Do you want to start a coffee import business? If YES, here’s a complete guide to starting a coffee import business with NO money and no experience.
Starting any business is challenging, but one business that you can start with little challenges is a coffee import business. A coffee import business is a business that involves importing a wide variety of coffee, either raw coffee beans or finely packaged coffee from countries where they are cultivated.
If you are considering starting a coffee import business in the United States, the good news is that you can’t get it wrong. This is because coffee is consumed by a large percentage of the American population and there are several outlets that will be willing to purchase coffee from you if you have a very good quality.
It is important to state that starting a coffee import business comes with its own challenges, but that does not rule out the fact that it is indeed a profitable business venture. An aspiring entrepreneur can either choose to start a coffee import business on a small scale by supplying a handful of outlets or covering several cities depending on their financial status.
Before launching this type of business, it will pay you to carry out your due diligence as it relates to market research, economic and cost analysis and of course feasibility studies. If you get things right before launching your coffee import business, it will not take you long before you break even and start smiling to the bank.
So, if you have decided to start your own coffee import business, then you should ensure that you carry out thorough feasibility studies and also market survey. This will enable you properly create your supplier and distribution network and then hit the ground running.
Steps to Starting a Coffee Import Business
1. Understand the Industry
Coffee import business falls under the import and export industry and coffee is indeed a popular beverage and an important commodity that is consumed in all countries of the world. As a matter of fact, several millions of peasant farmers in developing countries make their living growing coffee and selling to importers from developed countries.
Statistics shows that over 2.25 billion cups of coffee are consumed in the world every day and over 90 percent of coffee production takes place in developing countries – mostly South America, while consumption happens mainly in developed countries.
The two most economically important varieties of coffee are the Arabica and the Robusta; 75 to 80 percent of the coffee produced worldwide is Arabica and 20 percent is Robusta. Arabica beans consist of 0.8–1.4 percent caffeine and Robusta beans consist of 1.7–4 percent caffeine.
Coffee beans are a major cash crop and an important export product, accounting for over 50 percent of some developing nations’ foreign exchange earnings.
The industry generates several billion dollars annually from several registered coffee importers scattered all around the United States of America. This line of business is responsible for the employment loads of people directly and indirectly all around the world.
Statistics show that in the year 2000, coffee consumption in the United States was 22.1 gallons (100.468 liters) per day and more than 150 million Americans (18 and older) drink coffee on a daily basis, with 65 percent of coffee drinkers consuming their hot beverage in the morning.
As a matter of fact, in 2008, it was the number-one hot beverage of choice among convenience store customers, generating about 78 percent of sales within the hot dispensed beverages category.
The coffee import/export line of business is indeed a vast industry and there are loads of players in the industry hence the competitive nature of the business. The fact that the industry in most cities is competitive does not in any way stop an aspiring entrepreneur who has keen interest in the industry from being part of it.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who consume coffee cut across all gender, hence the demographic composition of the coffee import company is all encompassing.
The truth is that when it comes to the coffee import business, there is indeed a wide range of available customers. In essence, your target market can’t be restricted to just a group of people or business, but to all households, offices and businesses within your location.
So, if you are thinking of starting a coffee import company, then you should make your target demographics all encompassing. It should include retail stores, drive through coffee kiosks, and all outlets that retail coffee in various forms in and around the neighborhood where your company is located.
3. Decide What Niche to Concentrate On
The niche areas in this line of business are importation of raw coffee beans and importation of neatly refined and packaged coffee.
The Level of Competition in the Industry
The truth is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your products or business properly, you will always make headway in the industry. Just ensure that you import varieties of coffee at the right price and you know how to attract and reach out to your target market.
There is several coffee import companies scattered all around the United States. So, if you choose to start your own coffee import company in the United States, you will definitely meet stiff competitions. Besides, there are larger coffee import companies that determine the trends in the industry and you should be ready to compete with them for customers.
4. Know the Major Competitors in the Industry
In every industry, there are always brands that perform better or are better regarded by the customers and general public than the others.
Some of these brands are those that have been in the industry for a long time, while others are best known for how they conduct their businesses and the results they have achieved over the years. These are some of the leading coffee import companies in the United States of America and in the globe;
- Atlas Coffee Importers LLC
- Cafe Imports Warehouse
- Sustainable Harvest Coffee Importers
- Zephyr Coffee Importers
- Inter American Coffee Inc
- RGC Coffee
- Cafe Imports Office
- Royal Coffee Inc
- Walker Coffee Trading LP
- JC Coffee Importers
- Elephant Coffee Importers
- Crop to Cup Coffee Importers
- Atlantic Specialty Coffee
- Olam Specialty Coffee
Economic Analysis
Coffee import/export business is not a green business as you will come across several coffee importing companies all across major cities in the United States of America.
So, if you are mapping out your economic and cost analysis, you should carry out thorough market survey and costing of the required amount needed to purchase your first supply, shipping and also the cost to successfully run the business.
So, if you are considering starting a coffee import business, then your concern should not be limited to the cost of purchasing delivery vans, but also on branding and on how to build a robust clientele base. The truth is that if you are able to build a robust clientele base, you are sure going to maximize profits in the business.
