Equipment & Workspaces     What are the startup costs? Should we get the 3kg MCR or biggger?

2020-07-10 19:04

What are the startup costs? Should we get the 3kg MCR or biggger?

Hi MCR fam!

Just thinking pre-emptively, but we might have a wholesale client that would demand 100lbs of roasted coffee from at least 7 origins. I think with my 1kg this would be quite difficult... lol

The husband researched $40K to install a natural gas line, have HVAC guys come and install vent lines and rent a small warehouse. Is this number accurate?

If we decide to start roasting in out of a warehouse, what would be the safest number to plan around?

Also what machine would you recommend if we were to produce 100's of lbs roasted coffee per month and wanted to be as efficient as possible, we'd like to stay within the budget of $60K

Thanks so much for your input!

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2020-07-13 07:55

100 lbs is about 10-12 hours per week on your 1kg. Bite the bullet and suffer through it for a couple of months. See if it pans out and if your customers pays. See if you still like each other about 8 weeks in.

If this is a real thing, look for a Covid shuttered food service facility to start in. You'll find someplace with gas and electric and a 3 compartment sink that has already qualified (ideally) at least once before with the health department.

You have a lot to figure out. Make it as easy on yourself as possible.

As for machine size, to earn anything even close to making a living, you'll need at least a 6kg machine and you'll want a 10kg. Coffee scales well. If you're doing the right things (which I fully expect you will) you'll outgrow anything smaller within a year or two.

That's not the end of the world as the resale value of small machines is high and almost no one hasn't made enough money to have recouped the purchase price by the time you outgrow it.

Do the math: $5/lb gross net is $13k in gross revenue on 2400 lbs through a 3kg. That's 436 batches on a 3kg with 20% shrinkage or roughly 110 hours of roasting. So you roast 10 hours per week for 11 weeks and you've (worked for free) and pocketed $13k in free cash flow. Less rent and utilities, but you get the idea: it's pretty hard to outgrow a machine before it's paid for itself.

So to recap:

  • Fill the order with your 1kg for awhile.
  • Start skulking around Craigslist for a likely shuttered restaurant, bakery, or catering location.
  • If it makes sense, place your order for a 10kg sometime in the next couple of months.
  • In the meantime, become a subject matter expert on your local food service requirements. You're going to have to know that you can't put anything on the floor, understand pest control, and all applicable sanitation procedures.

Take all of this one step at a time and don't freak out when you're popped upside your head with something you never imagined. This is the "paying your dues" portion of the thing. You're going to have to adapt and overcome and suffer long and still be kind. Your goals are your goals. Most of the people you'll be dealing with are just trying to make it through the end of their day. They will absolutely not have your sense of urgency and your sense of urgency will be like a searing heat that they will flee to avoid. And that won't work because almost none of our plans work without the willingness of strangers to simply do their jobs. Attract them, don't repel them. Never let them feel your frustration and never, ever let them see your wrath.

-unless it's absolutely necessary to a) achieve a Pyrrhic victory to preserve your sanity or b) you've run into the kind of perverse a--hat of a human being who is incapable of being motivated in any other fashion than negatively.

The first rule of business is "don't burn a bridge." The second is probably "no good deed goes unpunished." The third you already know is "find ways to do things, not reasons to not do things."

This is a little "mansplainey", but these are the things I've picked up over the course of a seemingly never ending series of mistakes. My intention is merely to help you avoid a measure of the shame and regret I carry around from screwing all of this up while I was still figuring it out.

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2020-07-14 09:31

So much to read and reread here Steve. I sincerely appreciate everything and take all this to heart.

I love it. I receive it! Thank you so much, I'm so glad I have your words to back me up and support my pitch to take this back to my husband lol.

Thank you for being in my corner, 🙏

Meg

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