If you're a coffee connoisseur who loves to roast coffee and experiment with java then starting a coffee roasting business could be a smart career path. After all, the global coffee industry is valued at more than $465.9 billion.
At the heart of a good cup of joe is a well-roasted bean, which means your coffee roasting skills are in high demand. Who needs Starbucks when you've roasted the best coffee yourself?
But how do you start a coffee roasting business? There's a big difference between roasting your own coffee for yourself, friends, and family and starting a roastery that sells beans to home coffee brewers and local coffee shops.
Although you might be passionate about coffee, forming and operating a small business can be overwhelming for some. There's a lot of planning, paperwork, and research involved in getting your coffee brand off the ground. This article will walk you through the steps to starting a coffee roasting business - including legal paperwork, marketing and promotions, and day-to-day operations.
What's Required to Start a Coffee Roasting Business?
There are no formal education or training requirements needed to operate a coffee roasting startup. Most roasters will cut their teeth in the field by learning on the job while roasting coffee for someone else's company or by working as a barista. Others will learn as hobbyists roasting in their own homes simply for the love of coffee.
As you launch your coffee roasting brand, the taste of your coffee will speak for itself as you make connections with coffee shop owners and other potential customers. That said, if you're interested in elevating your roasting knowledge, there are numerous workshops and certificate programs for coffee professionals offered by organizations like the Coffee Roasting Institute and the Specialty Coffee Association.
Getting Your Coffee Roasting Business Off the Ground
You'll have many important decisions to make before you even get your coffee roasting company off the ground. Here's what you'll need to keep in mind when starting your business:
- Specialty areas: As a coffee roaster, you'll need to decide which types of high-quality coffee beans you plan to sell. Will you roast blends or opt for single-origin coffee, which means all the beans are sourced from the same place? Do you prefer darker or lighter roasts? Will you focus on beans from one specific area of the world or purchase beans from various locations? Will you offer organic or fair trade coffee? Will you stick with roasting or do you plan to eventually open your own coffee shop, as well? It's never too early to start thinking about these long-term plans.
- Target market: To succeed in the coffee roasting business, you first need to identify and understand your customer base. Who will be buying your roasted coffee? Will you target home coffee brewers and sell your beans at markets and retail shops or do you plan to focus on wholesale coffee and try to get your coffee into cafes, coffee shops, and restaurants? Both are very different customer bases and you'll promote your coffee to them differently.
- Average range of prices: Pricing your roasted coffee might be complicated. You need to consider the costs that go into making it: green coffee beans, your roasting equipment, shipping, marketing, and promotions. As you consider these costs and think about how you'll make money, you also need to research the price of other independent coffee roasters (both wholesale and those in grocery stores and retail shops). On average, the wholesale price for coffee from a small roastery tends to fall just under $10 per pound.
- Hours: As you master your roasting process, you'll determine how long it takes to roast a pound of coffee and then adjust your expectations accordingly as your customer list grows. Determine how much time you're able to dedicate to your business based on the number of customers you have and the amount of coffee they order.
- Business costs: Your biggest startup costs for your new business will fall into two areas: buying green coffee beans in bulk for roasting and your roasting equipment. You could launch your company with a smaller, at-home roaster before purchasing a new roaster that's more appropriate for commercial use. The size of your roaster will determine how many customers you can accommodate, though. You'll also need to shop around for the best price for raw beans. Other upfront costs for your roastery include marketing and promotions, rental space (if you decide to roast in a commercial kitchen or other professional space), business registration and insurance costs, and wages (if you hire employees).
- Business plan: Once you've decided on all of the above factors, you should write a business plan for your roastery. This important document will serve as the blueprint for your small business. A useful business plan will include the following sections:
- An executive summary
- A list of employees (contract and salaried)
- A complete list of your services and products
- Your business location (including details about the space in which you operate)
- A market analysis
- An in-depth company description
- Your business structure (outlining how your company is organized and managed)
- A marketing and sales plan
- A financial outlook
Get Roasting
With your business plan finalized, you're ready to start your small business. Here are the steps you'll take to launch your roastery.
Legal Requirements for Launching Your Coffee Roastery
The most important legal decision you'll make for your business is how you'll structure it. There are four common business entity types you'll likely consider: sole proprietorships, partnerships, limited liability companies (LLCs), and corporations.
