Do you want to start Starbucks business plan?
Do you want to know “How was Starbucks created?“ If you are thinking of starting a coffee business or any other business, it is a great idea to study the business plan for Starbucks.
Studying the business plans created by professional business plans writers can be a great way to understand the complexities involved in planning out a business. Though you can study other business plans like business plan for seafood restaurant for reference, however, it is always a good idea to pay attention to successful businesses as well.
In this template, we will be explaining the details of Starbucks business plan and the components that should be a part of every good business plan.
2.1 The Business
Starbucks was started as a coffee bean store by Jerry Baldwin, Gordon Bowker and Zev Siegi in 1971. The business was then converted to a coffee shop which over the years gained significant attention and expansion across the United States. The main aim of the business is to offer a wide variety of products ranging from different types of drinks and food to merchandise like mugs and tumblers etc.
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2.2 Management of Starbucks Company
To manage a business efficiently, you need to develop a strong business plan. A good business plan helps a company to manage its technical and financial resources and it contains all the details related to a business.
Starbucks franchise business plan contains all the details regarding Starbucks. For instance, it contains information about Starbucks strategic planning process or about how many franchises does Starbucks have etc.
When writing a business plan, you can get assistance from this document that contains Starbucks market development details or a separate plan like business plan for a Mexican restaurant. Otherwise, you can also choose the route of using business consulting services for help in developing a business plan.
2.3 Customers of Starbucks Company
Considering the fame of the business, the customers of Starbucks belong to many different domains and age groups. However, the targeted customers of the company include:
- Adults between 25-40
- Young Adults in the age group 18-25
- Generation Y
- Affluent People
2.4 Business Target
The target of Starbucks according to their mission statement is to “inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time”.
The financial targets that Starbucks wants to achieve in the next 2 years are given below:
3.1 Company Owner
Kevin Johnson is the owner of Starbucks. He completed his Bachelor’s in Business Administration from the New Mexico State University. He joined Starbucks as a member of the board of directors and then made his way up through COO to the company’s CEO and president.
3.2 Why the Starbucks company is being expanded
As a COO, Kevin handled the company’s operation throughout the world spanning different geographical locations. He also assisted with supply chain, HR, technology and marketing for the company on all platforms. Due to his outstanding ideas and management, he assumed the position of CEO intending to scale the business when his predecessor retired.
3.3 How the Starbucks company will be started
Step1: Plan Everything
The first step of starting any business is to plan thoroughly. The planning of Starbucks was done through Starbucks business plan. A business plan tells not only what type of company is Starbucks but also answers questions like how long Starbucks has been in business. Every business plan contains base information like this whether it is for a coffee shop or a BBQ restaurant business plan template. So If you want to write a business plan for a commercial business like a business plan for Subway franchise, you can refer to this plan.
Step2: Define the Brand
The next step is to advertise your additions and benefits to attract your target market. You can achieve this by developing a marketing plan that shows you management like strategic management Starbucks portion in the Starbucks business plan.
Step3: Establish Your Corporate Office
Kevin has decided to launch more branches across the US. Therefore, he talked to managers of different regions to get the work started. Next, he will assign the provision of inventory to the new branches to the COO.
Step4: Establish a Web Presence
Internet is a business’s best and worst friend. And Kevin knew that it is all about how you present yourself. To reach a wider audience with the new branches, Kevin decided to focus the main page of the Starbucks website on the expansion efforts.
Step5: Promote and Market
The final step of starting or expanding the business is to efficiently spread the word around through a marketing plan.
|Research and Development||$10,000|
|TOTAL START-UP EXPENSES||$290,300|
|Other Current Assets||$178,000|
|Start-up Expenses to Fund||$290,300|
|Start-up Assets to Fund||$979,000|
|TOTAL FUNDING REQUIRED||$1,269,300|
|Non-cash Assets from Start-up||$1,284,000|
|Cash Requirements from Start-up||$179,000|
|Additional Cash Raised||$50,000|
|Cash Balance on Starting Date||$35,000|
|Liabilities and Capital|
|Accounts Payable (Outstanding Bills)||$58,000|
|Other Current Liabilities (interest-free)||$0|
|Additional Investment Requirement||$0|
|TOTAL PLANNED INVESTMENT||$1,269,300|
|Loss at Start-up (Start-up Expenses)||$202,700|
|TOTAL CAPITAL AND LIABILITIES||$1,548,000|
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The first thing you need to decide when starting or expanding a business is the services you will provide your customers. Starbucks business plans contain this information. They also contain other pertinent analyses like Starbucks company analysis and Starbucks competition analysis. These components of a business plan allow you to manage different strategies of the company. For instance, the business plan for Starbucks allows the company to figure out Starbucks corporate strategy.
