Starting a coffee roasting business is a rewarding venture that combines a passion for coffee with sharp business sense. The market is worth tens of billions of dollars, with consistent demand for quality beans from cafes, restaurants, and home brewers alike.
This guide will walk you through the practical steps of validating your business concept, acquiring equipment, building supplier relationships, and obtaining the necessary permits to help you launch a successful coffee roasting business in the U.S.
Step 1: Plan and validate your business
Begin with hands-on market research. Visit local farmers markets, specialty grocers, and cafes. Take note of which roasters are on the shelves, their price per bag, origin information, and roast levels. This direct observation will give you a baseline for your local competitive landscape.
For a wider view, you can consult market reports from the Specialty Coffee Association (SCA) or industry analysis from platforms like IBISWorld. These resources help identify consumer trends, such as the demand for single-origin versus blended coffees, which can help you define your niche.
Define your startup costs
Many new roasters underestimate their initial financial needs. Your commercial roaster is the largest single purchase, typically from $15,000 to $40,000 for a small-batch machine. With that in mind, you should also budget for other startup expenses.
- Green Coffee Beans (Initial Inventory): $3,000 - $6,000
- Packaging and Labels: $1,000 - $3,000
- Business Licenses and Permits: $500 - $2,000
- Website and Basic Marketing: $1,000 - $5,000
This brings a realistic startup investment to between $20,500 and $56,000. Having these numbers clarifies the capital you will need to secure through loans or personal funds.
Here are 3 immediate steps to take:
- Scout three local competitors to analyze their products and pricing.
- Draft a preliminary budget using the cost ranges provided.
- Explore the Specialty Coffee Association website for one relevant market report.
Step 2: Set up your legal structure and licensing
First, choose your business structure. An LLC is a popular choice for new roasters because it separates your personal assets from business debts. It also offers pass-through taxation, which simplifies your annual filings compared to a C Corporation.
With your legal entity decided, you can register with the federal government. The Food and Drug Administration (FDA) regulates coffee roasting. You must complete the FDA’s Food Facility Registration online; it is free and mandatory before you begin operations.
Secure state and local permits
Next, you will need local permits. These typically include a general business license from your city or county ($50-$150), a food handler’s permit for anyone touching the coffee ($10-$30), and a health department permit for your roasting facility ($100-$400).
Many new roasters are surprised to learn their home kitchen does not qualify for a commercial food permit. You will likely need to operate from a certified commercial or commissary kitchen space to meet health code standards. Processing times for these permits can take 2-8 weeks.
Here are 3 immediate steps to take:
- File for an LLC with your state's Secretary of State.
- Complete the FDA's Food Facility Registration online.
- Contact your local health department to understand their requirements for a food processing facility.
Step 3: Secure your business insurance
Your first layer of protection is General Liability insurance, which covers accidents like a customer slip-and-fall. You also need Product Liability coverage in case a batch of coffee causes illness. A combined policy typically runs from $400 to $900 annually.
Next, protect your most expensive asset with Property Insurance. A frequent misstep is only insuring for the roaster's current cash value. You should always insure for the full replacement cost, which can be much higher. Expect annual premiums from $750 to $2,500, based on your equipment's value.
Depending on your operations, you might also need:
- Workers’ Compensation: This is mandatory in most states as soon as you hire your first employee.
- Commercial Auto Insurance: This is for any vehicle used for business, including personal cars for deliveries.
Find the right provider
Coffee roasting has unique fire risks from chaff buildup and equipment malfunctions. A general agent may not secure the right coverage. It is better to work with specialists like the Food Liability Insurance Program (FLIP), The Hartford, or Insureon who understand food production businesses.
Here are 3 immediate steps to take:
- Request a quote for a combined General and Product Liability policy.
- Ask potential insurers if their property policy covers the full replacement cost of your roaster.
- Contact an insurance provider that specializes in food businesses to discuss your specific risks.
Step 4: Find a location and buy equipment
You will need a space zoned for light industrial or commercial use, typically 500 to 1,500 square feet. This provides enough room for your roaster, green bean storage, and a packaging station. Check your city’s zoning map online before you visit any properties.
When you review a lease, focus on ventilation. You must install a powerful exhaust system. Also confirm the space has 3-phase power, as most commercial roasters require it. Landlords are sometimes open to rent concessions if you fund these upgrades yourself.
