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Page 1
The Business Plan for Your Coffee Shop
Fourth Edition
Page 2
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Fourth Edition
Starting, operating and managing a coffee shop is a
complex task. A functional business plan is not only
valuable when seeking investment funds, but in the
day to day management of the coffee shop.
This eleven step business plan will help you create
your coffee shop business plan with confidence. This
user friendly business plan was prepared with ProBP,
the professional business plan software solution.
Be sure that you have all of the components; the
workbook, the Excel spreadsheet and the Word
Option document.
Jack Samson

PO Box 2432
Frisco, Texas USA 75034
866-900-7887
www.125aday.com
iii
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Publisher:
Cover Design:
Chad Wade
Photographs & Graphs Copyright © 2007 David Lee
This publication is designed to provide accurate and authoritative information in
regard to the subject matter covered. It is sold with the understanding that the
publisher is not engaged in rendering professional services. If legal, account,
medical, psychological, or any other expert assistance is required, the services of a
competent professional person should be sought. ADAPTED FROM A DECLARATION
OF PRINCIPLES OF A JOINT COMMITTEE OF THE AMERICAN BAR ASSOCIATION AND
PUBLISHERS.
Copyright 2004-2008 by 125aday.com Publishing Company, Inc.
All rights reserved.
Reproduction or translation of any part of this work beyond that permitted by Section
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copyright owner is unlawful. Requests for permission or further information should
be addressed to the Permissions Department, 125aday.com Publishing Company,
Inc.
125aday, 125aday.com, Business Talk and ProBP (business plan software) are
trademarks of Dallas Distribution and Publishing Company, Inc.
Third-Party Materials and Linked Materials - The publisher is not responsible for the
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The Business Plan for Your
Coffee Shop
Table of Contents
Introduction................................................................................................. 1
Customizing the Business Plan ................................................................. 2

Changing the Page Setup.......................................................................... 2
The Page Tab ...................................................................................... 2
Orientation ...................................................................................... 2
Paper Size ....................................................................................... 2
Print Preview.................................................................................... 2
The Margins Tab .................................................................................. 2
The Header/Footer Tab ......................................................................... 2
Changing the Header......................................................................... 2
Changing the Footer.......................................................................... 2
The Sheet Tab ..................................................................................... 3
Changing the Font and Font Size ............................................................... 3
Changing the Color of the Text .................................................................. 3
Adding or Removing Worksheets................................................................ 3
Renaming the Pages in the Spreadsheet ..................................................... 4
Renaming the Pages in the Spreadsheet ..................................................... 5
Adding or Removing Rows or Columns........................................................ 5
Inserting Pictures .................................................................................... 5
Changing the Formulas............................................................................. 5
Excel Help .............................................................................................. 5
Word® Option........................................................................................... 5
Samples and Illustrations ......................................................................... 6
Changing Chart Information ..................................................................... 6
Mutual Non-Disclosure Agreement............................................................ 8
Step One ...................................................................................................... 9
Your Personal Evaluation.......................................................................... 9
Your Net Worth ....................................................................................... 9
Instructions on How to Complete in Excel ................................................ 9
Your Personal Budget............................................................................... 9
Why This Information Is Important ............................................................ 9
Step Two .................................................................................................... 11
The Cover Sheet...................................................................................... 11
First Impression! ....................................................................................11
Elements of the Cover Sheet....................................................................11
Complete the Cover Sheet Section ............................................................11
Saving Your Business Plan File..................................................................11
Cover Sheet Sample ...............................................................................13
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Step Three.................................................................................................. 14
The Executive Summary.......................................................................... 14
The Basics of the Executive Summary .......................................................14
Applying for Loans or Investors ................................................................14
Information That Should Be Included ........................................................14
Mistakes to Avoid................................................................................16
Mission Statement..................................................................................16
The Basics of the Mission Statement ......................................................16
Mistakes to Avoid................................................................................17
Products and Services .............................................................................17
Complete the Executive Summary.............................................................18
When You Have Completed the Executive Summary ....................................18
Executive Summary Sample.....................................................................19
Step Four ................................................................................................... 22
General Company Description................................................................. 22
Company Description: Business Plan Basics................................................22
Mistakes to Avoid ...................................................................................23
Company Goals and Objectives.................................................................23
Business Philosophy................................................................................23
Legal Form of Ownership .........................................................................24

Complete the General Company Description Section....................................24
When You Have Completed the Company Goals and Objectives.....................24
General Company Description Sample .......................................................25
Step Five .................................................................................................... 26
Products and Services Description.......................................................... 26
Competitive Advantages or Disadvantages..............................................26
Pricing Structures................................................................................26
Products and Services Description: Business Plan Basics ..............................27
Complete the Products and Services Section...............................................28
When You Have Completed the Products and Services Description.................28
Products and Services Description Sample .................................................29
Step Six...................................................................................................... 31
Start-Up Costs and Capitalization ........................................................... 31
Qualified and Non-Qualified Start-Up Costs ................................................31
Qualified Start-Up Costs.......................................................................31
Non-Qualified Start-Up Costs ................................................................31
Budget Allowances..................................................................................31
Evaluating Start-Up Costs........................................................................32
Start-Up To Do List.................................................................................33
Start-Up Narrative..................................................................................34
Instructions on How to Complete in Excel ...............................................35
Complete the Start Up Costs Section.........................................................36
When You Have Completed the Start Up Costs and Capitalization Section .......36
Start-Up Narrative Sample.......................................................................37
Step Seven ................................................................................................. 41
The Marketing Plan ................................................................................. 41
Marketing & Sales: Business Plan Basics ....................................................41
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Target Market: Business Plan Basics..........................................................43
Market Research Basics...........................................................................44
Market Research - Why? ......................................................................44
Market Research - How?.......................................................................45
Primary Market Research ..................................................................45
Secondary Market Research ..............................................................45
Economics of the Industry .......................................................................45
Product.................................................................................................46
Features and Benefits ..........................................................................46
Customers.............................................................................................47
Competition...........................................................................................47
Niche Market .........................................................................................48
Marketing Strategy .................................................................................48
Promotion ..........................................................................................48
Promotional Budget .............................................................................48
Pricing...............................................................................................49
Proposed Location ...............................................................................49
Complete the Marketing Plan....................................................................50
When You Have Completed the Marketing Plan ...........................................50
Marketing Plan Sample............................................................................51
Step Eight................................................................................................... 54
Sales Forecast......................................................................................... 54
Financial Projections: Business Plan Basics.................................................54
Sales Forecast .......................................................................................55
The Excel Spreadsheet ............................................................................55
Instructions on How to Complete in Excel ...............................................55

Complete the Sales Forecast Section .........................................................56
When You Have Completed the Sales Forecast............................................56
Step Nine ................................................................................................... 57
The Operational Plan .............................................................................. 57
Operational Plan: Business Plan Basics ......................................................57
The Operational Plan...............................................................................58
Production.............................................................................................58
Location................................................................................................59
Physical Requirements .........................................................................59
Access...............................................................................................59
Construction.......................................................................................59
Cost ..................................................................................................59
Legal Environment..................................................................................59
Personnel ..............................................................................................59
Inventory..............................................................................................60
Suppliers...............................................................................................60
Managing your Accounts Receivable ..........................................................60
Managing your Accounts Payable ..............................................................61
Complete the Operational Plan Section ......................................................61
When You Have Completed the Operational Plan .........................................62
Operational Plan Sample..........................................................................63
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Step Ten..................................................................................................... 66
Management and Organization ............................................................... 66
Management Team: Business Plan Basics...................................................66
Specific Team Members...........................................................................66
Board of Directors ..................................................................................67
Board of Advisors ...................................................................................67
Consultants ...........................................................................................67
Professional and Advisory Support ............................................................68
Complete the Management and Organization Section...................................68
When You Have Completed the Management and Organization .....................68
Management and Organization Sample ......................................................69
Step Eleven ................................................................................................ 71
The Financial Plan................................................................................... 71
Financial Projections: Business Plan Basics.................................................71
The Financial Plan for Your Company.........................................................73
Instructions on How to Complete the Profit-Loss Narrative ........................73
Profit-Loss Projection ..............................................................................73
Instructions on How to Complete the Profit-Loss Statement.......................74
Projected Cash Flow................................................................................74
Instructions on How to Complete the Projected Cash Flow.........................75
Opening Day Balance Sheet .....................................................................76
Instructions on How to Complete the Balance Sheet.................................76
Break-Even Analysis ...............................................................................76
Instructions on How to Complete the Break-Even Analysis ........................77
When You Have Completed the Financial Plan.............................................77
Financial Plan Sample .............................................................................78
Appendixes ................................................................................................ 81
Your Business Plan Now Complete and Ready for Printing......................... 82
In Conclusion ............................................................................................. 82
PowerPoint:Demonstrations ................................................................... 82
Non-Disclosure Agreement......................................................................... 84
Attachment One ......................................................................................... 87

