Launch Plan for Coffee Roasting
Follow 7 practical steps to launch your Coffee Roasting business, achieving breakeven in just 2 months (February 2026) with an initial CAPEX of $152,000
7 Steps to Launch Coffee Roasting
| # | Step Name | Launch Phase | Key Focus | Main Output/Deliverable |
|---|---|---|---|---|
| 1 | Define Product Mix & Pricing | Validation | Set SKUs, check margins. | 12oz price confirmed at $28.00. |
| 2 | Calculate Unit Economics (COGS) | Validation | Pinpoint per-unit costs. | $2.50 green bean cost locked. |
| 3 | Determine Fixed Operating Costs | Funding & Setup | Tally baseline overhead. | $5,200 monthly fixed cost set. |
| 4 | Model Capital Expenditure (CAPEX) | Funding & Setup | Acquire major assets. | $152k upfront spend budgeted. |
| 5 | Staffing and Wage Planning | Hiring | Plan Year 1 payroll needs. | $175k salary budget defined. |
| 6 | Revenue Forecasting and Growth | Launch & Optimization | Project long-term sales. | $2324M EBITDA goal set. |
| 7 | Financial Metrics and Breakeven | Launch & Optimization | Check liquidity needs. | $1,146,000 minimum cash needed. |
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What specific niche and customer segment will drive our initial volume and pricing power?
The initial volume driver for the Coffee Roasting business must be the Direct-to-Consumer (D2C) segment because wholesale channels typically demand lower pricing that makes justifying a $2,800 per 12oz bag specialty grade price point nearly impossible, as explored in analyses like How Much Does The Owner Of Coffee Roasting Business Typically Make?. That high price requires direct engagement with connoisseurs who value the Roast-to-Ship promise.
D2C Volume Drivers (Defintely)
- Target home-brewing enthusiasts first.
- Connoisseurs accept premium pricing for rarity.
- Use the 48-hour shipping window as a core sales pitch.
- This segment absorbs the cost of single-origin sourcing.
Channel Margin Hurdles
- Wholesale requires significant volume density.
- Cafe partners expect deep discounts for shelf placement.
- The $2,800 bag price point collapses under wholesale pressure.
- Focus on boutique restaurants needing unique offerings, not volume.
How much working capital cushion is needed beyond the initial $152,000 CAPEX?
You need a working capital cushion that covers the $175,000 annual salary burden plus the cash held up in inventory float before revenue catches up; this determines how long you can survive before needing more cash. Honestly, figuring out that lag time is key, much like understanding owner compensation in a How Much Does The Owner Of Coffee Roasting Business Typically Make? scenario.
Covering the Fixed Burn
- The $175,000 Year 1 salary burden translates to a fixed cash outflow of about $14,583 per month, separate from COGS.
- This minimum monthly burn must be covered by working capital until sales volume generates positive operating cash flow.
- Your initial $152,000 CAPEX is for assets; the working capital cushion pays the people and overhead before the first dollar comes in.
- If you project 6 months to reach consistent sales, you need at least $87,500 just for payroll coverage.
The Inventory Cash Trap
- The time lag between buying green beans and collecting payment traps cash in inventory.
- If you pay suppliers in 30 days and collect from customers in 15 days, you fund 45 days of inventory costs.
- This float is critical; if your Cost of Goods Sold (COGS) is 35% of revenue, that float requirement grows fast.
- You need to model this cycle precisely; if the lag is too long, you’ll run out of cash defintely before your first major shipment sells through.
Can our initial equipment capacity handle the projected Year 3 volume of 30,000+ units?
The initial $75,000 machine capacity is sufficient to meet the projected 30,000 units in Year 3, but you must optimize utilization defintely immediately to avoid needing a second asset purchase by late Year 2; this planning is key to keeping Are Your Operational Costs For Coffee Roasting Business Staying Within Budget? in check.
Initial Asset Utilization
- The $75,000 roaster supports 52,000 units annually based on 1 lb bag equivalents.
- Year 3 target of 30,000 units requires only 57.7% utilization of this asset.
- If average unit size is 12 oz, capacity drops to 39,000 units annually.
- You must lock in sales volume quickly to justify the initial capital outlay.
Next Capital Trigger
- If utilization hits 85% (around 44,200 units), process bottlenecks appear.
- Plan the next capital expenditure (CapEx) by the end of Year 2.
- A second machine purchase means doubling the fixed asset base, increasing depreciation.
- If growth accelerates past 45,000 units, upgrade planning starts Q4 Year 2.