Even though the business plan for the expansion of the Starbucks chain might be a bit different from the business plan for a new company, you can still use this business plan of Starbucks coffee for reference.
The services that will be offered by the new branches will be:
- Hot Beverages
Starbucks was started, first and foremost, as a coffee place. Therefore, the biggest product of Starbucks is hot beverages, primarily coffees in different sizes and flavours. Some of these include:
- Hot Coffees
- Hot teas
- Hot drinks
- Cold Beverages
Some of the most famous products of Starbucks are cold beverages like:
- Cold Coffees
- Frappuccino Blended Beverages
- Iced Teas
- Cold Drinks
Therefore, these will be some of the essential products in the new branches as well.
- At-Home Coffee
When Starbucks was started, its primary goal was to sell packaged coffees of different flavours to customers. Keeping up with that tradition, the new branches will contain packaged coffee as well that people can buy.
- Food Services
One of the relatively newer features of Starbucks is its food services. The new branches will offer food groups like:
- Hot Breakfast
- Bakery Items
- Snacks & Sweets
- Oatmeal and Yogurt
Like the current branches of Starbucks, the new additions will also sell Starbucks related merchandise like:
- Gift Cards
- Cold Cups
- Water Bottles
Marketing Analysis of Starbucks Company
Starting a business of any kind will require you to know and understand the target market. You should be able to analyze the past, present and future trends of the market. This knowledge, along with your financial goals will allow you to set prices for your products and services that benefit you in the long term.
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You can study the marketing plan of Starbucks pdf and Starbucks growth strategy to understand these nuances. You can also take help from other business plans like cat café business plan to see how these concepts work with newer businesses.
However, if you aim to start a coffee brand like Starbucks, you should take a look at business plan for Starbucks and study the Starbucks corporate plan.
If you don’t know how to carry out marketing analysis and set prices for your products, read through the Starbucks franchise model presented in the business plan Starbucks coffee shops.
In the following part of Starbucks business proposal, we have detailed the market trends and potential customers of the new branches.
5.1 Market Trends
According to Statista, the coffeehouse industry carries a market share of $36 billion out of which Starbucks revenue worldwide amounts to $24.61 billion. The coffee house industry has a growth rate of 3% per year which means that there is a steady demand for more branches of the famous coffee house. Therefore, you can’t go wrong with an expansion.
5.2 Marketing Segmentation
The potential customers of Pro Cleaning Services are divided into the following groups:
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5.2.1 Adults Between 25-40
The primary customers of new Starbucks branches will be the adults of the surrounding areas with an age range of 25-40. These are expected to be our regular customers as they belong to the working class and require a caffeine boost daily.
5.2.2 Young Adults in the Age Group 18-25
Our second target customers will be the young adults enrolled in schools and requiring coffee regularly. We expect them to visit the stores almost regularly.
5.2.3 Generation Y
This will be our third target group of customers. These are the people who saw Starbucks become what it is today. And we expect them as returning customers.
5.2.4 Business Workers
Lastly, the final customer group will be wealthy and affluent who buy Starbucks regularly on the go. These may include business people and people with their sources of earning.
|Potential Customers||Growth||Year 1||Year 2||Year 3||Year 4||Year 5||CAGR|
5.3 Business Target
- To continue its status as the biggest coffeehouse chain in the world
- To maintain service standards
- To maintain customer satisfaction above 95%
- To earn a net revenue of $120k/month in each branch
5.4 Product Pricing
Due to its flagship and custom drinks, the price of Starbucks products will be a bit higher as compared to its competitors. However, it will be offering more options and quality at that price.
