The Tea Room Business Plan – Basic Concepts

Business planning and the start of a new tea room venture is more of a process than an event. A new business is a separate entity that is very much like a garden: planning is required to start, certain mandatory steps are required and constant management and pruning must occur to produce a successful venture.

This plan addresses the basic steps as well as business structure and management steps that are required for success.

The Basic Concept

The basic concept of the business plan is simple:

o An Entrepreneur senses a market opportunity

o To capitalize on this opportunity the entrepreneur establishes a business entity

o The entrepreneur has a vision of the company for the future that foresees a healthy, growing, profitable company

o In order to reach that future vision, a roadmap is required that can be reviewed to determine progress to achieve the ultimate goal

Just like any important trip, a roadmap in the form of a business plan will improve chances of arriving on time and safely. An additional benefit of the business plan is the control function evidenced by the ability to measure progress against the plan.

The critical feature of any plan is not its complexity but its use. Since this document is focused on building a tea room business, a basic document should be prepared and used as the basic guide to the growth of the business, The business plan should be the business owner’s bible and should be read and consulted frequently to determine the mid course adjustments that are always required in the life span of the business.

TEA ROOM TIP: Believe that the business plan is your guide to success. The completion of the plan is only the start of the business. The plan will act as the guide to success and will constantly change as conditions require. The plan will never be complete but will always be useful.

Simplicity

Business planning is a universal discipline and there are as many plans as there are companies. The complexity of the business plan can vary from simple .to overly complex to Byzantine. A classic case study is the story of Compaq Computer, a multi billion dollar computer manufacturer that was launched based on a business plan written on the back of a cocktail napkin.

Many companies however focus on the tress of the planning process and overlook the forest of building a business. Often, the business plan becomes one more document for the corporate bookshelf or the drawer of the planning executive and is not used as it should.

Most effective business planners add only that detail that is informative and productive but does not distract the reader from the core ideas of the plan. Since each plan is a living document that represents a guideline to grow a business, changes can be made as often as required by business conditions. Excessive detail may become irrelevant in the light of new conditions.

TEA ROOM TIP: Start with a bare bones plan that can be expanded or enhanced as conditions warrant. Don’t attempt to create an overly detailed plan that may become obsolete as conditions change.

The Tea Room Business Plan – The Internet, Ecommerce and Affiliate Programs

What is E-Commerce?

E-commerce is the sale of products and services over the Internet. It is the fastest growing segment of our economy. It allows even the smallest business to reach a global audience with its product or message with minimal cost.

o Currently, there are more than 250 million people using the Internet internationally.

o Sixty-nine percent of the online population has made at least one purchase in the last 90 days. By 2007, two-thirds of U.S. households will be online shopping.

o According to the January 2005 Trend/Forecasting report of The Dilenschneider Group, in the U.S. alone, the 2004 holiday season online shopping jumped by more than 25% from 2003. And in 2005 it jumped another 25%.

o The average income of Internet households is over $66,790, making the Internet user a very attractive customer for you to target.

Is an E-Commerce website right for your tea room business?

Much depends on the nature of your tea room business model.

A website doesn’t need to exist solely to sell products online. It could supplement the revenue of your already established tea room. If you sell a unique product, such as loose leaf tea, you might find success reaching others around the country that do not have access to these products in their own towns.

The Internet provides a global audience of potential customers and it never closes. Information about your tea room can be easily added to the website and updated as required. Your customers will have access to information about your business 24 hours a day. You can add pictures and video. In addition, your customer will even be able to buy from you 24 hours a day and learn your best hours of operation of your tea room.

Tea Room Tip:

Promote your website address everywhere including your stationery, sales forms, brochures, leave behinds and advertisements.

The internet has opened the world to small companies and tea rooms are no exception. Owners of tea rooms should consider the revenue opportunities presented by having a web site on the internet that promotes the tea room business and provides product sales opportunities with only a small investment.

With the introduction of new and cost effective tools to develop web sites, the tea room can be advertised and promoted to a larger audience. The web site helps put forth the mission statement and message of the tea room visually and in an effective manner. One company that develops websites for the small business is Go Daddy.com at http://www.godaddy.com/gdshop/default.asp

E-Commerce and Affiliate Programs

Opportunities for sale of loose leaf tea are particularly attractive when combined with effective web based e-commerce through affiliate programs. For the tea room this can be a source of additional revenue with a very small investment. All that is required is a website, links to the tea supplier and an internet promotion plan.

Generally, loose leaf tea e-commerce sites list tea and tea ware offerings as well as information about tea and other value added benefits. Some have retail and wholesale features (ideal for tea rooms) as well as value added features.

Chose a recognized quality and feature rich e-commerce site that specializes in selling and supporting loose leaf tea products to tea rooms. Deal with a site that allows the direct purchase of tea in tins, bulk tea, teaware, tea club memberships, gift cards and other tea related items. The site should also encourage feedback on products so the highest quality can be maintained.

Affiliate programs afford a small entrepreneur the ability to leverage the website of the tea manufacturer through their own affiliate site. Through this technique the affiliate can minimize their investment and maximize their return on product sales. An affiliate relationship is established by agreement between the affiliate and the manufacturer whereby each party benefits.

There is more to an affiliate relationship than a simple agreement however. The affiliate must be provided with marketing support, account feedback and prompt payment of earned commissions. Most good affiliate programs share a number of characteristics:

o Real-time reporting statistics

o Real-time email alerts upon each sale

o Payment on a consistent monthly basis for initial and repeat orders

o High price-point products that are easy to sell and allow for substantial affiliate commissions

o A comprehensive package of rich content articles and banner advertising that the affiliate can reprint and use for marketing

Of special note for marketing support is the availability of banner ads that are high quality and effective. These are particularly useful affiliate marketing tools.

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