coffee shop business plan philippines

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How to Write a Coffee Shop Business Plan for the Philippines

A business plan is essential in any business that you plan to operate. A business plan can be described as a road map of objectives and strategies on how to reach the goals for the business.

In the Philippines, there are two types of business plans that are written. The first is to raise capital with a business plan and the second is a managerial guidance business plan.

Table of Contents

To open a coffee shop in the Philippines, you need to consider these six factors:

Promotions and Loyalty Programs

It is important to make sure that you incorporate these factors into your business plan.

Raise Capital with a Business Plan

This business plan is designed to raise money for your business in the Philippines. In this particular business plan, you will provide information on your products and services that you will provide to your customers.

Here are some examples of what products you may provide to your customers: Brewed Coffee (hot, iced, or frozen)

Fruit Smoothies
Biscuits/Sandwiches

You may even decide to have bags of your signature coffee that your coffee shop provides to your customers. This allows them to pick up a bag in travel so they can enjoy your signature coffee in the comfort of their home.

In this business plan, it is also important to have an understanding of how the market will play a central role. Who is your primary target? The market will also work together with the location of your coffee shop. For example, if you open your coffee shop in a tourist area of the Philippines, your primary focus will be on tourists.

Most raised capital business plans focus on selling equity or debt to investors. If you are selling equity, you will sell an ownership stake. This is common in Corporations and is commonly known as stocks or shares that are being sold. If you are selling debt, you will need to issue some type of bond or note to investors.

If you decide to sell stock in your company, you are enticing more potential investors to invest in your company by offering the security that they will eventually recoup their investment. However, you are also giving investors partial ownership in your company’s everyday operation.

Check out our additional article HERE on writing a business plan!

Managerial Guidance Business Plan

In the Philippines, a managerial guidance business plan has two different angles that are focused on. The first is no capital raising and the second is recommendations.

A no capital raising plan is not focused on raising money. This particular plan is focused on a strategy or strategies that the company should employ for growth opportunities. Basically, the more people you reach, the more opportunity for growth.

A recommendations plan is again not focused on raising capital. A recommendations plan is to strategically plan the next move of the business.

Your Business Plan

Your business plan should look almost like a book. Here is a basic outline:

Executive Summary
Business/Industry Overview
Market Analysis and the Competition
Sales and Marketing Plan
Ownership and Management Plan
Operating Plan
Financial Plan
Appendices and Exhibits

Your title page will have information on your coffee shop. This will include the name, address, phone number, and website (if available) for your coffee shop. The table of contents will help your investors and/or lenders to jump straight to the section that they are most interested in reviewing.

The executive summary is an overview of the coffee shop. It should not be more than two pages long and should give a brief description of each section of the plan. The business industry overview will explain the coffee shop industry, your position in the industry, and your competition.

In the market analysis and competition section, you will explain who your target market is and what products you will provide. You will also explain your seating options as well as your parking strategy. The sales and marketing plan is where you will explain the prices of your coffee shop. What will charge and why? You will explain what promotions and/or loyalty programs your coffee shop will offer. How, when, where, and what will you advertise your coffee shop.

The ownership and management plan is to provide the legal structure of your coffee shop. This should detail the ownership, management, and/or staffing requirements of your shop. The operating plan will provide information about the physical requirements of the coffee shop. In this section, you will want to go into detail about the retail space, the equipment you will be using, your inventory and supply needs, and the labor needed to successfully operate your coffee shop.

The financial plan is going to be the most important part of your business plan. You will want this to be as detailed as possible. This section is to demonstrate that the coffee shop will grow and be profitable. Some things to provide in this section will be projected income statements, cash flow statements, and balance sheets. Lastly, you will have an appendix and/or exhibit. In this section, you will provide any additional information that is important to your coffee shop. Some things you may include are:

credit histories for business owners

detailed market research and analysis of competitors

resumes of owners and key employees

industry information

products/services information

site/building/office plans

marketing brochures

Three Levels of Business Plans

Did you know that in the Philippines, there are three levels of business plans? Level one is the start-up business plan. Next, level two is the expansion or Series B. business plan. Finally, level three is the enterprise business plan.

The start-up business plan includes complete financials, potential cash-flow, market analysis, market strategies, the break-even analysis, and a separate executive summary.

The expansion business plan helps to define concepts, target markets, and market potential, as well as financial clarity necessary to define business concepts, identify the business market potential, and identify the capital requirements.

The enterprise business plan serves established companies seeking to raise additional capital to expand their business.

In simpler terms, each business plan level serves each level of your coffee shop. If you are wanting to open a new coffee shop, a start-up business plan is what you will need. Looking to expand your current coffee shop, you will need an expansion or series B. business plan. Or looking to raise additional money for your coffee shop, you will then need an enterprise business plan.

