Tea Room Business Plan

We will combine heavy print advertising with special events and targeted promotions to introduce Simsbury’s residents and tourists to Jasmine Teahouse, and to premium teas in general. Repeat sales depend on consistently high quality products and service. We will thus train every part-time teatender in the proper storage, brewing, and serving of our 52 kinds of tea.

Our teas and chocolates are offered at a price premium that discourages customers seeking cheap, low-quality goods. This not only enhances the feeling of prestige customers get when patronizing our teahouse, but also ensures that customers will have similar expectations of service and quality, based on their socio-economic class. The status and sophistication indicated by suggesting an outing to Jasmine, or a gift basket with our logo on it, will soon become valuable in themselves.

5.1 Competitive Edge

Key Competitive Strengths

• Earl Grey’s experience managing a successful boutique coffeehouse in a similar locale.
• Lady Grey’s four years of experience as a teatender, and 3 years of training as an herbalist.
• We are the only full-scale teahouse within 20 miles.
• We have arranged competitive distribution contracts with high-end tea growers around the world.
• We are the only retailer offering such a wide array of premium chocolates east of the river.
• Our interior design will give Jasmine Teahouse an intimate, cozy, comfortable, and chic feeling, without reminding customers of doilies and lace.
• We are committed to providing only high-quality products and services.

Competitive Weaknesses

Our primary weakness is that we are a new business competing against established chains, for customers who may not know how great our products are. To significantly build sales, we must not just find new customers – we must take customers away from existing stores and from their coffee-drinking habits. We can accomplish this only by offering a superior selection of teas and chocolates, and focusing on high-quality service and full service delivery.

5.2 Marketing Strategy

Our marketing strategy needs to accomplish two things: first, to make potential customers aware of Jasmine Teahouse’s opening and location; second, to educate potential customers as to what a teahouse is, and why it is so wonderful. Clearly, with committed tea drinkers, the first will suffice. However, for the rest of our target market, we must strategically define ourselves as the answer to the many different things each group is seeking. Our highly visible location in the historic shopping district of downtown Simsbury will encourage walk-in traffic.

The marketing budget will not exceed 3% of our gross annual sales.

Tea Drinkers
Appeal to their gourmet palates:

• Advertisements in the “entree” and food sections of all local papers within a 30 miles radius.
• Flyers in gourmet grocery stores and coffeehouses in the same area.
• Ads in local magazines: Fairfield Review, Connecticut Magazine, Westchester Magazine.
• Review by the food writer for the Hartford Courant.

Socializers
Appeal to their sense of prestige and good taste. Within the local market, we will initially target women looking for an intimate social gathering space. A cozy chat over a cup of tea is just right for exchanging gossip, planning outings, or simply relaxing and pampering oneself.

• Advertise through local churches and women’s organizations.
• Monthly “Tea Tasting” party with a different theme each month.
• Coupons in the local papers for “free friends” pots (with your tea order, a friend gets a free pot, to try out our teas for the first time).
• Flyers in local upscale boutiques, salons, and restaurants.

Gift Buyers
Focus on our wide gourmet selection and convenient location: 

• Ads in all local papers
• Press releases to local papers, including gift suggestions 

Tourists

• Walk-ins: In mild weather (Spring through Autumn), our best chances are to increase the visibility of our store to encourage visits from tourists strolling through downtown. The storefront design (in our highly visible location) will include our name and logo, and we will place standing signs pointing towards our store at both nearby intersections. Our menu, prices, and hours will be posted in the windows at all times.
• Destination Visitors: We will place ads in the programs of all plays, operas, and other cultural events in Hartford County throughout the year, billing ourselves as a “mini-getaway” from the pace of urban life. We will provide brochures in every local historical site, visitor’s center, and state park information booth.
• Alliances with local Inns: Each guest staying at a local inn or bed & breakfast will receive a coupon for a half-price pot of tea at Jasmine Teahouse, along with a brochure.

5.3 Sales Strategy

Because Jasmine Teahouse is a new entity, we understand that we will have to prove our company’s worth to upscale tea and chocolate buyers in order to earn their respect and business. Our Sales Forecast depends on establishing a loyal customer base who visits our teahouse at least once every month; we expect a few committed tea drinking “regulars” who will come in more than once a week. In order to achieve this kind of repeat business, every customer, whether on the first visit or their hundredth, will be treated graciously and with respect.

Part of our mission is to educate our customers about tea and tea brewing; however, this must only be done in a respectful fashion. Our knowledge is a resource, and must never be used to make a customer feel uncomfortable or ignorant.

Tea Profiles
In addition to our extensive menu describing all 52 teas, the Greys have developed a “Tea Profile” card for new tea drinkers, or customers looking to broaden their tea experience. These cards include questions about taste preferences which will help our teatenders guide the customer to a tea they will enjoy. Our teas vary widely in taste, aroma, smokiness, fruit, and pungency, and very few people will enjoy them all equally. A customer who finds his or her personal tastes met is much more likely to be a repeat customer than one who simply orders a popular tea.

“Tea Tasting” Plates
Every week we will offer a different selection of our teas as a “tasting:” 4 to 5 small cups of different teas, labeled and described, with appropriate pastry accompaniments. These plates will allow customers to try new kinds of tea without committing to a full pot. These tastings will be priced at 1 1/2 times the price of a regular pot.

Special Events
In addition to our monthly tea tasting parties, Jasmine Teahouse will offer customers the option of reserving the entire teahouse for a party or special event. We anticipate business for bridal and baby showers, as well as a few children’s birthday parties.

5.3.1 Sales Forecast

The following table and chart give a highlight of our forecasted sales. We expect sales to start off conservatively and increase extensively during the Christmas, Valentine’s Day, Easter and Mother’s Day holidays.

Jasmine teahouse expects average sales of just over $16,000 per month for the first year, as we build name recognition and status in the community. In the second and third year we look to see increased sales of roughly 10% per year, as we gain a larger percentage of the market share and increase our customer base beyond Simsbury and into the connecting towns.

Pricing

• Hot Tea: We offer two sizes of sit-down hot tea: small pots, at $3.50 each, and large pots, at $5.25 each (for two people). For customers wishing to take tea with them, we offer a flat rate of $2.50 for a 16oz. cup or a customer’s own mug.
• Iced Tea: Iced Teas are served in 12oz. or 16oz. cups, at $2.00 and $3.00, respectively.
• Pastries: Our pastry prices range from $1.25 for a lavender-lemon sugar cookie to $4.00 for a slice of cake. Prices depend on our daily cost of such items from the local bakery, and should be only 25 to 30 cents higher than the price of that item sold in the bakery itself.
• Chocolates: Chocolate prices vary widely, from $85 cents for a chocolate covered piece of candied ginger, to $4.00 for large truffles.
• Gift Baskets: Gift baskets start at $15, and can range up to $150 for the largest chocolate and tea selection combinations at holidays. We expect the average gift basket sale will be about $25.