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Starting a Coffee Business · 17 of 20

The Numbers: What It Costs to Start and What a Market Day Can Earn

A crowded covered farmers market, shoppers walking between stalls of flowers and produce
The Fulton Street Farmers Market in Grand Rapids on a busy day. The number that matters is how many of these people stop.

Every figure on this page is built from a price or a rule on one of the other pages. The market-day totals are models: arithmetic on stated assumptions, because nothing published says what a coffee stall in Michigan sells in a day. They are here to show which numbers matter. The first few real markets will replace them.

What each thing costs to make

A 12 oz bag costs about $6 to $8 in green coffee, bag, label and electricity (Bags, Labels and What a Bag Costs). At $17 that leaves $9 to $11.

A cup. Roasted coffee made from $6.11-a-pound green, after 15% roasting loss, costs $7.19 a pound, or 1.6 cents a gram.

DrinkPriceWhat goes inCostLeft over
Pour-over, 12 oz$4.0020 g coffee 32¢; cup, lid, sleeve 13¢about 45¢$3.55
House coffee from the airpot$3.5020 g coffee 32¢; cup set 13¢about 45¢$3.05
Cà phê sữa đá (kah fay shoo-uh dah · [kaː˨˩ fej˧˧ ʂɨə˨˩˦ ʔɗaː˦˥])$5.5025 g coffee 40¢; condensed milk about 30¢; ice 15¢; clear cup 15¢about $1.00$4.50
Honey coffee, hot$5.0020 g coffee 32¢; 15 g of honey, about 33¢ at its retail value; half-and-half; cup set 13¢about 90¢$4.10
Iced coffee, 16 oz$4.0023 g coffee 36¢; ice 15¢; clear cup 15¢about 65¢$3.35

A wooden honey dipper adds about a dollar to any drink it goes in.

Cups are taxed at 6% and bags are not (the rules page). A $4.00 menu price that includes the tax is $3.77 of revenue.

Samples. Two hundred tastes of 1½ oz is about 9 litres of coffee, which takes a little over a pound of roasted coffee, about $8. The cups are another $8. Sampling costs about $16 a market, or the profit on a bag and a half.

A cup earns less than a bag but far more per pound. A pound of roasted coffee makes one and a third bags, worth about $13 after costs, or about 22 cups, worth about $75. The cups are where the money is. The cups are also what need the licence, the water, the ice and the second pair of hands.

What it costs to start

Stage 1: bags, baked goods and jam under cottage food

ItemCost
Roaster for the learning year (Behmor 2000AB Plus), optional$479
Green coffee to learn on and to find the line-up, about 20 lb in small lotsabout $160
Valve bags, first 100 compostable pouches$95
Brand labels, first roll of 500about $125
Impulse heat sealerabout $100
Scale with timer$65
Rubber stamp and pad$50
Refractometer for the jamnot priced here
Tasting airpots, three$90 to $300
Sample cups, 1,000 compostable$40
Handwashing station (insulated spigot container, bucket, soap, towels)not priced here
Total, without the roasterabout $725 to $935
Total, with the Behmorabout $1,200 to $1,400

The canopy, weights, tables and card reader are already part of selling honey at a market. Liability insurance is the unknown: markets ask for anywhere from nothing to $1,000,000 of cover with the market named as insured, and no premium was researched. Get a quote before applying to a market that requires it.

Stage 2: adding brewed cups

ItemCost
Licence: one temporary licence per event, or$104 to $126 each
a Transitory Food Unit for the yearabout $165, plus two inspections at $90, plus plan review
Vacuum airpots for hot water, four$120 to $400
Pour-over stand, two drippers, filtersabout $200
Phins, 24 oz and 4 oznot priced here
Second coolerabout $240 for a good one
Probe thermometer, sanitizer, test stripssmall
Cups, lids, sleeves, first 1,000about $130
A second power station with a 1,500 W inverter, optional$560 to $670
Total, without the power station or licenceabout $700 to $1,000

Stage 3: a production roaster

ItemCost
Aillio Bullet R2 (120 V)$4,099
or Bullet R2 Pro (240 V)$5,299
Venting, built to suitnot priced
A 240 V circuit, if needed for the Pronot priced

At about $10 left on each bag, an R2 is paid for by 410 bags, which is about 310 lb of roasted coffee.

A market day, modelled

Assumptions: a $25 stall fee; 18 bags sold, which is the order of the few volumes found (Prices and Customers); bags at $17 costing $7 to make.

A vendor and a customer exchange a small basket of cucumbers across a table of vegetables at an outdoor market
One sale at the Ann Arbor Farmers Market. The model on this page is a count of moments like this one.

Bags and samples only

18 bags at $17$306
Cost of the bags−$126
Stall fee−$25
Samples−$16
Left for the dayabout $140

Honey, jam and baked goods sell on the same table and are not in that figure.

Adding 40 cups, at an average of $4.50

With a season licence (about $15 a market)With a temporary licence every market ($104)
40 cups, less sales tax$170$170
Cost of the cups−$30−$30
Ice and water−$11−$11
Licence, per market−$15−$104
Added by the cupsabout $115about $25
Day total with bagsabout $255about $165

That table is the most useful thing on this page. Whether cups are worth selling depends on how the licence is charged. Under a licence paid once for the season, forty cups nearly double the day. Under a $104 licence for every market day, forty cups barely cover it, and the break-even is about 32 cups. That is the first question for the health department.

For comparison, one roaster on a 2015 forum reported averaging about $250 for a five-hour market.

A season, and the cottage food cap

One market a week, 24 weeksTwo a week
Bags sold, at 18 a market432864
Roasted coffee324 lb648 lb
Bag revenue$7,344$14,688
Left from bags, after costs, fees and samplesabout $3,300about $6,700

Those are far inside the $50,000 cottage food cap. The cap is reached at about 2,940 bags a year, which is 42 lb of roasted coffee a week, every week. A stall selling 60 lb a week all year would be over it, and would need a licensed kitchen whatever else was true. Baked goods and jam count toward the same cottage food total; by MSU Extension’s reading, honey and maple syrup each have a separate cap.

Where the money is, and is not

  • Green coffee is 80 to 90% of a bag’s cost. Buying by the 65 lb box takes about two dollars off every bag.
  • The cup itself is a rounding error. A compostable, stamped cup costs eight cents more than the cheapest white one.
  • The licence structure is not a rounding error. It can be $15 a market or $104.
  • Sampling is cheap at $16 a market, and nothing sells a bag like a taste.
  • Time is the cost that is not on any of these tables. Roasting, bagging, labelling, baking, loading, a five-hour market and unloading is two long days for one market. A Behmor by its manual adds more: the 18 bags above would take it sixteen batches and about 25 hours.

The road to the shop

The one Michigan example found, 517 Coffee Company in Lansing, began roasting at home and selling at farmers markets in 2014 and opened its first shop in 2021: seven years. Honey, jam, baked goods and coffee on one table should shorten that, since each sale is larger. What the market years are for, besides the savings:

The counter of a café with customers at a pastry case; signs overhead read roaster
A café that roasts on the premises, with a small hot-air roaster in the shop.
  1. A line-up of coffees that sells, proved week by week.
  2. A list of customers who will follow the stall to a shop.
  3. A record of sales that a landlord or a lender will read.
  4. Answers, in writing, from MDARD and the health department on every open question on the rules page.

The shop changes the arithmetic in three ways already visible here: a licensed kitchen removes the cottage food cap and the limits on ice, cold brew and syrup; it allows wholesale, at about 69% of the retail price by one Michigan roaster’s published list; and it lets the shop’s own staff serve at a market under the shop’s licence.

Sources

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