To gain attention amongst so much competition, your business plan for cafe should highlight your competitive advantages over other cafes in the market. You will also need to develop a good strategy like Starbucks strategy plan to market your products.
In this business plan of Starbucks, we are highlighting the Starbucks corporate strategy that makes Starbucks stand out amongst its competitors in the market. You can follow along to develop the marketing plan that can make you stand out.
6.1 Competitive Analysis
- Starbucks has excellent customer care service
- Through the Starbucks website and user-friendly mobile app, our customers can order drinks and utilize many different offers.
- Starbucks doesn’t compromise on quality and thus provides the best quality products
- Starbucks constantly innovates its drinks and adds new menu items
6.2 Sales Strategy
- We’ll advertise our services through Google Local ads service, our website and social media.
- We’ll offer a 50% discount to the first 50 customers.
- We’ll offer a 25% discount on our new drinks for a week.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
|Unit Sales||Year 1||Year 2||Year 3|
|At-Home Coffee & Merch||12,500||13,250||14,045|
|TOTAL UNIT SALES||56,500||59,890||63,483|
|Unit Prices||Year 1||Year 2||Year 3|
|At-Home Coffee & Merch||$25.00||$29.00||$33.64|
|At-Home Coffee & Merch||$312,500.00||$384,250.00||$472,473.80|
|Direct Unit Costs||Year 1||Year 2||Year 3|
|At-Home Coffee & Merch||$10.00||$11.00||$11.55|
|Direct Cost of Sales|
|At-Home Coffee & Merch||$125,000.00||$145,750.00||$162,219.75|
|Subtotal Direct Cost of Sales||$410,500.00||$478,643.00||$532,729.66|
Starbucks doesn’t compromise on the quality of its services therefore Starbucks corporate plan contains strict guidelines about the behaviour of the workforce and the expectations associated with them. These criteria are a part of the Starbuck Strategic plan. You can follow this Starbucks business plan pdf to get a hint into what your personnel plan should include.
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7.1 Company Staff
- 1 Manager in each branch to help in overall operations
- 2 CIMS Certified Commercial Cleaners for each branch
- 2 Technician to upkeep the machinery across all branches
- 1 Web Developer/ Mobile App Developer to manage online sites
- 2 Sales Executives to organize and promote sales
- 1 Accountant
- 5 Delivery People
- 3 Receptionists at each branch
7.2 Average Salary of Employees
|Year 1||Year 2||Year 3|
If you do a financial analysis of Starbucks case study, you will understand that it takes a lot more than a good number of sales to make your business profitable. Starbucks financial strategy ensures that all the resources are being utilized efficiently so that the company doesn’t end up wasting money and going bankrupt. The Starbucks coffee business plan also carries out an analysis to figure out the prices of different items to keep the company accessible to customers and successful.
Here we’re providing the detailed financial plan made for Starbucks. So that you can get an idea of how to manage business finances.
