Starting up Business with a 2kg Roaster?

[thegoodies]

OK everyone, Its time to put it our there. I have registered a coffee roasting business and am wanting to change my career (if only slowly) to roast coffee. I have been looking at lots of options to decide on what I want to do. I am currently looking at buying a roaster and would like some advice from people who are doing the small commercial adventure of roasting coffee and those who have 2 kg roasters.

I have been advised by a number of people to skip the 2kg roaster and move straight to 5kg. I think in my current situation I think that moving to a 5 kg roaster is a much bigger leap. I want to build up my business slowly as I also have a full time job (partially shift work) and can not afford to just jump the gun and take the risk of leaving work to roast coffee. (I also have a family and kids to look after)

I think what I am trying to ask is that, who has done to small 2kg roasting thing, how did it turn out, what could have you have changed to make it easier, what hurdles did you come across What successes have you achieved. I really want to make this happen and by doing things slowly and not rushing into things might make sure I evaluate each process along the way and not become a going out of business statistic after the first 12 months. Any advice and assistance with this would be greatly appreciated.

Steve

[gregpullman]

Re: Starting up Business with a 2kg Roaster?

Cant offer any advice regarding roasters of that capacity Steve, but all the very best with your venture and hope it works out for you mate! I can see it now - Good Coffee!

[TC]

Re: Starting up Business with a 2kg Roaster?

Hi Steve,

Although 2kg might sound convenient, youll actually roast more like 75% capacity and then lose 15%+ in moisture.. Youd get more like 1.25kg brown beans per drop.

Assuming 20min/roast, its a lot of busy work and it will take you a looong time to receive a return on your investment.

Keep in mind that in addition to the cost of green beans and promotion/advertising, you need to factor in consumables such as labels and a printer, impulse sealer, bags as well....

My advice is that if youre hoping to one day make a buck out of this venture, 5kg is really a minimum capacity to start with.

2mcm

[thegoodies]

Re: Starting up Business with a 2kg Roaster?

The only thing is with a 5 kg I will really need to move to commercial property. With a 2kg roaster I was hoping to maybe remain at home and alter the shed to accommodate the roaster, install a range hood to help with smoke etc. The cost of going to light industrial areas will eat up all the profits as I do not have the customer base yet to warrant paying commerical rent.

[gregpullman]

Re: Starting up Business with a 2kg Roaster?

I guess if youre happy to put no charge on your time for the short-term then a 2kg will at least get you up and running and starting to build a customer base. If things go well you can then look at a larger unit in a commercial premises and hopefully start making a bit yourself out of it. Dont plan on retiring just yet though!

Obviously youll need to give some sorts of consideration to council regulations regarding smoke and noise. You might like to contact Dennis as I seem to recall he went through the whole home option when starting cuppacoffee.

Greg

[cuppacoffee]

Re: Starting up Business with a 2kg Roaster?


Hi Steve

2kg is too small imo. I love my 3kg and it works well with a 3kg charge, but with other makes, as Chris said, 75% of the rating is probably the best youll do.

Regarding regulations, of course every Council is a law unto themselves, though I believe its the EPA who is most interested in emissions. Either way, they dont seem to particularly care unless they get a complaint. One complaint could shut you down and that will interrupt your ability to provide service.

You are going to need a lot of beans. At first to season the drum, then to learn how to use your roaster and get the best out of your roasts, and of course for blending, offering some diversity, etc. I started with 500kg.

As Chris said, there are lots of extras you will need and you can spend $2k on these in the wink of an eye.

The following will probably sound harsh. Perhaps its only me, but I do have a laugh when people say they want to start a business yet arent prepared to take the risks. I do understand that there are people who have built a successful business using the softly, softly approach. Then again, they may also have achieved that success and their goals in far less time if they had thrown themselves into the business. I took the latter approach and more than 12 months down the track, were still in business and its growing day by day, despite some set-backs.

You need to constantly, day in, day out, work on how youre going to promote your coffee. Pounding the pavements can be demoralising - marketing in other ways may be more expensive, but is more productive.

