financial plan for cafe business

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Making a Risk Management Plan for Your Business

It’s impossible to eliminate all business risk. Therefore, it’s essential for having a plan for its management. You’ll be developing one covering compliance, environmental, financial, operational and reputation risk management. These guidelines are for making a risk management plan for your business.

Developing Your Executive Summary

When you start the risk management plan with an executive summary, you’re breaking apart what it will be compromised of into easy to understand chunks. Even though this summary is the project’s high-level overview, the goal is describing the risk management plan’s approach and scope. In doing so, you’re informing all stakeholders regarding what to expect when they’re reviewing these plans so that they can set their expectations appropriately.

Who Are the Stakeholders and What Potential Problems Need Identifying?

During this phase of making the risk management plan, you’re going to need to have a team meeting. Every member of the team must be vocal regarding what they believe could be potential problems or risks. Stakeholders should also be involved in this meeting as well to help you collect ideas regarding what could become a potential risk. All who are participating should look at past projects, what went wrong, what is going wrong in current projects and what everyone hopes to achieve from what they learned from these experiences. During this session, you’ll be creating a sample risk management plan that begins to outline risk management standards and risk management strategies.

Evaluate the Potential Risks Identified

A myriad of internal and external sources can pose as risks including commercial, management and technical, for example. When you’re identifying what these potential risks are and have your list complete, the next step is organizing it according to importance and likelihood. Categorize each risk according to how it could impact your project. For example, does the risk threaten to throw off timelines or budgets? Using a risk breakdown structure is an effective way to help ensure all potential risks are effectively categorized and considered. Use of this risk management plan template keeps everything organized and paints a clear picture of everything you’re identifying.

Assign Ownership and Create Responses

It’s essential to ensure a team member is overseeing each potential risk. That way, they can jump into action should an issue occur. Those who are assigned a risk, as well as the project manager, should work as a team to develop responses before problems arise. That way, if there are issues, the person overseeing the risk can refer to the response that was predetermined.

Have a System for Monitoring

Having effective risk management companies plans includes having a system for monitoring. It’s not wise to develop a security risk management or compliance risk management plan, for example, without having a system for monitoring. What this means is there’s a system for monitoring in place to ensure risk doesn’t occur until the project is finished. In doing so, you’re ensuring no new risks will potentially surface. If one does, like during the IT risk management process, for example, your team will know how to react.

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Cafe Bistro Coffeehouse Business Plan

Start your own cafe bistro coffeehouse business plan

The Watertower Cafe

Financial plan investor-ready personnel plan .">, key assumptions.

The most important indicators in our case are are daily seating "counts" and weekly sales numbers. We must also make sure that we are turning our inventory rapidly so as to avoid food spoilage.

We must target net profit/sales figures toward the 14% level with gross margins around  45%. Marketing costs should never exceed three percent of sales. We will use Social Media Facebook Twitter and Instagram to reach to the community and listen to our customers while keeping the costs down. 

Revenue by Month

Expenses by month, net profit (or loss) by year, use of funds.

We will use the funds to: move into a space that has enough room for a restaurant and coffee service. renovation, buy all the equipment we need to set up, and decorate as well as train our people to give really good service. 

Sources of Funds

We plan on getting 180,000 dollars from two investors. We will also get a 30,000 dollar loan that will be paid off in 2 years. 

Projected Profit & Loss

Projected balance sheet, projected cash flow statement.

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Coffee Shop Business Plan Template

Business Plan Outline

• Coffee Shop Business Plan Home
• 1. Executive Summary
• 2. Company Overview
• 3. Industry Analysis
• 4. Customer Analysis
• 5. Competitive Analysis
• 6. Marketing Plan
• 7. Operations Plan
• 8. Management Team
• 9. Financial Plan

Financial Plan

Key revenue & costs.

The revenue drivers for Java Bros Coffee shop will come from its coffee offerings, bakery items, and panini and Italian soda offerings. The pricing will be upscale yet competitive with other Austin coffee shops.

The cost drivers are its ability to scale by selling local Texas coffee, salaries and wages within market range, and by offering a limited menu, the cost for supplies is minimal. Java Bros is also limited on cost because Joey and Max will take home a small salary. They would rather invest back into the company than take home inflated salaries.

Funding Requirements and Use of Funds

Java Bros is seeking $300,000 in debt financing to open its two locations. The funding will be dedicated for leasehold improvements, design, working capital, and opening inventory. The breakout of the funding is below:

Location #1

• Store design/build: $100,000
• Working capital: $25,000
• Opening inventory: $25,000

Location #2

Key Assumptions

The following table outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the business loan.

• Number of Customers Per Day:  80
• Average Menu Item Cost:  $3.00
• Average Order per Customer:  $6.50
• Annual Lease (per location):  $60,000

Financial Projections

Income statement, balance sheet, cash flow statement.

