Starting up Business with a 2kg Roaster?

[stratford]

Re: Starting up Business with a 2kg Roaster?

^^ Just curious as to how much you paid for a 2kg roaster?

Cheers  

A few years ago, it was around the 8K mark...

[jaclarkaus]

Re: Starting up Business with a 2kg Roaster?

Think you will find new roasters cost $6k for 1kg, $8k for 2kg and $11.5k for 5kg

[stratford]

Re: Starting up Business with a 2kg Roaster?

5kg roasters start around 13k at the moment...

[cuppacoffee]

Re: Starting up Business with a 2kg Roaster?

Steve, Im just wondering what your priorities are in regard to the size of the roaster. Maybe it might help you to list some pros and cons for either option.

You could also ask yourself a few questions, like, "If a 2kg and 5kg roaster were sitting side by side in a shop, both with the same price tag, which one would I buy?" Your answer might help tease out what the main drivers are for your decisions.

Cheers!

[thegoodies]

Re: Starting up Business with a 2kg Roaster?

I think the main concern I have with a 5kg is that I am not ready to set up shop in a commercial environment. I would like to trial this business at home and with a 2kg I think I can run it successfully without upsetting neighbors and the local council. I am not planning on making lots of dollars this year or the next. I think I just want to get the feel roasting in a drum roaster. Gain the knowledge and along the way gain a few extra customers. I guess i like to notion of a 2kg on the side to roast decaf or organic at a later stage once I decide to upgrade.

[stratford]

Re: Starting up Business with a 2kg Roaster?

I had the same idea about keeping the 2kg roaster, but when the 5kg arrived, I found I simply ran out of space, and the little 2kg had to go. I was sad to sell it, I must say...the 5kg is a much more full-on machine. The 2kg was very quaint, but hobbylike.

But if the neighbours are your main consideration, remember you can roast 2kg loads in your 5kg roaster....

[JRCoffee]

Re: Starting up Business with a 2kg Roaster?

Ok, I was briefly writing down some numbers. Lets see how this looks;

1. 1kg roaster - lets say, $8k cost
2. 2kg roaster - $11k cost
3. 5kg roaster - $18k

Lets say an order of 10KG of coffee comes in. You buy the green beans at $12/KG and sell it for $28/KG.

Your profit is, once sold as roasted beans is $16/KG, 10KG, $160.

Now how long does it take to roast this coffee? You could spend say, 1hr doing 750grams (popcorn machine) and spend 13 hours for 10KG to make $160 profit (and make $12/hr). Youre better off working at HJs or Subway in your spare time.

In a Toper 1kg batch roaster, it can do 3KG an hour.
An AutoRoast 2kg batch can do 4-6KG/hr
A toper 5KG roaster can do 15KG/hr
(based on information on each product).

Whats your profit per hour? Obviously you dont want to spend 13 hours roasting to make $160. If you werent doing anything else, sure, but you want to be above $30-$35/hr to make some money + cover overheads.

- A Toper 1KG roaster will do 3KG hour, resulting in $160/3.33 = $48/hr
- AutoRoast 2kg will do 4KG an hour automatically, resulting in $64/hr
- Toper 5KG roaster, 15KG/hr, 0.66hrs roasting, $242/hr.

This is assuming that youre doing roast after roast, batch after batch.

As you can see, theres a big jump between the 2KG and the 5KG batch roaster.  To be honest, after looking at the numbers, theres a big different between the 2kg and the 5kg roasters.

How long do you want to spend roasting coffee to cover the cost of your initial capital outlay before you start making profit? If you determine that theres demand and can justify going for a 5kg over a 2kg, then go for it.

Lets say you spend $11k on a 2kg batch autoroaster, doing 4kg/hr automatically (based on roast profile, etc). Based on a profit of $16/KG, you need to roast 687KG of coffee to cover your initial outlay for the coffee machine.

687KG, lets say per year, is 14KG a week (50 week year). That 14KG is going to take you 3-4 hours per week to cover your roaster costs. 3-4 hours isnt very much at all.

Anyway, I have much to write - but let me know what you think. Im heading to bed, Ive had a long day - as Im sure we all have.

[thegoodies]

Re: Starting up Business with a 2kg Roaster?

