A coffee shop, coffee café, or coffee bar is a small, informal restaurant where coffee and light refreshments such as snacks, sandwiches, muffins, fruit, or pastries are served to customers. It is also a place where coffee lovers meet to network and socialize. Please note that coffee shops are part of the specialty eatery industry, which also includes outlets specializing in products such as bagels, donuts, frozen yogurt, and ice cream.
Reports made available by Allegra World Coffee Portal’s market-leading report on the UK café industry revealed that the total UK coffee shop market is valued at £10.1bn across 25,483 outlets. The total UK branded coffee chain market is now valued at £4.4bn having recovered to around 87 percent of its pre-pandemic value.
Steps on How to Write a Coffee Shop Business Plan
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Executive Summary
James Salford® Coffee Shop, Ltd. is a first-class coffee shop that will operate world-class coffee shops across major cities in the United Kingdom with her headquarters in the heart of London.
James Salford® Coffee Shop, Ltd. will operate our coffee shop in a centrally located facility with a capacity to accommodate 50 people per time with enough parking space. James Salford is the founder and CEO of James Salford® Coffee Shop, Ltd.
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Company Profile
a. Our Products and Services
James Salford® Coffee Shop, Ltd. will be involved in the sale of;
- Coffee beverages
- Snacks
- Drinks and water.
Our products are designed to give our customers all the satisfaction and fulfillment they need from a coffee shop.
b. Nature of the Business
Our coffee shop will operate with a business-to-consumer model.
c. The Industry
James Salford® Coffee Shop, Ltd. will operate in the cafes & coffee shops industry.
d. Mission Statement
Our mission is to establish a standard coffee shop business that will make available different types of coffee in a conducive environment that is specifically designed for socializing and networking.
e. Vision Statement
Our vision is to establish a coffee shop that will become the number one choice in and around our coffee shop locations.
f. Our Tagline (Slogan)
James Salford® Coffee Shop, Ltd. – James Salford® Coffee Shop, Ltd., The Melting Pot for Coffee Lovers!
g. Legal Structure of the Business ((LTD or Ltd), PLC, LLP)
James Salford® Coffee Shop, Ltd. will be formed as a Private Limited Company (LTD).
h. Our Organizational Structure
- Chief Executive Officer (Owner)
- Manager
- Accountant (Cashier)
- Baristas, Waiters, and Waitresses
- Cleaners
- Security Guard
i. Ownership/Shareholder Structure and Board Members
- James Salford (Owner and Chairman/Chief Executive Officer) 52 Percent Shares
- Dennis Wembley (Board Member) 18 Percent Shares
- John Kingsley (Board Member) 10 Percent Shares
- Henry Peter (Board Member) 10 Percent Shares
- Maggie Benson (Board Member and Sectary) 10 Percent Shares.
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SWOT Analysis
a. Strength
- Ideal location for a coffee shop business
- Highly experienced and qualified employees and management
- Access to finance from business partners
- Access to varieties of coffee supplies
- Excellent customer testimonials.
- A reliable and efficient method of preparing coffee
- Safe and secured facility.
b. Weakness
- Financial Constraints
- A new business that will be competing with well-established coffee shops and other bars that retail coffee.
- Inability to retain our highly experienced and qualified employees longer than we want
c. Opportunities
- A rise in the number of people who want to socialize after the prolonged covid19 lockdown and coffee shop provides such an opportunity
- Online market, new services, new technology, and of course the opening of new markets.
i. How Big is the Industry?
The cafes & coffee shops industry is a big and thriving industry. The total UK coffee shop market is valued at £10.1bn across 25,483 outlets.
ii. Is the Industry Growing or Declining?
The coffee shop line of business is constantly growing. It might interest you to note that the cafes & coffee shops in the UK will grow at the rate of 42.8 percent in 2023.
iii. What are the Future Trends in the Industry
The future trends when it comes to the coffee shop business will revolve around technology. Software that is meant to predict what customers want, online stores, and deliveries will come forward.
iv. Are There Existing Niches in the Industry?
No, there are no existing niches when it comes to the coffee shop business.
v. Can You Sell a Franchise of your Business in the Future?
