LAS VEGAS, Nev.
It's a delicate balance of time and money when it comes to opening a brick-and-mortar tea business. It will cost more, and it will take more time, said Bill Waddington, owner of TeaSource, who led a jam-packed World Tea Expo session on RealiTea: The Real Life Evolution of a Tea Store.
After a success of his first two stores, Waddington told the group he decided to expand into a third location to further his vision of selling quality teas and letting customers taste them before making a purchasing decision. Even as a seasoned veteran, he ran into a few setbacks but ultimately opened a store he expects to be profitable in less than nine months. Here are some pointers he gave the audience.
Identify strategic reasons for opening the store. "Having a dream is vital but there should be a reason for pulling the trigger," Waddington said. Once the decision is made, start doing the homework as soon as possible to avoid wasting time after the lease is signed.
Let the pros handle the work. This advice goes for everyone from general contractors to architects and lawyers. "They can do the job faster and better than you can," Waddington said. That doesn't mean that you shouldn't be an integral part of the process, going as far as setting up your office in the new space as it is being remodeled to resolve any issues on the spot and impress on the general contractor the urgency of the project.
Negotiate everything. When opening the first store, Waddington accepted the lease contract at face value. Now he saves thousands of dollars by negotiating responsibility from garbage removal to HVAC to the initial condition of the space. That is also one of the reasons to hire a good lawyer with expertise in lease negotiations.
Start Marketing Early. As soon as you get your space, Waddington suggests putting a sign up advertising the upcoming opening of your store. For his third store, he held a mid-construction open house on a Saturday morning that gave the locals a taste of the new place, let them peek around and enjoy a free sample of two. The event attracted more than 100 people in three hours and turned out to be a great marketing tool. Another useful tool was a direct mail campaign that offers $5 off bulk tea. Even though it was expensive to execute, the average sale to customers with mailers was $90.
Budget extra time and money. Waddington notes that at least 10 percent of the overall budget should be allocated for unforeseen expenses. Working with contractors, getting permits and even stocking product can also add days and even weeks to the process. That is also one of the reasons to get as much done as possible during the flex time before signing the lease.
While opening a new store can be an overwhelming experience, Waddington says it's all worth it.
"We have a passion for the tea industry and a dream," he told the audience. "Even if the numbers freak you out, if it is your dream to have a tea business for God's sake go out and do it."