A Discussion of the Basic Legal Forms of Ownership .............................. 87
Proprietorship, Partnership or Incorporation?..............................................87
Advantages and Disadvantages of Proprietorship .....................................87
Advantages.....................................................................................87
Disadvantages.................................................................................88
Advantages and Disadvantages of Partnership.........................................88
Advantages.....................................................................................88
Disadvantages.................................................................................89
Advantages and Disadvantages of Incorporating......................................89
Advantages.....................................................................................89
Disadvantages.................................................................................90
Registering a Proprietorship or Partnership .............................................90
Registering a Corporation.....................................................................90
Incorporating a Company in your State ..................................................90
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ix
Attachment Two......................................................................................... 91
Information Resources ........................................................................... 91
U.S. Small Business Administration (SBA)..................................................91
Service Corps of Retired Executives (SCORE) .............................................92
Small Business Development Centers (SBDCs) ...........................................92
Small Business Institutes (SBIs)...............................................................92
SBA Business Development Programs........................................................92
Other U.S. Government Resources............................................................92
Federal Publications ................................................................................92
Consumer Information Center (CIC)..........................................................93
Consumer Product Safety Commission (CPSC)............................................93
U.S. Department of Agriculture (USDA) .....................................................93
U.S. Department of Commerce (DOC) .......................................................93
U.S. Department of Health and Human Services (HHS) ................................93
U.S. Department of Labor (DOL)...............................................................94
Internal Revenue Service (IRS) ................................................................94
U.S. Environmental Protection Agency (EPA) ..............................................94
U.S. Food and Drug Administration (FDA) ..................................................94
For More Information ..............................................................................94
Government and State Websites ................................................................ 96
Index ......................................................................................................... 97
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Introduction
There are few very secrets and absolutely no short cuts to preparing a
business plan for a coffee shop. Careful investigation, complete research,
and a through thought process is required to complete an accurate business
plan for a coffee shop.
The real value of creating a business plan is not in having the finished
product in your hand; rather, the value lies in the process of researching and
thinking about your business in a systematic way. The act of planning helps
you to think of things thoroughly, study and research if you are not sure of
the facts, and look at your ideas critically. It takes time now, but avoids
costly, perhaps disastrous, mistakes later.
This business plan is carefully structured to take you a step at a time. In
order to complete this business plan accurately, you should take each step,
in order, and then move on to the next step. You do not have to complete
the entire business plan at once. We do suggest that you complete each
step before leaving your work.
Important Notes and Tips

Throughout this business plan, there will be important notes and tips about
entering information into the business plan spreadsheet template, formatting
the business plan spreadsheet template, Word option narratives, and printing
suggestions and alerts. If you have any problem with these areas, check
the Appendix on page 81 for trouble shooting information related to these
important notes and tips. So when you see these, carefully read the
information!
Let’s get started.
The Business Plan for Your Coffee Shop is divided into eleven (11) steps.
These steps are:
Step One – Your Personal Evaluation on page 7
Step Two – The Business Plan Cover Sheet on page 11
Step Three – The Executive Summary on page 13
Step Four – General Company Description on page 22
Step Five – Products and Services on page 26
Step Six – Start Up Costs on page 31
Step Seven - The Marketing Plan on page 41
Step Eight – Sales Forecasts on page 54
Step Nine – The Operational Budget on page 57
Step Ten - Management and Organization on page 66
Step Eleven – The Financial Plan on page 71
Appendixes on page 81
Your business plan Is Now Complete and Ready for Printing on page 82
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In Conclusion on page 82
Customizing the Business Plan
You can customize the business plan and how it looks when viewed on the
computer and when the business plan is printed. Here we explain some of
the basics of customizing the Excel® spreadsheet.
Changing the Page Setup
The Page Tab
Orientation
Here you can select to view and print your business plan in portrait (vertical)
or landscape (horizontal) format. The default setting is portrait.
Paper Size
Here you can select to and view print in letter, legal or custom paper sizes.
The default setting is letter.
Print Preview
Here you can select to print the business plan from the back to the front, or
vice versa. The default setting is back to front.
The Margins Tab
Here you can select the margins for your business plan. The default settings
are the recommended settings.
The Header/Footer Tab
Changing the Header
Click on the Custom Header button and you can customize the header for
your business plan. Also notice that you can select a print preview from this
screen that allows you to see the entire page, with headers and footers.
After changing the header, click OK to save your changes.
Changing the Footer
Click on the Custom Footer button and you can customize the header for
your business plan.
After changing the footer, click OK to save your changes.
2

The Sheet Tab
Here you can adjust and set the:
Print Area
Print Titles
Print Instructions for:
Gridlines
Row & Column Headings
Comments
Page Order
Changing the Font and Font Size
You can select the entire worksheet or specific text to assign font and font
size to in the workbook and make your changes on the toolbar. You can
have different size fonts on the same page. The default font is Trebuchet MS
and the font size varies. You can select the Formatting Toolbar that will
show the font and font size. It will look like this:
Changing the Color of the Text
You can select the entire worksheet or specific text to assign font and font
size to in the workbook and make your changes on the toolbar. You can
have many different colors on the same page. The default color is the color
that is on the worksheets now.
Adding or Removing Worksheets
You can add worksheets by clicking on Insert, Worksheet. You will want to
click on the tab next to the area where you want to insert the worksheet.
You can delete a worksheet by clicking on Edit, Delete Sheet.
Spreadsheet Note
Important Note Regarding Deleting a Worksheet
WARNING: if you delete a sheet with formulas that extend to other
pages in the spreadsheet, you will receive errors in the formulas. So
be sure you want to delete the worksheet before doing so!
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Viewing the Pages in the Spreadsheet
The pages of the spreadsheet are shown at the bottom of the page as tabs.
To view the different pages, the sheet tabs Sheet tab bar appears at the
bottom of the screen with tab scrolling buttons displayed on the left side.
If the Sheet Tabs are not there, you can restore them by the following:
1. On the Tools menu, click Options.
2. On the View tab, under Window options, select or clear the Sheet tabs
check box.
You will notice that the columns are labeled with letters (A, B, C, etc) and the
rows are numbered. As we go through spreadsheets, we will refer to the
column letter and the row number. The column letter is across the top of the
spreadsheet. The row number is along the left hand side of the spreadsheet.
Each individual block in the spreadsheet is called a cell.
Rows, Columns and Cells
While we have attempted to include everything necessary in these
spreadsheets, if you add rows to the spreadsheets, the totals may not add
up! You will need to adjust the formulas to add up the figures if you add
rows. While this is not difficult, you will need to ensure that you can adjust
the totals so the figures will be correct. You can also change the text colors,
fonts, and sizes of the fonts as you work.
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Renaming the Pages in the Spreadsheet
Select the tab you want to rename. Right click on the tab and select
Rename. Type the new name of the page, but there is a character limit.
Adding or Removing Rows or Columns
You can rows or columns by selecting where you want to add the row or
column. Then select Insert, then row or column.
You can remove an entire row by clicking on the row number (far left) and
selecting Edit, delete.
You can remove an entire column by click on the column and selecting Edit,
delete.
Spreadsheet Note
Important Note Regarding Deleting a Rows or Columns
WARNING: if you delete a cell, row or column with formulas that
extend to other pages in the spreadsheet, you will receive errors in
the formulas. So be sure you want to delete the cell, row or column before
doing so!
Inserting Pictures
You can insert pictures from your computer into the business plan by
selecting the cell where you want the picture to be inserted. Then select
Insert, Picture and browse to the picture you want to insert. Double click the
picture and then format the cell.
Changing the Formulas
Changing or adding formulas is not extremely difficult in Excel®. However, it
does require a working knowledge of the formulas. You can search the Help
section for information pertaining to the formula you want to change or add.
Excel Help
Depending on the version you are using, you can use the Help section in the
application and later versions have online extend help resources. Just click
on Help on the toolbar or you can hit F1.
Word® Option
If you are not familiar with how to enter text into the Excel® spreadsheet,
you might find it easier to enter all of the narrative information in the Word®
Option document. If you use the Word® Option document, you will need to
manually enter the page numbers onto each page of your business plan.
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Samples and Illustrations
In each step of the business plan, we provide you either a sample or an
illustration of the information that you will need to provide in the step.
Sample Illustration Excel
Step 1
Net Worth
√
Step 2
Cover Sheet
√
Step 3
Executive Summary
√
Step 4
General Company Description
√
Step 5
Products and Services Description
√
Step 6

