This is the beginning of a series of posts aimed at addressing questions from budding and established tea entrepreneurs. If you have a question for Zhena, please send it to AskZhena@tching.com. We look forward to hearing from you!
Dear Zhena,
How important is a business plan in the tea industry and do you think I really need one?
Regards,
Tea Entrepreneur
Dear Tea Entrepreneur,
Having a plan is as powerful as imbibing a cup of tea. You must brew your business much as you would steep a cup of precious Pu-Erh or Yin Zhen. The loving care the workers take with the leaves is the loving care you must take with your roadmap to success – that is, your detailed and sincerest attempt at a full-bodied business plan.
When I wrote my business plan, I simply took a template off the score.org website, wrote every little detail of every single way to sell tea that I would undertake, and followed it to create Zhena’s Gypsy Tea. It was a calling for me, but as much as I loved it, I knew that I had to write the entire plan in order to make it work. You see, that first day of having my tea cart was not the total plan, but I knew that it was a step in the right direction in line with my plan. When I think of the power of a business plan, I am reminded of the following story:
“There were three people chiseling away at stones. A passerby asked the first chiseler what he was working at. The worker said, ‘I am making a brick.’ The passerby asked the second worker and her reply was, ‘I am making a wall,’ while the third replied, ‘I am building a cathedral.'”
You see, you must not be simply selling a cup of tea to make ends meet; you must have a bigger plan that puts into context what you are doing on a larger scale. That bigger plan motivates both you and your customer. For me, it was never “I am selling tea.” Instead, it was, “I am ending poverty for tea workers.” And that started out with a plan – and that plan turned into a multimillion-dollar business whose end is nowhere in sight. I wrote a plan to end poverty through fair trade for at least 50,000 workers, and at this point, it will be ten more years before I can rest, but at least I know that because I planned it. Without a plan, you are a ship without a navigation tool.
I wish I would have known then what I know now. I spent too much time, money, and heartache on what I didn’t know, even though I had a thorough plan. So here’s my core advice: write a detailed plan that focuses mainly on your product and your core customer – her attributes, her loves, her desires, her hopes, her income, and her love of new experiences, oh, and especially what she likes to shop for. Detail out how you will fill that love with your time and effort, which is your product. Then, and maybe only then, will you have a chance at succeeding. There is money involved at times – lots of it – and a ton of mentoring that you must be willing to receive in order to rock the tea world. But, if you plan well, and your plan is worked and well written – along with flexible and REAL, meaning you can actually make those lofty numbers – you have a great chance of making it.
Remember, tea is not grown in the U.S. (well, there are a few exceptions) and you have access to the same tea blenders and importers as every other tea company, so what will make you different? That is the reason and purpose and design of a good plan. If you can answer those questions, you’re in business. You cannot succeed without a plan, mark my word.
The business of tea is not easy, I won’t lie. But it’s worth it if you are willing to live for it. I joke that I am the overnight success that took 12 years and 12 hours a day. I definitely am an outlier on that front, but have I made my goal yet? Not even close. Until poverty is eradicated, I am still following that plan I built 12.5 years ago, with the mission to “end poverty for tea workers.” A mission, a plan, and a strong sense of taste are all items that should be in your plan – if you have one and not the others, develop them.
A plan is as critical as the leaf itself. Seems like gravitas? Try finding your way without a plan and let me know how that goes. A great idea is only as good as the plan to execute it.
To your health, happiness, prosperity, and wealth!
Zhena
Mistress of Tea
Your wisdom is tremendously valuable. Thanks for sharing it with the T Ching community. The only thing I would add is the need for persistence, which of course you’ve implied. In my experience, the majority of people end up giving up when they meet with initial failure or resistance. I remember a mentor of mine, Mark Victor Hansen, who is the co-author of the Chicken Soup for The Soul series. He tells the story of being turned down by 26 publishers when he pitched his first book. The 27th saw the vision and the result made history. The Chicken Soup for the Soul series went on to be the most successful series ever published and yet 26 top publishers rejected it. 26 leaders in their field were wrong. Had they not persisted, the series would have died with their dreams.
I feel blessed that you’ve chosen to mentor us – the T Ching community.
Michelle, You are right, persistence is the most critical aspect, I didn’t have a choice in the matter of being persistent or not since my son’s operations were pending and the bills were climbing. I remember the collections agencies calling me all hours of the day and night for his medical bills and me just thinking, “If I could only sell more tea, I could get these guys off my back!”
Both of you are ladies I so respect in the specialty tea world..what a model to look up to as we grow our own businesses! I would add that picking the right investors and partners is absolutely critical!! We had to ‘start over’ from scratch with funds trapped in a company we have no control over and I would highly not recommend it!! Take your time, get to know, as best you can, who you are teaming up with. Even though we did our homework…stuff happens. And, what Michelle said. If you can keep your dream alive through pain and incredibly long hours and economy slumps, and all the rest…then you know it’s a passion! Congratulations, Zhena, on your overnight success! :)
Diane,
YOU ARE SO RIGHT! This is a column in itself- or several. I have a lot of investors, starting with my little brothers and parents to wealthy individuals and then to venture capital, I raised millions in financing and it was never easy. One thing is this: when the venture capitalist said, “What’s your 100-year plan” I knew he was right for me. We do disagree on a lot, (I am a total democrat and he is a staunch Republican- lots of healthy debate there!) but what we agree on is this: We will make our customers’ days more delicious and healthy, we will end poverty for tea workers and eventually, we will make enough profits to pay dividends to our shareholders. If you can agree from the beginning on your standards, then you can have an easier time in the relationship. I had one investor that wanted “OUT” by year 3, and he couldn’t care less about fair trade, so I bought him out and then the company got even more clear on our standards for those of us left. You have to have the “expectation” conversation first- like, “Do you want your money back in 5 years?” or “What rate of return are you seeking?” If the answer doesn’t match yours, then seek different investors, or re-design your plan to use a bank and debt financing instead.
Zhena, it makes us all feel better when we know others have made the same mistakes we have. In our case, it was a total blindside, but sure made us more cautious and wiser, so everything works for good. I’m really looking forward to your column on investors, because we have turned down about four ‘great’ offers since we opened California Tea & Coffee Brewery and have another opportunity we are looking at now. I’d love to hear your wisdom on that subject.
Hi Zhena, what made you choose the score.org website? Did you like it and what templates did you use–do you remember? :) Thanks! Liked your article!
Alexandra,
Score.org was really the only website back then that had business plan templates. Remember, I am ancient! I started this 12+ years ago when the internet was still using Altavista as its browser (GOOGLE DIDN’T EXIST!) It’s amazing now what is out there, I probably would do more research if you are writing a plan, but you can easily and for free, download their new business and established business templates as “guides” to get you started- but you don’t have to be totally exacting with their templates- you can tweak them to fit your style. They are good tho’ to show you what you need to think through, as naturally if you don’t have an MBA, it’s hard to know everything. Score.org also has free mentors, mine was the former CEO of Balance Bar who had taken it public, and we met monthly- I credit him for making me ambitious, I wanted to save the world for the tea workers and he reminded me that to do that I had to have a company that actually made money :-)
Hi Zhena, thanks for the advice. I might be more keen on looking for a business mentor than copying the templates. You might be interested in my T Ching article coming out this month!