That is great that some many people are punching the numbers on the calculators (well for me anyway) I cant do that much in my head. I have done some of the math and without a doubt going to a 5kg roaster is certainly a better option in regarding to making more dollars quicker with less roasting time. I am in the middle of talks of a roaster deal and will hopefully come back with some good news soon. Im getting excited.
I love this business. I want to learn more and more.

Oh an keep up the good work guys with the calculations. its good brain food. Make sure your sippin on a good espresso to keep it alert while your doing it. ;D

[bolb]

Re: Starting up Business with a 2kg Roaster?

JRCoffee
How valid is green beans @ 12/kg??
I can source them from a contract roaster for less than this and i would have thought that Goodies would be looking to purchase a full bag of 60 - 70KG from a supplier in order to obtain cheaper rates of the green beans.

Of course the lower the grean cost the better the calculations become.

Mal

[beanflying]

Re: Starting up Business with a 2kg Roaster?

Then factor in the gas/electric, bags etc etc. It still makes for a good rough comparison and into WA $12 from this side of Oz may be fairly close due to freight. 5kg makes good economic sense if you have the capital.

Interesting discussion topic anyhow.

The consideration for an operating Cafe may be different as the staff are tied there anyway so a 2-3kg may well suffice for that scenario.

[Thundergod]

Re: Starting up Business with a 2kg Roaster?

How valid is green beans @ 12/kg??
I can source them from a contract roaster for less than this and i would have thought that Goodies would be looking to purchase a full bag of 60 - 70KG from a supplier in order to obtain cheaper rates of the green beans.

$12/kg is way over the top.
My 60kg bags of Kimel cost a lot less than that.

Id be willing to bet Andy could supply green to Goodies for less than $12/kg.

Im not sure about the $28/kg roasted as I have no info on what prices are out there.
But as I pay $40/kg roasted for small amounts, It would depend on how much Goodies customers were buying, how much they paid their previous supplier and the difference in quality (assuming Goodies beans are better).

Some small businesses are forced to buy more beans than they need and end up with stale beans before the next delivery.
This arrangement also hurts their cash flow by forcing them to fork out more than theyd like to.

Buying in smaller amounts more often might mean a slight per kg price premium but the benefit is in a lower cash flow figure and fresher coffee.
Fresher coffee will mean happier customers.

There are a lot of factors to consider.  

[stratford]

Re: Starting up Business with a 2kg Roaster?

Even with my little business, I am only paying between 5 and 7 dollars per kilo...

[>SupremeRoasters]

Re: Starting up Business with a 2kg Roaster?

Depends on freight, volume and most importantly the quality of the beans your buying in. Obviously estate coffees and higher grades are going to attract a premium.

$5-$10 a kilo green would be a better gauge when buying in bulk. Unaware of situation regarding freight to WA but some green suppliers will supply FIS (free into store) when buying a pallet.

Some green bean suppliers in Australia are:

ARC Coffee
Coficom
H.A. Bennett & Sons
Coffee & Nut

Would suggest doing exhaustive research before placing your first orders. Dont be shy about asking for samples and asking questions.

Things to ask include: Processing method, source/estate information, cupping notes, grade & size and age and year of crop to name a few. If they dont have this information then either consider buying elsewhere or make them work for your business.

[JRCoffee]

Re: Starting up Business with a 2kg Roaster?

Thanks BrighterSide, Ill check them out. $12/kg is what Ive been paying for green beans at the moment, but thats only 1-5kg orders

[stratford]

Re: Starting up Business with a 2kg Roaster?

Depends on freight, volume and most importantly the quality of the beans your buying in. Obviously estate coffees and higher grades are going to attract a premium.

$5-$10 a kilo green would be a better gauge when buying in bulk. Unaware of situation regarding freight to WA but some green suppliers will supply FIS (free into store) when buying a pallet.

Some green bean suppliers in Australia are:

ARC Coffee
Coficom
H.A. Bennett & Sons
Coffee & Nut

Would suggest doing exhaustive research before placing your first orders. Dont be shy about asking for samples and asking questions.

Things to ask include: Processing method, source/estate information, cupping notes, grade & size and age and year of crop to name a few. If they dont have this information then either consider buying elsewhere or make them work for your business.

I only buy the best beans available...