Start-Up Costs Narrative
√
Step 6
Start-Up Costs
√
Step 7
Marketing Plan
√
Step 8
Sales Forecast
√
Step 9
Operational Plan
√
Step 10 Management and Organization
√
Step 11 Financial Plan Narrative
√
Step 11 Profit-Loss Statement
√
Step 11 Projected Cash Flow
√
Step 11 Balance Sheet
√
Step 11 Break-Even Analysis
√
Changing Chart Information
We have provided charts in the Excel® spreadsheet for the information that
bankers, investors, and other lenders want to see in your business plan. The
charts are automatically produced from the information that you enter.
Based on the information that you enter, you may need to change the
information on the axis of the chart. For example, this Chart Example 1 is
from Step One, Personal Net Worth. As you can see, the Income Needed
axis on the left is in the increments of $100,000 and $200,000. The axis
information needs to be changed to make the information look better and
more visible.
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Chart Example 1
We have changed the axis information to increments of $10,000 up to
$90,000. See the difference in Chart Example 2 below.
Chart Example 2
How to change entries on the X-axis or Y-axis:
1. Right click on the Axis that you would like to change and then click the tab
labeled Scale.
2. When you have determined what range of numbers you want to use insert
them into the proper boxes to the minimum and maximum units that you
want to use.
3. With this option you can also change the font, sizing of the font, the
category and alignment.
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Mutual Non-Disclosure Agreement
A non-disclosure agreement (NDA) can send up red flags to your intended
audience. A seasoned banker or venture capitalist is bound by client
confidentiality and may find a NDA insulting. Secondly, if the business needs

to protect its ideas and concept at this stage of the game then there may not
be any barriers to entry for others to enter the market.
A simple
confidentiality clause at the front of the plan should suffice. In some cases,
such as setting up a strategic alliance a non-disclosure may be necessary. If
in doubt, consult with a lawyer. A sample agreement is shown on page 84.
We have chosen to include a Confidentiality and Recognition of Risks
statement on the Cover Sheet. You can view this statement on the Cover
Sheet Sample on page 13.
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Step One
Your Personal Evaluation
Your Net Worth
Before starting your coffee shop, you need to have a firm grasp on your own
personal financial situation. For that reason, the first step in preparing your
business plan will be to determine your personal financial picture.
Instructions on How to Complete the Excel Spreadsheets
Refer to your Excel® Spreadsheet. The first page is entitled Step 1 -Your
Net Worth.
In viewing the first page of the Excel® spreadsheet entitled Step 1 -Your Net
Worth, you will find that this information is very straight forward and simple,
so a detailed discussion is unnecessary. Just fill in the blanks. At the bottom
of the page, you will see your Estimated Net Worth. The areas in the light
blue color automatically fill themselves in, so do not enter any figures in
these cells. Hopefully, this will be a positive number.
Your Personal Budget
Refer to your Excel® Spreadsheet, Step 1 – Your Net Worth and scroll down
to the section entitled Your Personal Budget.
Again, this information is commonplace and you should know what dollar
amounts to enter into the cells. For instance, in Column C, Row 56, this is
monthly mortgage. If you monthly payments are $1,500.00, enter 1500 in
Column D, Row 56.
You will see that this Personal Budget is for 1 month, 3 months, 6 months,
and 1 year. You should also notice that as you enter your monthly mortgage
payment, the spreadsheet automatically totals the rest of the row. So you
only need to enter the monthly amounts to get the 3 and 6 months totals
and the yearly total.
Why This Information Is Important
In starting your coffee shop, you need to have your personal financial
situation firmly planted on the ground. Starting a business is difficult enough
without personal financial problems getting in the way of your success.
If the Total Income Needed (Column D, Row 89) is greater than your Total
Income (Column D, Row 87), you have some financial issues to fix before
starting your coffee shop. We can’t tell you how to fix this problem, but we
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can tell you that your will be starting your coffee shop in financial trouble and
that is no way to start a business!
In the example below, the total income is $8,000 a month with monthly
expenses of $4,355. Therefore, there is a surplus of funds monthly for
savings, investment and/or starting a business.
Figure 1-1. Income Differential
Figure 1-2. Income Differential
Now, assuming that your personal financial situation is acceptable, you are

ready now to begin preparing The Business Plan for Your Coffee Shop.
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Step Two
The Cover Sheet
First Impression!
The Cover Sheet is the first page of your business plan. The cover of the
document is often the "First Impression" of your shop for any interested
parties or investors. The purpose of a cover is to tell the reader what the
document is about. Your cover sheet should include:
Name and business name
Company logo
Address
Telephone number
Fax number
E-mail address
Other contact information
Tip
Important Tip
Cover Sheet
The cover should be attractive and professional looking. Fonts used should be
easily read and color contrasts should be pleasant to the eye.
Elements of the Cover Sheet
The information is very basic. You can view an example of a Cover Sheet on
page 13.
Complete the Cover Sheet Section
You can prepare the Cover Sheet in Excel® or Word®.
To complete the Cover Sheet in Excel®, go to the Excel® spreadsheet to the
tab labeled Step 2 – Cover Sheet. Fill in the information and save your work.
To complete the Cover Sheet in Word®, go to the Word® options file and
complete the information.
Saving Your Business Plan File
As you complete the Steps in this business plan, be sure to save your work
often.
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Tip
Important Tip
Save Your Work Often
Nothing is worse than working on your business plan for an hour
and then having the computer shut down expectedly. Save your work often
and you won’t lose your information!
When you have completed the Cover Sheet, you are ready for the next step
in the preparation of your business plan. So proceed to Step Three, the
Executive Summary on page 13.
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The Business Plan For
Perk Me Up Coffee Shop

2738 Commerce Way
Any Town, State, Zip
Contact Person: Dustin Roberts
Telephone: 222-333-4444
Fax:
111-222-3333
Email:
xyz@example.com
Confidentiality and Recognition of Risks
Confidentiality Clause
The information included in this business plan is strictly confidential and is provided on the
understanding that it will not be disclosed to third parties without the expressed written
consent of Dustin Roberts.
Recognition of Risk
This business plan represents management's best estimate of the future potential of our
business venture. It should be recognized that not all-major risks can be accurately predicted
or otherwise avoided and that few business plans are free of errors of omission or commission.
Therefore investors should be aware that this business has inherent risks that should be
evaluated prior to any investment.
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Step Three
The Executive Summary
The Basics of the Executive Summary
The Executive Summary is a narrative and should be one to two pages in
length. We certainly suggest you make it two pages or less, especially if
investors or bankers will be reviewing your business plan for loan or
investment purposes.
You should explain the fundamentals of your coffee shop:
1. What will your menu products and store services be,
2. Who will be your customers,
3. Who are the owners of your coffee shop, and
4. What you think the future holds for your coffee shop and the industry.
You should make this narrative enthusiastic, professional, complete and
concise without overstating the financial figures.
If You Will Be Applying For Loans or Investors
If you will be applying for a loan or looking for investors, state clearly how
much you want, precisely how you are going to use it, and how the loan or
investment will make your coffee shop more profitable and successful,
thereby ensuring repayment.
Tip
Important Tip
Applying for Loans or Approaching Investors
If you are going to use your business plan for applying for loans
and especially if you are going to be looking for investors, make sure that
your business plan meets any requirements as it can be construed as a
Securities Offer. You consult with your attorney regarding this matter.
What Information Should Be Included in the Executive Summary?
We have provided a sample Executive Summary to help give you an idea of
the way the information can be formatted. See the sample Executive
Summary on page 19.
The following are commonly used sub-headings to cover the key points.
Avoid general statements and be sure to clearly articulate key numbers.
•
The Company
14