Hope that helps a little.

[Ray_C]

Re: Starting up Business with a 2kg Roaster?

my advise is to keep an eye out for a larger second hand commercial roaster, there are quite a few struggling businesses out there at the moment. from experience the lack of cash flow can be a real pain in the back side, undercapitalisation will repaetedly frustrate you to no end, a good business plan is a start but you will definately need a healthy cash base to work from and a big sense of adventure to go with it. to put it staight it is a difficult economic climate at the present time and any new business venture is going to be a gamble, so you have got to ask yourself one question; are you up for the challenge? Its going to take all that you have and more. Major important note; "Make damn sure the missus is completely on side with this" you need her support not her chastisment or ridicule or you could end up single again like me, but I can tell you thats not a bad thing either, I am the happiest now than I have been for years, but thats me...   All the best with it brother.
Ray. 8-)

[JavaB]

Re: Starting up Business with a 2kg Roaster?

Steve,

Dont know about the size of roaster.... but starting a new venture in the current economic climate is really risky......

I have quite a few friends in small business (not coffee related) and most of them are doing it tough at the moment.... really tough.

Some things (like movie ticket sales) have dramatically increased (it has been suggested that this is a form of escapism from the reality of their life)...... I wonder if much relief can be found in the bottom of a coffee cup?????

Whilst it is a great time to make purchases (if you have the spare cash) as there are some real bargains to be had...... Im not sure that setting up a business venture right now is so good..... Maybe buy your roaster and sit on it (not literally ) until the economy picks up....

Best of luck if you do intend to proceed.

[thegoodies]

Re: Starting up Business with a 2kg Roaster?

I am not really getting much resistance in regarding the coffee sales. Tonight I have just landed a opportunity to regularly stock an African Restaurant with coffee. The previous supplier wanted 16 kg of coffee at a time for them and they said that woud last them over about 8 months. I told them to order small, but more regularly and buy from me. So they did. When I talk to people about coffee (As this is all I even seem to talk about.) They want to know more and get some of that fresh coffee taste. I personally am not seeing the current economic slump as people are willing to buy if they know its fresh and its local.

Thanks for all the comments and keep them coming. Good advice comes to those who ask.

[gregpullman]

Re: Starting up Business with a 2kg Roaster?

Thats really good to hear Steve. Certainly economic times are difficult but that doesnt automatically mean you cant succeed if you do things right (weve been snowed under with work this year as a recession looms!). People still need to eat, they still want their caffeine fix and if you can provide the raw materials to assist with what people will continue to do in a manner thats in keeping with the way they want to do it youll be a long way in front of larger organisations who are more concerned about volume than quality, and perhaps dont have the flexibility you can offer being a smaller show. Last month we supplied two dozen customised Pullman tampers to a well-known outlet in Melbourne with four weeks from order to delivery. A big bloated organisation cant respond to a custom request in that sort of time.

I adopted the softly softly approach to my business (which was always just a hobby!). Im not a giant risk-taker and never intended it to be a big money-maker anyway, so its taken longer to build than if I did it full-time but then its also taken some of the pressure off when you go through quiet patches (which you do) and knowing you still have the day job to keep food on the table.

You never know, you may be able to get into equipment offerings down the track. The words of Ray C are very true though; cashflow is king in small business, and for the first couple of years youll probably be churning 100% of your profits back into the business to build it up. Unless you have a big wad of cash to start with it can get you up and running faster, it may take a while to build it to where you want it to be. The last thing you want is to get things moving along nicely and suddenly have no cash to pay suppliers, resorting to high interest overdrafts and suddenly undo six months hard work in three weeks by being a bit TOO ambitious! Make sure youve got a good business plan with contingencies for worst case scenarios.

Good luck!
Greg

[Epic76]

Re: Starting up Business with a 2kg Roaster?

Last month we supplied two dozen customised Pullman tampers to a well-known outlet in Melbourne with four weeks from order to delivery.

