Think of a blank canvas in front of you, and you are the painter of your coffee shop dream. You must first prepare your paint and paint brushes before you begin to paint your dream into reality.
In this case, you are using a coffee shop business canvas, and your “art supplies” include the following 9 elements or blocks to make it successful:
- Key partnerships
- Key activities
- Cost structure
- Key resources
- Customer relationships
- Revenue streams
- Value positions
- Customer segments
The coffee shop business canvas tool is used to visualize all the building blocks necessary for starting a business such as customers, value positions, market route and finances. Learn more by reading below!
Benefits of the Canvas
To set up a good coffee shop business canvas, you must first understand its definition, how it works, and its importance to your business. Business canvas is simply a strategic management startup template used to document an existing business plan or to develop a new business model.
There are 7 benefits of the business canvas.
- Business canvas is easy to understand visual because it’s just a single page.
- Canvas is a single-page structure that shows how everything is connected in business. It shows the connection.
- Canvas is customer-focused therefore it forces you to think about the value that you want to provide to your customers and what it takes to deliver that value.
- It’s flexible. It is very easy and quick to make changes to the model as you sketch different ideas.
- It’s very direct and focused as it removes all the fluff that was in the traditional business model.
- It’s very easy to communicate. You can easily communicate or explain something that you fully understand.
The canvas structure is comprised of 9 elements. Refer to the diagram below. Use this as a valuable tool as you create your unique coffee shop business canvas.
1. Key Partnerships
This comprises all the network suppliers and all the partners that make the model work. In this section, you list tasks and activities that are very important but will be done by another person. You will use the suppliers and partners if running a partnership form of business to make the business model. There are three major reasons for creating a partnership:
- To reduce risk and uncertainty.
- To acquire resources or activities.
- For economies of scale.
2. Key Activities
These are key things that you must do as a coffee shop owner to make everything successful. The activities should be directly related to the value proposition. Key activities can be broken down further into three categories; production, problem solving and platform or network. When building this block it is good to list only core activities in delivering your value proposition. Having this in place before opening a shop and hiring staff will cut down on future stress a lot. It will also help your staff if they run into a problem and are unsure how to solve it.
3. Cost Structure
This involves the total cost that must be incurred to run a successful coffee shop business. In this block, you have to ensure that the costs are aligned with your value proposition. It should be transparent and straightforward to determine important cost. You should include the amount you’re putting into the shop, how much investors are adding, things like rent cost, any loans and banking information like your business account number and interest rates. (Read more about hidden costs of coffee shops here.)
4. Key Resources
These are the basic and most important things that be done to successfully run the business model. The resources can fall into either of the categories: physical, intellectual, human and financial. This is a place where you can list your vendors, what you’re getting from them and their prices. You can also list where you get your furniture and other equipment along with any contact information to get in touch with suppliers.
5. Customer Relationships
This involves the methods used to make maintain relationships with the customer segment. This block helps you know how to get, keep, and grow your customers. Getting customers to buy from your coffee shop is very essential; you can do it through various means of adverts. Excellent services will help you keep/retain your customers and could offer promo services to keep them updated on your latest services or products. Social media is an easy way to garner free marketing. You can also consider having customer cards that they get a free beverage after X amount of purchases or month giveaways and the like. Having guests is obviously what drives income so the way customers are treated should be at the top of your priority list. There is no better feeling as a customer than feeling heard and provided for, if you can do that, they’re almost guaranteed to love the shop and bring in more business. Word of mouth can easily help your business skyrocket or tear it to the ground.
6. Revenue Streams
This describes the income generation and collection methods mechanisms used in the business. This block describes how you intend to get money. It requires you to figure out the most effective strategy you’ll use to capture the most value from your customers. You can consider using Google for starters. If you have your numbers in order and a fairly low break-even point, you can start profiting rather early after opening up your doors. This can also be a place to consider things like employee discounts and giveaways as well.
This describes the means by which the business reaches out to its customers’ segments to communicate with them and to deliver their products and services to them. To successfully complete this block section you need to ask yourself how your customers would wish to be reached and how are you planning to reach them? Again, social media is the easiest and not to mention, most cost-effective way to do this. It’s free and can very simply be the biggest marketing tool you use. It’s suggested to start the coffee shops social media accounts before opening the store so you can gather a bit of a following and you can even countdown to opening day. This can excite future customers and people who have a following that can drive customer sales way up.
8. Value Positions
This stipulates what the business is offering and how the owner solves the problems and creates value for the customers. In this block, you have to answer some questions such as: why would a customer buy from you, what needs are you going to satisfy and what problems are you going to solve for every client that comes to your coffee shop?
The most common value positions include high performance, design, prices, brand, newness, risk reduction, convenience and cost reduction.
9. Customer Segments
These are specific groups of people that the company or business aims to offer their products and services to. You must understand that customers do not exist for you but rather you exist for the customers. Study what age range lives around the neighborhood you’re considering opening in. If there are mostly teenagers, maybe consider some sweeter drink options on your menu. If it’s more of an older crowd, you’ll more likely sell more drip brew and espresso beverages. Will you be located in a big city with a diverse customer base? This might mean getting dairy-free milk options and even gluten-free and vegan pastries.
Coffee shop business model or canvas is a style in which coffee is served to meet the customer’s expectations. The primary expectation of any coffee customer is to enjoy the coffee but the comfort they get when they are enjoying a cup of coffee really matters. This is why you need a coffee shop business canvas to help you strategize everything to help you get the maximum profit as you satisfy your customer’s needs.
What are the key partners for coffee shops?
According to the Cleverism blog, there are four types of key partners for general businesses. We will name them and apply them to the coffee shop business canvas.
- Joint-ventures: Maybe you want to have a joint-venture with a local bakery or pastry company and you will both have input into the business.
- Strategic alliances: Forming a strategic alliance is done with a non-competitor. Perhaps you will have a brick and mortar location and an online venue to sell your coffee goods.
- Buyer-seller relationships: Who are your suppliers? Do you get your milk from Borden or Lehigh Valley? Where do you get your coffee beans?
- Co-opetition: Risk can be more spread out by using this partnership type, especially if a new venture begins. There is a need for pastries in coffee shops as an accompaniment to a morning cup of coffee. Hence, a new bakery and a new coffee shop could form a co-opetition.
What are the key resources for coffee shops?
According to empowerwomen.org, there are four key resources for any business model. We will name the general terms and then apply them to how they relate to coffee shops.
- Physical resources: Coffee shop equipment, Point-of-sale system, coffee shop brick and mortar location, and etcetera.
- Human resources: Staff members such as Baristas, Team Leads, Assistant Managers, Store Managers, HR Representative, Marketing Director, and etcetera.
- Intellectual resources: This includes copyrights, brands, and parents related to your coffee shop products and the business entity itself.
- Financial resources: This includes cash, credit, and savings in your bank account. This could also include crowdfunding resources.
Interested in starting your own coffee shop? Click here to learn how.
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.