After coming up with the idea, the next step in starting your coffee roasting business should be to write a business plan.  The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, your value proposition to use for marketing, and more. You’ll also need to do some research to calculate exactly what your startup expenses will be and what your ongoing expenses will be.

Not only is a business plan essential to take to a bank for financing, but multiple studies have also shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you think through all the aspects of the business and then serves as a guide as you begin.

Related: How to write a business plan

Finding the perfect coffee roasting business name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, but it also has to be available to use. You can check your state’s website to see if the name is available and register your name.  Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.

A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.

When deciding on which business entity is best for a coffee roasting business, it normally comes down to the sole proprietorship and Limited Liability Company.

A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay. The corporation can be a good choice because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.

That leaves the sole proprietorship and LLC.

The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.

Related: Guide to forming your LLC
 

The location of your coffee roasting business will probably be your home, and you can also sell your beans online. To have a coffee roasting shop would be cost-prohibitive.

Related: Choosing a business location

Since you are handling a food product, a coffee roasting business will likely need the necessary permits and be subjected to regular inspections from their local health department.

Additionally, there will likely be some general local, state, and federal business registrations needed such as a sales tax permit and an Employer Identification Number.

Related: What licenses does a coffee roasting business need?

Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a coffee roasting business is another.  In order to get a loan, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs.

Related: Finding the money to start a business

Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
 
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.

People love the aroma of coffee, so be sure to emphasize the aroma, flavors, and freshness of your coffee beans.

Some common marketing techniques for a coffee roasting business include a social media presence on platforms like Facebook, Instagram, or YouTube, online advertising to get traffic to the website, as well as flyers and postcard mailers.  Developing a website can be a significant expense, but it can also give your coffee roasting business greater visibility online.

Many coffee customers are interested in businesses that focus on sustainable farming practices. If this is important to your customers, be sure to look into coffee sourced from farmers that have Fair Trade certification or are Rainforest Allied Certified.

Marketing and acquiring customers will be a continual challenge and an ongoing expense.  Your best bet for consistent (but lower profit) income is to obtain wholesale customers, like coffee shops, grocery stores, or cafe partners. This will require a bit of business networking to get these established.

Related: Low-cost ideas to market a new business

There are several types of insurance a coffee shop owner should consider when starting a coffee roasting business. A few of these include:
– General liability insurance can help protect you from third-party claims of bodily injury and property damage.
– Professional liability insurance protects you from claims of professional errors or negligence that result in a financial loss.
– Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.

The cost to insure a coffee roasting business will vary depending on a number of factors. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.

Related: Common types of insurance a business may need

You may need to hire employees to help you run your coffee roasting company if you grow a large customer base.

In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a small business will need to cover when hiring staff.

Related: Hiring your first employee

Setting up an accounting system for your coffee roasting business is critical to the long-term success of your business.

Staying on top of taxes not only keeps the business out of trouble with the government but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

Related: Setting up the accounting for your business