Starting a coffee roasting business is a big undertaking and not something you should decide to do lightly, but it might not be as daunting as it sounds. We know roasters who started in their backyards roasting for friends and family. We’ve even heard about a college student running a roasting business out of their dorm with a custom-made roaster.
We’re not suggesting it’s an easy thing to do, but there are actually relatively few essential pieces to starting a roasting business compared to starting some other kinds of businesses. It’s even feasible – although not recommended – to run a roasting business as an individual. In this guide, we’re going to go through the steps required and teach you how to start a coffee roasting business. You won’t be gunning for Starbucks’ market share any time soon, but you have to start somewhere! Let’s dive right in:
Before You Start Your Business…
Before we get into the specific details, we think it’s a good idea to take a step back and set a few things straight. First of all, there are many paths to success in most endeavors, and a roasting business is no exception. We don’t claim that this is the only way to do it, but we think, for most people, the steps we put forth here are a reasonable start.
Second, there is a huge range of scales that a roasting business could operate on. The college student we mentioned in the beginning certainly had his own roasting business, but he sold less than 100 pounds of coffee a month. A professional scale roaster with a 25-pound roaster could surpass 100 pounds in a single day.
Rather than try to cover a specific business model, we’ll try to be as generic as possible. Each step of the way we’ll give you an idea of what to expect on each end of the spectrum. Whether you’re looking to dip a toe in the water or feel ready for a cannonball, we hope you find this guide useful!
Top 5 Tips For Starting a Coffee Roasting Business:
1. Make a business plan
This is an essential step, and “start a coffee roasting business” doesn’t count as a business plan. You need to figure out how much money you will need and how much you’re willing to invest.
This is the absolute bare minimum and doesn’t cover regulatory fees or licensing fees that vary tremendously depending on where you’re located.
The two biggest cost items on that list are the roaster and the premises. Coffee roasters can be very expensive if you want a professional scale machine. San Franciscan is a manufacturer of professional-grade coffee roasters, and their 1 lb roaster costs about $11,000! That is far too low of a capacity to produce any serious amount of coffee, and a 25 lb roaster is proportionally more expensive.
Many people get started with cheap roasters since the barrier to entry is so much lower. It is tempting to purchase a relatively cheap roaster, but know that you pay more for a smaller sized roaster in the long run. More roasting capacity means you will reach break-even sooner even though the initial cost of a large roaster is higher. Read our guide to choosing a home coffee roaster here!
The second-largest cost is the location where you will do the actual roasting. Rent prices vary depending on where you live, but there are also the costs of getting your premises inspected. Many countries and US states have different requirements, but most require you to operate out of a food-safe kitchen, and getting approval costs money.
The rest of the list is fairly cheap by comparison, but you should research the costs of the equipment you’re interested in using to get an estimate of the total startup cost. A very rough estimate that takes into account the price of green beans and all of the equipment suggests that you can expect a gross profit of $5 per pound of green coffee you purchase. Once you estimate your startup cost, you can use this profit estimate to calculate how long it will take for you to break even – assuming you can find people to buy your coffee.
And that brings us to step two.
2. Build an audience
This is probably the hardest part of starting any new business, regardless of what you’re trying to sell. Starting a coffee roasting business actually has an advantage in this regard since there is already a large audience of coffee drinkers out there. The challenge is to get them to try your coffee, and that isn’t easy.
A great way to build an audience more quickly is to focus on selling your coffee wholesale to local restaurants and cafés. Using the local connection is often enough to get your foot in the door with some businesses. If you offer your coffee at a discounted rate to start, you might be able to get your coffee sold to a large audience. This is essential for growth.
Wholesale accounts are the most reliable way to generate continuing revenue because the orders will be large and consistent. On the other hand, you need to keep up with large order volumes even if you only have a single wholesale account. If you’re starting out with a small roaster, you need to consider any client’s requirements carefully. A large order from a local restaurant sounds great but won’t do you any good if you can’t meet their expectations.