James Salford® Coffee Shop, Ltd. has plans to sell franchises in the nearest future and we will target major cities with thriving coffee markets in the United Kingdom.
d. Threats
- The arrival of a new coffee shop business within our market space
- Unfavorable government policy and regulations.
- Steady wage expenses
- Economic uncertainty
- Liability problems
- The Food Standards Agency (FSA) could change its regulatory status and decide to enforce strict regulations that can strangulate new businesses like ours.
i. Who are the Major Competitors?
- Costa Coffee
- Tina We Salute You
- Relish, Foundry Court
- Red Roaster
- Dose Espresso
- Kilimanjaro
- Roasters Coffee
- The Apple Tree
- Coffee Aroma
- Monmouth Coffee
- Society Café – Oxford
- Laynes Espresso – Leeds
- Boo Boo Coffee – Birmingham
- Origin Coffee Roasters – Porthleven, Cornwall
- Foxes Café Lounge – Carlisle, Cumbria
- Bold Street Coffee – Liverpool
- The Scandinavian Coffee Pod – Cheltenham
- Prufrock Café – London
- Wayland’s Yard – Worcester
- Bould Brothers Coffee – Cambridge
ii. Is There a Franchise for Coffee Shop Business?
- Starbucks
- Really Awesome Coffee
- Krispy Kreme
- Cafe2U
- Esquires Coffee
- Costa Coffee
- Coffee-Bike
iii. Are There Policies, Regulations, or Zoning Laws Affecting Coffee Shop Business?
Yes, there are regulations and zoning laws for coffee shops in the UK. Please note that the Food Standards Agency (FSA) is responsible for food safety and hygiene in England, Wales, and Northern Ireland. FSA is a non-ministerial department, supported by 7 agencies and public bodies.
Under the Food Safety Act, 1990 and the General Food Law Regulation 178/2002 you are responsible for ensuring that the food customers eat is safe and the quality is what they expect. This means you should understand exactly what foods can cause problems.
It is important to also state that in the United Kingdom, the basic food law is intended to assure consumers that foods are pure and wholesome, safe to eat, and produced under sanitary conditions. Generally, food law prohibits the importation and distribution of food products that are adulterated, or have labels that are false or misleading in any context.
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Marketing Plan
a. Who is Your Target Audience?
i. Age Range
Our target market comprises adults above 18 years old who have the finance to purchase coffee drinks from us.
ii. Level of Educational
We don’t have any restrictions on the level of education of those who we are ready to welcome to our coffee shop.
iii. Income Level
There is no cap on the income level of those that will buy coffee drinks from us.
iv. Ethnicity
There is no restriction when it comes to the ethnicity of the people that will purchse coffee drinks from us.
v. Language
There is no restriction when it comes to the language spoken by the people that will purchase coffee drinks from us.
vi. Geographical Location
Anybody from any geographical location is free to buy and drink our coffee.
vii. Lifestyle
James Salford® Coffee Shop, Ltd. will not restrict any customer from purchasing coffee drinks from us based on their lifestyle, culture, or race.
b. Advertising and Promotion Strategies
- Deliberately Brand Our Shop.
- Tap Into Text Marketing.
- Make Use of Bill Boards.
- Share Your Events in Local Groups and Pages.
- Turn Your Social Media Channels into a Resource
- Develop Your Business Directory Profiles
- Build Relationships with players in the key industry.
i. Traditional Marketing Strategies
- Marketing through Direct Mail.
- Print Media Marketing – Newspapers & Magazines.
- Broadcast Marketing -Television & Radio Channels.
- OOH, Marketing – Public Transits like Buses and Trains, Billboards, Street shows, and Cabs.
- Leverage direct sales, direct mail (postcards, brochures, letters, fliers), print advertising (magazines, newspapers, coupon books, billboards), referral (also known as word-of-mouth marketing), radio, and television.
ii. Digital Marketing Strategies
- Social Media Marketing Platforms.
- Influencer Marketing.
- Email Marketing.
- Content Marketing.
- Search Engine Optimization (SEO) Marketing.
- Affiliate Marketing
- Mobile Marketing.
iii. Social Media Marketing Plan
- Start using chatbots.
