Q. I am interested in roasting coffee as a small business. My budget is going to be pretty tight, I would say I have about $5,000 to spend on equipment. Do you have any advice on which would be the best way to start out?
Start with good coffee of course, but don’t go buying fancy equipment just yet. If you want this to be a real business, not just a hobby business, it's going to be all about creating cash flow to support further spending: you won’t be able to lose money on every sale and make it very far.
It may seem counter-intuitive, but you need customers before you need production equipment. If you already know coffee, that’s your biggest asset. Use that. Find an existing company that would be willing to roast larger batches for you. Don’t go spending on any equipment just yet. Let someone else have the responsibility of maintenance, health codes, labor issue, electricity, etc etc. This will give you freedom and you’ll keep that money reserved while you learn the business. You will easily spend $5k on a lot of other things. Source only a couple kinds of good coffee from The Coffee Project and keep it simple.
Find someone who will roast about 20 lbs at a time for you and pay them to do that according to how you like it roasted. You spend your time finding customers and bag it up and deliver it. Your customers are gold. It’s MUCH easier to find a new roastmaster if you ever need to than to find new customers. Later on when you have a LOT of orders (income) to support the purchase, then go buy equipment.
You’ll probably have to roast a bare minimum of 20 pounds at a time if you hire out the coffee roasting. So make sure you have pre-sold at least 17 pounds of beans figuring moisture loss. The Roaster may want anything from .80 cents to 1.25? to roast for you. But keep the other $4,970 in your pocket for as long as you possibly can.
The next step is that one coffee will give you two options: Medium or dark. Depending on the region you live in, light and medium may be the better bet. Make sure you are moving out all 17 pounds of one or the other inside a week before progressing to this next step. Sell all 34 pounds a week before progressing to the second kind of coffee.
Add this next kind of coffee. You can now turn two kinds of coffee into at least six options: two roast levels each, and two blends. Add something solid and familiar like a Java. As business starts to grow add some Yemen or North African beans for a Mocca Java blend, it’s a classic and people will know the name. Now you have straight Ethiopian, A Central American and Island coffee, plus blending options to work with. That’s plenty!
When you get enough volume to justify the spend, roasting a few pounds at a time is probably the only option. A small 2-kilo pro roaster starts at $8000. Something like a Sonofreco roaster is about $3,000. Huky’s are about $1300. With your own roaster on hand you can do smaller batches as needed, but still, hire a Roaster for volume roasts. Your semi-pro home office machine will fill in the gaps as needed. Yes, you can use a BBQ drum roaster, but consistency can be hard under changing conditions outside.
Small electric home roasting machines of a few ounces are not designed for production, so you risk killing one if you try to roast pounds of coffee to fill orders. Also, consistency goes out the window and so will your customers, if you can’t deliver what’s expected. Do some small samples if needed on your SR500 or Gene but use another Roaster for the actual orders to get started. Customers will pay a premium price for a premium service, so go for that.
The MORE you can get customers on a schedule the better! Tell them you only roast once a week and can deliver fresh soon after. You don’t want to get caught trying to roast one pound of coffee every few days on a home machine, make sure you have the volume to hire another Roaster. THEN progress to buying the equipment you need to support roasting more yourself.
Also, create a simple webpage with a PayPal button to order. Explain the time frame and only deal with local orders. NO mail ordering at this point, it won’t work out. Find local customers in your city for local delivery. The point of the webpage is to make it easy for locals to order and pay.
With a very limited budget to start, this would be the way to go. Once you have consistent cash flow move onto online shipping.
It might seem tempting to go for a Huky or SonoFresco right away, but the volumes are very small. At most, you will only be able to produce about 2-4 pounds an hour. Figure what your time is worth and if you can realistically produce enough coffee in a day to make the venture worthwhile. When you have enough sales to afford $8000-$12,000 for a pro table top roaster, then go for that.
An alternative way to get started is to offer a premium service for delivering brewed coffee. One pound of roasted beans might net a few dollars, but figure 40 6 oz cups to a pound brewed At $1 a cup and that’s $40. Buy a few airpots and a brewer and put your coffee (and business cards) in waiting rooms (dentists, hairdressers, anywhere people need to sit a while.) You may need to go with the honor system or set up a flat rate with the owner to provide fresh good coffee, but starting somewhere is a start. Between offering fresh brewed coffee, and the roasted orders, you'll pick up from that and you’ll be on your way.
It’s pretty bootstrap, but doable if you are committed.