Running a great business on a shoestring is no easy task. Well-known chefs usually have an investor or partner(s) to establish their restaurant brands. It does really take money to make money.If you are leaning toward a store rather than a cafe, you will need displays, shelving, focus lights, a good amount of inventory stock and, since many concepts are a combination of both, you will need to decide where your emphasis will be. I can’t tell you how many times we were in the process of making a $50 loose tea sale when someone just wanted a tea to go for $2.50 and was in a big hurry to get it and get going. Staff decisions are important, not only as to how many per shift, but also the personality type and amount of training in tea and customer service you plan to provide. What about pay? Will it be by the hour with tips, and/or with a bonus or profit-sharing program? Will you manage the store or hire an experienced manager? Are you physically up to 60-80 hour work weeks? This is not necessarily age-dependent. I know of two women in the eighty-year range who work their restaurants hands-on. I’ve worked with twenty-somethings that couldn’t keep up with me or them.
So, back to the dream: who will your vendors be and how will you find them? The easy answer is trade shows but I can tell you that my best vendors were not found through trade shows but through word of mouth, lots of research, and calling and emailing and sampling and searching and digging. How much do you know about tea itself? How much do you know about major growing regions, how tea is processed, differences between regions, terroir, flushes, Fair Trade, organic? Some of your customers will know a whole lot about tea, but most will know almost nothing and will expect you to educate them.
Inventory control is a huge factor in running a business. Even with ‘forever’ shelf life, general merchandise is expensive (to you) if it just sits on the shelves looking pretty. If you offer food, how it complements the tea selections is important. In cafe concepts, it often happens that the person who went into business to sell tea ends up running a sandwich shop when the concept is not clear or focused.
All that and the tremendous time and cost aside, here we go again. This will be my third launch into the deep, and this time I have much more helpful information to move forward with. Like a veteran with war scars and a bit of trepidation, I sit here looking at the new dream on paper, and the entrepreneurial adrenalin still starts pumping. It’s like you can’t help yourself. You get pregnant again, even with the memories of the pain of childbirth, exhaustion of early morning feedings, and innumerable challenges as the child matures.
Are you already a retail tea business owner? I’d love to hear your input and experiences!
This is the second in a two-part series. To read part one, click here.
It feels a bit overwhelming just reading all that must be considered. Very interesting about Teavan and their $30 per estimate transaction. I’m curious why you think that is the case as it is so significantly more than most. Might it be the mall mind set? Typically one goes into a mall with an expectation of buying “stuff” so it’s no big surprise to buy some stuff there. When I go into a tea shop, I typically buy some tea to drink and secondarily to purchase some whole leaf for home. Steve Smith resisted the allure of selling food at his cafe and focused all of his attention on tea. (You could get some yummy thin little biscuits) I always love to bring a new tea drinking friend in there for their tea flights. That was such a great idea. Most of the microbreweries in Portland that sell their artisan beers offer flights as do wine bars of course but I had never heard of it with tea. It provides such a unique educational experience for the newbie and a chance to experience a boarder selection of their offerings for those interested in taking some home.
I will eagerly await updates over the up coming months…….hopefully the partner who can fund, the quintessential location and the experiences that are sure to await you.
Thanks for sharing the good, the bad and the ugly Diane. How I wish I had some deep pockets cause my money would be on YOU.
Thanks, Michelle…that really does mean a lot..wow, very humbling. I’d love to speak with Dharlene by phone and hear some of her stories about retailing. Yesterday we went up the Southern California coast for hours and hours on end, from one beach city to another, as well as ‘downtown’ to look and get the feel of locations and made notes and asked lots of questions. We stopped at Philz Coffee in Santa Monica and saw how their system works. It’s quite amazing that they have built a 20+ store chain, now VC funded by Silicon Valley big money investors, and do only pour-overs and put in the condiments for you. Who would have thought customers would accept ‘losing control’ of that cream and sugar station? How smart though, in a number of ways, that Philz does it that way. (The coffee was incredible..the iced Mint Mojito was delicious.) Interesting what you said about Smith’s Tea flights, as that is part of what our ‘sampling’ will involve, and our technology makes so many things possible that just can’t be done the same way without it. I would like to hear more from Dharlene about her trepidation in retail, as I believe she is currently working with someone who has the money needed to scale their concept and has very ambitious growth plans. About Teavana, we were talking this morning about the fact that, when they started in the mid/late 1990’s, the only other concept that we have heard of that was trying to grow into a chain was Tealuxe on the East Coast, and they still have just a few stores. I remember seeing franchise opportunity for them back at the Take Me To Tea (now World Tea Expo) in 2004. Teavana had a few things going that helped: No competition (which could also have been a negative but wasn’t for them), great locations (they were helped by their first commercial landlord who liked the concept and helped scale them into other malls his company owned across the country), visually appealing, professionally done product mix/store interiors, and real (how shall I say this) ‘enthusiastic’ selling policies/sales training. No food and very little beverage sales %-wise also let them concentrate on selling the high margin loose-leaf and high ring accessories rather than wiping up messes and washing dishes.
I read your article and I am sorry for all your miscues and troubles. I think the issue is in training – so many people open businesses because they either like the product or the idea of the business without ever having been in or run a similar business. If you are planning on opening a retail store or a restaurant I would highly suggest having a strong background in that area – not accounting, not marketing, – but in actually working and running that kind of business. I find so many business owners “surprised” at the difficulties which really are no different than in any other business – but are more problematic as you are learning while earning which is never a good combination. Opening a tea related business is not a lifestyle decision.
Hi David, and thanks for the input. Personally, our biggest problem was in finding that someone we knew for 15 years was not the person we knew. If you know what I mean. You also know how important proper funding is. Business partnerships are like marriages. You are also able to choose amazing locations and you know how important that is. I’d like to hear more about how you got into the tea business.
Diane
I was not referring to your specific instance – of course entering into a business relationship is fraught with difficulties – but again experience in handling partnerships through prior business relationships may have helped – knowing someone socially is not the same as getting into bed with them economically. I am happy to chat off line about my business – 14 years and going strong – we are just about to expand nationally – our 2nd store in Downtown Los Angeles – another in Newport Beach and New York City in early 2016.
Congratulations! I’m sure you could help a lot of people by telling more about your story here on T Ching. Although not in a partnership together prior, my meeting and association with my ex-partner had been through business. There are things that come up in business that are not foreseen, however, regardless of the past experience. They will humble and teach you if you look at them as lessons, which is what this has been for me. I’m a huge advocate of reading the experiences of others, and know that the tough experiences of life are what built their character and ultimate successes. I’m looking forward to following your growth and hope you will continue to share it here. We can chat offline via our DM on Twitter…I’ll be looking forward to that and to learning from you.
Hello again, Diane. I have sent you a Twitter message with my phone number to talk on Friday. I’d love that. Yes, I had to go, “whew” when I read your newest article. There is a lot to this! A whole lot! With passion and desire and the willingness to ask for help and admit mistakes — one can succeed! 10 a.m. works for me on Friday.