It’s worth mentioning that thinking outside the box can be beneficial. When you’re looking for large clients, don’t limit yourself to restaurants or cafés only. These are great options, but hotels, office buildings, grocery stores, and local markets are all good candidates as well. Think about what businesses around you drink coffee in large volumes and reach out to them. The worst-case scenario is they decline, and it only takes one to get your business off the ground.
If you start on a roaster with under a 5-pound capacity, you probably won’t be able to sell to big clients. In this case, selling online is an option. Online sales require a website, so you’ll need to hire a developer if you’re not comfortable with technology. Modern website building tools make it very easy to create your own website with minimal knowledge required. It’s worth checking these out if you want to have an online presence.
This is related to the last step but is different enough to warrant it’s own section. Building an audience from nothing requires legwork and creating contacts in the industry, but maintaining your audience and growing it beyond your local shops requires something more. In today’s world, social media is a great tool for new businesses looking to expand their reach.
We think it is essential for an up-and-coming coffee roaster to have an Instagram account and a Facebook page. More people connect on Facebook than any other platform. If you already have local customers, having them follow you on Facebook gets them to engage with your brand and increases the visibility you have to other potential customers.
Instagram serves a similar but slightly different purpose. Coffee can be visual, and Instagram is a great way to tap into a different userbase than Facebook. Coffee has almost universal popularity across many demographics, so targeting all ages and types of coffee drinkers is possible and important.
There are so many ways to use social media to promote your new roasting business that you really are only limited by your creativity. Running giveaways in exchange for follows is a popular technique and, most importantly, gets people to try your coffee. Word of mouth is powerful, and on the back of a lively social media presence can dramatically increase your customer base.
4. Perfect your craft
Until now, we’ve glossed over a rather important point: learning how to roast coffee takes time. Roasting coffee is a skill, and getting to the point where you can roast high-quality coffee consistently will take a lot of effort. It’s easy to get caught up in the logistics of running a business and forget about the core feature: the coffee.
This will sound like a cliché, but if you don’t have good coffee, the best marketing, networking, and business plan in the world won’t make you a success. The easiest way to build and keep an audience is to make stellar coffee. Most professional roasters come with automation features that help you get your roasts just right, but there is a steep learning curve. Knowing how to make changes to the roast profile is one thing, but knowing how those changes will influence the taste only comes with practice.
Another aspect of making excellent coffee is making sure people know the best way to enjoy your coffee. We think providing educational material about how to brew your coffee can go a long way to connecting with customers. Dedicating part of your website to brew guides, roast descriptions, and general information about the coffee-making process builds your authority in the coffee world and helps encourage people who visit your website to try your coffee.
5. Be prepared for setbacks
This is generic advice, but it’s important enough to warrant its own number. Starting a business is all about spending long days making little money and solving big problems. Whatever the image you have in your head of what it will be like, odds are there will be things to deal with that you never anticipated. Being able to persevere and get a little closer each day to your ideal picture of a roasting business is essential.
You will have to manage your inventory, agreements with green coffee bean providers, client relationships, website management, order processing, and that’s to say nothing of the actual roasting! Just one of these tasks is enough to warrant a full-time job, and this isn’t even an exhaustive list.
If you can find a partner to start your roasting business with, your life will be much easier. A partner can take on some of the work and serve as encouragement and support when things start to go awry. Having a business partner comes with its own challenges, so choose who you work with wisely. A good partner is the easiest way to increase your chance of success.
This guide only scratches the surface of what you’ll face starting a roasting business. Our intention here isn’t to provide you with a comprehensive overview of every detail but instead to give you a sense of what goes into starting a coffee roasting business at a high level.
We hope that you have a better sense now of what it takes and some of the challenges you’ll face if you decide to start a roasting business. Roasting coffee isn’t easy by any means, but there is a relatively low barrier to entry compared to other businesses. Still, to really succeed will take hard work, people skills, and an unparalleled passion for delicious coffee.
Featured image credit: gedsarts, Pixabay