Importance of the Six Factors

As stated above, there are six factors that you need to consider as you put your business plan together. Those six factors are market, location, budget, employees, suppliers, and promotions or loyalty programs.

Your market and location will work together in your business plan. The market target is very important because it will help you to find the perfect location for your coffee shop. For example, if you are looking to focus more on tourists, you will have your location set up in a tourist part of the Philippines. If you are wanting to focus on a small community, you may consider setting up shop in a Filipino neighborhood.

Your budget will play the biggest role of all as you are creating your business plan. You must be aware of how much money it will take to operate your coffee shop. Your budget will consist of how many employees you can comfortably hire, which suppliers you will use (based on quality, quantity, and price), and your advertising expenses.

When hiring employees, you will want to make sure you are hiring people that will fit well in the location and market of your Filipino coffee shop. The best employees for a coffee shop are usually upbeat and happy and are willing to go over and beyond for their clients.

Promotions and loyalty programs are very important. Advertising your coffee shop is well needed and there are many ways you can advertise. A few examples can be to cross-market with neighboring businesses, having brochures at the airport for tourists to review. Loyalty programs will make your clients feel appreciated. This will create customer retention as well as referrals. Promotions for a coffee shop may be seasonal such as pumpkin flavor for the fall season or peppermint for the winter season.

Frequently Asked Questions

You should prepare a business plan to define and focus on your objectives. Your business plan can be used as a selling tool with your lenders, investors, and banks. A good business plan can also uncover commissions and/or weaknesses in the planning process.

You can write your own business plan if you choose to. The prospectus is a business in the Philippines that specializes in business plan writing. If you are about to open your coffee shop, and you are a good writer, writing your own business plan will help reduce your start-up cost.

To learn more on how to start your own coffee shop checkout my startup documents here

Please note: This blog post is for educational purposes only and does not constitute legal advice. Please consult a legal expert to address your specific needs.

Hi! I’m Shawn Chun

My adventure in coffee began when I first launched my first coffee shop back in the early 2000s. I had to figure out so many things on my own and to make it worse within 2 years of opening two large corporate coffee chains moved in just blocks away from me!

As I saw smaller and even some larger coffee shops in the neighborhood slowly lose customers to these giant coffee chains and slowly close up shop, I knew that I had to start getting creative…or go out of business.

I (like you may be) knew the coffee industry well. I could make the best latte art around and the foam on my caps was the fluffiest you have ever seen. I even had the best state-of-the-art 2 group digital Nuova Simonelli machine money could buy. But I knew that these things alone would not be enough to lure customers away from the name brand established coffee shops.

Eventually, through lots of trial and error as well as perseverance and creativity I did find a way to not only survive but also thrive in the coffee/espresso industry even while those corporate coffee chains stayed put. During those years I learned to adapt and always faced new challenges. It was not always easy, however, in the end, I was the sole survivor independent coffee shop within a 10-mile radius of my location. Just two corporate coffee chains and I were left after that year. All told the corporate coffee chains took down over 15 small independent coffee shops and kiosks and I was the last one standing and thriving.

Along the years I meet others with the same passion for coffee and I quickly learned that it is not only “how good a barista is” that makes a coffee shop successful, but the business side of coffee as well.

Hence why I started this website you are on now. To provide the tools and resources for up and coming coffee shop owners to gain that vital insight and knowledge on how to start a coffee shop successfully.

Stick around, browse through my helpful blog and resources and enjoy your stay! With lots of LATTE LOVE!

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Starting a Coffee Shop in the Philippines: Required Capital and Tips to Success

Last Updated: January 21, 2023

With millions of coffee drinkers in the Philippines saying they need coffee to kick-start their day, it’s no wonder that you’re considering starting a coffee shop.

People love their coffee! In theory, starting a coffee shop sounds like a great idea, but it’s no small investment. According to statistics, the cost of opening a coffee shop ranges from Php 6 to 12 million.

Also, aside from the financial load, there are many other considerations to be made before pursuing this business venture.

Is there a suitable location available?
What equipment do I need?
What about licensing and permits?

Consider this article to be a comprehensive resource compilation and checklist to better inform your coffee shop planning should you decide to pursue this business venture.

Starting a Coffee Business in the Philippines: 3 Ways to Do It

Want to start your coffee shop in the Philippines? You have at least 3 ways to go about it.

