Posted Feb 11, 2016 by Lina Vashurina, Ecwid Team

What Your Business Plan Should Look Like: Sample — Part 2

Congratulations on beginning what is generally a large undertaking for any new business venture: you’re going to create a business plan. This all-important document will serve to not only provide you and your employees with focus, but will also be a means to quickly let anyone in on what your business is all about, why it’s better and different from the competition, and will explain all of its moving parts. It’s your business’s “bible.”

Below is a sample of a coffee shop business plan for a fictional e-commerce shop that we’re calling Green Tree Coffee.

Importantly, all of the facts and figures it contains are invented, but its formatting and flow are valid. Use it as an example to inspire you as you create your own business plan!

Begin business plan:

Executive Summary

Based in Asheville, North Carolina, Green Tree Coffee is an online retailer of high-quality limited-run coffees from around the world. It is founded by Lawson McBride, a backpacker, world traveler, and coffee lover who spent the past five years funding her travel by working on small coffee farms in exotic locales on six of the seven continents. McBride is passionate about well-produced coffee that simply cannot be bought in any conventional grocery store, so she brings worldwide Internet attention to her favorite coffee farms where she used to work, lest they otherwise go unnoticed by the coffee-loving public.

The business currently operates entirely online, making its products available everywhere at once. Business projections have Green Tree Coffee on track to generate $35,000 of revenue in its first year, and as the business grows, it will be doing $$350,000 of business annually within three years. Upon meeting these projections, there will be a physical Green Tree Coffee storefront open to residents and visitors to Asheville who want to experience the sights and smells of this coffee in person.

The business retains a focus on environmentalism and sustainability. Customers in Asheville are invited to bring their used coffee grounds to a designated drop-off point each week, where it will be made into fertilizer for a community garden. Once the physical storefront is up and running, customers can their grounds to the store at any time.

Research shows that coffee is more popular than it’s ever been. The average American drinks nine cups of coffee a week. The average European drinks 11. The average South American? 13 cups of coffee each week. This is why it remains important for Green Tree Coffee to focus on serving the world at large.

The business primarily competes with Red Fern Coffee, a small coffee distributor that works exclusively with American coffee farms. Green Tree’s value proposition and key differentiation comes from its worldwide focus and attention to sustainability in its operations.

At the outset, marketing will be done through social media. In the course of her travels, founder and CEO McBride has amassed a large following on Twitter and Instagram. She will direct attention to the Green Tree Coffee website, make regular suggestions on coffee to purchase, and share stylish photographs pertaining to the coffee-lover lifestyle. Over time, marketing efforts will grow to include paid search and hyperlocal coffee-tasting events.

Product will be sourced from the coffee farms that McBride has personal experience working with. She has access to a trust and understanding with these niche farms that larger businesses will simply never have; she is a former employee. Product will be shipped in bulk via conventional delivery means to a warehouse space, where it is then repackaged with Green Tree branding, including a short text on every bag of coffee beans about the farm and country from which the coffee comes.

Green Tree is not presently seeking funding, but this may change in the future. Right now the company is entirely bootstrapped off of McBride’s savings, and she is able to purchase product at a great discount due to her personal connections in the coffee industry around the world.

Our Story

After several years of working as an investment banker on Wall Street, securities trader Lawson McBride was ready for drastic change in every way. She sold most of her possessions and lived out of a backpack for five years while traveling the world in pursuit of the best coffee she could find. After all, coffee was the only thing she consistently enjoyed in her daily life. She wanted to bring that same joy to others, but she knew that she had to learn everything about it before she could do so. After working a series of manual labor jobs on coffee farms around the world, she leveraged her industry connections to buy the first batch of Green Tree Coffee inventory, and is now set on glamorizing coffee like never before.

Green Tree Coffee’s vision is simple: the world’s coffee, brought to your doorstep. Just as Amazon can frictionlessly deliver daily household necessities like toilet paper and cat litter, Green Tree seeks to bring rare or hard-to-find coffees to their customers just as easily. The company only sells coffees that have been vetted in person by McBride’s work experience; she knows the small coffee farms that treat its workers well and pay a fair wage by virtue of being a former employee of them herself.

Current Company Status

Green Tree Coffee currently operates as an LLC, but will soon seek to incorporate as its business grows. The company is privately held entirely by McBride, though she makes no secret of the fact that the business depends on the hard work of coffee farmers around the world. As a reseller itself, the business sells directly to consumers through its online e-commerce shop and avoids business with resellers or wholesalers.

Green Tree Coffee Objectives

Green Tree is intent on swaying the world away from the Starbucks lifestyle. Business is primarily domestic, within the United States. Right now, the focus is on growing business to be more international. Below is a business plan sample showing what is necessary over the time to come in order to meet such a goal.

Phase I (next six months)

  • whether domestic or international, increase total sales by 15% through strong social media push
  • grow social media following on Twitter and Instagram by 25%
  • identify and work with three key brand ambassadors who can be high-profile spokespersons for the Green Tree brand in the coffee world.

Phase II (next 12 months)

  • communicate with and travel to five new coffee farms to investigate reselling their product to the Green Tree audience
  • host coffee-tasting events in these new locales with the interest of simultaneously drumming up new international interest in the Green Tree brand
  • begin investigating spaces to rent or buy in the Asheville area for the purposes of putting together a physical storefront
  • begin outlining an employee handbook for when the time is right to begin hiring more help.

The Team

Right now, Green Tree is a one-woman team. With a Wall Street resume that only speaks to experience of turning money into more money, Lawson McBride is now at work turning the world’s coffee into money. She is founder, CEO, and primary funder of all of its operations.

