Are you looking to start your own coffee business?
Do you want to import coffee beans from, say Ethiopia, to Canada or the United States? Or maybe you just want to be a coffee roasting business?
Follow along in this guide. We researched this topic for ourselves, when we were considering starting our own coffee import business.
Key Questions about Starting a Coffee Business
The Top 11 Questions to Answer Before Starting Your Own Coffee Business
- Who are you going to buy the coffee/beans from?
- What varietals of coffee do you plan on serving ?
- Do you plan to travel to the countries of origin to sample the coffees before you buy them?
- Will the coffee beans still be fresh once they reach you?
- Who will roast the beans?
- Who will bag (and possibly ship) the beans once they are roasted?
- Are you going to sell the coffee locally or ship them to people?
- How much will you have to charge per pound/kilogram to make a profit?
- How much profit per year will satisfy you?
- Can you buy enough coffee to minimize the per-unit shipping costs?
- How will you make the payment to the seller of the coffee?
Sourcing Coffee Beans
One of the key questions you need to ask yourself is who you will buy the coffee beans from.
Most large coffee companies have representatives that travel to each country of origin.
They do this during the harvest season and sample each coffee. This way the coffee purchasers can ensure quality and variety of the coffee that they eventually sell in their cafes.
These trips can be very fun. I have been to Ethiopia, which is where my favorite coffee comes from. Learning about the growing process, meeting farmers (who often have 1-2 acres) and trying many different coffees there can be very rewarding and educational.
But even after you decide on beans you want to buy there are a number of other key questions.
If you want to buy them from the producers, there are a number of payment and logistical questions to solve, including:
- How will you pay the producers?
- Who is going to deliver your beans to the ship that will deliver the coffee to your country?
Buying from Local Importers
One option that will greatly simplify the early stages of your business is to simply buy your coffee from a local importer of coffee.
Importers handle all of the sourcing, payment and delivery challenges of getting the coffee to you in your city.
The process of buying from an importer will basically go like this:
- Find an importer and contact them
- Decide on which coffee varieties you want to buy from them
- Decide on whether you want the importer to roast the coffee for you or not
- Tell them how much coffee you want delivered each delivery period
- They will deliver the coffee when you want it
Logistical Questions of Delivering Coffee
In addition to deciding on who you will buy coffee from and how you will pay them, there are a number of logistical questions.
These are further documents that you will need if you plan to import coffee directly from the producer:
- Ocean Bill of Lading (from the freight liner after the coffee is loaded on the ship)
- Weight Notes to identify the exact variety and weight of the coffee
- Certificate of Origin (issued by the exporting government’s customs authority)
- Certificate of Fumigation (if required by your country)
- ICO Certificate of Origin (Approved by the ICO: International Coffee Organization)
- Invoice sent to buyer
- Packing list from seller
- Other agricultural certifications depending on your country
Roasting Your Coffee
Once you take delivery of your coffee there are a number of additional considerations. You or someone else will need to roast your coffee.
You have a few different options for this:
- Roast the beans yourself
- Roast with a commercial roaster
- Buy pre-roasted beans
Roast the beans yourself
This is of course another step and another expense to add to your list. Buying and operating a roasting machine can be a significant expense.
Commercial roasting machines can cost anywhere from $2,000-$100,000 USD.
So adding this expense on top of every other expense may not make sense for a coffee shop that is just starting out. It’s wise to minimize the time required to maintain the business and your financial costs at the beginning.
You can always buy a coffee roasting machine later.
Roasting with a Commercial Roaster
A better option for your cash flow cycle is to use a commercial roasting firm. If you outsource roasting you will reduce the total amount of money you need to start your business.
Some roasters will even let you store your beans in their warehouse until they are roasted.
You can have your beans sent directly to them and they will roast them for you. This will save you the fixed and operating expenses of roasting your beans yourself.
Commerical roasting companies are companies that specialize in handling, roasting and bagging coffee.
Luna Gourmet is an example of a large roasting company located in Denver, Colorado.
Using a roasting company like Luna Gourmet will be especially important if you plan to ship your coffee to customers and not just serve your coffee locally.
You can have your green coffee beans shipped straight to the roaster. After the roasting company has roasted your coffee they can ship out individually bagged and branded bags of coffee to your customers.
Every bag of our coffee is roasted after a customer places an order.Luna Gourmet
Buy pre-roasted beans
You could also fine a coffee roasting company and purchase roasted coffee directly from them.
Developing an Online Store
Here’s how to start an online coffee business in 7 steps:
- Pick an eCommerce platform.
- Determine exactly who you will sell your coffee to.
- Connect a payment provider.
- Name your store and get a Domain.
- Design your site for sales.
- Create a strong branding strategy.
- Market to coffee buyers
Online eCommerce Platforms
You have quite a few options these days to develop an online store.
Sites that specialize in eCommerce platforms suggest Shopify, Wix or Weebly for local brick and mortar businesses.
Shopify, Wix and Weebly all make it very easy to establish an online business.
- Shopify pricing for new ecommerce businesses with occasional in-person sales starts at $29 per month.
- Wix pricing for businesses and eCommerce starts at $23 per month
- Weebly’s eCommerce pricing starts at $6 month with a limited set of features
So if you’re planning on having a cafe and shipping online sales of coffee then one of these is likely your best choice.
Delivering the Coffee
Once your coffee is roasted you need to actually deliver coffee to your customers. This applies if you are starting an online store.
Selling coffee online could be a lucrative source of revenue. But keep an eye on your profit margins and financial assumptions. Especially when it comes to shipping costs.
Any online business takes a while to get going. So be prepared, both mentally and financially for your sales to take a while to develop.
What is the Total Cost to Start a Coffee Shop?
The total cost to start a coffee shop ranges from $50,000 to $300,000.
Whether or not you have a drive-thru, your own roasting machine and the size of the cafe greatly impacts the total cost.
If you feel overwhelmed about starting your business there are even coffee schools to help you! These are companies that will teach you and consult for you when starting a coffee business.
Bootcoffee.com is a great example.
They can help you navigate many different aspects of a new coffee business. They can assist with the purchasing of coffee, creating a business plan and building coffee roasting facilities.
Their website has some great and very detailed resources like this Ethiopian coffee buying guide.
Operating Commercial Espresso Machines
Once you get started, someone will have to be an expert in making all of the drinks you serve.
It can take a while to train good baristas. Making the perfect foamy cup is not always the easiest thing and some are better than others.