Coffee shops come in all shapes and sizes; from small moveable kiosks, to big warehouse-sized shops with multiple levels and lofted ceilings, to everything in between. Generally, coffee shops appear to be straightforward business models. At first glance, they may seem easy to understand, but there is a lot more going on than what meets the eye. The magic of a good coffee shop is taking complex processes and making them streamlined, attractive, and simple to all stakeholders (partners, investors, employees, and customers).

Everyday, coffee shops close down because of poor planning and misunderstanding of the business model. Before you sink a lot of money into your new coffee shop venture, you want to make sure to give it the best chance of success while avoiding the many frustrating and costly mistakes that can come from poor planning. A business plan can help you do this.

How a business plan can be helpful

A plan can serve a variety of purposes and be useful to you throughout and after your launch process. Here are a few benefits that you might get from having a business plan:

1. It facilitates learning and decision making

When I prepared my own business plan for my first coffee shop, I didn’t fully understand the value of the process. I thought it was simply a requirement of new businesses, and so I did it. The process to write the plan was longer than I thought, in part because I was inexperienced in the business I was starting, and in part because the process facilitated a steep learning curve for me and guided me to discover important information and make crucial decisions at an early stage. Without the requirement of completing the various sections of the business plan, I would not have known that these were areas I needed to think through and research.

Once you start the business and have the operational requirements, your time to do research and make major decisions will become more limited. Getting into the nitty gritty of planning before the business is open means you are making a lot of these decisions when you have the capacity to make them.

2. It identifies potential problems and solutions in advance

In addition to facilitating your planning and learning process, business plans can help you to identify potential problems at the planning stage. This gives you an opportunity to either pivot your plan to avoid the problem or mitigate the problem in some other way.

For example: you are thinking of renting a space for a coffee shop with a small footprint, only a couple of hundred square feet. As you’ve worked on the layout, you discovered that there is no room for seating inside. Knowing that this will be a problem, you can either look for another space or choose to mitigate the problem by adding covered seating outside. Or, like Patricia Coffee Brewers in Melbourne, you could own the fact that your coffee shop is standing room only and build your concept around that as they have done with their tagline “Standing Room Only.” In their case, they placed milk crates outside of the shop and took advantage of or commissioned artwork to be painted on the building wall across from their shop to make enjoying their coffee and food items in the back alley a part of the Patricia experience.

3. It is helpful (and required) when securing financing

Regardless of whether you are planning to finance your coffee shop through a bank loan or investment, you will need a business plan. Banks and investors want to see that you’ve done your research and put in the advance work to increase the potential that your business will be a success. Banks do this to protect their investment and reduce the risk that you will default on a loan. Investors do this both to protect their investment and to get an idea if the business will be able to provide an ROI (Return On Investment). The good news is, once you have a business plan, you have done the hard work of creating a pitch deck, which will be based on the information in your business plan.

4. It keeps you on track as you prepare

During the process to start your coffee shop, you will be called upon to juggle many processes all at once. It can be easy to get off track or distracted from the end goal. Having a business plan helps to define what the finish line for the launch process looks like and will create a measured path toward that goal. While not necessary, incorporating a list of milestones and a target date to reach those milestones will help drive you toward your opening date.

Get started with our free business plan and template

Business plans generally follow a standard template with some customizations depending on the type of business. We’ve developed a template for a business plan with a format that is commonly used for coffee shops. The guidebook will help you understand each section and offers samples from a fictional coffee shop concept that we created. The customizable Google Docs template is where you’ll write your business plan. Download the template and guidebook here.

Need extra help?

If you would like additional assistance with all or part of your business plan, we’re here and are excited to work with you to get your business off to the right start. Request a proposal and discover how we can help your coffee shop start up process.

Get powerful business planning and financial projection tools with Liveplan

Writing your business plan in Google Docs can be helpful and get the job quickly, however you might be missing out on some powerful business planning tools.

We recommend using LivePlan’s online business planning software. We’ve used LivePlan for all of our businesses because it makes the business plan writing quick and easy. LivePlan makes financial forecasting simple and integrates with Quickbooks for ongoing financial tracking. Use this link to get 40% off a LivePlan subscription.

This post contains affiliate links. We may earn an affiliate commission off of purchased you make by clicking links on our website. We only recommend products and services that we believe will be helpful to our community of readers.