5. Decide Whether to Buy a Franchise or Start from Scratch
If you are looking towards starting a coffee import company, you would have to start from the very scratch because the nature of the business does not permit franchising. It is a business that as to do with buying and selling and with little technicalities that may not warrant selling franchise.
6. Know the Possible Threats and Challenges You Will Face
When it comes to starting a coffee import business or any import/export business, you just have to rely on trade ties between your country and the country you intend importing your coffee from. In essence, if there are diplomatic challenges between the countries you intend importing your coffee from and the United States, it will definitely affect your business.
It is in fact one of the major threats and challenges you will face in this line of business. We are not ruling out the fact that potential coffee importers within your location can also pose as a threat to the growth of your coffee import business.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
When considering starting a coffee import company, the legal entity you choose will go a long way to determine how big the business can grow; some coffee import company design their business for regional market, while others for national market.
You are free to choose a general partnership or limited liability company for your import company. Ordinarily, general partnership should have been the ideal business structure for a small scale coffee import company especially if you are just starting out with a moderate startup capital.
But if your intention is to grow the business and distribute coffees all across the United States of America and other countries of the world, then choosing general partnership might not be too ideal for you. Limited Liability Company, LLC will cut it for you.
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for general partnerships. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholders meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your coffee import company; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectation and of course taxes.
If you take your time to critically study the various legal entities to use for your coffee import company, you will agree that limited liability company; an LLC is most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.
8. Choose a Catchy Business Name from the ideas Below
When it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. If you are considering starting your own coffee import company, here are some catchy names that you can choose from;
- Davenport Coffee Importer, LLC
- Charles Taxon Coffee Importer Company, Inc.
- Sleek Jaden Coffee Suppliers, LLC
- Brown Cup® Coffee Importing Company, Inc.
- Tasty Coffee® Importer Company
- Nava’s Carlos & Sons Coffee Importer, Inc.
- Leo Gracias® Coffee Importer, Inc.
- GDP Coffee Importers Company, Inc.
- Ally Coffee Trading Company, LLC
- Coffee Brown Importing Company, Inc.
9. Discuss With an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your coffee importing company.
Here are some of the basic insurance covers that you should consider purchasing if you want to start your own coffee import company in the United States of America;
- Export credit risk insurance
- Marine Cargo insurance
- General insurance
- Health insurance
- Liability insurance
- Deposit insurance
- Workers compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own coffee import company, usually you may not have any need to file for intellectual property protection because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
But if you just want to protect your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO.
11. Get the Necessary Professional Certification
When it comes to a coffee import business, you do not need to have any formal training or special certification before you can be allowed to start the business. All you need is informal training that will expose you to how to identify good coffee, sort out international trade and of course the import and export process.
On the other hand, if you come across any form of certification that can aid you to conduct your coffee import business pretty well, then by all means try and pursue such certification.
12. Get the Necessary Legal Documents You Need to Operate
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentations.
If you do, it won’t be too long before the long hand of the law catches up with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run your own coffee import company in the United States of America;
- Certificate of Incorporation
- Business License (Import License)
- Tax Payer’s ID/Tax Identification Number
- Business Plan
- Foods and drinks handler certificate
- Employee Handbook
- Operating Agreement for LLCs
- Insurance Policy
- Online Terms of Use (if you also operate online)
- Online Privacy Policy Document (for online payment portal)
- Company Bylaws
- Memorandum of Understanding (MoU)
13. Raise the Needed Startup Capital
Starting a coffee import company can be can be expensive even if you choose to start on a small scale. This is so because of the amount required to purchase, package and ship coffee from other countries of the world. When it comes to financing a business, one of the major factors that you should consider is to write a good business plan.
If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business. Here are some of the options you can explore when sourcing for startup capital for your coffee import company;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Selling shares to interested investors
- Applying for loan from your bank
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends
14. Choose a Suitable Location for your Business
When it comes to choosing a location for your coffee import company, the rule of thumb is that you should be guided by the demand for coffee in the location where you intend pitching your business tent.
It cannot be overemphasized that the location you chose to start your coffee import company is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of businesses that retail coffee.
If you make the mistake of starting your coffee import company in an area where you can hardly find retailers of coffee, you will struggle to grow the business. It is important to note that a business facility in good location does not come cheap hence you should be able to allocate enough fund for leasing/renting in your budget.
If you are new to the dynamics of choosing a location for your coffee import company, then you should feel free to talk to a business consultant or a realtor who has a full grasp of the city and perhaps country you intend starting your coffee import company.
Most importantly, before choosing a location for your coffee import company, ensure that you first conduct a thorough feasibility studies and market survey. The possibility of you coming across similar businesses that just closed shop in the location you want to open yours can’t be ruled out.
15. Hire Employees for your Technical and Manpower Needs
On the average, there a no special technology or equipment needed to run this type of business except for relevant tracking software applications. But you will definitely need computers, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.
You would need a delivery van for this kind of business and you would have to procure one. In some cases, depending on the agreement you reached with retailers, they might come to your warehouse to pick up their orders.
