How to Write a Business Plan for Coffee Roasting
Follow 7 practical steps to create a Coffee Roasting business plan in 10–15 pages, with a 5-year forecast, breakeven at 2 months, and funding needs over $11 million USD clearly explained in numbers
How to Write a Business Plan for Coffee Roasting in 7 Steps
| # | Step Name | Plan Section | Key Focus | Main Output/Deliverable |
|---|---|---|---|---|
| 1 | Define Your Product and Market | Concept/Market | Validating $624k Y1 revenue | Segmented customer pricing confirmed |
| 2 | Detail Production and CAPEX Needs | Operations | Mapping workflow and assets | CAPEX schedule showing $75k roaster |
| 3 | Build the 5-Year Revenue Forecast | Financials | Projecting volume growth (2026-2030) | Total revenue growth model based on units |
| 4 | Calculate Unit Economics and COGS | Financials | Confirming margin sustainability | Unit cost structure showing 828% gross margin |
| 5 | Map Operating Expenses and Staffing | Team/Financials | Detailing fixed costs and payroll | $175k Year 1 wage expense for 30 FTEs |
| 6 | Determine Breakeven and Funding Requirements | Financials/Risks | Calculating runway needs | Justification for $1,146,000 minimum cash needed |
| 7 | Define Growth Strategy and Key Risks | Risks/Strategy | Managing commodity price swings | Path to $2.3M EBITDA by Year 5 |
Coffee Roasting Financial Model
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What specific market segment will drive my initial wholesale and D2C volume?
Initial volume for your Coffee Roasting business hinges on validating the willingness to pay among specialty cafes and high-value home subscribers. You must confirm that these core customers accept the projected pricing tiers, including targets like $2,800 for high-volume or annual commitments.
Validate Core Customer Segments
- Focus on specialty cafes needing consistent, fresh supply.
- Test subscription conversion rates with home-brewing enthusiasts.
- Offices represent a potential bulk channel if onboarding is fast.
- Churn risk rises defintely if the first delivery experience is poor.
Confirm Price Acceptance
- Confirm if a $2,800 annual commitment is viable for office contracts.
- Wholesale pricing must cover sourcing costs plus premium roasting labor.
- Direct-to-Consumer (D2C) subscribers need clear value vs. retail shelf price.
- If you plan physical distribution, Have You Considered The Best Locations To Launch Your Coffee Roasting Business?
What are the true unit costs and margins across all product sizes, especially wholesale?
Hitting that 828% gross margin goal hinges entirely on pricing power, as the $450 cost for a 12oz bag is the baseline you must scale from; check out Is The Coffee Roasting Business Highly Profitable? for context on this level of return.
Unit Cost Leverage
- COGS is $450 for the standard 12oz retail bag.
- This figure must support the overall 828% gross margin target.
- Volume sales are critical to dilute the per-unit operational cost.
- Contribution margin per unit must be exceptionally high.
Wholesale Cost Structure
- Wholesale 10lb bags show a $2,900 unit COGS.
- This wholesale tier requires efficient fulfillment processes.
- The margin on wholesale must cover higher initial material outlay.
- Verify that the pricing tier justifies the premium bean sourcing.
How will I manage the scaling of production and fulfillment labor as volume increases?
Scaling labor for the Coffee Roasting business requires aligning headcount increases, like growing packaging staff from 10 FTE in 2026 to 30 FTE by 2030, against initial capital investments such as the $152,000 allocated for equipment, including the $75,000 roaster.
Labor Headcount Milestones
- Plan to increase packaging staff from 10 FTE in 2026 to 30 FTE by 2030.
- Initial capital expenditure (CAPEX) budget totals $152,000 for production setup.
- The primary equipment purchase is the roaster, budgeted at $75,000.
- You must defintely map labor hiring schedules directly to projected unit volume increases.
Connecting Spend to Throughput
- The initial $75,000 roaster defines your maximum throughput ceiling until further investment.
- Labor costs must be managed tightly; review Are Your Operational Costs For Coffee Roasting Business Staying Within Budget? regularly.
- If onboarding new packaging staff takes longer than projected, fulfillment speed suffers.
- Ensure equipment uptime is near perfect to justify the fixed cost of 30 FTE salaries later on.
What is the minimum cash required to sustain operations until positive cash flow is stable?
The Coffee Roasting business requires $1,146,000 secured by February 2026 to bridge the operational gap until positive cash flow is established. This capital funds the initial 13-month payback period, covering setup and early operating losses before sales volume covers costs.
Capital Runway Need
- The total cash requirement is $1,146,000.
- This runway must cover 13 months of negative cash flow.
- Ensure capital deployment prioritizes roasting equipment and initial green bean inventory.