If they were to a business on Yarra Pl then they are THE sexiest gawd damn tampers Ive ever seen. Deadset Greg, masterpieces.

Epic76

[stuartgrant]

Re: Starting up Business with a 2kg Roaster?

Hi Goodies,

Good on ya! My aim is to do the same as youre doing here - give me a few more years tho (going OS for 12 months in May)... As such, Ive thought about this kind of thing a lot and may (or may not) have some useful advice.


Have you got a business plan? I have a hunch that using a 2kg roaster for the establishment phase of your business could work. While there are the cashflow issues that others have mentioned, if your business plan involves doing the roasting thing on the side of another job for 2-3 years (which is probably realistic), it might be the best option. A 5kg roaster will make things very difficult if your orders arent up to it - in the same way that a 2kg will be hard work if you have too many orders.

Maybe some others could suggest X kg per week that would be ideal for each of the roaster sizes people are suggesting here? You could roast 25kg a week (3 roasts = 1 hr per day for 6 days) with the 2kg roaster. You might fit in more roasting than that if you werent working full time tho - keeping in mind that packing, labelling and delivery would take at least as much time again. 5kg roaster would do ~55kg by the same logic - although you probably wouldnt want to be doing it "on the side" if you went with a bigger roaster.


Another option I would consider is building a larger roaster yourself. Some people might scoff at this, but the results from a well-built, controllable BBQ drum-style roaster are undeniably great. You could construct one that could do 1.5-2kg greens for a few hundred dollars. If youre engineeringly challenged, Im sure any number of friendly CSers would do it for a 2% share in your business. :P


Im with Greg on the softly-softly approach - but only because Im a careful bloke. Again, your business plan should state things like how much business you expect/want in the first 3, 6, 12, 24 months so you should be able to build a plan (and a contingency) based on either approach.

Also, think about your brand. Much marketing will be a waste of time and money if youre aiming to build your business slowly, but it can be useful to have thing like biz name, website, labelling, product names and any advertising stuff "thought out" for when you want to take that next step.


About the economic climate. Someone posted recently about a study which found that during times of recession, consumption of cheap luxuries such as coffee actually went up. If and when global economic conditions improve, one would think that the specialty coffee sector in Australia is due for a big upturn. In other words, I think economic conditions are ok for coffee. But Im no expert.

HTH
Stuart.

ps. PMed you with additional secret info! :P

[gregpullman]

Re: Starting up Business with a 2kg Roaster?

Last month we supplied two dozen customised Pullman tampers to a well-known outlet in Melbourne with four weeks from order to delivery.

If they were to a business on Yarra Pl then they are THE sexiest gawd damn tampers Ive ever seen.  Deadset Greg, masterpieces.

Epic76

Nah it was actually the Coles down the end of the street! ;D Nice to know the gallons of midnight oil were worth the effort!

[acoggins]

Re: Starting up Business with a 2kg Roaster?

Greg,

Those Tampers you mention being supplied to coles are very very nice indeed.

[JRCoffee]

Re: Starting up Business with a 2kg Roaster?

Go for it. Theres no reason why you cant start off with a 2kg roaster to get on your feet, make a bit of profit and put it back into the business and buy a 5kg roaster down the track.

Ive been roasting a few different beans for a while now in my little popcorn machine (as do many others) and will probably buy a 300g Gene Cafe roaster to do little batches, as it makes it alot easier. A few dollars here and there all adds up.

Estimate your demand, work out how much itll cost and what profit (or possibly loss) youll turn in say, 12 months with a 2kg roaster. Then do the same with a 5kg roaster.

If youre not using a 5kg roaster for its full potential, theres no point in getting one. Id rather spend 2 hours on a 2kg machine than 1 on a 5kg machine if I was just starting up. When youre starting up, you put a lower money value on your time.

Also, (sorry if it sounds like Im harping on) work out a work case scenario plan. Determine how much money youll lose if everything goes belly up. Your current work should help you out, but work it out so you know how much youll be up for