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  1. #1
    Junior Member
    Join Date
    May 2009
    Location
    Birmingham, AL
    Posts
    11

    Opinions please on roastery options!

    Okay friends, I'd like some advise, opinions, and words of advise if you don't mind. I'll try and keep this brief but give you enough info to understand the situation:

    So i've been home roasting for over 4-5 yrs, just this past January ('09) I made it official, got a business license, and put together a website. Since then things have been really taking off. I roast everyday on my 1# behmor to keep up with demand. My website has allowed me to ship all over the U.S. And a facebook page I created for the business has sparked quite a buzz in the community. I think it's time to carry the momentum, buy a bigger roaster to keep up with the demand already in place, and get an actual location to work out of (instead of my side porch). I have two primary goals for the upgrades: 1) better efficiency for the demand already in place. 2) start going after wholesale accounts in the city and on the internet. 3) make my presence known in the community and capitalize on the interest already in place.

    So here I am today:
    My roaster is being built as we speak. I ordered a 3kilo USRC because i've heard great reviews and comments about them from members of several different discussion boards. It should be ready early to mid December. It's big enough to suite my needs (to start anyway), great price, and great customer service.

    Being on such a tight budget i've had to think WAY outside the box in terms of where to set up my roastery. I've come across two opportunities:

    1)There is a lady who is opening a coffee house here in town that i've discussed “partnering” with. I pitched the idea of letting me rent a corner of her space to set up my roaster. She gets an onsite roaster, industry insider, and more or less an advisor. And I get a built-in wholesale account and a space to work out of. She also gets the benefit of having a built-in customer base (ppl who have been waiting for me to have a place where they can get my coffee!). I told her I could commit to a year and hopefully by then would be able to move out, to a space of my own. I also made it clear my objective would be to serve her with great coffees, advise on various coffee topics, and continue to secure other wholesale accounts. I would not work the espresso bar at all, but would be available for demonstrations, and talk coffee with patrons. I also discussed Private Labeling with her, her logo and info on a bag so patrons could buy various coffees by the pound and thus diversifying her and my profits. She loves the idea.
    The pros: Cheap/cost efficient start up. Better visibility than if I were to just open up a warehouse. Built in wholesale account. Will have a place for current patrons and friends to come get my coffee.
    The cons: This lady knows very little about the coffee industry. Communication has been poor the last couple of weeks as we get closer and closer to the opening of her shop. If this lack of communication is indicative of the future i'm nervous. Despite strong urgings from me, she still insists on getting a fully automatic espresso machine. THAT i'm not comfortable with at all. I'm afraid true coffee enthusiasts won't take her seriously and will associate me with sub par coffee. If they can't get my coffee served correctly then how will they know how good it truly is??

    2)Option 2 is an office space located in the industrial side of town. A lady who owns several music lesson businesses is renting out an office space within one of her locations. It's a tiny tiny office with just enough room for my roaster, a desk, and some shelving for storage, etc...
    Pros: Cheap/cost efficient startup. For taxes purposes its in a unincorporated city/county with dirt cheap taxes. It would be a great place to focus primarily on wholesale. Only a 6 month lease.
    Cons: No visibility (which might be a better thing so I could focus on business more). SMALL space.

    So I don't know. From a business and practical stand point the coffee house seems like the better deal. From a coffee snob stand point i'm nervous about the equipment and lack of knowledge from the owner down and how that would affect my business's image. If I get into the office space, then I have total freedom and control to do what I want with the space and dirt cheap taxes.

    Opinions??

  2. #2
    Senior Member
    Join Date
    Feb 2004
    Location
    Kuala Lumpur, Malaysia/Bukit Sentul, West Java
    Posts
    1,065

    Re: Opinions please on roastery options!

    Its always a risk when you tie in your business sucess with that of someone else. As you have tiouched upon, she knows little about specialty coffee so it probably would fall upon you yourself to make sure her cafe as well as your roastery work. I dont like the idea of private labelling. No matter how attractive it seems to someone starti ng up wholesaling, it makes no sense to me (again) building up someones business especially if your coffee is excellent. We have always resisted doing this despite some really lucrative offers- I have never regretted it.

    OK, to counter balance what I have said- yes it would of course be nice to have a retail operation tied into your wholesale business. When we started years ago (albeit from zip) the first 9 months were really tense... it was only then that we landed our first sizeable client that basically paid the bills. 9 months of low revenue and dipping into your own pocket is not unexpected for a start up, atill it is only really when that money starts to flow out of your bank account that you realise that! If I was starting up again today I would most likely look at linking a retail presence of my own to my wholesale business. We only began retailing (cafe business) 4 years into our businesses existance and since then growth has been really strong. It helps to build a brand awareness that wholesaling alone (ie like you have aluded to in your business plan point 3) will not. However I would clarify that by saying it would have to be my own retail business, not someone elses!

    So really I guess I have not been a real help. I think that tying yourself in closely to a new startup cafe is risky. Option 2 really is a small step from what you are doing at present.
    Merdeka Coffee (Indonesian Coffee Roasters and relationship coffee specialists) - Antipodean (Coffee - Cafe - Culture)

  3. #3
    Senior Member
    Join Date
    Jul 2004
    Location
    Hartford and New Haven, CT
    Posts
    991

    Re: Opinions please on roastery options!

    I'd go with the industrial office space. If she does not know much about coffee industry and sounds like she does not care either, what is her receipt for success? If you take the coffeehouse space, you will be associated with her. If you are not comfortable now wait until she serves 3 hours old coffee. What if she doesn't do well and wants to shut down, yet you want to continue to roast?
    You want cream and sugar?
    NO COFFEE FOR YOU! NEXT!

 

 

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