When should we hire the Marketing & Sales Manager to maximize Year 2 growth?
The current plan defers hiring a dedicated Marketing & Sales Manager until 2027, meaning the existing team must absorb initial sales and marketing duties until then; before you commit to that timeline, you need to assess if the initial Operations Manager and Head Roaster can effectively drive growth, or you might want to review the key components to include in the business plan for your Coffee Roasting venture, especially regarding sales channel development, as detailed here: Have You Considered The Key Components To Include In The Business Plan For Your Coffee Roasting Venture?
Current Sales Capacity Check
- Head Roaster focuses on quality control and production volume.
- Operations Manager handles logistics, inventory, and fulfillment processes.
- Sales tasks are currently split, requiring significant time reallocation.
- If onboarding takes 14+ days, churn risk rises due to slow response times.
Justifying the 2027 Hire Date
- Delaying saves approximately $90,000 in Year 1 salary and benefits.
- The initial growth rate must sustain itself without dedicated lead generation.
- We need Year 1 revenue to hit at least $500,000 to validate this strategy.
- The team must defintely maintain a customer satisfaction score above 90%.
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Key Takeaways
- The coffee roasting venture requires an initial capital expenditure (CAPEX) of $152,000 and is projected to achieve breakeven rapidly within just two months of launching in February 2026.
- Maintaining high gross margins, validated by the 839% margin target on the core 12oz SKU, is the primary driver for the business's fast path to profitability.
- Green beans represent the largest variable cost component, demanding careful management as they cost $250 per 12oz unit sold.
- The initial Year 1 operational budget includes $175,000 allocated for three full-time employees while future capacity must be assessed before Year 3 volume goals are met.
Step 1 : Define Product Mix & Pricing
SKU Setup & Margin Check
Defining your product mix dictates revenue potential. You must lock down the five core SKUs immediately. This step validates if your desired profit levels, like the 839% target gross margin on the 12oz bag, are achievable against market reality. Pricing wrong here sinks the whole ship. It’s defintely the foundation for your five-year forecast.
Pricing Validation Steps
Start by setting the price for the D2C 12oz SKU, using the example price point of $2800. Compare this against specialty coffee competitors to see if the price holds water. Next, calculate backwards: if COGS is $X, does that yield your 839% margin? If not, adjust the price or the SKU definition.
Step 2 : Calculate Unit Economics (COGS)
Pinpointing True Unit Cost
Calculating Cost of Goods Sold (COGS) determines if your pricing strategy actually works. If you misjudge material costs, your gross margin target becomes meaningless, defintely hurting future fundraising. For the 12oz bag, you must lock down the $2.50 green bean cost. This is your baseline material expense before roasting and packaging variables are added.
This step requires absolute accuracy on sourcing contracts. A 10% variance in green bean price directly translates to a 10% variance in your gross profit per unit sold. You need to verify this $2.50 figure monthly against actual purchase orders.
Calculating Variable Burden
You must incorporate operational overhead directly into this unit cost calculation, even if it’s revenue-based. We are adding a 12% overhead factor tied to revenue. Assuming the 12oz bag sells for $28.00, that overhead allocation is $3.36 per unit (0.12 times $28.00).
Here’s the quick math for your total variable cost: The $2.50 bean cost plus the $3.36 overhead equals a total variable unit cost of $5.86. This $5.86 is the minimum you must cover before hitting your fixed operating costs.
Step 3 : Determine Fixed Operating Costs
Fixed Baseline Check
You need a clean, predictable overhead number before you factor in people costs. This baseline covers the non-negotiable costs of keeping the lights on. For this coffee roasting operation, we confirm the initial fixed spend sits at $5,200 monthly. This covers rent, utilities, and insurance. Get this number right now; it anchors your entire profitability calculation.
Salary Inclusion Timing
Don't mix operational overhead with human capital expenses yet. Salaries, detailed in Step 5, are significant operating expenses but they aren't part of this initial $5,200 fixed bucket. Wait until you calculate the 3 FTEs payroll before defintely finalizing total monthly overhead. If you include salaries too early, your break-even point will look artificially high.
Step 4 : Model Capital Expenditure (CAPEX)
Asset Funding Required
The initial capital expenditure (CAPEX) defines your entry barrier; these are the big, non-recurring purchases needed before you sell a single bag. For this artisan roastery, you must account for a total upfront spend of $152,000 just to get the doors open and the first batch ready. This cash must be secured before operational spending begins.