Purchase your core machinery
With your space identified, you can select your equipment. The roaster is your centerpiece. A 5-15kg machine is a solid start for small-batch production. You will also need a few other items.
- Commercial Roaster: $15,000 - $40,000
- Commercial Grinder: $1,000 - $3,000
- Bag Heat Sealer: $200 - $800
- Digital Scales: $100 - $300
For green coffee, look to importers like Cafe Imports or Royal Coffee. They sell by the bag, usually 60-70kg, which is a typical minimum order. This lets you start with a few different origins without a massive inventory investment.
Here are 4 immediate steps to take:
- Research your city’s zoning map for light industrial areas.
- Ask a potential landlord about the building’s HVAC and electrical capacity.
- Request quotes for a 5-15kg commercial roaster from two different manufacturers.
- Check the current offerings and minimum order sizes on the Royal Coffee website.
Step 5: Set up your payment processing
Choose your payment processor
Most of your initial sales will be immediate. For wholesale clients, like cafes, Net 30 terms are standard. However, you might want to start with payment on delivery (COD) to maintain healthy cash flow in the early days.
When you select a payment processor, look closely at the fees. Many new roasters get caught by high transaction rates, which often range from 2.5% to 3.5% plus monthly charges. You need a system that can handle both online subscriptions and in-person sales.
For roasters who sell at farmers markets or make local deliveries, JIM offers a streamlined solution. With JIM, you can accept debit, credit, and digital wallets directly through your smartphone. Just tap and the sale is done.
At just 1.99% per transaction with no hidden costs or extra hardware, it is particularly useful to manage sales at events without a traditional register. This rate is competitive against the higher commissions other providers charge.
- Get Started: Download JIM app for iOS
- Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone
- Access Funds: Your money is available right on your JIM card as soon as the sale is done - no waiting for bank transfers
Here are 3 immediate steps to take:
- Decide on your payment terms for early wholesale accounts.
- Compare the transaction fees of two different payment processors for online and in-person sales.
- Download the JIM app to see how it works for on-the-go payments.
Step 6: Secure your funding and manage finances
With your business plan and budget ready, you can approach lenders. The Small Business Administration (SBA) Microloan program is a popular starting point. It offers loans up to $50,000, which aligns well with initial roaster startup costs. Interest rates typically range from 6% to 9%.
Another route is equipment financing. Lenders in this space focus on the value of the roaster itself, so credit requirements can be more flexible. Also, search for local or state-level grants for food producers or agricultural businesses. These do not require repayment but have specific application windows.
Manage your working capital
Many new roasters find their cash flow is tighter than expected in the first year. You should have enough working capital to cover at least six months of operating expenses without any sales revenue. This buffer, often $15,000 to $30,000, covers rent, beans, and utilities.
From day one, open a dedicated business checking account. This separation is not just good practice, it simplifies tax preparation and makes your financial records look more professional to lenders and investors. It is a simple step that prevents major headaches later.
Here are 4 immediate steps to take:
- Research the SBA Microloan program requirements on the official website.
- Contact two equipment financing companies for quotes.
- Calculate your six-month operating expense buffer.
- Open a business checking account at your local bank.
Step 7: Hire your team and set up operations
Hire your first employees
You will likely be the first roaster, packer, and delivery driver. When you are ready to hire, your first team member is often a Production Assistant. This role handles bagging, labeling, and cleaning, freeing you up to focus on sales and roasting.
Expect to pay a Production Assistant between $15 and $20 per hour. They will need a food handler’s permit, which is the same one you acquired for yourself. The process is usually a short online course and a small fee.
As you grow, you might hire a dedicated Head Roaster. This person manages quality control and develops roast profiles. Salaries typically range from $45,000 to $60,000. Certifications from the Specialty Coffee Association (SCA) are a strong indicator of skill.
Streamline your daily operations
A mistake many new owners make is not tracking inventory from day one. Use a simple spreadsheet to monitor green beans, roasted coffee, and packaging supplies. This prevents surprise shortages that can halt production and disappoint customers.
For scheduling your new team, you can use apps like Homebase or When I Work. They simplify shift planning and communication. As a general benchmark, aim for $150,000 to $200,000 in annual revenue per full-time employee to maintain healthy margins.