•
Mission statement
•
Management
•
Products & Markets
•
Sales and Profit Summary
•
Funding Requirement
•
Investment Proposal
Regardless of how you organize your Executive Summary, be sure to answer
the following questions (note - due to the sensitive, confidential nature of
what you might say in such a document, you might want to restrict your
disclosure in certain areas and only reveal such information to others if you
are assured of confidentiality). You should address these questions, and any
others which you consider important, under headings such as those noted
above.
We have provided a sample of a simple Executive Summary to help give you
an idea of the way the information can be formatted. See the sample
Executive Summary on page 19.
Questions to Address:
1. What is the full, legal name (and jurisdiction of incorporation) of your
coffee shop (if it exists) and a brief history (when incorporated,
ownership and capital structure, track record, accomplishments to date
if any, etc)? Don't forget to include a complete address and contact
details (email address, telephone numbers, etc).
2. What is the "Mission" of your coffee shop (i.e. what is it setting out to
achieve or accomplish)?
3. What is the market which your business is going after (who, where,
size -in dollars) and what is the unique (i.e. proprietary advantage in
the form of patents, trade secrets, trademarks) or new product or
service which is being offered to this market?
A comment on
competition is useful. Also, identify and current and potential
customers. Testimonials are helpful.
4. Who are the key people behind your coffee shop (i.e. why would
someone entrust them with their money?) and what are their
credentials? Include all board members and key management people.
5. What does your coffee shop expect to achieve in sales and profit
(before tax) (in $) in years 1, 2, 3 and beyond?
6. How much capital is needed (at various stages over the first 3 years)?
And what are the uses to which these funds will be applied?
7. What has already been invested (# of years sweat equity, or seed
investment amounts, i.e.#shares@$xx, and by whom)?
8. What is being offered for the investment (e.g. equity %, board seat,
etc.)
9. What kind of return might an investor expect? Over what time frame?
And what is the "exit strategy"?
10.What else is important to note? (that hasn't been covered elsewhere)
15
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Executive Summary: Mistakes to Avoid

Here are several common mistakes that can make your Executive Summary
less effective:
•
Lacking a specific focus
•
Too long and wordy, and failing to get to the point
•
Trying to be all inclusive (it should be a powerful summary)
•
Failing to demonstrate a special or unique opportunity
•
Failing to outline the terms of the investment sought
•
Failing to generate enthusiasm in the reader
Some suggestions to combat these problems:
•
Limit your Executive Summary to a maximum of 3 pages (at the very
most)
•
If possible, attempt to present your Executive Summary on 1 or 2
pages
•
Focus on the opportunity you are presenting your investor and explain
why it is special
•
Make certain that the opinions and claims in your Executive Summary
are fully supported in the other sections of your business plan
•
Attempt to use only concrete facts and figures that explain your
business concept, market niche and financial projections
•
Don't forget to include the details of your investment (the amount you
need, what you will spend it on, and the return you offer your
investor)
•
Keep your reader in mind - why are they reading the plan and what
response/action to you hope to generate?
Mission Statement
Many companies have a brief mission statement, usually in thirty words or
less, explaining their reason for being in business and their guiding principles.
Some are very complex.
You should carefully think through your own personal Mission Statement for
your coffee shop, also referred to as Mission and Vision Statements. You
might write down whatever comes to mind now. The good news is that you
can change, revised, and detail your Mission Statement later on, as you
should with your entire business plan over the years.
The Basics of the Mission Statement
The Mission and Vision Statements set the tone for not only your business
plan, but also for your company. They define the path your company will
follow and act as a guiding principle by which your company functions.
16
Page 26
Your Mission and Vision Statements tell your reader what you and your
business are all about - what your company stands for, what you believe in,
and what you intend to achieve.
Economy of words is critical. This doesn't necessarily mean that they should

be short at the expense of effectiveness, but that each word should be
powerful and meaningful. Be clear and concise and make it obvious what
your company is attempting to do.
Is there a difference between a mission and vision statement? Yes, the
differences are:
Your VISION defines your long-term dream. It should not be achievable.
That may sound ridiculous, but the objective is for your vision to always be
just slightly out of your reach. It's what you constantly strive to attain, and
it becomes your reason for being.
Your MISSION is what you intend to become or accomplish. It should be
challenging but achievable. A well-written mission statement demonstrates
that you understand your business, have defined your unique focus, and can
articulate your objectives concisely to yourself and others.
Mission & Vision: Mistakes to Avoid
Here are some of the "don'ts" to avoid when writing your Mission Statement
or Vision Statement:
•
Don't regurgitate a description of your business.
•
Don't make it boring.
•
Don't make it the length of a Ph.D. thesis.
•
Don't fake emotion.
•
If you don't believe it, don't include it.
•
Don't lie or claim to be something you aren't (i.e. intend to do exactly
what you say you are going to do in your mission statement).
•
Don't forget to get the input of everyone on your team.
Products and Services
This is a SUMMARY of the menu products and store services that you will
offer in your shop. The detailed products and services section is in Step 5 of
the business plan.
For now, you might have a good idea of the menu products and store
services that you will offer. Some might include the following:
Coffee Club
Blends
Special Blend
Full Service Menu
Buffet
Specials
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Page 27
Grab and Go Menu
Café Rental
Delivery Service
Banquet Facilities
Smoking Facilities
Business Meetings
Souvenirs
Other Retail Sales
Bakery Products
Cold and Hot Beverages (Other)
Describe each of the menu products and store services you will offer in your

coffee shop. Go into as much detail as necessary for the reader to get an
understanding for what the enterprise will be. Make it interesting. It is
important to point out how your coffee shop is different from other coffee
shops. Just saying "It is better" is not enough. You must tell how it is
better. Every business claims to be "high quality, better service". While a
business must have quality and good service, it is no real selling point, since
the consumer is bombarded with that claim at every turn. One can not bore
a reader into buying their proposal! One must convince them about their
product or service. If it can not be done here, it won’t be done in the market
place when your business starts.
Complete the Executive Summary
To complete the Executive Summary in Excel®, go to the Excel®
Spreadsheet to the tab labeled Step 3 – Executive Summary. Fill in the
information and save your work.
To complete the Executive Summary in Word®, go to the Word® options file
and complete the information.
When You Have Completed the Executive Summary
Now you are ready to proceed to the next step in the preparation of your
business plan, so proceed to Step Four, General Company Description.
18
Page 28

Executive Summary
The Company
Perk Me Up Coffee Shop is incorporated in the state of Washington. It
is equally owned and managed by its two partners.
The company intends to hire six full-time waitresses and six part-time
workers/students to handle day to day operations.
Mission Statement
Perk Me Up Coffee Shop aims to offer beverages, coffee, and pastries
at a competitive price to meet the demand of the local market area
residents.
Management
Dustin Roberts has extensive experience in sales, coffee products, and
management. Mr. Roberts was manager of Coffee and Donuts. Lynn
Baur brings experience in the area of office management and financial
accounting. Ms. Baur was operating manager of Coffee To Go.
Products & Markets
The Company will provide the following products and services:
Coffee Club
Blends
Special Blend
Full Service Menu
Buffet
Specials
Grab and Go Menu
Café Rental
Delivery Service
Banquet Facilities