As regards leasing or outright purchase of a warehouse facility, the choice is dependent on your financial standing, but the truth is that to be on the safe side, it is advisable to start off with a short – term rent/lease while test running the business in the location.
If things work out as planned, then you go on a long – term lease or outright purchase of the property but if not, then move on and source for other ideal location/facility for such business.
When it comes to hiring employees for a standard coffee import company, you should make plans to hire a competent Chief Executive Officer (you can occupy this role), Admin and Human Resources Manager, Warehouse & Logistic Manager, Sales and Marketing Officer, Delivery Vans and Bike Drivers, Accounting Clerk, and Cleaners.
On the average, you will need a minimum of 5 to 10 key staff members to run a medium – scale but standard coffee import company.
The Service Delivery Process of the Business
Just like any other import or export business, you just have to first check up with regulating authorities in your country to be sure that what you intend importing is accepted in your country, and then handle the necessary documentations.
Once that is sorted out, the importer either visits the country he intends importing the coffee from or they agree via correspondence. Once the agreement is done (the amount of coffee to be imported and the overall cost) the money is paid and the coffee is packaged and shipped to the stated destination.
After clearing the coffee from the port of entry, the coffee is transported to the warehouse and then sold to distributors and retailers.
16. Write a Marketing Plan Packed With ideas & Strategies
Normally, running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a coffee import company, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands determining the market direction for the import and export industry.
As a matter of fact, your marketing strategy will center on reliability, swiftness, safety, pricing, secured payment platform, and above all excellent customer service. The truth is that if you are able to put the above stated in place, you won’t struggle to retain your old customers and at the same time win over new customers.
Businesses these days are aware of the power of the internet and which is why they will do all they can to maximize the internet to market their services.
In other words, a larger percentage of your marketing effort will be directed at internet users and your website will become your number one marketing tool. These are some of the marketing ideas and strategies that you can adopt for your coffee import company;
- Introduce your coffee import company by sending introductory letters alongside your brochure to businesses that deal in coffee within and outside the city where your business is domicile
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
- Create a basic website for your business so as to give your business an online presence
- Directly market your coffee as a wholesaler
- Join local importer and exporter company associations for industry trends and tips
- Provide discount days for your customers
- Advertise our business in community based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of word of mouth marketing (referrals)
17. Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you retail your coffee bottom prices is to ensure that you buy your coffees directly from farmers especially in countries such Brazil and Ethiopia where you are likely get it cheaper. Aside from shipping and logistics, you are sure going to save a lot if you deal directly with farmers as against dealing with third-party exporters.
Another strategy that will help you retail your coffee at the right price is to ensure that you cut operational cost to the barest minimum and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products.
18. Develop Iron-clad Competitive Strategies to Help You Win
The availability of varieties of coffee under your supply, your business process and of course your pricing model are part of what you need to stay competitive in the industry.
Another possible competitive strategy for winning your competitors in this particular industry is to build a robust distribution network all across the United States. Over and above, ensure that your organization is well positioned, key members of your team are highly qualified and your coffee can favorably compete with the best in the industry.
19. Brainstorm Possible Ways to Retain Clients & Customers
When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps attract new customers is to produce results and satisfy your customers always.
If your customers are satisfied with your products and services delivery, they can hardly source for alternative service provider or products. If you can continue to import quality coffee and your customer service delivery is top notch, then you won’t struggle to maintain loyal customers.
Ensure that you offer your customers incentives if you want to retain them and of course continue to generate repeated sales from them and also attract new customers.
Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers, and building a loyal clientele base, you should purchase a customized CRM software.
With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized emails and above all, you can easily receive compliant and feedback from them).
20. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you are in business and you are not deliberate about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be. One of the secret of larger corporations is that they are willing to spend fortunes to boost their brand and communicate their corporate identity the way they want people to see them.
If your intention of starting a coffee import company is to grow the business beyond the city where you are going to be distributing your coffee to become a national and international brand by going into franchising, then you must be ready to spend money on promotion and advertisement of your brand.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand awareness and create a corporate identity for your coffee import company;
- Place adverts on both print (newspapers and magazines) and electronic media platforms
- Sponsor relevant community based events
- Leverage on the internet and social media platforms like Instagram, Facebook, Twitter, YouTube, Google + et al to promote your coffees
- Install your billboards in strategic locations all around your city or state
- Distribute your fliers and handbills in target areas
- List your coffee import company in local directories/yellow pages
- Advertise your coffee import company in your official website and employ strategies that will help you pull traffic to the site.
- Position your Flexi Banners at strategic positions in the location where your coffee import company is located
- Ensure that all your staff members wear your branded shirts and all your vehicles, vans and bikes are well branded with your company logo
21. Create a Suppliers/Distribution Network
In order to successfully run a coffee import company, you must establish good business relationship with coffee farmers and coffee producers in countries where you can get a better deal.
It is one thing to import coffee, and it is another thing to find buyers for your coffee and that is why you need to network with coffee wholesale distributors and retailing outlets within and outside the city where your business is domicile.
Just ensure that you keep expanding your distribution network. You need to work with the report you generated from your market survey so that you will be properly guided on the coffee retailing outlets you need to talk to in order to become their delivery contractor.