- Create a personalized experience for our customers.
- Create an efficient content marketing strategy.
- Create a community for our target market and potential target market.
- Gear up our profiles with a diverse content strategy.
- Use brand advocates.
- Create profiles on the relevant social media channels.
- Run cross-channel campaigns.
c. Pricing Strategy
When working out our pricing strategy, James Salford® Coffee Shop, Ltd. will make sure it covers profits, insurance, premium, license, economy or value, and full package. All our pricing strategies will reflect;
- Cost-Based Pricing
- Value-Based Pricing
- Competition-Based Pricing.
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Sales and Distribution Plan
a. Sales Channels
Our channel sales strategy will involve using partners and third parties—such as referral partners, affiliate partners, strategic alliances in the event and party planning industry, and freelancers to help refer customers to us.
James Salford® Coffee Shop, Ltd. will also leverage the 4 Ps of marketing which are place, price, product, and promotion. By carefully integrating these marketing strategies into a marketing mix, we can have a visible, in-demand service that is competitively priced and promoted to our customers.
b. Inventory Strategy
The fact that we will need supplies such as coffee, sugar, milk, teacups, and straws means that James Salford® Coffee Shop, Ltd. will operate an inventory strategy that is based on a day-to-day methodology for ordering, maintaining, and processing items in our warehouse. We will develop our strategy with the same thoroughness and attention to detail as we would if we were creating an overall strategy for the business.
James Salford® Coffee Shop, Ltd. will make sure we work with “Just-in-time (JIT) inventory” – (JIT involves holding as little stock as possible, negating the costs and risks involved with keeping a large amount of stock at hand.)
c. Payment Options for Customers
Here are the payment options that James Salford® Coffee Shop, Ltd. will make available to her clients;
- Payment with cash
- Payment via credit cards
- Payment via check
- Payment via mobile money transfer
d. Return Policy, Incentives, and Guarantees
At James Salford® Coffee Shop, Ltd., our customers are our top priority hence if you receive coffee drinks that are different from what you paid for, we will sincerely apologize. You can call us as soon as you notice that there was an error in your order so you can come and pick up the right order.
For credit card payments, you will be refunded the sales price amount associated with the error and recharged for the new items’ price. For cash payments, you will be asked to pay the difference of the balance if the new coffee drinks have a greater value than the coffee drinks received in error.
In the same way, you will receive the difference of the balance back as credit for the new item if less than the coffee drinks received in error. In some cases, we may offer you store credit. Your order will be a priority if you come to pick it up. In all cases, please return the coffee drinks order in the original container(s) to our host.
e. Customer Support Strategy
Our customer support strategy will involve seeking customer feedback. This will help us provide excellent customer service to all our clients and investors. We will work with effective CRM software to be able to achieve this goal.
Regularly, we will work towards strengthening our Customer Service Team and also Leverage Multi-Channel Servicing as part of our customer support strategy.
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Operational Plan
We plan to expand our revenue by 45 percent in the second year. The plan will include a marketing, sales, and operations component. The operations component of the plan would include attracting partnership and retainer deals that will enable the firm to boost our coffee shop business sales and support revenue growth.
a. What Happens During a Typical Day at a Coffee Shop Business?
- The business is open for the day’s work
- The coffee shop serving area is cleaned and ready for the day’s business
- Supplies such as coffee, sugar, milk, glass cups, and straws are purchased, and ready for use
- Customer’s orders are taken and they are served or their orders are delivered to them
- Cashier collect’s cash and reconciles account for the day
- Administrative duties are carried out
- The store or warehouse is restocked when required.
- The business is closed for the day.
b. Production Process (If Any)
The production process of coffee drinks involves;
- Getting the supplies ready
- Mixing coffee drinks.
- Filling in cups and serving the coffee drinks.
c. Service Procedure (If Any)
The service procedure for a coffee shop business starts with a customer requesting coffee drinks. Once the request is gotten, it will be processed and the customer will be served or the order delivered to a location as requested.
d. The Supply Chain
James Salford® Coffee Shop, Ltd. will rely on key players in the event and party planning industry to refer business deals to us. So also, we have been able to establish business relationships with wholesale suppliers of coffee, sugar, milk, glass cups, straws et al.
e. Sources of Income
James Salford® Coffee Shop, Ltd. makes money from the sale of;
- Coffee beverages
- Snacks
- Drinks and water
- Franchise
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Financial Plan
a. Amount Needed to Start your Coffee Shop Business?
