# Business plan



## Hoggr20 (Oct 25, 2017)

Hi all has anyone had experience of putting a business plan together for a home roasting business?


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## Coffeejon (Oct 10, 2014)

Look at cost per KG to buy beans, then what you could sell them for. Then work out how much you'd need to make a decent profit. From that you can see how much you need to roast & what equipment you'd need to buy (1kg roaster £3000, 2KG £5K, 5-6Kg £30k) bags etc.


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## Obnic (Jan 14, 2014)

You should also work out how much you need to sell in order to earn enough to pay yourself properly. If you dont earn a living the business will fail. You need to know your minimum turnover.

Once you've worked out your minimum required sales to get your minimum required profit less tax to pay yourself.....

Then (1.) get a practical plan together for who you are going to sell this amount of coffee to - be specific ie not 'five local cafes' but name the cafes and be sure they aren't tied in to a contract already; (2.) work out what deal you are offering them to make sure they buy from you and stay with you eg 'a bespoke blend + same day delivery + tiered pricing ie gets cheaper the more they buy.' I dont know what cafes want but your plan should make clear that you do know.

I also strongly recommend that you build into your expenses before profit the cost of a book-keeper and accountant. They'll try to sell you on advice on building your business but what you want is accurate and continuously up to date books, prompt debt collection, and prompt payment of creditors and HMRC.


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## Obnic (Jan 14, 2014)

I am assuming you have a basic idea about how to draw up a profit and loss account? If not, let us know and we can give you an outline.


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## Hoggr20 (Oct 25, 2017)

Thanks for the advice in addition to cost of beens and book keeping Ill need to take into account packaging transport marketing materials including web site and desighns. Can anyone advise the best place to look for packaging costs? Additional aside from the roster is there any other kit I'll need to invest in, I'm thinking the likes of grinder, coffee machine and packaging sealer.


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## MildredM (Feb 13, 2017)

Do you have any knowledge of the intricacies of roasting beans. And profiling, tasting, and brewing . . .


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## Coffeejon (Oct 10, 2014)

as MildredM says, I would advise you know about coffee before you get into roasting. If you do, start with a small roaster (Gene Cafe 101) before you get into big scale roasting, otherwise you waste allot of cash getting your roasts right. You could alternatively do a roasting course.

As for expense, depends on what your roasting for, as if your only roasting for filter, then you don't need a espresso machine etc. Again, if your supplying beans only, you won't need a deli grinder. So I'd learn more before you spend lots of cash on stuff you may/may not need.


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## jimbojohn55 (Jan 15, 2016)

If you want to avoid a lot of mistakes then find a successful roaster outside of your catchment area and volunteer your services for a month, understand the reality not just the dream. I had thought about it myself a couple of years ago, good luck


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## Obnic (Jan 14, 2014)

Dont waste money on website designers. Buy an off the shelf service like Squarespace or the Microsoft option. Pick a template and get going.


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## ajohn (Sep 23, 2017)

Most of the roasters offer beans and various levels of grind for different brewing methods. That implies the need for some knowledge that you may not have.

It sounds like you are on the right track. First thing is price and source of materials. Beans and bags plus what beans and I assume packaging for mail order.

Some roasters effectively roast to order. Some roast a few times a week, more suitable for a company that has a decent idea of what they will sell.

Then comes equipment. Probably the difficult area as what you will need depends on the how much you manage to sell. Into the bag grinders for instance can be very expensive down to relatively cheap*. How easy will it be to change beans needs to come into that aspect as it will on a roaster.

How much can you charge for your beans - however they are supplied.

Advertising ? If your not known you are unlikely to sell - just how are you going to become known?

Once you have run through these and their options then you can draw up a business plan. That is likely to include some period of time where there will be insufficient income on a business like this. It's also probably a rather competitive business especially when supplying commercial users. You need to compete in some way or the other with who ever they currently get their beans from. Their customers will need to like to drink what you sell to them. Domestic users need to be attracted some how. There are rather a lot of companies meeting that need.

In short a lot of research really before even attempting to draw up a business plan.

John

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I saw a spout sticking out of a Fiorenzeto grinder and thought it was for on demand use but it turns out to be for grinding into a bag. Cheap however no obvious way of weighing what goes in,

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## johnealey (May 19, 2014)

Read post #3 from @Obnic, work out your market.

