Newbie looking for some guidance

[coffeevt]

Hello,

We are in the process of a mid-career change and dreaming of starting a small-batch roasting company out of our home in Vermont. I am having trouble finding some trusted sources on reasonable margins to expect once a business such as this is up and running? We would be roasting for wholesale to area stores, as well as retail to online customers and subscriptions. If any of you have any real-world data or insights that you would be willing to share, we would really appreciate it. We fully understand that many variables will affect the margins, but rough estimates will be helpful for us at this stage. Thanks in advance.

 

[NabeCoffee]

My recommendation is to look into the price of raw beans, and go to a wholesale website and search as though you are a large company looking to buy wholesale. Deduct all your factors of making them and that will give you your margins. Good luck!

 

[Musicphan]

Hello,

We are in the process of a mid-career change and dreaming of starting a small-batch roasting company out of our home in Vermont. I am having trouble finding some trusted sources on reasonable margins to expect once a business such as this is up and running? We would be roasting for wholesale to area stores, as well as retail to online customers and subscriptions. If any of you have any real-world data or insights that you would be willing to share, we would really appreciate it. We fully understand that many variables will affect the margins, but rough estimates will be helpful for us at this stage. Thanks in advance.

Just a forewarning... the market is pretty saturated and super tough. To wholesale, most states will not allow you to do under cottage laws. So most likely, this means you are renting a wholesale space to operate. Look on Loopnet.com for rates in your area (typically quoted in price per sq foot per year). Regarding margins, it depends on the type of coffee you are offering... rot gut grocery store at $8 or specialty at $25 a bag. Your main two costs in coffee are the coffee and bag - the cost can be found online. Honestly, I don't give out #'s because there are too many variables and if you serious about starting a business this is scratching the surface of things you will need to know.

 

[IslaMujeres]

Starting a small-batch coffee roasting business in Vermont is an exciting step. While margins can vary, here are some simple points to consider:

1. Cost Breakdown: Understand all your costs, like beans, packaging, equipment, labor, and more.
2. Wholesale vs. Retail: Wholesale might have slimmer margins, while selling online or through subscriptions can give you better profits.
3. Check Competitors: Look at what others charge to get an idea of reasonable prices.
4. Value Matters: If you offer unique flavors or quality, you can charge a bit more.
5. Direct-to-Consumer: Selling online cuts middleman costs and can boost your profits.
6. Grow Efficiently: As you grow, you can become more efficient, lowering costs.
7. Subscription Perks: Offering lower prices for subscription customers can attract more buyers.
8. Experiment with Pricing: Adjust prices as you learn what customers are willing to pay.
9. Cover Costs: Aim for margins that cover all expenses and leave room for growth.
10. Branding Helps: Good marketing and branding can convince customers to pay a bit more.

Remember, it might take time to find the right balance between pricing and profits. As you gain experience, you can fine-tune your strategy for the best results. Good luck with your business!