James Salford® Coffee Shop, Ltd. would need an estimate of £75,000 successfully set up our coffee shop business in the United Kingdom.
b. What are the Costs Involved?
- Business Registration Fees – £12.
- Legal expenses for obtaining licenses and permits – £1,300.
- Marketing, Branding, and Promotions – £1,000.
- Business Consultant Fee – £2,000.
- Insurance – £1,400.
- Rent/Lease – £35,000.
- Other start-up expenses include commercial satellite TV subscriptions, and phone and utility deposits (£1,800).
- Operational Cost (salaries of employees, payments of bills et al) – £30,000
- Start-up Inventory – £7,500
- Store Equipment (cash register, security, ventilation, signage) – £1,750
- Furnishing and Equipping the Shop and Kitchen – £30,000
- Website: £600
- Opening party: £2,000
- Miscellaneous: £1,500
c. Do You Need to Build a Facility? If YES, How Much Will it Cost?
James Salford® Coffee Shop, Ltd. will not build a new facility for our coffee shop business; we intend to start with a long-term lease and after 5 years, we will start the process of acquiring our own facility.
d. What are the Ongoing Expenses for Running a Coffee Shop Business?
- Supplies such as coffee, sugar, milk, teacups, straws et al
- Utility bills (gas, internet subscriptions, phone bills, signage and software renewal fees et al)
- Salaries of employees
- Equipment maintenance
- Insurance
- Marketing costs
e. What is the Average Salary of your Staff?
- Chief Operating Officer (Owner) – £40,000 Per Year
- Manager – £30,000 Per Year
- Accountant (Cashier) – £28,630,000 Per Year
- Barista, Waiters, and Waitresses – £22,100 Per Year
- Cleaners – £18,000 Per Year
- Security Guard -£24,000 Per Year
f. How Do You Get Funding to Start a Coffee Shop Business
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank/banks
- Source for soft loans from your family members and friends.
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Financial Projection
a. How Much Should You Charge for your Product/Service?
The price of our coffee drinks to a large extent depends on the type of coffee drinks, but on average, we will sell a cup of our coffee drinks anywhere between £1.50 and £4.
b. Sales Forecast?
- First Fiscal Year (FY1): £160,000
- Second Fiscal Year (FY2): £250,000
- Third Fiscal Year (FY3): £300,000
c. Estimated Profit You Will Make a Year?
- First Fiscal Year (FY1) (Profit After Tax): £65,000
- Second Fiscal Year (FY2) (Profit After Tax): £100,000
- Third Fiscal Year (FY3) (Profit After Tax): £120,000
d. Profit Margin of a Coffee Shop Business Product/Service
The ideal profit margin we hope to make at James Salford® Coffee Shop, Ltd. will be between 20 and 60 percent all things being equal.
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Growth Plan
a. How do you intend to grow and expand?
James Salford® Coffee Shop, Ltd. will grow our coffee shop business by first opening other outlets in key cities in the United Kingdom within the first five years of establishing the business and then will start selling franchises from the sixth year.
b. Where do you intend to expand to and why?
James Salford® Coffee Shop, Ltd. plans to expand to;
- Auckley, South Yorkshire
- Dorchester, Dorset
- Ammanford, Carmarthenshire
- Prestwich, Manchester
- London
- Bradford, West Yorkshire
- Birmingham-Wolverhampton
- Leeds-Bradford
- Little Horwood, Buckinghamshire
- Southampton-Portsmouth
- Liverpool
- Newcastle
The reason we intend to expand to these locations is that available statistics show that the cities listed above have the highest and most thriving market for coffee drinks in the United Kingdom.
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Exit Plan
The founder of James Salford® Coffee Shop, Ltd. plans to exit the business via family succession. We have placed structures and processes in place that will help us achieve our plan of successfully transferring the business from one family member to another and from one generation to another without hitches.