Smoking Facilities
Business Meetings
Souvenirs
Other Retail Sales
Bakery Products
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The Company will target the following market:
local market area residents.
Sales and Profit Summary
Perk Me Up Coffee Shop is a start-up company. Financing will come
from the partners' capital and a ten-year SBA loan. The following
chart and table illustrate the company's projected initial start-up costs.
Start-up
Funding Requirement
Perk Me Up Coffee Shop expects to raise $110,000 of its own capital
and to borrow $100,000 guaranteed by the SBA as a ten-year loan.
This provides the bulk of the current financing required.
Perk Me Up Coffee Shop anticipates sales of about $389,000 in the
first year, $443,000 in the second year, and $590,000 in the third year
of the plan. The company should break even by the fourth month of
its operation as it steadily increases its sales. Profits for this time
period are expected to be approximately $33,000 in year 1, $56,000
by year 2, and $76,000 by year 3. The company does not anticipate
any cash flow problems.
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Investment Proposal
The company is currently seeking total capital in the amount of
$110,000 to be repaid as follows:
Interest only for five (5) years at a negotiated rate (APR).
Principal payments of $10,000 per year plus interest payable as
negotiated, but quarterly payments are preferred.
Stock, equity or ownership is available as negotiated.
21
Page 31
Step Four
The General Company Description is made up of the following:
Company Goals and Objectives on page 23
Business Philosophy on page 23
Legal Form of Ownership on page 24
Company Description: Business Plan Basics
The Company Description section of your business plan should outline your
company’s basic background information and business concept. Explain in
general terms who you are and what you do. It should also cover the history
of your company, how you reached this point, and where you intend to go in

the future. Consider covering the following in your company description
section:
Legal Description
Include details about where and when the company was formed, where and
when it was incorporated, a one line description of what business you are in,
and a brief overview of what your shop offers. If the location of your shop is
important, explain the advantages and benefits to your reader.
History of the Company
Provide a general overview of the history of your company. Organize details
of your company into a timeline or narrative format, and include your
achievements and significant milestones. Explain why you started the shop,
the driving force behind its inception, and how your company’s
product/service mix has changed over time. Include historical data on sales,
profits, individual menu products and store services, number of employees,
and other important facts to build a case for your company.
Current Status
Provide a snapshot of where your company is today. Are you in one location,
what do you offer to your customers now, how many employees do you
have, and how successful are you? Point out your current strengths, but also
honestly and frankly address your weaknesses.
Investors know all
businesses have weak points.
You demonstrate business maturity by
acknowledging your weaknesses and outlining steps to combat them.
Future Goals
This section gives your reader an idea of where your company is heading.
What are looking to accomplish over the next 1, 3, 5 and 10 years? Relate
these goals to the investment you seek so an investor understands why you
need their money and what you intend to do with it. Explain the overall
approach for reaching growth and profit goals in optimistic language, but
22
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make sure it's realistic. It's easy to make rosy projections about the future
of your coffee shop, but it's harder to make them believable.
Company Description: Mistakes to Avoid
The company description should clearly explain your shop and the products
and services you offer. This section could be considered the who, what, why,
where, when and how of your company, with the focus on significant
highlights of your business. Here are some of the most common mistakes
that we find in the company section:
•
Including far too much detailed information about your business
•
Providing information that an investor would consider your "personal
opinion"
•
Appearing as though you have no business history or business purpose
•
Leaving out important business and legal particulars
•
Writing the section in an unorganized or confusing manner
Company Goals and Objectives for Your Coffee Shop
Your goals and objectives for your shop are destinations; where you want
your shop now and in the future. Objectives are progress markers along the
way to measure goal achievement. For example, a goal might be to have a
healthy, successful shop that is a leader in freshly brewed import JavaBest

brand coffee availability and world famous Southern Style® pecan pie.
Objectives might be annual sales targets and some specific measures of
customer satisfaction.
Tip
Important Tip
Goals & Objectives
This particular area of the business plan may be difficult to completely fill out
at this time. You might need additional financial data to reasonable
determine your goals and objectives. Nevertheless, you should make some
notes in on the page and then proceed.
Business Philosophy
This is a description of what is important to you in your business as the owner
and operator of a coffee shop. You will need to address, in some detail, the
following:
1) To whom will you market your products and services.
2) Describe who your target market is.
3) Describe the coffee industry with some emphasis on the following
items:
4) Is the shop in a growth industry?
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5) What changes do you foresee in your industry, short term and long
term?
6) How will your company be poised to take advantage of the changes
mentioned above?
7) Your most important company strengths and core competencies.
8) What factors will make your shop succeed?
9) What do you think your major competitive strengths will be?
10)
What background experience, skills, and strengths do you
personally bring to this new venture?
Legal Form of Ownership
Describe what legal form of ownership you have decided to form for your
coffee shop; Sole Proprietor, Partnership, Corporation, Limited Liability
Corporation (LLC) and describe why you have selected this form.
Tip
Important Tip
Legal Form
If you haven’t determined the legal form of ownership, you certainly need to
discuss with your attorney and/or accountant. We will provide you some
information here about this, but in no way is this information to be assumed
to be legal advice. Only your professional legal and accounting team can
correctly advice you what you should do in this regard as to the legal form of
ownership of your coffee shop.
For a general discussion on the legal forms of business ownership, please see
Attachment One – A General Discussion on page 84.
We have provided a sample General Company Description to help give you
an idea of the way the information can be formatted. See the sample
General Company Description on page 25.
Complete the General Company Description Section
To complete the General Company Description in Excel®, go to the Excel®
Spreadsheet to the tab labeled Step 4 – Gen Co Description. Fill in the
To complete the General Company Description in Word®, go to the Word®
options file and complete the information.
When You Have Completed the Company Goals And Objectives

business plan, so proceed to Step Five, Products and Services on page 26.
24
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Company Goals and Objectives
The initial goal of the Company will be to gain enough customers in the
first six (6) months of operation to reach a break even point between
expenses and revenue.
In the following twelve months of operation, the Company will strive to
increase the total base increase of new customers by 10% per quarter.
Thereafter, the Company will strive for a total base increase of new
customers by 5% per quarter.
Business Philosophy
The Company will provide top quality menu products and store
services to a market consisting of local market area residents. The
coffee industry is a staple growth industry, as rated by Standard &
Poor’s when reporting on the condition of the industry as of December
2007. With an increase in expected population growth, the expected
marketplace will increase 30% over the next three (3) years in the
state of Washington. By gaining a foothold in the next six (6) months
with the Company’s new customer base, the Company will be firmly
situated to take advantage of increases in the marketplace.
The experience and past success of the main participates in the
Company will enhance the success potential of Perk Me Up Coffee
Shop.
Legal Form of Ownership
Perk Me Up Coffee Shop is a corporation form in the state of
Washington in September 2007. All corporate documentation is
available for inspection upon request.
25
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Step Five
The Products and Services Description section of your business plan will
describe in detail the products and services you will provide in the course of
your operating your coffee shop.
We have provided an illustrative Products and Services Description to help
give you an idea of the way the information can be formatted. See the
Products and Services Description on page 29.
How to Describe In Depth Your Products and Services
Here, you will describe in depth your menu products and store services.
Here is a general list of potential products and services, but you will need to
elaborate and breakdown the pricing for each products and services.
Coffee Club
Blends

Special Blend
Full Service Menu
Buffet
Specials
Grab and Go Menu
Café Rental
Delivery Service
Banquet Facilities
Smoking Facilities
Business Meetings
Souvenirs
Other Retail Sales
Bakery Products
Competitive Advantages or Disadvantages
You will need to list what factors will give you competitive advantages or
disadvantages. For example, the level of quality or unique or proprietary
features you will offer in your coffee shop.
Pricing Structures
You will need to list what the pricing structures are for the menu products and
store services.
If you have any drawings, photos, sales brochures, etc, these can be shown in
your first Appendix. We have provided an example Appendix One on page 30.
26
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Tip
Important Tip
Appendixes
The Appendixes will be at the back of your business plan, so
keep this in mind when saving your files.
Products and Services Description: Business Plan Basics
The products and services section is one of the most important parts of your
business plan. It's your chance to clearly explain your menu products and
store services, identify their features and benefits, and discuss what needs or
problems they address in the market.
Product Overview
In explaining each of the products you will offer, your reader will want to
know what it is, what it does, and its features and benefits. Consider
including pictures if they would help your reader get a better understanding
of your product.
Service Overview
In explaining each of the services you will offer, your reader will want to
know what it is, what it does, and its features and benefits. Consider
including pictures if they would help your reader get a better understanding
of your service. Write this section with enough information to satisfy an
outsider's need to understand your service without boring them with trivial
details.
Products and Services Description: Mistakes to Avoid
The following are the some of the most common mistakes we find in the
products and services description section:
•
Failing to identify the benefits of the menu products and store services
(focusing instead on the features)
•
Describing the products and services in language that is too technical,
with too many industry specific words or phrases