Coffee Shop Business Plan Template

Financial plan.

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you serve 100 customers per day or 200? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets : While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities. For instance, if you spend $100,000 on building out your coffee shop café, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. For example, let’s say a company approached you with a massive $100,000 catering contract, that would cost you $50,000 to fulfill. Well, in most cases, you would have to pay that $50,000 now for supplies, equipment rentals, employee salaries, etc. But let’s say the company didn’t pay you for 180 days. During that 180 day period, you could run out of money.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a coffee shop:

• Location Build-Out including design fees, construction, etc.
• Cost of equipment like coffee grinders, espresso machines, blenders, refrigerators
• Cost of ingredients and maintaining an adequate amount of supplies
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal expenses

COFFEE SHOP BUSINESS PLAN OUTLINE

• Coffee Shop Business Plan Home
• 1. Executive Summary
• 2. Company Overview
• 3. Industry Analysis
• 4. Customer Analysis
• 5. Competitive Analysis
• 6. Marketing Plan
• 7. Operations Plan
• 8. Management Team
• 9. Financial Plan
• 10. Appendix

Start Your Coffee Shop Plan Here

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Coffee shop Business plan - Financial plan part

4. Financial Plan: Our concept is unique; however, we also need to convince lending institution that it can be successful and profitable. The purpose of this financial plan is to obtain debt-based capital and to secure private equity funding. The total amount of capital needed is $30,000. 4.1. Financial objectives & finance required In our financial plan, we focus exactly what we are trying to achieve, precisely where we want to go and how we plan to get there. We detail the start-up cost, which involved many expenses in opening our business, the projected sales and monthly expenses of actual operation over the three financial years, and the volume of business we will need to generate to be profitable. We also plan to finance our business by two streams: owner injection and crowdfunding (33%) and debt financing with a small business loan in three years, which is expected to pay off at the end of year three. We also set up the break-even and make sure it can be achieved within the year one. Our financial target is maintaining a healthy and progressive surplus cashflow, keep it liquidity and on track.

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Coffee Shop Business Plan: Financials

Out of all the business plan, I was dreading the financial section most, however it’s probably the most important. It addresses how much money you need to start your business, keep it operating, when you’ll be profitable, what you can afford, and where the money even comes from– among other things.

Since you can make your forecasts as detailed and accurate as you want, just the thought of endless numbers makes my head spin! To help start somewhere, I compiled a collection of financial basics to include in your business plan.

Financials Contents

• Calculate your start-up costs.  What is needed to open the doors of your coffee shop? This includes all business fees, permits, licenses, insurance, marketing, rent, equipment, and beginning inventory. You should probably include cash float to keep on hand, because if one month no money comes through the door, you’ll still have to pay those operating expenses.
• Calculate your operating expenses.  These are the costs to keep your business running day to day, and month to month. This includes business and legal fees, rent, payroll, and your product inventory. Regardless of making any sales, these need to be paid.
• Sales  (or revenue)- Estimate how many how many units you’ll sell for what price based on your market share. If you have 150 customers a day, and they each spend $5, your projected sales will be $22,500 a month. Don’t forget to account for seasonality and days open a week.
• Income (or profit & loss)- Estimate your profit from your projected sales after all your expenses are paid: Revenue (or sales or income) – Cost of Goods Sold   (variable cost of selling your product) = Gross Margin (or profit) – Operating Expenses (fixed costs) = Net Profit
• Cash flow –   Estimate the balance between cash inflows and outflows. This statement keeps track of how much cash you have at any given point: Starting Cash + Cash In -Cash Out = Ending Cash 
• Balance Sheet – Your balance sheet takes a “snapshot” look of your business financials at any given time, usually month to month: Assets (cash, accounts receivable, inventory, etc.) -Liabilities (debts, accounts payable, accrued expenses, etc.) = Net Worth (or capital)

Come up with different business scenarios: pessimistic, realistic, optimistic and breakeven figures (covering all costs, but no profit). Have figures for every month for the first year, then each year for the next three years. Don’t forget to address assumptions made   in your projections.

• Calculate your break-even point.  This is the point when all your start-up and operating costs are covered, and you are making profits. Based on your profit and loss, know how long it will take to pay off those start-up costs. Also know how many coffees you need to sell to pay expenses every month. One basic equation you can use: BEP = (Cost of Goods Sold + Operating Costs) / Dollars Per Sale          = transactions per month           = the number of sales per day to cover your costs and break even 
• Explain the source and use of funds.  Where is your money coming from? If you’re raising money from investors, detail exactly how you plan to use their money. Include where you plan on allocating your profits. When and how much do you plan on paying yourself to cover your own living expenses?
• Mention future plans or exit strategy.  Where do you see your coffee shop going? Whether it’s franchising it or selling it, have a plan whether or not your future turns out to be profitable, or running at a loss, or even whether something happens to you where you’re not able to continue the business.