8.1 Important Assumptions
|Year 1||Year 2||Year 3|
|Current Interest Rate||8.12%||8.20%||8.26%|
|Long-term Interest Rate||8.40%||8.44%||8.47%|
8.2 Break-even Analysis
|Monthly Units Break-even||5340|
|Monthly Revenue Break-even||$132,500|
|Average Per-Unit Revenue||$231.00|
|Average Per-Unit Variable Cost||$0.62|
|Estimated Monthly Fixed Cost||$163,800|
8.3 Projected Profit and Loss
|Pro Forma Profit And Loss|
|Year 1||Year 2||Year 3|
|Direct Cost of Sales||$410,500||$478,643||$532,730|
|TOTAL COST OF SALES||$410,500||$478,643||$532,730|
|Gross Margin %||60.00%||62.07%||65.67%|
|Sales and Marketing and Other Expenses||$145,000||$148,000||$156,000|
|Total Operating Expenses||$550,700||$592,100||$643,415|
|Profit Before Interest and Taxes||$65,050||$191,134||$375,459|
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8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
|Pro Forma Cash Flow|
|Cash Received||Year 1||Year 2||Year 3|
|Cash from Operations|
|Cash from Receivables||$22,000||$23,760||$25,661|
|SUBTOTAL CASH FROM OPERATIONS||$73,000||$79,570||$85,936|
|Additional Cash Received|
|Sales Tax, VAT, HST/GST Received||$0||$0||$0|
|New Current Borrowing||$0||$0||$0|
|New Other Liabilities (interest-free)||$0||$0||$0|
|New Long-term Liabilities||$0||$0||$0|
|Sales of Other Current Assets||$0||$0||$0|
|Sales of Long-term Assets||$0||$0||$0|
|New Investment Received||$0||$0||$0|
|SUBTOTAL CASH RECEIVED||$74,000||$79,000||$85,000|
|Expenditures||Year 1||Year 2||Year 3|
|Expenditures from Operations|
|SUBTOTAL SPENT ON OPERATIONS||$69,000||$70,000||$76,000|
|Additional Cash Spent|
|Sales Tax, VAT, HST/GST Paid Out||$0||$0||$0|
|Principal Repayment of Current Borrowing||$0||$0||$0|
|Other Liabilities Principal Repayment||$0||$0||$0|
|Long-term Liabilities Principal Repayment||$0||$0||$0|
|Purchase Other Current Assets||$0||$0||$0|
|Purchase Long-term Assets||$0||$0||$0|
|SUBTOTAL CASH SPENT||$69,000||$74,520||$80,482|
|Net Cash Flow||$21,000||$23,000||$25,000|
8.5 Projected Balance Sheet
|Pro Forma Balance Sheet|
|Assets||Year 1||Year 2||Year 3|
|Other Current Assets||$1,000||$1,000||$1,000|
|TOTAL CURRENT ASSETS||$282,000||$315,840||$355,004|
|TOTAL LONG-TERM ASSETS||$24,400||$27,328||$30,744|
|Liabilities and Capital||Year 4||Year 5||Year 6|
|Other Current Liabilities||$0||$0||$0|
|SUBTOTAL CURRENT LIABILITIES||$19,000||$21,280||$23,919|
|TOTAL LIABILITIES AND CAPITAL||$300,000||$329,280||$370,440|
8.6 Business Ratios
|Year 1||Year 2||Year 3||INDUSTRY PROFILE|
|Percent of Total Assets|
|Other Current Assets||2.11%||2.34%||2.59%||2.40%|
|Total Current Assets||149.80%||151.00%||152.00%||158.00%|
|Percent of Sales|
|Selling, General & Administrative Expenses||93.56%||96.09%||98.78%||97.80%|
|Profit Before Interest and Taxes||41.50%||42.62%||43.81%||33.90%|
|Total Debt to Total Assets||0.18%||0.18%||0.17%||0.40%|
|Pre-tax Return on Net Worth||74.08%||74.89%||75.00%||75.00%|
|Pre-tax Return on Assets||96.30%||101.12%||106.17%||111.30%|
|Additional Ratios||Year 1||Year 2||Year 3|
|Net Profit Margin||33.56%||34.60%||35.67%||N.A.|
|Return on Equity||55.80%||57.53%||59.31%||N.A.|
|Accounts Receivable Turnover||7.7||7.8||7.8||N.A.|
|Accounts Payable Turnover||15.6||16||16.3||N.A.|
|Total Asset Turnover||2.5||2.5||2.6||N.A.|
|Debt to Net Worth||-0.04||-0.03||-0.04||N.A.|
|Current Liab. to Liab.||1||1||1||N.A.|
|Net Working Capital||$244,000||$257,664||$272,093||N.A.|
|Assets to Sales||0.85||0.87||0.89||N.A.|
|Current Debt/Total Assets||1%||0%||0%||N.A.|
1. What is the business plan of Starbucks?
Business plan Starbucks coffee shops details the different management aspects that go into starting a business. You can take a look at the Starbucks original business plan to get an idea of how the company management was planned in the beginning.
2. How much does it cost to start a Starbucks business?
Depending on the scale and nature of your business, it requires different costs to start a business. You can look at the above project report on Starbucks to understand how much costs are involved in opening chain stores. You can also take a look that theStarbucks marketing strategy pdf to make your business successful.
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