Opening a café can be a daunting thing to do and writing a café business plan can be just as challenging. Remember that your plan is a guide for your entrepreneurial venture, so nailing it will increase your chances of opening and running a successful café. A great plan reflects your aspirations for the kind of eatery you want and proves to any readers the viability of your business, so keep reading to find out exactly what you need to create a thoughtful café business plan.
Step 1. Executive Summary
Although this comes at the start of your business plan, this section should actually be written last. That’s because it’s an overview of the rest of the sections in your plan. Consider who’s going to be reading your plan, because these few opening paragraphs can make or break investor interest. Your summary shouldn’t be longer than two pages and should summarise each of the following sections succinctly.
Step 2: Business Industry Overview
This section should provide a brief overview of your industry and discuss what kind of problems your café solves. For example, is there a gap in the market for your type of café? You should also discuss where your café will be, and how it will stand out in the area.
Step 3: Market Analysis and Study of Competition
In this part you need to demonstrate that you’ve analysed the target market and know that there’s enough demand for your café to make your business viable. You need to discuss similar cafés, coffee shops and restaurants in the area – including chains like Starbucks. The best way to go about researching this is to visit these businesses in person, and look at what they have on offer, their prices, and who is buying what. Understanding this will help you decide on what your café will offer and how much you should charge.
Step 4: Analyse your target market
You need to attract customers for your café to succeed, and simply opening a café isn’t enough to convince potential customers that they should come to your establishment. Look at what’s in the area – are you near schools, offices, shopping centres, parks? If your café is near a primary school, there could potentially be a market for parents wanting coffee after dropping their children off. If it’s near a university, you may want to think about lunch deals for students. You should also be looking at the foot traffic in the area and seeing just how big your market is.
Step 5: Pricing Strategy
Let your reader know what you’re selling and how much you’re selling it for! This section is often the most enjoyable, as it’s where you’ll craft your menu. Think about the theme of your café, logistics (try to use the same ingredients across a variety of dishes), and what you can feasibly sell. Once you open your café, this menu can change, however you need a solid starting menu to convince readers and customers that your café is worth their time.
Step 6: Sales and Marketing Plan
Here you should discuss how you’ll attract customers to your café using advertising, promotions, pricing, sales and service. Are your high-quality coffee beans what set you apart from local competition? Then you need to let your potential customers know. What kind of advertising will you use? You could want to develop a website or announce daily specials on Facebook and Instagram. Promotions could include loyalty program for coffee, or offering small discounts if customers tag your café on social media. You should also discuss how you’ll accept payment at your café.
Step 7: Management Plan
Describe the ownership, management, legal structure and staffing of your café. Who owns the business? Will the owners also manage the business, or will someone need to be hired? How many wait staff, chefs and baristas will you need? You should also discuss specific companies you’ll be contracting for things like the interior design, accounting and coffee bean supply of the café.
Step 8: Operations
Describe the physical requirements of your café, such as floor space, equipment, inventory and labour. This section needs to be very detailed and should also discuss the costs of every aspect of operations, such as rent, staff wages and equipment costs.
Step 9: Financial Plan
This is the most important section of your café business plan, and it’s what lenders and investors are going to be scrutinising. This section should include an overview of your start-up costs, an income statement, cash flow projections, a balance sheet and a breakeven analysis (which tells investors what level of sales you need to make a profit). A good rule of thumb for this section is to underestimate revenue and overestimate expenses, so that you know you’re prepared for anything. Your financial plan should ultimately demonstrate that your business will grow and will make a profit.
Writing a café business plan may seem like a tedious task, but you should be invested and interested in every aspect of your café. Take pride in your research, your plans and your café itself, because your passion will translate to a successful café business plan that not only attracts investors, but also sets you up to open your dream café.
Read more about starting a coffee van