Franchise. If you don’t want to build your coffee shop from scratch, you can choose to franchise – there are numerous established brands out there you can consider. Popular brands like Bo’s Coffee, Seattle’s Best Coffee, Coffee Bean & Tea Leaf, and the like are all open for franchising. Many first-time entrepreneurs choose to franchise because the business model is already established, and deployment is typically easy and low-stress. However, the cost can range anywhere from 6 to 12 million pesos, which is a sizable investment. For instance, a Bo’s Coffee Franchise costs around Php 1 million!
Buy an existing coffee shop. You’d be surprised, but there are entrepreneurs who actually buy established, well-performing coffee shops. And who can blame them? It’s a much easier, safer route. There are numerous reasons why you’d want to do this, one of them is the opportunity to deliver good-quality, specialty coffee. However, it’s difficult to find a profitable business that’s for sale. What’s more, you’ll be bound to the existing branding, design, and vision and remodeling it will likely be even more expensive than simply starting your own shop.
Build your own from the ground-up. This option allows you to build something that’s truly your own – from the business model, branding, culture, menu, and everything else. Starting your own coffee shop gives you the freedom and flexibility to do whatever you want. Of course, it’s worth noting that building your own coffee shop from the ground-up can be time consuming and difficult to execute, particularly for entrepreneurs without much experience in the food and beverage industry. Also, depending on the size and scope of your business operations, starting your own coffee shop can be quite costly.

How to Start a Coffee Shop Business: 6 Key Tips for Success

No matter which method you choose – whether you’re looking to franchise, buy an existing business, or if you’re building your own coffee shop from the ground – here are 7 tips to help you.

Step 1: Research the coffee business.

Opening a coffee shop takes a big investment – both in time and money. It’s important that you spend time understanding what it takes to run a successful café.

This means doing some research – you can look for useful articles online, or better yet, talk to coffee business veterans and learn from their experience.

You should also visit other coffee shops to get an insight into what you want your business to be like.

Step 2: Create a business plan.

The process of writing a business plan helps you to really understand your business vision, your local market, and it allows you to get a grip on the numbers you need to make your business successful.

A business plan will guide you through each stage of developing and managing your coffee shop, and will serve as a road map for how to run, structure, and grow your business.

Your business plan should include:

A summary: What your business stands for, your mission and vision, and your business goals.
A local market analysis: Who are your competitors? Who are your target customers?
Financial projections: Cash flow, projected profit and loss, etc.
Your team: What is your role in the business? Who do you need to hire?
A marketing plan: How will you define your brand? How will you market your business? There’s a lot to consider, but taking time to carefully plan for each aspect of your business will help set you up for success.

Step 3: Choose a location.

Location is crucial to the overall success of your business. Before making a decision, make sure to spend some time in the areas that you’re considering. Is there enough foot traffic in the area to sustain your coffee shop? How much parking space is available?

Is the location visible enough? Are you near lots of other coffee shops?

Also, if you’re going to be hands-on in running your coffee shop, pick an area you enjoy spending time in – after all, you’re going to be spending lots of time there.

Step 4: Find good, reliable suppliers.

Finding good, reliable suppliers is essential for your business success. Depending on the type of coffee shop you’re building, the major suppliers are usually coffee, milk, bread, and groceries.

You’ll also need cups (porcelain and paper), syrups, coffee stirrers, napkins, teapots… the list goes on. Start by listing all of the supplies you need – be as detailed as you can.

From there, you can start looking for suppliers until you find ones that match your business requirements and needs.

Step 5: Create a menu to complement your coffee shop.

Your menu is the core ‘ingredient’ of your business. So, make sure that your menu expresses your vision and the ‘theme’ of your coffee shop. Everything needs to be considered – from coffee and food options, to design, to product descriptions and images, and pricing.

Think about a signature drink or dish and how that might shape the style of your menu. As much as possible, keep it simple – one of the most common mistakes coffee shop owners make is trying to please everyone.

If you’ve got too many items on your menu, there may be items that are hardly ever ordered, so just focus on no more than 10-12 options that your customers will surely enjoy.

Also, your menu has to be profitable – calculate the ingredient costs and margin of each item.

Step 6: Hire the right people.

You can’t run your coffee shop alone – you’ll need to hire a few people, such as baristas, bakers, and cashiers (to start with).

Also, remember that hiring the right people doesn’t always mean choosing experienced staff. While hiring someone with experience is important, remember that skills can be learned but attitude… not so much.

If you want to develop a great team culture, make sure to hire people who are the best fit for your business.

The Bottom Line

Starting a coffee shop sounds like a great idea, but it’s no small investment – it can cost anywhere from Php 6 to 12 million! Also, the cost varies depending on whether you want to franchise, buy an existing business, or if you’re building your own coffee shop from the ground-up.

Aside from the financial aspect, there are also other things you need to consider to build a successful coffee shop.

You need to choose the best location, find the right suppliers, build a delicious menu, and hire the right people – just to name a few. If you dream of starting your own coffee shop, consider these tips to better inform your coffee shop planning. Good luck!