There are different techniques and strategies to predict your numbers, many templates you can use, different things you can include or omit– so research a few and do what works for you. Whether it’s simple or detailed, make sure you understand and find it useful. Definitely draft a budget, sales projections and a profit-loss statement for your company, as many templates are available online too. If anything, your accountant can provide an actual profit/loss, cash flow, and balance sheet you can use for your business.

I used a downloadable template from  “Start & Run A Coffee Bar,” Matzen & Harrison  that combined the revenue, profit/loss and cash flow projections in a spreadsheet.

Click here for a downloadable Dream|a|Latte Financials Checklist  to help outline the financial section of your business plan!

Other  Coffee Shop Business Plan  Sections:

• Company Description
• Products & Services
• Marketing:  Market/Industry Analysis ,  Competitive/Internal Analysis , &  using the Marketing Mix
• BPlans: Financial Plan, The Key Elements of Financial Plan
• Coffee Talk: Determining Your Break-Even Point
• The Complete Idiot’s Guide to Running & Starting a Coffee Bar
• MSU Management Program
• Start & Run A Coffee Bar

Note: As a fellow aspiring entrepreneur that simply wants to share my journey with you, know this is information I’ve gathered from various books on starting a coffee shop, business websites, and courses that have helped me in writing my business plan to start a coffee shop. I only hope to share some of these resources to help you get started and inspired, however this is by no means extensive. All materials available in this series are for informational purposes only, and not to be business consulting or legal advice– so do contact a licensed consultant, accountant, or attorney to obtain advice with respect to any particular issue or problem.

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Creating a Financial Plan for Your Cafe or Coffee Shop: A Step-by-Step Guide

• February 6, 2023 July 6, 2023

7 Steps for Creating a Cafe Financial Plan

As a cafe or coffee shop owner, you know that managing your finances is key to the success and sustainability of your business. A financial plan is a crucial tool for helping you understand your financial position, set financial goals, and make informed financial decisions . In this article, we’ll go over the steps you can take to create a financial plan for your cafe or coffee shop.

Step 1: Understand your current financial position

Before you can create a financial plan, you need to understand your current financial position. This includes understanding your current assets, liabilities, and net worth, as well as your current income and expenses. You should also have a clear understanding of your financial goals, including any short-term or long-term financial targets you want to achieve.

Step 2: Forecast your financial performance

Once you understand your current financial position, you can start forecasting your financial performance. This involves creating financial projections, which are estimates of your cafe or coffee shop’s financial performance over a given period of time (usually a year). Financial projections should include detailed estimates of your revenue, expenses, and net income, as well as any assumptions or variables that could impact your financial performance.

Step 3: Develop a budget

A budget is a crucial tool for helping you manage your finances and achieve your financial goals. A budget should include a detailed breakdown of your expected income and expenses, and should be based on your financial projections. A budget can help you identify areas where you can save money, and can help you allocate your resources effectively to achieve your financial goals.

Step 4: Identify financial risks and opportunities

As a cafe or coffee shop owner, you’ll face a range of financial risks and opportunities. It’s important to identify these risks and opportunities as part of your financial planning process, and to develop strategies for mitigating risks and seizing opportunities. Some common financial risks and opportunities for cafe and coffee shop owners include changes in consumer demand for coffee and food, changes in the cost of goods, changes in competition, and changes in the local economy. By identifying these risks and opportunities, you can develop contingency plans and take advantage of opportunities as they arise.

Step 5: Determine your financing needs

Based on your financial projections and budget, you can determine how much financing you’ll need to fund your cafe or coffee shop. This could include funding for startup costs, expansion, or ongoing operations. Make sure you have a clear understanding of your financing needs, and be prepared to provide this information to potential lenders or investors.

Step 6: Identify financing sources

There are a range of financing sources available to cafe and coffee shop owners, including loans, grants, and investment. It’s important to research the various financing options available to you , and to choose the option that best fits your needs and goals. Consider factors like interest rates, repayment terms, and collateral requirements when choosing a financing source.

Step 7: Create a financial management plan

A financial management plan outlines the processes and systems you’ll use to manage your cafe or coffee shop’s finances . This could include things like budgeting, financial reporting, and cash flow management. By creating a financial management plan, you can ensure that you’re making informed financial decisions and staying on track to achieve your financial goals.

By following these steps, you can create a comprehensive financial plan that will help you manage your cafe or coffee shop’s finances effectively and achieve your financial goals. By understanding your current financial position, forecasting your financial performance, developing a budget, identifying financial risks and opportunities, determining your financing needs, and creating a financial management plan, you can set your cafe or coffee shop up for financial success.