- If lead times for key suppliers stretch past 30 days, you’ll defintely need extra working capital buffer.
Deployment Focus
- The deployment plan must align with the February 2026 target date for funding.
- Track utilization closely; fixed asset purchases consume a large chunk of this initial raise.
- For context on profitability drivers, review What Is The Most Important Measure Of Success For Your Coffee Roasting Business?
- High initial spending on sourcing unique beans must be balanced against achieving target unit economics fast.
Coffee Roasting Business Plan
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Key Takeaways
- The financial model emphasizes achieving a rapid breakeven point within just 2 months by leveraging high gross margins calculated to be around 828%.
- Successful execution requires defining specific customer segments and confirming unit economics that support a projected Year 1 EBITDA of $232,000 USD.
- The comprehensive plan necessitates securing over $11 million in total funding, with $1.146 million specifically earmarked to cover initial working capital needs until positive cash flow is stable.
- Operational scaling must be mapped precisely, detailing CAPEX needs like the $75,000 roaster and projecting staff growth necessary to hit $2.3M EBITDA by Year 5.
Step 1 : Define Your Product and Market
Product Line Definition
Defining your revenue streams upfront prevents surprises later. This coffee business relies on three core channels: Direct-to-Consumer (D2C) sales, Wholesale accounts, and recurring Subscription orders. Getting the mix right validates the $624,000 revenue target set for Year 1. If you over-rely on one segment, your margin profile changes fast. We need to see the math confirming this split.
The challenge here is mapping the five conceptual product lines—the three mentioned plus any necessary breakdowns in volume—to specific revenue contributions. This segmentation is the bedrock for your production plan, which starts in Step 2. Don't just list the channels; assign expected sales volume and pricing to each.
Revenue Target Validation
To confirm the $624,000 target, break down the volume assumptions for each channel. For example, the D2C channel projects 10,000 12oz bags in 2026. If the assumed unit price for D2C is $2800 annually, that segment alone generates $28 million, which doesn't align with the total goal. You must adjust the unit price or volume assumptions for D2C, Wholesale, and Subscription so they defintely sum to $624,000 total revenue.
Here’s the quick math: if D2C volume is fixed at 10,000 units, the average price per unit across all channels must be around $62.40 to hit the target ($624,000 / 10,000 units). If your Wholesale AOV is significantly lower than D2C, you’ll need a higher volume mix in the higher-priced Subscription channel to balance it out. That’s the lever you pull here.
Step 2 : Detail Production and CAPEX Needs
Initial Asset Spend
This step quantifies the physical reality of your ambition. You must nail down the $152,000 in initial capital expenditures (CAPEX) right now. This spend isn't optional; it buys the machinery required to produce revenue later. The core constraint is the $75,000 commercial roasting machine. That asset defines your maximum potential output before you buy a second unit.
If you skip detailed procurement planning, you risk cash flow shocks when the invoice arrives. Think about facility readiness too; that machine needs specific power and ventilation infrastructure. Honestly, securing that primary roaster is the first real operational hurdle you face.
Workflow to Volume
You need a clear production schedule supporting your 2026 volume targets, which means mapping every step from green bean intake to final shipment. The workflow must be tight to maintain the 'Roast-to-Ship' promise of under 48 hours. This involves scheduling roasting cycles around cooling and packaging capacity.
If 2026 volume requires 10,000 D2C bags, calculate the necessary roasting hours per week based on the machine's batch size. What this estimate hides is the time needed for quality control checks between batches. Defintely budget for extra labor hours during peak fulfillment periods; the machine runs, but people package the final product.
Step 3 : Build the 5-Year Revenue Forecast
Forecasting D2C Trajectory
This projection step is where the rubber meets the road for operational planning. Mapping unit volume growth anchors your entire financial model, linking production capacity needs to sales goals. If your Direct-to-Consumer (D2C) volume assumptions are soft, the five-year revenue picture falls apart fast. You defintely need a clear path from 10k to 40k units.
We must project sales volume based on unit growth, not just abstract percentages. This forces decisions on roasting equipment and warehouse space early on. Don’t treat this as a simple spreadsheet exercise; it dictates your hiring plan.
Scaling Unit Projections
We build this forecast by charting the D2C 12oz bag volume progression. Starting at 10,000 units in 2026, we scale to 40,000 units by 2030. This assumes a steady, linear increase in demand over those four years.
Given the specified price of $2,800 per 12oz bag, this single channel drives revenue from $28 million in the first projection year (2026) to $112 million by Year 5 (2030). That’s a massive jump; check your fulfillment capacity now.
