I look for struggling cafes and bakeries with the aim of turning them around under the Tina’s Traditional brand. From this experience, here are some tips for creating a serious tea business rather than a hobby.
1. Rent, don’t own, the building. Kitting out a building is expensive. I only consider properties that already have a kitchen. This saves considerable build-out costs. If I owned the building, I would also have to put money down on top of paying the mortgage and maintain the property – a business I don’t want to be in. I’ve also met prospective owners who want to run a tearoom from their home. I wouldn’t recommend this. It’s much better to have separation and time off away from the business when you can.
2. Don’t spend money on a property if you don’t own the building. I limit how to spend money on a location I don’t own; and I negotiate with the landlord for the things he will do. For our latest property, the landlord repainted the outside, removed trash and broken equipment. I then used his contractors to do the work I needed, such as painting inside and doing electrical work. I haven’t replaced the flooring because I see that as a fixture I can’t take with me.
3. Look at the rent-revenue ratio. Is it higher than I would like to pay? I look for properties where the rent-to-revenue ratios are at an acceptable level. I have noticed landlords ask for standard rent, even where the foot traffic is lower. I expect cheaper rent if I’m not on the main street, for example.
4. Manage the right retail merchandise. Most tearooms carry some kind of general merchandise. But be selective and don’t give up tables/seats for retail space. You can always fill seats and inventory ties up cash. Stock impulse buys. I keep to a strict under $20 price point. Items under $10 are even better. And I always make sure I can sell at 100 percent mark-up. I have a few things on consignment, which also helps cash flow. Developing a model, product mix, pricing and promotion also help with sales.
5. Invest in on-premise baking. If I’m going to invest in a space that needs a health department permit, I make sure I have baking capability so everything can be made fresh, from scratch on the premises. This means my food cost is very low and the quality is very high. It also means I can make authentic British products, a keystone to my Tina’s Traditional brand, and I know exactly what goes into each item. There are two drawbacks of this strategy: You need trained staff and staff costs can be higher as a result.
6. Find the right people. This is one of the biggest challenges in a low-unemployment environment. Holding out for the right people takes time; and you have to have the money behind you if you delay an opening to wait. I would rather open and get it as right as I can than open with the wrong people and suffer later.
7. Build a business beyond yourself. Most business I have looked at over the years have owners who work in the business—they either love to talk to guests or bake and cook. Unfortunately, this isn’t sustainable and many owners face burnout or need to move on because they aren’t hitting revenues. The best thing I ever did was to document processes and procedures so I can “tell” others how I want it to be done when I’m not in the room. It helps us train new people, which means they know what’s expected of them and it makes life easy, even when I take time off.
8. Create a reputation online–deliberately. You have a reputation online if you intend to or not. You need to own your online reviews and use them positively in your business. We always look at the underlying issue and ask what we can do differently next time to stop an issue from happening again. The answers then find their way into our revised processes so we get better as a company. Always being graceful online is absolutely necessary.
9. Find mentors. Many owners I have met aren’t the best managers. Many acknowledge they lack management and delegation skills, which is one of the reasons they want to sell. Be very open to mentoring and welcome systems, training and support you might not have when you open your teahouse.
10. Market the business. Many business owners know the technical things like baking or service but don’t know much about marketing. The people you serve are the best source of helping you market but you need to make sure you keep connecting with them. Email, website, blogs, vlogs, Facebook, social media and TV appearances help to keep the Tina’s Traditional brand in mind. But we don’t spend a penny on advertising.
Tina Jesson is the owner of Tina’s Traditional Tearooms based in Indiana. The British entrepreneur owns three traditional English-style tearooms with family recipes baked at each site.
Plan to Attend or Participate in the
World Tea Conference + Expo, March 27-29, 2023
To learn about other key developments, trends, issues, hot topics and products within the global tea community, plan to attend the World Tea Conference + Expo, March 27-29, 2023 in Las Vegas, co-located with Bar & Restaurant Expo. Visit WorldTeaExpo.com.
To book your sponsorship or exhibit space at the World Tea Conference + Expo, or to enquire about advertising and sponsorship opportunities at World Tea News, contact:
Ellainy Karaboitis-Christopoulos
Business Development Manager, Questex
Phone: +1-212-895-8493
Email: [email protected]
Also, be sure to stay connected with the World Tea Conference + Expo on social media for details and insights about the event. Follow us on Twitter, Facebook, Instagram and LinkedIn.