Micro Roasters! How To Compete and Grow Your Business!#coffee#coffeeroasting#entrepreneurs#businessadvice#businessstrategy#smallbusiness#gourmetcoffee#microroasting
A few posts ago I wrote that I would shed some light on how the niche market you are in can be grown and your profitability will increase.
The one big hurdle I have faced working in this niche of the industry is the fine line between art & business performance! What I mean by that is, clearly, if you are a micro roaster you are passionate about what you do, most I have worked with and met feel it is more of an art than a business.
The problem with the art analogy is, most famous artists don't ever make money until after they're dead! So I hate to break it to you but you need to grow your business and more importantly you need to make a living doing it! Preferably a very comfortable living.
So let's look at the limitations, shall we? Obviously the first thing is if you're a micro-roaster you have a limited amount of roasting and packaging capacity! I have worked with several and most pack their product by hand with a small scale and hand sealer. The shocking thing I have encountered though is most of you, aren't at your capacity. So there is room to grow just by acquiring more customers! I know one company that has a capacity to roast approximately 1,000 lbs of coffee using a 6 hour a day schedule, but they only roast/sell approximately 300 lbs per week! That means that company is operating at 30% capacity. That clearly means they need more customers!
The other thing is, don't forget you can increase your capacity by simply adding another roasting shift or half of a shift! This would increase your capacity to 1,500-2,000 lbs per week. At that level, you are almost assured a nice profitable business.
There are 2 key ways you can sell more coffee and they both work, because I have used them to help a few company's in the last 6 months!
Number 1 - Approach medium to large roasters in your market. They hate doing small runs, and are turning away business everyday, because the prospective customers don't fit their model. Let them know you can supply them with small single origin whole bean coffee, or a gourmet blend to them at a slightly discounted price. In effect you become their outsourced gourmet roaster. The best and easiest way to do this would be to roast the coffee, put it in super sacks and deliver it to them for them to pack, but most will want it packed for them. So you do that and have them pick it up at your location. You'd be surprised how responsive some of these company's will be.
The other way is to come to some sort of a lead generation sharing agreement. If the medium-large co. gets a lead that doesn't make sense they send them your way, and vice versa, if you can't do something, because its too large you give it to them. Or you could have them do the larger runs you might have an opportunity to supply, so they become your co-packer! Think out of the box here! There are many ways to overcome limitations. Remember limitations are just unsolved opportunities!
Strategy #2- Mail order sales! This would be all web based or small advertising in local papers(this still works by the way).
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