•
Omitting the specific problem the products and services addresses and
how that problem is solved
•
Assuming an improved products and services will "sell itself"
•
Describing the products and services in terms that are too broad
•
Failing to include a third-party evaluation or analysis of your menu
products and store services
•
Underestimating the importance of legally protecting your products
and services
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Complete the Products and Services Description Section
To complete the Products and Services Description in Excel®, go to the
Excel® Spreadsheet to the tab labeled Step 5 – Prod and Servs. Fill in the
To complete the Products and Services Description in Word®, go to the
Word® options file and complete the information.
Tip
Important Tip
Appendixes
If you use Appendixes, be sure to number them in the actual
order that you use them.
When You Have Completed the Products and Services Description
Section
business plan, so proceed to Step Six, Start Up Costs and Capitalization on
page 31.
28
Page 38

(As described in the instructions, you will need to elaborate on your
products and services. You can start with this list.)
Coffee Club
Blends
Special Blend
Full Service Menu
Buffet
Specials
Grab and Go Menu
Café Rental
Delivery Service
Banquet Facilities
Smoking Facilities
Business Meetings

Souvenirs
Other Retail Sales
Bakery Products
29
Page 39
Appendix One
Products and Services Attachments
30
Page 40
Step Six
Start-Up Costs and Capitalization
You will have many expenses before you even begin operating your coffee
shop. It is important to estimate these expenses accurately and then plan
where you will get sufficient capital. This is a research project. The more
thorough your research, the less chance you will leave out important expenses
or underestimate them.
Qualified and Non-Qualified Start-Up Costs
Qualified Start-Up Costs
Start-up costs include costs for the following:
Surveys of potential markets.
Analyses of available facilities, labor, supplies, etc.
Advertisements for the opening.
Salaries and wages for employees who are being trained, and their
instructors.
Travel and other necessary costs for securing prospective distributors,
suppliers, or customers.
Salaries and fees for executives and consultants, or for similar
professional services.
Non-Qualified Start-Up Costs
Start-up costs do not include the following.
Deductible interest.
Taxes.
Research and experimental costs.
Budget Allowances
Even with the best of research, however, opening a coffee shop has a way of
costing more than you anticipate. There are two ways to make allowances
for surprise expenses. The first is to add a little “padding” to each item in
the budget. The problem with that approach, however, is that it destroys the
accuracy of your carefully thought out plan. The second approach is to add a
separate line item, which we call contingencies, to account for the
unforeseeable. This is the approach we recommend, and you will see a
“Contingencies” line in our spreadsheet.
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Page 41
Tip
Important Tip
Contingencies
You should talk to other individuals who have started similar coffee shops to
get a good idea of how much to allow for contingencies. If you cannot get
good information, we recommend a rule of thumb that contingencies should
equal at least 20% of the total of all other startup expenses.

Evaluating Start-Up Costs
When starting a new coffee shop, moving to a new location, opening a new
branch or expanding your shop, there will be start-up or one-time expenses.
Know what these expenses will be by filling in the amounts of dollars
required for each of the items listed below.
Item
Dollar Cost
Real Estate, furniture, fixtures,
machinery, equipment:
a) Purchase price - if paid in
full with cash
$
______________
b) Cash down payment - if
purchased on contract
$
______________
c)
Transportation
&
installation costs
$
______________
Starting Inventory
$
______________
Decorating,
refurbishment,
&
remodeling costs
$
______________
Deposits Required:
a) Utilities
$
______________
b) Rent
$
______________
c) Other (identify)
$
______________
Fees Required:
a) Legal, accounting, others
$
______________
b) Licenses, permits, etc.
$
______________
c) Other (identify)
$
______________
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Initial Advertising & Marketing Costs
(i.e., flyers, sales letters and calls,

signs, brochures, etc.)
$
______________
Accounts Receivable (_____ days of
sales)
$
______________
Salaries and owners draw until
business enterprise opens or until
cash flow is positive
$
______________
Other miscellaneous expenses:
Merchant
Association fees,
equipment
rental,
office
supplies,
cleaning
service,
other supplies, signs, etc.
$
______________
Payments on other fixed obligations
$
______________
Total Start-Up Costs
$
______________
Start-Up To Do List
_____ 1.
Know what type of business you would like to start and learn al
you can about it.
_____ 2.
Appraise your business strengths and weaknesses.
Be strict and objective.
_____ 3.
Conduct thorough research of potential customers,
your industry, your competition, your licensing and
tax requirements, location, and name.
_____ 4.
Determine type of business organization
(i.e. Proprietorship, Partnership, or Corporation)
_____ 5.
Evaluate possible shop locations. Check physical condition
suitability, traffic flow, parking, utility requirements, and
cost.
_____ 6.
Prepare a comprehensive business plan – include
your action timetable.
_____ 7.
Decide on your business hours.
_____ 8.
Secure necessary capital. (Bank loan, budget to
save, borrow on insurance, etc.)
_____ 9.

Obtain needed facilities, equipment, furnishings,
signage, supplies, stock.
_____ 10.
Recruit personnel. Establish job descriptions and a
training program.
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_____ 11.
Print business cards, stationery, invoice or
statement forms.
_____ 12.
Register name of business (your assumed name)
and/or file articles of incorporation with the
Secretary of State. Publish notice in newspaper.
_____ 13.
Secure any necessary permits, licenses, or
zoning variations. Check with both local and state
licensing agencies.
_____ 14.
Register your business with the state and obtain a
Sales & Use Tax Permit (if applicable).
_____ 15.
Register for Federal tax number (Form SS-4) and
obtain employee tax and withholding information from
the IRS.
_____ 16.
Establish bank account (separate from personal account). Shop
for the bank and services that best suit your needs.
_____ 17.
If you intend to hire employees in your business,
phone your Department of Economic Security or
Workforce Commission.
_____ 18.
Phone the IRS for a free "Small Business Tax Kit" at
1-800-829-3676. For information about free Tax
Education Workshops, call 1-800-829-1040 or check
out the IRS website (http://www.irs.gov/) for this information.
_____ 19.
Issue news releases. Publicize your new coffee shop.
Start-Up Narrative
We have provided a sample Start-Up Narrative to help give you an idea of the
way the information can be formatted. See the sample Start-Up Narrative on
page 37.
To complete the Start-Up Narrative in Excel®, go to the Excel® Spreadsheet
to the tab labeled Step 6 - Startup Costs Narrative. Fill in the information
and save your work.
To complete the Start-Up Narrative in Word®, go to the Word® options file
and complete the information.
Explain your research and how you arrived at your forecasts of expenses.
Give sources, amounts, and terms of proposed loans. Also explain in detail
how much will be contributed by each investor and what percent ownership
each will have.
34
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Instructions on How to Complete this Section in the Excel®
Spreadsheet
In the Excel® spreadsheet, you will either enter the dollar amount that you
know will reflect the projected cost of the item to the left or use the best
estimate approach we told you about earlier.
In Column C, these dollar amounts will reflect the actual start up costs while
the dollar amounts in Column G will reflect a gross amount spent over a 3
month period. This is considered your Start-Up Period.
Start-Up Costs (to be completed in Excel®)
C
G
Start-up
Costs
Operating
Costs
(Pre-Revenue
(3-Months
Cash
Requirements)
assuming no
revenue)
Audit / Accounting Fees
$0
$0
Bus Dev. - Travel
$0
$0
Bus. Dev. - Entertainment
$0
$0
Bus. Dev. - Meals
$0
$0
Capital Acquisitions
$0
$0
Charitable Contributions
$0
$0
Commissions
$0
$0
Conferences & Seminars
$0
$0
Consulting Fees
$0
$0
Contingencies
$0
$0
Employee Benefits
$0
$0
Entertainment
$0
$0
Equipment Lease
$0
$0
Facilities - Insurance
$0