The bulk of this spend centers on production capability. You need $75,000 locked in for the Commercial Roasting Machine, which is your primary asset. Also, earmark $20,000 specifically for the initial green bean inventory needed to process those first orders. That’s $95,000 tied up in core production assets right away.
Controlling Initial Outlay
Focus your immediate negotiation power on the largest line item: the $75,000 roaster. Ask vendors about financing options or used equipment, but be wary of extending your timeline. If you finance, remember those payments immediately become a fixed monthly cost, separate from this initial CAPEX calculation.
You must defintely plan for costs outside the machine and beans. While the data shows $152,000 total, always add a 15 percent contingency buffer for unexpected installation fees or permitting costs. That buffer protects your runway while you wait for Step 3’s $5,200 rent commitment to kick in.
Step 5 : Staffing and Wage Planning
Initial Headcount Budget
You need to lock down your initial labor structure before scaling operations. Year 1 starts lean with 3 FTEs covering core production and management needs. This initial payroll outlay is budgeted at $175,000 for salaries across the team. These three specific roles—Head Roaster, Ops Manager, and Packaging Staff—define your absolute baseline capacity for the first year.
Getting these roles staffed correctly now is vital, as under-capacity slows revenue growth later. If the Head Roaster is also managing inventory, that’s two jobs in one person. That’s fine for starting, but you need to track that overlap.
Aligning Roles to Volume
Don't overhire early; those 3 FTEs must cover all initial production volume effectively. The Head Roaster must focus on quality control and roasting schedules; don't let them get bogged down in admin. Keep compensation competitive to avoid turnover; losing a key roaster is defintely expensive.
If volume spikes past initial projections, plan for the next hire by Q3. You’ll need to model the impact of adding a second packaging person before Year 2 starts. That next hire might cost $65,000 annually.
Step 6 : Revenue Forecasting and Growth
Five-Year Unit Projection
Your five-year forecast must lock down the path to 40,000 D2C 12oz bags and 7,000 Wholesale 10lb bags by 2030, which the plan projects will yield $2324M EBITDA. This aggressive scaling dictates your immediate capital deployment, especially the $152,000 required for upfront assets like the commercial roaster. You need clear monthly milestones to track progress against this endpoint.
Forecasting growth isn't just about sales volume; it’s about capacity planning. If you cannot secure sustainable sourcing for the required volume of green beans, these targets are purely academic. Honestly, hitting $2.3 billion in EBITDA from coffee sales requires more than just fresh roasting; it means massive distribution penetration.
Scaling Levers for Volume
To reach those unit goals, you must prioritize channel efficiency now. The D2C channel often carries higher fulfillment costs but offers better margin control. You need a clear strategy to manage the 839% target gross margin on the 12oz bag while ensuring COGS, including the $250 green bean cost per bag, stays manageable.
Focus on customer acquisition cost (CAC) relative to customer lifetime value (LTV). If your D2C growth stalls, you must pivot to securing larger wholesale accounts faster than planned. If onboarding takes 14+ days, churn risk rises defintely. This operational friction kills growth momentum.
Step 7 : Financial Metrics and Breakeven
KPI Validation
Verifying the timeline hinges on hitting operational targets precisely when planned. The goal is achieving cash flow breakeven within 2 months, specifically by February 2026. This aggressive timeline demands that initial sales velocity must immediately overcome the combined fixed costs and the initial capital outlay. If the operational ramp is slow, that 2-month window closes fast.
The required minimum cash buffer is substantial at $1,146,000. This figure isn't just for the $152,000 in upfront capital expenditures (CAPEX). It must cover the cumulative operating deficit until profitability is sustained. We need to see the projected monthly losses leading up to Feb-26 to confirm this number is accurate, defintely.
Cash Buffer Necessity
That $1,146,000 minimum cash requirement is your safety net against market friction. It covers the initial investment in the commercial roaster and inventory, plus the operational burn rate until breakeven hits. Given that monthly fixed expenses approach $20,000 before factoring in the 12% revenue-based overhead, any delay in sales growth directly increases the cash needed to survive.
To support the 2-month breakeven, you must model cumulative cash flow showing the point where net cash stops declining. If the initial cash injection only covers CAPEX and 6 months of burn, you risk running dry before the 2026 target. Focus on the velocity needed to offset the high cost of green beans, which is $250 per 12oz bag.
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Frequently Asked Questions
Total pre-launch capital expenditure is $152,000, covering the $75,000 roaster, $15,000 packaging setup, and $20,000 initial inventory;