, and balance sheet will help you evaluate your proposed venture's financial condition and potential. Financial ratios and financial metrics (NPV, IRR, Payback Period) are financial planning tools to help you better evaluate your financials and can provide a go or no-go analysis.

After considering all the factors above and make the necessary preparations, you are now more confident to start your café business. Starting a café business from scratch won't be easy, but you will have more room for profit potentials and growth. Being an entrepreneur is not an easy feat but a rewarding experience.