Each type has its benefits depending on your company's unique circumstances. Choose carefully, as the business entity you adopt will affect your business in many ways: how you're taxed, your personal liability, how to obtain funding, and which paperwork you will need to file during formation.
Another major decision is what you'll name your roastery. Most states have business naming requirements and will ask that you select a name that's unlike any other business already operating in your state. Your state might even have rules prohibiting the use of certain words in business names, so double-check your state laws. Many states will also have databases of existing businesses that you can search to make sure you come up with something unique.
After choosing a business name, you're ready to fill out all of the legal paperwork that comes with forming a business. The registration process will vary by state so it's important to do your research. You'll also need to check your local laws for licenses, permits, regulations, and required insurance to put in place before you get roasting.
Taxes are another part of running a business. Research federal, state, and local tax requirements for your business type. How you file your taxes will depend on the business structure you've selected. Most businesses use an employer identification number (EIN) as their tax ID. You can apply for and receive your EIN immediately on the Internal Revenue Service (IRS) website.
Once your coffee roastery is registered and you've been assigned an EIN, you should open a business bank account. You'll need several items to open this account, although you should check your bank's requirements beforehand.
If you're operating out of a brick-and-mortar shop or even just roasting out of a commercial space, there's some additional paperwork. Whether renting space for your business or purchasing property, you're required to obtain a Certificate of Occupancy that's issued through your local building department. This document establishes that your space is up to code and approved for your business to use.
Build an Audience Through Marketing Initiatives
The coffee industry is a competitive field. There are a lot of coffee lovers in the world - but also a lot of coffee brands for them to choose from. How do you stand out? You'll need to find ways to grab the attention of coffee drinkers through marketing and promotional initiatives. This should include a mix of traditional promotions and digital outreach projects.
Here are a few easy ways to promote your roastery:
- Create a website. Create a website for your brand - a place on the internet where regular and potential customers can find you whether they're individuals purchasing coffee to brew at home or wholesale customers buying coffee in bulk for their coffee shop or restaurant. If you've never designed a website before, there are many inexpensive and easy-to-use website building sites to choose from. It's probably in your best interest to hire a web designer to create your website, especially if you decide to include an e-commerce component. If you don't know how to find a web design professional, use a site like Upwork to hire a talented freelancer.
- Build a social media presence. Social media sites - like Facebook, Instagram, and Twitter - are free or inexpensive ways to engage your customers and reach new coffee lovers. Use these sites to have some fun while connecting with followers. Show off your products and your knowledge of coffee.
- Use branded media. Focus on branding your roastery by creating a logo, social media banners, themes, color schemes, slogans, and other branded media to help your business stand out. Hire a graphic designer to create a complete package of branded media as you launch your company.
- Write a blog. Adding a blog to your website is another easy - and free - way to show off your coffee expertise. Write about fun topics from the industry that draw in coffee drinkers so they realize that you know what you're talking about.
- Join local organizations. Chambers of commerce and other networking groups are excellent ways to get to know other business owners in your region - including restaurants, bars, coffee shops, cafes, and retailers - who might want to purchase your coffee wholesale.
- Don't forget print media. There's still a place for traditional print mailers and other promotional materials. Business cards are a must for networking events and business-to-business mailings can be used to reach other business owners who might want to sell your roasted coffee. (Although nothing beats that in-person connection, especially when you're starting out.)
- Claim your online business pages. Many shoppers turn to Google My Business and Yelp to search for specific businesses and services in their areas. Be sure to claim your pages on these sites as they're an easy way to reach customers.
Day-to-Day Operations to Consider
While your true passion lies in the coffee industry, you can't forget about the day-to-day tasks you need to complete to keep your business running successfully. This paperwork is integral to building your brand.
Skynova's full range of accounting and invoicing software can help make running your business a little easier. Our intuitive software and templates make it easy to track all the money going in and out of your business.
Build Your Coffee Brand With Skynova
If you love coffee and experimenting with roasting beans, launching a roastery might be the right career path for you. There's a lot of research and planning that goes into pursuing your passion, though. You'll need to determine the legal requirements for launching a small business, build a customer base, and handle day-to-day operations.
Not everyone is built to handle these administrative tasks. Thankfully, Skynova is here to simplify and streamline all of your business needs. Our full range of software products offers everything a small business might need for successful growth. This gives you more time to focus on your real passion: running your roastery.