Coffee Shop Business Plan: Competitive Analysis

Coffee Shop Business Plan: Competitive & Internal Analysis

We started researching the Denver market and competition early on in our business planning, and even gave an introduction on where to start in the process. Today we’ll be expanding on the competitive analysis to use for the Marketing section in your business plan.

The purpose of the competitive analysis is to give an overview of the competition in your industry and market in relation to your business. Knowing the strengths, weaknesses, opportunities, and threats of your business, and those of your competitors will allow you to strategically identify and implement your key competencies in order to be successful.

Marketing Plan Contents

Industry & Market Analysis

See last week’s post on what to include in the industry and market analysis.

Competitive Analysis

  • Define your main direct and indirect competition. What other places are helping customers solve their caffeine problems? Direct competition are other coffee shops who compete for the same coffee dollar you’re going after. Indirect competition such as donut shops, bakeries, or sandwich shops compete for the same general food and beverage dollar.
  • Research competitors by visiting them yourself. Take advantage of creative secondary research like Yelp reviews and social media as well.
  • Create a competitive matrix that compares your coffee shop to your competitors’ according to variables that are important in this environment.
    1. Choose competitors most important to you, either based on geographic region, being leaders in the market, or being most similar to you– whatever you find important.
    2. Choose variables that you think are important in your market. Those for a coffee shop could include: name, location, menu, prices, operation hours, seating capacity, traffic count, customer decor, customer service, reputation, competitive advantage, and taste/quality, among others.
    3. Compare and/or rank your competition to these variables. If you compare them, go ahead and write descriptions in the table. If you rank them, do it on a consistent scale of 1-10 for where they stand on these qualities. You can also do both.
    4. Analyze where you stand according to your competitors. Find patterns of success or opportunities in the market.
      Example Competitive Matrix made in Pages:
  • Conduct a SWOT Analysis for yourself and your competition. Analyze internal Strengths and Weaknesses, and external Opportunities and Threats.
    Example Swot Analysis table made in Pages:

Internal Analysis

Use the Competitive Matrix and SWOT Analysis to get a picture of where you fit in the market in relation to your competitors. This should stir up, as well as answer key questions to start forming your strategy:

  • How is your competition perceived? How do you want to be perceived?
  • Who is their target market? Is your target market important to your competitors?
  • How is your coffee shop’s solution to customer needs different or better than other shops a potential customer might consider? What features or benefits do you offer than your competitors don’t?
  • What are your competitors good at? Where do you/they fall behind?
  • What customers are under-served? Are there opportunities to excel where others are falling short?
  • Start using this information as well as the Marketing Mix to formulate a solid marketing strategy.

Coffee Shop Business Plan: Competitive & Internal Analysis

Click here for a downloadable Dream|a|Latte Competitive & Internal Analysis Checklist to help you stay organized in writing your business plan, useful for starting your coffee shop or any business!

Other Coffee Shop Business Plan Sections:


Note: As a fellow aspiring entrepreneur that simply wants to share my journey with you, know this is information I’ve gathered from various books on starting a coffee shop, business websites, and courses that have helped me in writing my business plan to start a coffee shop. I only hope to share some of these resources to help you get started and inspired, however this is by no means extensive. All materials available in this series are for informational purposes only, and not to be business consulting or legal advice– so do contact a licensed consultant, accountant, or attorney to obtain advice with respect to any particular issue or problem.

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