As the company grows, McBride will begin hiring hardworking coffee enthusiasts to see Green Tree Coffee soar to new international heights.

Market Size and Development

Coffee is international, consumed in one form or another almost everywhere that humans live. With this fact well-acknowledged, Green Tree seeks to have regular business in every inhabited continent on the planet. In the United States alone, coffee is a $30 billion business. Internationally, it is more than 10 times that figure. Three out of every four people on the planet consume coffee at least once a week. This is a potential market size approaching two billion customers.

Developing the brand is not without its challenges. There are some de facto names in the coffee business that occupy more than their share of the spotlight, so the difficulty becomes one of raising Green Tree’s profile in such a way that the casual coffee drinker becomes aware of it. The company believes that the best way to do this is to begin leveraging attention in the coffee enthusiast world first, where attention will dribble downward and into the mainstream over time.

Rather than see people leave the house to go to a fancy coffee shop in order to enjoy an exquisite caffeine infusion, Green Tree Coffee knows that people would prefer to stay home and have the well-done, well-grown coffee come to them.

Competition

Red Fern Coffee – based in the US, Red Fern has distinguished itself by working with unknown American coffee growers to bring their product to more mainstream attention.

Blue Bottle Coffee – this high-end American coffee shop is known for its delicious (if expensive) coffee made to order in its retail stores.

Orange Lightning Coffee – working specifically with one coffee grower in Australia, this American reseller makes the most hyper-caffeinated coffee in the world available for purchase to anyone with an Internet connection and a shipping address.

Brand Differentiation and Value Proposition

As discussed above, coffee is a ubiquitous, worldwide phenomenon. None of the competition incorporates the entire world into their businesses, and as such, they limit themselves. Simultaneously, none of them are especially known for their fair trade business operations or commitment to sustainability. As Green Tree works with coffee growers on every continent where people live, making their lesser-known coffees available to absolutely anyone else in the world, it stands to severely outpace the competition in terms of revenue and worldwide brand recognition. The focus is and will remain perpetually international, whether it’s the supplier or the customer.

Target Market

Our customers are generally social media-savvy coffee lovers in the developed world. To segment that demographic more specifically, it looks like this.

Age – 18-34
Coffee enthusiasts – they go out for coffee or make their own at home with some degree of regularity.
Social media-savvy – they have and are active on their social media accounts, whether it’s Facebook, Tumblr, Instagram, Twitter, or similar. These services came into being while this market grew up. They are comfortable with these services and use them regularly.
Some interest in sustainability and the environment – this market is increasingly aware of human impact on the world and is interested in taking steps to counteract it, even if they are small steps.
Location – anywhere and everywhere in the developed world. Green Tree Coffee is an Internet-only business for the time being. This requires that our customers have credit card numbers, shipping addresses, and an Internet connection.

Marketing Plan

Social media – founder Lawson McBride amassed an astounding social media following over the course of her travels to small coffee farms around the world. She is a known coffee connoisseur and tastemaker in the coffee world. Her tweets and Instagram posts will unobtrusively direct people to Green Tree’s unique offerings on its site, and they will be retweeted and re-shared, multiplying this marketing effort.

Paid search – plenty of people love coffee and don’t know where to start. The purchase of key Google search terms will direct people to the Green Tree website, which is laid out in such a way as to make even a coffee novice confident in his or her purchase decision.

SEO – a short, daily blog post written by the company founder will share her thoughts on the coffee world at large, as well as discuss the goings-on of the company as she works to grow it. It will own keywords like “organic coffee,” “fair trade,” and the like.

PR – as the foundation of the marketing plan comes together over time, Green Tree Coffee will be pitching media outlets ranging from business publications (to cover the unique story behind the start of this business) to well-known blogs in the coffee world, where the founder will share her thoughts on what’s good and bad when it comes to a cup of coffee.

Daily Operations

As discussed, Green Tree Coffee operates entirely as an e-commerce shop for now, Daily operations revolve almost entirely around filling orders, shipping them, and restocking supply before it sells out. Relations with current providers are rock-solid due to our founder’s personal experience with these businesses.

Orders are packed into custom-printed coffee bags made of recyclable paper, each one bearing a short text about where and how the individual coffee was grown. They are then packed into a cardboard box in order to be delivered to the customer. UPS comes by for a regular daily pickup. While international orders remain small, they are shipped from a local post office for airmail delivery as needed.

Restock deliveries are inventoried at the end of each business day for the sake of selling them the very next day.

Financial Plan

 Year 1Year 2Year 3
Sales$35519$160000$350000
Direct Cost of Sales$5070$22857$40000
Other Production Expenses$7370$33226$50000
Total Cost of Sales$12440$56083$90000
Gross Margin$23079$103916$260000
Gross Margin %64.9%64.9%74%
Expenses   
Payroll$0$50000$75000
Sales and Marketing and Other Expenses$1000$5000$7500
Depreciation$500$500$500
Leased Equipment$0$0$0
Utilities$1500$1500$1500
Insurance$2000$2000$2000
Rent$12000$25000$25000
Payroll Taxes$0$1000$2000
Other   
Total Operating Expenses$15500$29500$30500
Profit Before Interest and Taxes$7579$74416$229500
EBITDA$9,579$77316$233500
Interest Expense$900$1600$1600
Taxes Incurred$1100$1300$2400
Net Profit$20019$27034$63343
Net Profit/Sales56.3%16.8%18.09%

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I hope, you’ll now have a thorough framework to create a business plan of your own. And remember: if the plan doesn’t work, change the plan — not your goal to start a business!