Post #6 from @MildredM and post #7 from @Coffeejon . If you are wanting to more than just commodity you may want to consider some training

Roasting from the outside looks attractive but is a very competitive business.

John


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## MildredM (Feb 13, 2017)

johnealey said:


> Roasting from the outside looks attractive but is a very competitive business.


And did we mention it is a skill. It isn't something you just pick up in a week or two.


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## johnealey (May 19, 2014)

Still learning every time I roast and will continue to learn with each and every bean type roasted, whether am any good or not would have to ask my roast sharers ( Sarah and I like what I roast but we're biased).

I guess having said the above, get some objective criticism of your roasts as well once up and running, not being too thin skinned about what people say as they all have different tastes / needs. Not all of them will want a speciality bean with provenance that costs more than they are prepared to pay or recoup in the cup no matter how you present the maths, then you need to decide what type of roaster you are: Commodity, up against the big boys, no hope of competing on costs if small scale; Speciality, niche market, who are your competitors? who do they supply?can you buy your greens at a price you can make a living off depending on how you sell (direct to public / wholesale).

Don't also forget you will need to be registered with the local authority as a food producer, fill out forms, be inspected (potentially), have where you are roasting kitted out to be food safe, fire precautions, food safety training, professional / public liability & premises insurances, register with other authorities that will all want their share of your sales, Retail Scales that come with calibration certs.

All in all, you may want to seek professional advice to learn how to both roast and run a roasting business, will pay off long term.

John


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## Obnic (Jan 14, 2014)

Chrickie, yes hadn't thought about all that food safety and premises registration regulatory stuff. Thats cracking advice John.


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## Obnic (Jan 14, 2014)

By the way, dont ever be put off by people black hatting an idea. If your passionate, you'll get over most hurdles provided you have a good finance person who understands *cash* management. Cash is oxygen. Profit is just a number on a spreadsheet.


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## Batian (Oct 23, 2017)

The advice I was given donkeys years ago by The Small Business Advisory Service (or similar name) was if you are already employed do not leave the job to start the job. Do however make a start by expanding your hobby on a 'not for profit' basis---keep 'books' to prove that you are not trading. This means you have the cushion of a wage while you get going.

Just start small and roast for a few honest pals who will give you a really honest opinion on the quality of your product. Keep it to a a very few pals as you will have to continue to 'look after' them in the future should you start trading.

However, if you are unemployed and have the capital to start properly, then get busy with your homework as the many good suggestions above.

I am not sure if it is still applicable, but in the past, if you had been on the dole/disabled benefits for X amount of weeks you could apply for various small start up grants as well as a a cash payout every fortnight for a year. Sounds good? It was for me, but be warned, they did check up on you and look at your accounts!

A grant was also available for retraining following industrial injury, so if that should apply, you may wish to look up the detail on that.

Research into your tax position re capital assets is advised. I stand to be corrected by better authority, but I think you can go back 3 years from the start of trading with receipts for capital assets.

Local councils often run free/cheap courses for new business start ups. They may also have advice re other sources, especially rural startups and the like.

The Job Centre (or whatever its called now) may be another source of information as well.

Number one rule.

Do not throw away a receipt for ANYTHING that you buy for your business. Think a stamp or a paper clip, roll of Cellotape. No matter how small GET A RECEIPT!

I had the devil of a job persuading my then business partner to collect his receipts. What worked in the end was making a letter box out of an old card box, labelling it with the month and retrieving it from him at the start of the next month.

Discipline is then required to sort the paperwork out on at least a monthly basis. It's a daunting prospect if you let it pile up, and the more YOU do, the less you have to pay the accountant/book keeper!

So after some of the honest well meaning and very sound (and at times daunting!) advice from others above, I hope that my contribution has helped you focus.

GOOD LUCK!


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## Hoggr20 (Oct 25, 2017)

I do not have any experience of roasting or indeed as a barista, I just love and have a passion for my coffee and am intrigued by what I have see on roasting coffee. Currently have a good job and don't intend to give it up but looking at starting a hobby along side my bee keeping with the thought that when I retire in 6 years I could have a little home business up and running that could generate a small income.

Clearly there is a lot to learn and I don't expect to be a master roaster overnight but I need to start somewhere and I've always found the best way to start something new is to ask those who have first hand experience. Thanks for all the positive and sound advise.


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## Stanic (Dec 12, 2015)

very good thinking, in 6 years time you can certainly become a good roaster if you have passion and will to learn IMO


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