$0
Facilities - Phone
$0
$0
Facilities - Property Taxes
$0
$0
Facilities - Rent
$0
$0
Facilities - Security
$0
$0
Facilities - Utilities
$0
$0
Facility - Other
$0
$0
Financial Charges
$0
$0
Furniture
$0
$0
Insurance
$0
$0
Inventory Purchases
$0
$0
IT Consulting
$0
$0
Legal Fees
$0
$0
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Loan Interest
$0
$0
Loan Capital
$0
$0
Miscellaneous
$0
$0
Office Supplies
$0
$0
Payroll - Administrative Staff
$0
$0
Payroll - Sales / Marketing
$0
$0
Payroll - Owner / Directors

$0
$0
Payroll Taxes
$0
$0
Postal / Shipping
$0
$0
PR / Advertising
$0
$0
Repairs & Maintenance
$0
$0
Research and Development
$0
$0
Storage
$0
$0
Subscriptions & Dues
$0
$0
Taxes & Licenses
$0
$0
Telecommunications
$0
$0
Vehicle Expenses
$0
$0
Total Start-Up Costs
$0
$0
The total amount in Column G represents the total Start-Up Cost for start-up
period.
Complete the Start-Up Costs Section in the Excel® Spreadsheet
Go to the Excel® Spreadsheet to the tab labeled Step 6 – Start Up Costs.
Fill in the information and save your work.
When You Have Completed the Start-Up Costs and Capitalization
Section
business plan, so proceed to Step Seven, The Marketing Plan on page 41.
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An Explanation of the Facts, Assumptions, and Information
Pertaining to the Start-Up Costs Section
The Company estimates that the total Monthly Start-Up Costs to be
$192,960. Therefore, the total Start-Up Costs for the Start-Up Period
will be $578,880.
The Company will use Larry Belcher, CPA for all accounting needs and

functions. The anticipated Audit/Accounting Fees for the Start-Up
Period will be $1,000.
The Company estimates the Business Development expenses to be
$2,000. Of this amount, $1,500 is for Travel, $400 for Entertainment
and $100 for Meals.
The Company does not anticipate any Capital Acquisitions during the
Start-Up Period.
The Company will not make any Charitable Contributions during the
Start-Up Period, but will consider such expenses based on profitability.
The Company estimates that Commissions will be $3,000 per month
and will be funded directly from revenue.
The Company plans to attend one Conferences or Seminars. The cost
has already been included in the Business Development section.
The Company estimates that Consulting Fees will be paid in the
amount of $1,000 for training related to safety issues and food
delivery/handling techniques.
The Company estimates Contingencies to be $32,160 which is 20% of
the total Start-Up Costs estimates.
37
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The Company plans to offer Employee Benefits after the first year of
operation, so no allocations have been made for employee benefits for
the Start-Up Period.
The Company plans to lease certain office equipment and may lease
coffee shop equipment and fixtures. The Company estimates that the
Equipment Lease amount will be $2,000.
The Company estimates Facility expenses for the shop as follows:
Facilities – Insurance, $1,000
Facilities – Phone, $500
Facilities - Property Taxes, $1,500
Facilities – Rent, $1,300
Facilities – Security, $75
Facilities – Utilities, $300
Facility – Other, $200
The Company estimates Financial Charges will be $200 and will result
from credit card finance charges.
The Company estimates Furniture expense to be $2,000, which will be
primarily office furniture purchases.
The Company estimates Insurance expenses will be $700. This
insurance will be a policy purchased to cover general liability,
employee dishonesty, dining area furniture, fixtures, kitchen
appliances and equipment, and premise from damage.
The Company estimates Inventory Purchases will total $130,000. The
inventory will consist of food items, dining room furniture, initial
kitchen appliances and equipment, and other related products and
support items.
The Company estimates that there will be IT Consulting expenses in
the amount of $1,000. The Company plans to explore the use of
staffing resources for kitchen help, wait staff, and building

maintenance.
The Company also plans to study, design, development, implement,
support or manage computer-based information systems, particularly
software applications and computer hardware by using computers and
computer software to convert, store, protect, process, transmit, and
securely retrieve information.
38
Page 48
The Company estimates that Legal Fees will be incurred in the amount
of $2,000. These costs represent incorporation and filing fees.
The Company has not included Loan Interest which might result from
the Investment Needed Proposal. The Company will revise the Start-
Up Costs for the loan interest costs when the negotiated investment
proposal is completed.
The Company estimates Miscellaneous and unforeseen costs might be
$1,000.
The Company estimates Office Supplies to be $200.
The Company estimates Payroll expenses to be:
Payroll - Administrative Staff, $2,000
Payroll - Sales / Marketing, $3,000
Payroll - Owner / Directors, $500
Payroll Taxes, $1,500
The Company estimates Postal / Shipping costs to be $200. These
costs will result from a Direct Mail program.
The Company estimates PR / Advertising to be $1,000. These costs
will result from print and media advertising.
The Company estimates Repairs & Maintenance budget to be $500.
The Company estimates Research and Development to be $1,000.
This cost can result due to menu product research, Consumer Report
comparisons of cold storage equipment, and traffic studies.
The Company estimates Storage costs to be $100. This cost will result
from storing excess inventory, extra dining room furniture, spare
equipment and parts.
The Company estimates Subscriptions & Dues costs to be $25. This
cost will be for subscriptions.
The Company estimates Taxes & Licenses costs to be $300. This cost
will result from municipal business license, occupancy license, and
police, building and sellers permits. Also for regulations that might
include health regulations and requirements, fire safety standards or
regulations, retail sales tax, and/or zoning by-laws.
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The Company estimates Telecommunications expenses will be $300.
These costs include land lines and mobile (wireless) expenses.
The Company estimates Vehicle Expenses to be $400. This cost
includes insurance and possible lease fees.
40
Page 50

Step Seven
The Marketing Plan
Marketing & Sales: Business Plan Basics
Every good marketing plan should include two major parts - a definition of
your target market and a specific outline to market, promote and sell your
menu products and store services.
Target Market
It's critical to clearly define your target market in your business plan -
investors expect it. Tell your business plan reader about your customers and
describe their defining characteristics in detail. Include information such as
age, gender, geographic location, income bracket, buying similarities, and
more.
The goal of this section is to build a demographic profile of your typical coffee
shop customer. The more clearly you pinpoint the defining traits of your
customer, the easier it is to construct a marketing program to reach them
effectively.
The information and research included in your target market section should
originate from primary and secondary sources. Primary sources includes
information that you discover or conclude from personal observation and
research, such as personal studies, results of questionnaires, site visits, and
conversations with experts in your coffee industry. Secondary sources
include such sources as journals, books, published reports, government
statistics, or internet findings.
Marketing Program
After you define your target market, you need to determine specifically how
you will reach them. Outline the details and steps necessary to reach
potential customers and convert them from prospects to paying customers.
Tip
Important Tip
Market Avenues and Procedures
It is important to demonstrate to investors that you have identified specific
marketing avenues and procedures to effectively sell your products and
services.
Answer questions such as the following in your marketing program section:
•
What specific marketing mediums will you use to reach your customer?
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•
How often will each be used? What will they cost? Why did you
choose these marketing avenues over others?
•
What marketing materials will you need? (brochures, website, etc)
•
Who will design your marketing materials? What will they cost?
•
What is the cost of marketing materials per customer? (You may
choose to include marketing pieces in the appendix of your business
plan)
•
Will your shop be able to attract PR? Why will they run your story?
What's the "angle"? Which publications and mediums will you target?
Marketing & Sales: Mistakes to Avoid
Here are some of the most common mistakes found in the marketing and
sales section:

•
Defining your target market too widely and assuming success will
result from simply capturing a "small portion" of this enormous
market.
•
Unclear definition of your target market.
•
Attempting to attack an entire market instead of a narrow niche.
•
Making assumptions about your target market without research or
concrete support.
•
Not specifically identifying the mediums you will use to advertise and
promote your products and services.
•
Omitting details such as when, where, why and how you will reach
your target customer - along with costs.
•
Making the assumption that offering a lower price will lead to
increased sales.
•
Underestimating the importance of packaging, brand name, and
reputation.
•
Attempting to immediately fill several lucrative but unrelated markets.
•
Lacking clarity about how future changes might affect your market.
We have provided an illustrative Marketing Plan to help give you an idea of
the way the information can be formatted. See the Marketing Plan on page
51.
The Marketing Plan consists of six (6) primary sections and five (5) sub-
sections under Marketing Strategy. Those sections are:
Economics on page 45
Product on page 46
Customers on page
Competition on page 47
Niche on page 48
Marketing Strategy on page 48
Promotion on page 48
Promotional Budget on page 48
Pricing on page 49
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Proposed Location on page 49
You will gather the information necessary for these sections to fit your exact
demographical area. This is not something that can be a “One Size Fits All”
scheme. Someone starting a coffee shop in Chicago, IL will have different
statistics than someone starting a coffee shop in Charlotte, NC. The only
way to gather this information is by conducting market research for your
specific demographical area.
Target Market: Business Plan Basics
The target market section of your business plan must clearly identify the
current and prospective buyers of your menu products and store services.
Your goal in preparing the target market section is to demonstrate to readers
that you clearly understand who your customers are and how your products
and services directly meet the needs of the marketplace. Properly identifying

your potential customer base also helps to drive overall marketing and sales
strategies that you will include within other sections of your business plan.
Although your product or service may meet the needs of a large constituency
of potential customers, the goal is to define your customer base as
specifically as possible, both quantitatively and qualitatively. Consider the
follow types of characteristics for inclusion in the target market section of
your business plan:
Size
How large is your target market? Are there 1,000 business customers? 10
million potential customers ready to purchase your product or service? Or a
small handful of very large target customers?
Demographics
The demographic traits of your customers often vary based on whether you
are focused on serving the consumer or business markets:
•
Consumer - Income, Occupation, Gender, Single/Married, Ethnic
Group, Education
•
Business - Industry, Product/Service, Years in Business, Revenue,
Employee Size, Private/Public
Geographic
Where are your customers located? While technology has made location less
of an issue for many companies, it doesn’t mean you should overlook the
importance of defining the geographic location of your coffee shop
customers. Clarifying these issues also helps to ensure that your marketing
and sales strategies/budgets properly match your goals to capture market
share.
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Other Characteristics
What are some of the more subjective traits that define your customers?
This might include things such as current buying motivations, perceived
shortcomings of other solutions in the market, and trends/purchasing shifts
likely to occur within your target market.
Naturally, the more you understand your customers, the better your chances
of success. Many times the best approach to answer the target market
question: Who is our customer? Invest time and resources in primary
market research. Conduct simple surveys or focus groups. If feasible, work
with a reputable market research firm to guide you through the process.
At the very least, use the Internet and industry groups to locate market
research studies and statistics for your business plan. These resources can
range from free information available on websites to expensive professional
market research studies prepared by experts in the field.
Performing primary research enables you to gather and document the
quantitative and qualitative information needed to prepare a solid target
market section for your business plan.
Target Market: Mistakes to Avoid
Here are some of the "don'ts" to avoid when writing the Target Market
section of your business plan:
•
Don't assume that everyone is a buyer of your products and services.
•
Don't be unclear about the characteristics that define who your target
customers are.
•
Don't assume you must have a "huge" target market - a well-defined

target market that your coffee shop can serve is far better.
•
Don't jump to conclusions about why your target market needs you -
instead explain how you meet their needs.
•
Don't underestimate the value of focus - sell a specific product or
service to a specific group.
•
Don't try to attack too many markets at once - particularly if you are a
startup or early-stage coffee shop.
Market Research Basics
Market Research - Why?
No matter how good your product or service, your coffee shop cannot succeed
without effective marketing. This begins with careful and systematic research.
It is very dangerous to simply assume that you already know about your
intended market. You need to do market research to make sure that you are
on correct track. Use the business planning process as your opportunity to
uncover data and question your marketing efforts. Your time will be well
spent.
44
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Market Research - How?
There are 2 kinds of market research: primary and secondary.
Primary market research means gathering your own data. For example,
you could do your own traffic count at a proposed shop location, use the
yellow pages to identify competitors, and do surveys or focus group interviews
to learn about consumer preferences. Professional market research can be
very costly, but there are many books out that show business owners how to
do effective research by themselves.
Tip
Important Tip
Be Specific
In your marketing plan, be as specific as possible; give statistics & numbers
and sources. Later on, the Marketing Plan will be the basis of the all-
important sales projection.
Secondary research means using published information such as industry
profiles, trade journals, newspapers, magazines, census data, and
demographic profiles. This type of information is available in public libraries,
industry associations, Chambers of Commerce, vendors who sell to the coffee
industry, government agencies (Commerce Dept. and state and local
development agencies), and the SBA Business Information Centers.
Start with your local library. Most librarians are pleased to guide you through
their business data collection.
A good way to start is at the SBA site,
http://www.sba.gov/; click the Outside Resources button for a great collection
of resource links. Your Chamber of Commerce has good information on the
local area. Trade associations and publications often have excellent industry
specific data.
The Economics of the Industry
You will need to gather information from your market research that will be
able to address these questions and provide facts about your coffee industry:
What is the total size of your coffee shop target market?
What percent share of the market will you have? (This is important only if you
think you will be a major factor in the market.)
Current demand in your target market.
Trends in target market - growth trends, trends in consumer preferences, and

trends in product development.
45
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Growth potential and opportunity for a coffee shop of your size.
What barriers to entry do you face in entering this market with your coffee
shop? Some typical barriers are:
High capital costs
High production (food prep) costs
High marketing costs
Consumer acceptance/brand recognition
Training/skills
And of course, how will you overcome the barriers?
You will also need to address how could the following affect your business?
Change in technology.
Government regulations.
Changing economy.
Change in the coffee shop industry.
Back to Market Plan Sections on page 42
Product
In the Step Five, Products and Services section, you described your menu
products and store services as YOU see them. Now describe them from your
CUSTOMER'S point of view.
Features and Benefits
List all your major menu products and store services.
For each product or service that you provide in your coffee shop:
Describe the most important features. That is, what will the product
or service do for the customer? What is special about it?
Now, for each menu product and store service, describe its benefits.
That is, what will the product or service do for the customer?
Note the difference between features and benefits, and think about them. You
build features into your product or service so you can sell the benefits.
46
Page 56
Customers
Identify your targeted customers, their characteristics, and their geographic
locations; i.e., demographics.
You may well have more than one customer group. Identify the most
important groups. Then, for each customer group, construct what is called a
demographic profile:
Customer Profile
Age
Gender
Location
Income level
Social class/occupation
Education
Group Profile
Industry (or portion of an industry)
Location
Size of shop
Quality/technology/price preferences
Competition

What products and services and other coffee shops will compete with you and
your coffee shop?
List your major competitors:
Names & addresses
Will they compete with you in across the board, or just for certain products
and services, certain customers, or in certain locations?
Will you have important indirect competitors?
How will your menu products and store services compare with the
competition?
47
Page 57
Niche Market
Now that you have systematically analyzed your industry, your product or
service, your customers and the competition, you should have a clear picture
or where your coffee shop fits into the marketplace.
In one short paragraph, define your niche market; your unique corner of the
market.
Marketing Strategy
Now you can outline a marketing strategy for your coffee shop that is
consistent with your niche.
Promotion
How will you get the word out to customers?
Advertising: what media, why, and how often? Why this mix and not some
other?
Have you identified low cost methods to get the most out of your promotional
budget?
Will you use methods other than paid advertising, such as incentives, word of
mouth (how will you stimulate it?), network of friends or professionals?
What image do you want to project? How do you want customers to see you?
In addition to advertising, what plans do you have for graphic image support?
This includes things like logo design, cards and letterhead, brochures,
signage, and interior design.
Should you have a system to identify repeat customers, and then
systematically contact them?
Promotional Budget
How much will you spend on the items listed above?
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Before startup? (These numbers will go into your Startup budget.)
Ongoing? (These numbers will go into your Operating Plan budget, which we
will discuss later.)
Pricing
Explain your method(s) of setting prices. For most coffee shops, having the
lowest price is not a good policy. It robs you of needed profit margin;
customers may not care as much about price as you think; and large
competitors can under price you anyway. Usually, you will do better to have
average prices and compete on quality and service in your coffee shop.
Does your pricing strategy fit with what was revealed in your competitive
analysis?

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