Last Updated on January 8, 2021 by Nick Baskett
In 2021 Carvetii will be celebrating its 10th anniversary. In a way the timing couldn’t have been better – it is allowing us to look beyond the Spring of 2021 in order to plan how we might mark this occasion, perhaps giving us a little bit of respite from the current challenges facing the hospitality industry.
I’m sure many business owners across the world are asking themselves the same questions as us: Why are we doing this? Is it worth it? The past few months have presented us with challenges the like of which we have never seen before, with uncertainty and worry a pretty much constant state of being!
It is enough to put anyone off running a business, which would be a shame. There is no doubt that being your own boss is hard work; even before the challenges of Covid-19 running my own business was by far the hardest thing I had ever done (and I came to this from the teaching profession!).
But at the same time the past 9 years have provided me with some unforgettable moments, and I am extremely proud of what we have achieved here at Carvetii. We work with amazing suppliers and customers, we roast delicious coffee, we have a committed and hard-working team, and we have created a great environment to work in.
Hopefully there are still people out there who would like to run their own coffee roasting business and if that is the case then here is what we have learnt.
Make sure it really is what you want
If you are a bit of a coffee geek then owning your own coffee roasting business might sound like a dream. While it can be rewarding, it is also really hard work. More importantly you run the risk of destroying your passion for coffee!
This was our route into the business and I’ll be honest, I have a different relationship with coffee today than I used to.
It is now my job! Increasingly when I close the door to the business and go home, I really want very little to do with coffee. It is even very rare that I find myself relaxing in a coffee shop, which was something I enjoyed doing in the past.
Be prepared for hard work, long hours, potentially very little financial return for the first few years and the loss of a hobby!
No person is an island
You cannot do this alone! When we started the business we were lucky enough to develop a relationship with two key people, a local and very successful businessman, and a very respected individual from the coffee industry.
Both of these helped shape our business and over the past 9 years have provided the critical feedback we have needed to prosper. Sometimes their feedback has been harsh and difficult to absorb, while at other times their reassuring comments have eased many a worry.
Build up a network of key people who can act as a support structure and make sure you listen to their advice!
Think big, but not too big!
The key purchase we made at the outset was on a the coffee roaster itself. We used 50% of our available budget to buy a second hand coffee roaster, and on the advice of the aforementioned individuals we opted for a 12kg machine.
On day one it seemed way too big, particularly as we took the approach to roast fresh each week. We didn’t like dropping batch sizes below 6 kg so those early months were spent trying to deal with surplus coffee!
The volume of orders slowly grew and within a year a 12 kg coffee roaster made sense. The less time we spent on production the more time we could spend on the core role of the business, generating sales.
I know roasters who started with a 5 kg machine and before long found themselves roasting small batch after small batch to fulfil orders. By the time production was consuming more than half our working week we knew it was time to invest in a new machine.
Today we roast on a brand new 25 kg Probat, which is one of our prouder purchases!
Your business is about sales, not coffee
This was the hardest lesson for me to learn and it probably took me a lot longer than it should. We are a wholesale business (with some retail) who just happen to have chosen coffee as the product to sell.
I will happily admit that in the early days the product consumed way too much of my attention. I should have spent much more of my time focusing on sales and generating more income.
This perhaps gave us a slower start than we would have liked. On the positive side it means that we roast amazing coffee! Even today we have not totally delegated the production side of our business and my partner is the main coffee roaster.
Focusing on the product is important but without sales your business will falter. Somewhere there is a balance, and often it is a hard balance to find!
Don’t set it in stone
The past few months have proven that business needs to be flexible. The quicker a business can adapt to changing market conditions, the more likely it is to succeed.
Part of our business involves the installation of espresso machines in coffee shops and my heart always sinks when I turn up to an establishment who has splashed out a small fortune on a marble counter top.
Any adaptations which need to be made once those doors have been opened are that much harder, and believe me it is highly likely that the business will need to adapt.
Employ staff based upon the skills you need
I often get a sense that baristas see coffee roasting as some form of career progression. Experience has shown me that a business needs a diverse team with varying skills, so if I am approached by a barista with a CV limited to working in coffee, it is highly unlikely that they will be employed here.
We do not need any more coffee experience, we have that in abundance. We need people skilled in social media, marketing and sales. Each business will have a different need in this respect but it is important to employ staff based upon an analysis of this need.
If you are employed as a barista and want to progress into roasting, I suggest you work on expanding your experience base first.
Know your market
Why is it that every roaster pretty much wants to be specialty? When we opened in 2011 there was one other coffee roaster in the area and they were delivering a more traditional style of product.
It made sense to pitch our offering in the specialty sector. Today we have seven other roasters in what is an area of relatively low population (with seasonal tourist related booms), and each of these ‘new’ businesses aspires to be at least in part specialty.
However, the specialty market accounts for less than 8% of the all the coffee consumed! In 2011, it made sense to pitch our business into this market with a view to converting some 92%.
Today it makes no sense to pitch a business into an increasingly saturated specialty market. If I had to make a choice today whether to open this business or not then in all honesty I would probably choose an alternate career path, or at least pick a different product!
If you want to succeed and prosper, do your market research and develop your business in line with demand. As lockdown unfolded in the early part of 2020, we’ve had to adapt our business to tap increasingly into this 92%. If there were less sales to be made in the specialty sector then we wanted to broaden our market base to offset this.
In 2015 our region was devastated by flooding. Numerous road bridges were destroyed causing havoc to local transport links.
This had a devastating effect on tourism and the local economy, and this in turn made business less confident. We have learnt over the years that when we see a drop in confidence we also see a drop in new custom.
People are less willing to change supplier when confidence is low. During this period we adapted and diversified our offering.
We developed our own range of teas which allowed us to sell more product to our existing customer base, and we have continued to evolve our offering along these lines.
This year we launched a new range of hot chocolates which will improve our gross profit margins and give us an additional retail presence.
Sales take time
Specialty coffee, by its very nature, costs more than its more commercial cousin. This means people need to buy into your story as much as the coffee itself. In the early days we sold coffee based upon the ‘local’ ticket, but as competition has grown we have needed to adapt our sales pitch. Today we have a very diverse offering allowing us to shape a pitch to suit a particular business. It might be training, the servicing of machines or even consultancy support, allowing the business to take advantage of our in-depth knowledge of the industry.
You might think you have a unique business proposal but very often this will not be the case – many people will often have arrived at the same idea and will already have developed it into a business.
We have just closed a deal with what might be one of our biggest customers to date and at a time when we need it most! It has probably taken around six years of relationship forming and failure to get to this point. It has been slow progress, and at times frustrating, but the reward will be worth the effort.
Accounts, accounts, accounts
Arguably this should be right at the top but I have saved the best until last! This lesson was drummed into us before we opened the business and I can attribute much of our success to the diligence by which we have maintained our accounts.
As well as weekly and monthly monitoring we draw up full management accounts each quarter and make all our spending decisions based upon the information from these. I cannot stress how important your accounts will be.
If you do not have the knowledge to do them yourself, make sure you employ someone who can.