Step 4 : Calculate Unit Economics and COGS
Unit Cost Foundation
Establishing the Cost of Goods Sold (COGS) is the bedrock of your financial model; it dictates how much you actually keep from every sale. If you miscalculate this, you won’t know if your premium pricing strategy is working or if you’re just selling expensive inventory. The immediate test is confirming if that 828% gross margin target is real or just aspirational math based on incomplete input data. This requires precise tracking of raw materials.
You must define COGS to include everything that touches the bean before it ships: green bean acquisition, roasting labor, and packaging materials. If the 828% figure assumes only the raw bean cost, that margin will evaporate quickly once overhead and variable fulfillment costs are factored in. You need defintely to isolate the true unit cost.
Green Bean Cost Check
The largest variable cost component is the Green Beans, budgeted at $250 for a 12oz bag. To hit an 828% markup (Gross Profit / COGS), your selling price would need to be approximately $2,320 per unit, assuming $250 is the total COGS. However, Step 3 suggests the D2C unit price is $2,800.
- If SP is $2,800 and COGS is $250, Gross Profit is $2,550.
- This yields a 91.1% Gross Margin ($2,550 / $2,800).
- This is a very healthy margin, but it is far from the 828% target mentioned in the plan.
Focus on validating that $250 input cost. If that $250 only covers the green bean itself, you must add roasting labor and packaging to find the true COGS before you can confirm sustainability.
Step 5 : Map Operating Expenses and Staffing
OpEx Baseline
Mapping operating expenses (OpEx) sets your initial cash burn rate before sales stabilize. Year 1 requires $175,000 in total wages to support 30 Full-Time Equivalent (FTE) staff members. This headcount must be perfectly aligned with production needs right away. If staffing exceeds immediate demand, your runway shrinks defintely.
Controlling Fixed Spend
Non-wage fixed costs are budgeted at $62,400 annually, meaning rent and utilities are fixed at about $3,500 per month. Keep a close eye on this overhead; any expansion beyond this budget directly eats into gross profit. Furthermore, the Head Roaster salary of $65,000 must deliver superior quality to justify the investment in that key role.
Step 6 : Determine Breakeven and Funding Requirements
Funding Needs & Quick Break-Even
You must confirm the operational breakeven point lands in February 2026, just two months after launch, to justify the initial funding ask. This speed relies on aggressive sales execution meeting the Year 1 revenue target of $624,000 almost immediately. If sales lag, the cash burn rate will quickly consume your runway. This timeline demands you have sufficient capital to bridge the gap between initial spending and positive cash flow.
The minimum cash required is $1,146,000. This amount covers the $152,000 in initial Capital Expenditures (CAPEX), including the $75,000 commercial roasting machine. The majority of this cash acts as working capital buffer. It must cover the initial operating expenses, like the $175,000 Year 1 wage expense and $62,400 in fixed overhead, before sales revenue fully offsets them.
Managing Cash Runway
To maintain the 2-month breakeven target, cash deployment must be precise. Segment the $1,146,000 into hard assets, pre-launch operating costs, and a working capital buffer that covers at least six months of fixed overhead. If your initial inventory build-up takes longer than projected, that timeline shortens fast. You need the full cash amount secured before starting operations to avoid emergency fundraising later.
If onboarding wholesale clients slips past the first 60 days, the breakeven date moves. This schedule is defintely tight. Focus on securing early subscription revenue, as that cash flow is the most predictable buffer against unexpected costs in the first quarter.
Step 7 : Define Growth Strategy and Key Risks
EBITDA Scaling
Hitting $2,324k EBITDA by Year 5 from $232k in Year 1 requires aggressive margin defense as you scale volume. You must actively manage the two biggest threats to that growth curve: commodity price volatility and high initial transaction costs. Wholesale acquisition is the engine that spreads fixed overhead across higher revenue bases quickly.
If you rely only on Direct-to-Consumer (D2C) growth, managing the fluctuating cost of green beans becomes an administrative nightmare. You need predictable input costs to support the projected revenue ramp. Honestly, this growth is defintely achievable with strong wholesale accounts driving volume.
Cost Levers
To buffer commodity risk, start negotiating forward contracts for your primary green bean volume as soon as Year 1 revenue targets are confirmed. This locks in your Cost of Goods Sold (COGS) component. You can’t wait for spot prices to dictate your margin.
Your initial 25% payment processing fee in 2026 is a major drag; this needs immediate optimization. Use the leverage from securing large wholesale clients to demand tiered, lower processing rates from your merchant service provider. Every percentage point cut here directly boosts your EBITDA.
Coffee Roasting Investment Pitch Deck
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Frequently Asked Questions
Most founders can complete a first draft in 1-3 weeks, producing 10-15 pages with a 5-year forecast, if they already have basic cost and revenue assumptions prepared;