Roasting as a side-business - Advice needed - Page 3

Discuss roast levels and profiles for espresso, equipment for roasting coffee.
dale_cooper

Postby dale_cooper » Nov 27, 2018, 11:03 pm

Random sidenote - I'm surprised how many people have friends/coworkers who make requests for coffee and you have a small group to regularly roast for....

Most of my friends know I roast and many of them enjoy coffee but most are far too cheap to have a grinder or actually care to pay for quality coffee - they'd rather go to starbucks or have a keurig. Only recently has my mom and 1 other friend recently been requesting coffee. Maybe I'm a loser lol...

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drgary
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Postby drgary » Nov 28, 2018, 2:15 am

Usually I've hooked them by offering a taste of my brewed coffee. :P
Gary
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What I WOULD do for a good cup of coffee!

blondica73

Postby blondica73 » replying to drgary » Nov 28, 2018, 2:43 am

I do the same thing, I invite friends over and pull a few shots for them and they are hooked. However, the most common feedback I get is that coffee tastes different at my house, at which time I explain the importance of a good grinder and decent espresso machine.

dale_cooper

Postby dale_cooper » replying to blondica73 » Nov 28, 2018, 10:54 am

For sure - it's actually quite difficult IMO to brew coffee effectively. I don't think your common coffee drinker really knows the levels from bad to good you can make a cup taste, even with the same bean. Water is IMMENSELY important. It still makes me mad how good the water is at my dad's house (better than TWW for some reason). Water, grinder, technique!

Sorry, going off topic now. Please proceed while I try to find more friends that are willing to plunge into coffee nerdery. :mrgreen:

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Almico

Postby Almico » Nov 28, 2018, 11:48 am

dale_cooper wrote:Random sidenote - I'm surprised how many people have friends/coworkers who make requests for coffee and you have a small group to regularly roast for....

Most of my friends know I roast and many of them enjoy coffee but most are far too cheap to have a grinder or actually care to pay for quality coffee - they'd rather go to starbucks or have a keurig. Only recently has my mom and 1 other friend recently been requesting coffee. Maybe I'm a loser lol...


Likewise. When I first entertained the idea of a roasting/coffee business I thought friends and family alone would give me a reasonable output. After all, they all agreed the coffee is so much better than DD and SB.

Fast forward a year++ and I have sold maybe a dozen or so bags to the friends, family and neighbors I thought would be my no-brainer mainstay.

a) most people don't care that much about coffee. If they did, they'd be roasting it themselves.
b) most of the rest that care about coffee are not willing to go 10 minutes out of their way to get mine, even though they know it's better.

That's just the cold hard reality of the coffee business. It needs to be convenient. Granted, I don't have a lot of friends and most of my family is spread all over the country. But...

...you still need to figure out how you are going to get bags of coffee from your roasting table to your friends/families kitchen and their money to your bank account profitably.

If you buy coffee in 70kg bulk sacks at $3.50/lb and add roast shrinkage your at $4.10. Adding $1 for a bag and label brings you too $5.10. Roasting only 2# at a time adds a significant amount of labor to the process. Let's say you can roast and bag 8# an hour. At $16/hr labor rate that adds $2/bag bringing you to $7.10. Add a bit of gas or electricity and figure $7.25 is your cost basis. If you sell a 12oz bag of coffee for $12, you are making less than $5 per bag. Are your friends and family already paying $12+ for a bag for coffee now? Are they going to pay you $12 for a 12oz bag for your "roasted in the garage" coffee? Back to the business plan...

If they would, that would not be too bad if you had an efficient distribution system. But friends, family and neighbor customers do not make for an efficient distribution system. Even if my neighbor knocked on my door to buy a bag of coffee, the 10 minutes of social graces would eat up the $5 profit I was making on the bag.

Selling coffee from a farmer's market table is efficient. Selling it mail order can be efficient. I sell most off the shelf from my coffee bar.

Which brings up the business plan again. Your first business plan will not likely be your last if your business is to be successful. I never planned on selling brewed coffee, only bags. The market and subsequent opportunities dictated differently and plans changed.
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TomC
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Postby TomC » Nov 28, 2018, 12:06 pm

Almico's advice is pure gold. ^

blkswn

Postby blkswn » Nov 28, 2018, 1:14 pm

Almico wrote:If you sell a 12oz bag of coffee for $12, you are making less than $5 per bag. And are your friends and family already paying $12 or more per bag for coffee now? Are they going to pay you $12 for a 12oz bag for your "roasted in the garage" coffee? Back to the business plan...


This made me lol. It reminded me of a potential warm referral customer who is a big coffee snob that wanted to buy a Panama Gesha from me at a rate of $13/lbs because they can get intelligentsia coffee from the local grocery store at that rate.

I look at businesses all day and can't stress your points about business plans and how it will not be what you first thought it would be. Though I will venture to say certain parts of Los Angeles may be a bit easier to ramp to profitability, initially, as the hipsters here are happy to pay a per pound rate equivalent of $32. Though, you can find places as low as $22 for high grade specialty. Please feel free to opine if your experience suggests otherwise, but I believe the average check is one of the most important metrics for a coffee business.

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Almico

Postby Almico » Nov 28, 2018, 1:29 pm

If the OP counts those $32/lb hipsters amongst his friends and family, then he is in luck.

From my experience hipsters are all about the cool factor, though. And Gary's Garage Coffee might take a while to achieve hipster status and garner those prices, or even close to it.

But all that has to go into the business plan.

It's probably safe to assume that if someone doesn't have the fortitude to effort through a business plan, they will not have what it takes to make a real business work.

Of course one can go the "luck" route...."let's throw it against the wall and see if it sticks". Most do in the food service industry. That's why 95% of them fail and banks won't even consider lending start up money for one.

The best place to start is a local Small Business Development Center. Most of their services are free.

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drgary
Team HB

Postby drgary » Nov 28, 2018, 5:02 pm

Alan, your informative posts prompted my thinking about other parts of planning a business.

1. Where/how do you want to sell? Who else is selling there, for what prices and with what regularity? (Farmer's markets, popups, supplying restaurants, etc.) I would check that before buying a roaster.

2. If you are not really intending to move beyond a hobby that may fund itself, what size of roaster will allow roasting for yourself and your family and have large enough capacity to efficiently roast for paying customers? There may be a rationale here for starting with the largest roaster that can go down to a desired charge.

3. Then there's the situation of a dog who chases cars and catches up with one. One of the risks is achieving more than expected success. If your hobby/side business roasting elicits high demand, what then? Do you find a partner and launch a real business?
Gary
LMWDP#308

What I WOULD do for a good cup of coffee!

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Almico

Postby Almico » Nov 28, 2018, 7:06 pm

1. Part of the business plan.

2. 5# is about minimum to roast profitably as a business. Are you willing to spend the money on a 5# roaster and end up using it for hobby/family alone? Most drum roasters can go to 1/4 of their rated maximum successfully. Air roasters can go much smaller. That is how I started. I was willing to spend $5K on home roaster and see what happened. I really had no intention of selling coffee when I bought it. I just wanted to roast better coffee.

3. Business plan. "More than expected success" does not happen all-by-magically. You have to have laid the groundwork.

When my current situation became available, the principles had several choices of roasters to choose from. Some were smaller than me, some larger. But when they interviewed me, and offered me the opportunity, I was able to say yes because I had a done my homework, registered my business with the state and local authorities, had my garage certified as an official commercial kitchen complete with health inspections, had all the required business insurance in place and an inventory and roaster that would permit me to ramp up output immediately. Luck is where opportunity meets preparedness.
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