INVESTMENT FEASIBILITY ANALYSIS AND ITS IMPACT ON THE PROFITABILITY OF COFFEE SMES (CASE STUDY: INVESTMENT IN ROASTING EQUIPMENT AND SUSTAINABLE PACKAGING)

Abstract

This community engagement initiative focuses on enhancing the financial literacy of coffee Small and Medium Enterprises (SMEs) by introducing investment feasibility analysis. The core problem addressed is the low profitability of SMEs that sell unprocessed (green) beans and their difficulty in accessing premium markets. This program analyzes the feasibility of two strategic investments: acquiring in-house roasting equipment and adopting sustainable packaging. The methodology involved participatory workshops with 20 coffee SMEs in the West Java region, where participants were trained to use financial metrics such as Payback Period (PP), Net Present Value (NPV), and Internal Rate of Return (IRR) to evaluate these investments. The results of the financial modeling show that the combined investment is highly feasible, with a calculated Payback Period of 2.5 years and an IRR of 28%, significantly exceeding the typical cost of capital. SMEs that adopted the strategy reported an average profitability increase of 37%. This program concludes that strategic investment in value-addition technology and sustainable branding is a viable and critical pathway for enhancing the competitiveness and profitability of coffee SMEs.