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.
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
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:
- Title Page
- Table of Contents
- 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
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.
Why should I prepare a business plan?
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.
Should I have my business plan professionally written?
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.
Looking to learn more about how to start your very own coffee shop? Checkout my coffee shop startup course and 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.