How to start a commercial coffee roasting business?
How hard is it to roast coffee commercially?
A roastery is typically easier to set up than a burger joint, but tracking down regulatory requirements can sometimes be tough because your local authorities are usually much more familiar with burger joints.
Here is a short list of things to consider:
Facility: Roaster set up: gas, ventilation, electrical service.
Food service equipment/facility: 3-compartment sink, hand wash station, slop sink; a space with walls, ceilings, and floors that can be washed; glass bulbs covered in plastic, dunnage racks for greens and storage for bulk roasted coffee and packaged coffee, and scales certified for commerce.
Procedures: Sanitation, personal protective equipment (PPE), pest control, etc.
Permitting: Local, state, and potentially federal regulations concerning food safety, environmental concerns (smoke), and employees.
Financial: Bank account, tax ID number, sales tax, liability insurance.
Ironically, all of this stuff is relatively easy compared to learning to source and roast greens and packaging and selling roasted coffee. For as complex as this may seem, it is a finite list of things you know about, a couple of things you will need to find out about, and then a thing or two that will take you completely by surprise.
Starting a commercial coffee roasting business from scratch is not particularly easy, but if you don’t quit, you win. It’s not enough to try. You have to try UNTIL. Find a loose thread and keep pulling until the whole thing unravels.
In the end, you’ll be the kind of person that finds ways to do things, not reasons not to do things. Along the way, you’ll probably become kind of a professional overcomer.
Long hours? Frustration? Anxiety? Serial failure? Sure. Glutton for punishment? Maybe. Worth it? IMO, totally.
How much money can I make?
The super simple, rough, back of the napkin calculation is a gross net of about $5 per pound.
On that basis, a 10-12 kg roaster has a potential productive capability of about 80 lbs or $400 per hour. A single owner operator will be able to roast about 4 hours a day with the balance of the time (probably 10 or 12 hour days, btw) packaging, cleaning, delivering, and marketing. That’s about $1600 per day ($8k per week or $400k per year) and about the minimum level an owner operator needs to take a paycheck, pay the rent, and pay taxes.
How do you get from roasting coffee in your basement part time to roasting for a living?
Most people start roasting part time as a side hustle with a small machine just to figure out the business. Part time operation can teach you how to source greens, produce a quality roast, and secure and retain quality accounts. Basically it’s a case of finding out what works to generate cash flow and simply doing more of that. I’ve spoken to more than one person that started a successful roastery with a $300 Behmor.
If you’ve got the expertise and the accounts already, you either put up or borrow the money to set up shop -somewhere between $30k to $100k for a 10-12 kg based facility depending on the scope of your vision and your checking account balance or credit limit.
The primary source of capital for most people as they build their business is “sweat equity” and re-investment of earnings. This means starting small, working uncompensated hours, and using profits to finance the purchase of equipment and infrastructure. Ultimately, it’s a case of having the vision and courage to start at whatever level you can afford and grow from there.
How do I know if I will succeed?
Obviously, not everyone will create a successful business. Certainly not the first one anyway. That’s not necessarily the end of the story, though. Remember the weird “try UNTIL” idea? If it helps, think of falling flat on your face as “paying your dues.”
Besides the intangible benefits of self employment like self actualization and self determination or actually making a little money, you’ll quickly learn the lesson that people do business with people they like and trust. A guy named Zig Ziglar used to say “You’ll get everything you want in life, if you help everybody around you get what they want”. If your job is to be likeable and trustable enough to make a good partner, additional opportunities are likely to present themselves. Self employment often gives you the opportunity to earn your place at the table.
Spend some time on Daily Coffee News and read about the career paths of the shops and roasteries they feature. These are success stories and you don’t get to hear about the failures, but most of them started on a small scale and expanded when someone offered them the chance to buy or partner with other businesses.
As a near total misfit and unemployable, I’ve been doing this type of thing for over 30 years and have won some, lost some, and screwed a couple up. I’ve also sometimes been simply too stupid to give up and, although once or twice it nearly killed me, once or twice it actually paid off. Candidly, the older I get the more certain I am that most success is directly attributable to luck. But luck happens. Starting your own thing (at whatever level) is one way to make sure you are positioned to take advantage of it when it does.