IndustriesCoffee shop
A coffee shop business plan built on covers, not optimism
Coffee has the best gross margin in food service and the worst operating leverage: rent and staffing are fixed, and the whole model turns on transactions per day. The number that decides the plan is footfall, and it is the number most plans wave at.
Written for an SBA or bank loan, which is where most plans in this sector goNAICS 722515
Where the money goes
Typical shares of revenue in this sector. Shown as a starting point to argue with, never as a target to hit — your own figures replace all of these at intake.
- Coffee, milk and food
- 24%
- Drink-only would be nearer 18%; food drags it up and is usually the difference between viable and not.
- Labour
- 32%
- The binding constraint. Opening hours set headcount before revenue does.
- Rent and occupancy
- 12%
- Above 15% of revenue, most independent shops do not clear a living for the owner.
- Marketing
- 2%
- Mostly local and organic. A shop that needs paid acquisition has a location problem.
A worked model
One plausible coffee shop, built out in full.
Not an illustration. These assumptions were run through the same engine the product uses, and the plan review was run over the result. It is here so you can see the shape of the answer before you start.
- Year 1 revenue
- $665.6K
- Year 3 revenue
- $947.2K
- Operating profit from
- Month 3
- Year 3 net margin
- 7.5%
- Coverage, first full year
- 2.17×EBITDA less tax, over debt service
Balance sheet ties in all 60 periodsNo blocking findings — this model would exportLowest cash $72.5K in month 2
The revenue build
Not a growth rate. These are the drivers a reader can argue with, which is the only kind worth putting in a plan.
Counter sales
Traffic × conversion × ticket
- Daily trafficPeople past the door, or covers seated
- 240
- ConversionShare who buy
- 100%
- Average ticket
- $10
- Open days per month
- 28
- Monthly growth
- 0.0%
- Cost of salesFood, drink or goods only
- 24%
Sixty months of it
Monthly revenue against monthly EBITDA. Both are flows, so they share an axis honestly — plotting a cumulative cash balance beside a monthly figure would flatten the one that matters. The cash trough is in the strip above.
- Monthly revenue
- Monthly EBITDA
Year by year
| Year | Revenue | EBITDA | Net income | Closing cash |
|---|---|---|---|---|
| Year 1 | $665.6K | $3.2K | -$48.4K | $95.8K |
| Year 2 | $873.9K | $91.5K | $41.6K | $146.2K |
| Year 3 | $947.2K | $136.1K | $71K | $224K |
| Year 4 | $1M | $174.5K | $101.6K | $330.1K |
| Year 5 | $1.1M | $207.3K | $129.4K | $461.6K |
Sources and uses: $250K debt, $90K owner capital, $240K of fit-out and equipment. 7 people on the payroll by month 36.
Against the coffee shop band
Benchmarks warn; they never overwrite. An assumption outside the band is flagged with its source so you can justify it — substituting an industry median would destroy the specificity that makes a plan credible.
- Gross margin, before direct labour
- 76.0%in band
- 70.0%median 78.0%85.0%The published band is quoted on cost of goods alone, so this is the comparable figure. After direct labour the statements show 47.2%.
- Net margin
- 7.5%in band
- 2.0%median 7.0%15.0%
Source: Specialty coffee trade data, 2026 · NAICS 722515 · secondary tier. Secondary-tier bands are usable as ranges, not as something a lender will read; where a figure has to survive scrutiny we substitute RMA Annual Statement Studies or IRS SOI data.
What they will ask first
A plan that answers these before they are asked reads as competent. One that does not gets sent back with them attached.
- How many transactions a day, and where does that number come from?
- A counted number beats an assumed one: a morning footfall count outside the unit, a comparable shop's queue, or the previous tenant's utility load. Say which.
- What is rent as a share of projected revenue?
- This single ratio explains most failed coffee shops. Compute it explicitly and defend it, because the lender will.
Where these plans get sent back
Fit-out overruns
Espresso plumbing, extraction and an accessible counter routinely add twenty per cent to a build-out quote. A plan with no contingency reads as a first plan.
The second bad month
Ramp is slower than founders model. The lowest cash point is usually month four or five, not month one.
Licences and filings to budget for
These belong in the use of funds, not in a footnote. A missing permit line is the cheapest possible reason to be sent back.
- Food service establishment permit and health inspection
- Certificate of occupancy after fit-out, which gates the opening date
- Grease trap and extraction sign-off where hot food is served
- Sales tax registration in the trading jurisdiction
Requirements vary by state, county and city, and they change. Treat this as the list to go and verify locally rather than as legal advice — the product tracks the dated ones as configuration with a source and an effective date, and prints which version it assumed.
Start from these defaults, then make them yours.
The intake pre-fills this sector’s drivers and tags each one as your figure or an industry default — and says which in the finished plan.