Here are 4 immediate steps to take:
- Draft a job description for a Production Assistant, including pay rate and responsibilities.
- Look up the process for employees to get a food handler's permit in your county.
- Create a basic inventory tracking spreadsheet for your green and roasted coffee.
- Review the features of a scheduling app like Homebase to see if it fits your needs.
Step 8: Market your brand and find customers
Your first customers will likely come from direct sales at farmers markets or local events. Use these opportunities to build an email list. Offer a small discount to anyone who signs up. This list becomes your most valuable marketing asset for announcing new roasts and promotions.
Build your online presence
Set up a simple online store using a platform like Shopify. Focus on high-quality photos of your bags and beans. A common mistake is neglecting social media. Post daily on Instagram, showing your roasting process or sharing details about a coffee’s origin to build a following.
For online ads, aim for a customer acquisition cost (CAC) under $25. A typical e-commerce conversion rate is 1-2%, so track your website traffic and sales closely. A successful campaign might be a "Roaster's Choice" subscription box promoted to local coffee lovers on social media.
Secure wholesale accounts
To approach cafes, prepare a one-page sell sheet with your offerings and pricing. Schedule a brief meeting instead of just dropping off samples. Bring a small 4-8oz bag for them to cup. This professional approach shows you respect their time and business.
Here are 4 immediate steps to take:
- Set up a business Instagram account and post three photos of your process.
- Create a sign-up sheet to collect emails at your next market or event.
- Draft a one-page sell sheet with your initial coffee offerings and wholesale prices.
- Identify five local cafes to approach for a tasting.
Step 9: Develop your pricing strategy
Your pricing starts with your cost of goods sold (COGS). This includes green bean cost, roasting weight loss (usually 15-20%), packaging, and labor. If green beans are $5 per pound, the roasted cost is closer to $6.25 per pound after shrinkage.
A common mistake is to forget this weight loss, which eats into your margins. Once you have your roasted bean cost, add expenses like your bag and label (around $1) and labor to find your final COGS per bag. For a 12oz bag, this might be around $8.25.
Set your margins and final price
For wholesale, a 30-50% markup on your COGS is a good starting point. That $8.25 bag would have a wholesale price of about $10.75 to $12.40. For direct-to-consumer sales online or at markets, you can often apply a 100% markup, pricing the same bag at $16.50 or more.
While it is smart to look at what competitors charge, do not let their prices dictate yours. Price based on your costs and quality first. You can use a simple spreadsheet to track these numbers and compare different markup scenarios before you finalize your price list.
Here are 3 immediate steps to take:
- Calculate the COGS for one 12oz bag, including bean cost, weight loss, and packaging.
- Research the retail prices of two comparable roasters in your area.
- Set your initial wholesale and retail prices using a 40% and 100% markup.
Step 10: Maintain quality and scale your operations
Establish your quality control process
Your reputation depends on consistency. Use the Specialty Coffee Association (SCA) 100-point scale for cupping every batch. Aim for scores above 80 to meet specialty grade standards. This formal process helps you identify and replicate your best roasts.
Many new roasters fail to log their roast profiles, which makes consistency nearly impossible. You might want to use software like Cropster or Artisan to track variables like charge temperature, rate of rise, and first crack time. This data is your recipe for a repeatable product.
Know when to scale
Growth should be data-driven. When you consistently sell out or wholesale lead times stretch beyond one week, it is time to expand. A good benchmark is to add a production employee for every $150,000 in revenue you generate.
Also, watch your roaster's operating hours. If your machine runs more than 25 hours per week, an upgrade to a larger model can cut labor costs. Consider certifications like USDA Organic to access new markets. The process can take 3-6 months and cost around $2,000.
Here are 4 immediate steps to take:
- Download the SCA cupping form to standardize your tasting notes.
- Explore the features of roast logging software like Cropster or Artisan.
- Calculate your current weekly roaster operating hours.
- Research the USDA Organic certification requirements for coffee roasters.
Starting your coffee roasting business is a journey of details. Remember that your passion for great coffee is your biggest asset, but consistency is what will build your brand. You have the steps, now it's time to put your plan into action.
As you start to make sales, you'll need a simple way to get paid. JIM turns your smartphone into a card reader, letting you accept payments anywhere with a flat 1.99% fee and no extra hardware. Download JIM to get started.
