Have a go at our Coffee Shop Business Planning Quiz below. The results of previous respondents are then explained throughout this blog:

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The coffee shop industry in the UK has exploded since the arrival of the global force, Starbucks, in the late 1990s. The sight of the deep maroon awnings of Costa Coffee, the nations largest coffee outlet, now adorn over 2,300 locations around the UK.

Recent trends have moved preferences away from the national chains to independent enterprises. This shift in tastes gives a range of new opportunities for new entrepreneurs to enter the market.

You have landed here because of your expressed interest in learning more about the coffee shop business. Please enjoy the blog below and learn more about this ever more popular sector.

Industry Stats

The figure below shows some of the key industry stats for the UK Coffee Shop Sector. The market has been in a period of sustained growth for the past 20 years and are key businesses in the fight against the slow decline of the high street.

The coffee shop run plays a big part to a large majority of UK consumers. It is estimated the average person makes 3 visits to a coffee shop each week, spending around £13-£15 at every visit. That totals to over £2,000 a year on coffee shops. In the main coffee shops will offer ancillary food products though it is possible to build a business around the sole sale of various coffees.

The graph opposite shows the percentage of uptake across various food offerings in coffee shops. Depending on the business model the type of food offering will encourage customers to sit in store or ‘grab and go’.

Once upon a time coffee in the UK came one of two ways, black and white with the additional bespoke option of adding sugar. In contemporary coffee shops, the range of options can be as long as a wine list and sometimes equally as confusing. There are household favourites which any coffee shop would be remiss not to offer. Shops can establish further niches by leveraging unique suppliers and blends of coffee.

The Customer Spend in Coffee Shops

A recent report found that over 60% of regular coffee drinkers see their daily hit of caffeine as a necessity rather than an affordable luxury. The rising demand and increased differentiation in the market has seen the average spend continue to climb over the past 5 years, with customers spending around £13.50 per visit.

How Do Street Food Vendors Get Financed?

A small 400 square foot coffee shop can easily be established for under £15,000. The most expensive start-up costs are generally made up of the deposit for a lease and the purchase of equipment, which can either be purchased second-hand or leased to reduce initial layout.

Marcus founded ‘Cortado’ from a low-interest bank loan. This small coffee outlet mirrors the standing bar coffee culture from our European friends. With a well laid out business plan, that had focused financial forecasting the shop was able to obtain its necessary seed finance and begin trading with the confidence of a well thought out strategy behind them.

The table below shows the main sources of business finance and their associated percentage. In some cases, for larger projects, businesses may need to obtain finance from more than one source.

The layperson may be misled into thinking a fully written business plan would only be a requirement if looking for outside finance. Whilst it is true a solid business plan would be a pre-requisite for any form of form debt or equity finance the value of having a quality business plan cannot be underestimated. Even for those self-funding, a viable and robust business plan is a sure way to keep focused and accountable which will ultimately lead to better business decision making.

Importance of a plan

Having a solid business plan in the back pocket allows any business to have safe knowledge that their financial projections are carefully noted. For small businesses on small budgets, who may not have much contingency in place, the value of a quality plan should not be underestimated. The graphic below shows a high proportion of coffee shops have invested in a professionally prepared business plan and any new coffee shop venture should seek to do the same.

So what can we say about starting your own coffee shop business?

Pros

  • The sector has seen 20 years of steady growth
  • Consumer tastes are moving away from chains to smaller independents
  • Businesses have a good track record of profitability

Cons

  • Clear differentiator needed in a competitive market
  • A strong business plan required to obtain the necessary finance

 

How you can succeed

The best way to get ahead of the competition and eliminate the biggest unknowns and risks when starting your own coffee shop business is to invest in a high-quality business plan. The investment is invaluable. We at MyBizPlan provide the highest quality and yet lowest cost business plan in the UK, for a minimal outlay you can obtain a high-quality, visually stunning, financially robust business plan. It will give you a greater chance of seeking that vital finance and in the long run, could save you thousands. 

If owning and running a coffee shop business sounds like the kind of business for you, get started with a Coffee Shop Business Plan from MyBizPlan. See which of our solutions is right for you by having a go at our – Do You Really Need a Business Plan Questionnaire?

 

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