Copyright
© 2007 Marcus Stout
http://www.goldenmoontea.com
Every venture starts with the first steps and a business
plan for a quality tea room is no exception. Well thought out first steps, properly
implemented, will pay dividends in the business operations of the tea room in
later years.
First Steps
- Use a "first
steps" checklist.
- Focus on selling a great product or service at
a fair price.
- Specialize. Specialists outperform non-specialists.
- Train your employees thoroughly in marketing and customer service skills.
- Consider your suppliers as a source of financing.
- Develop
a database of prospects.
- Open quietly to work out the bugs before
you schedule the grand opening promotion.
- Include the Internet in
your marketing plans with an appealing website.
Start
up Basics
Choosing your business name
Find
a name that will encompass all areas that you are interested in-tea room, tea
party catering, gift shop, tea education, etc. You want to leave room for growth
and/or change.
Changing a business name after you have used
it can be a problem. If you already have stationery, business cards, etc. printed
with a name, you have to redo all of it and that can be expensive. If you are
on the internet, you have to forward everything to your new site and that can
be difficult.
Before you commit funds and resources to promotion,
make sure the name you choose is final.
After you name your
business, it is time to register your business name.
Registering
your business name
It's important to register your business
name because if you don't, someone else could register it and you would lose the
right to use that name. First, check the web to see if someone else has registered
your chosen business name in your state. You can find your state's Secretary of
State office and locate the business name registration area on your state's website.
Most
states' Secretary of State websites have a business name search feature and information
on registering your chosen business name in your state.
Go
to your own state's office of Secretary of State. Go to the registration area
to register your business name.
Another good idea is to
trademark your business name and logo for national protection. Go to the "trademarks"
section U.S. Patent and Trademark Office.
Obtaining a
Business License
Every state has their own regulations
for obtaining a business license. All you need to do is call the city clerk's
office listed in the government section of your telephone book... There is of
course, a fee and paperwork.
Getting Your Resale Tax
Number
Since you are going to be selling food, tea,
tea accouterments, etc. you need to have a sales tax number or a resale tax number
(they are both the same thing.) You can find your state's department of revenue
online or in the state government section of your phone book.
This
resale tax number allows you to purchase your supplies at wholesale prices. Some
suppliers only sell to businesses with resale numbers (this is also referred to
as a wholesale number or wholesale license.)
Opening
a Business Bank Account
Have a separate account so you
do not mix your own personal money with your business money. The IRS requires
you to have a clear distinction between your money and your business' money.
You
need to keep a record of your income and expenses.
Tea
Room Tip: Do not combine business funds with personal funds. This will only
result in chaos.
Location
For
a tea room, finding a good location is a critical factor. It cannot be overemphasized;
the location should accommodate foot traffic and have adequate parking. Visibility
and ease of access are two important elements.
Usually premises
are leased and lease negotiations with the landlord are important for the success
of the tea room.
Tea Room Tip: Remember, in a lease
negotiation, EVERYTHING is negotiable. Do not become emotionally attached to any
piece of property. There are always other sites available.
Business
Organization
Since you are forming a business, you will
require a business entity that has its own identity, name logo and other promotional
identifiers. The general forms of organization are:
- Sole Proprietorship
- Partnership
- Limited Liability Corporation
- Corporation.
Each organizational form has different features, tax liability
and protection for the individual. Check with a qualified legal advisor on the
form best for you and the best state fro formation.
Tea
Room Tip: Initially avoid including partners or shareholders in your business.
Wait until the business is operating profitably (and you may well conclude you
don't need the extra help.)
Licenses and Permits
When
you start a business you are operating in the community at large and must comply
with issues like business permits, licenses and registration of you trade name
and logo may be required. Check with your local Chamber of Commerce or the Small
Business Administration to determine the permits and other approvals required.
Go
to the health department in your city to find out their regulations. You may have
to take a course in food handling. You may have to have a grease interceptor or
a grease trap.
Tea Room Tip: DO NOT OVERLOOK LICENSE/PERMIT
REQUIREMENTS. Failure to comply with local building codes or licensing requirements
will delay the opening of your tea room.
Insurance
A
tea room will required liability insurance since you are dealing with the public
on your premises or may have vehicles associated with the business is a good idea.
Projecting financial
figures for your tea room is one of the most challenging and critical undertakings
of any consulting assignment. This is because initial estimates must be adequate
to pay start up expenses and have a reserve for working capital to fund the business.
If
you don't provide for enough capital going in going in, you won't have enough
capital to run your business let alone maintaining business operations.
Tea
Room Tip: Make a conservative forecast of your capital requirements based
upon conservative cash flow projections. You will come up with a number that represents
capital required. Then double the capital requirements and fund accordingly.
Tea
Room Tip: You must be psychologically prepared to undertake the risks and
effort associated with starting and running a business. But the benefits are worth
the challenge. Proper preparation before you start will pay dividends later.
Tea
Room Tip: If you've put all the necessary thought, preparation and research
into how your business is going to run, if you have enough money to make it happen
and to sustain you through the initial growth phase, if you have invested in some
essential training to equip you to run your business for profit, then you should
have every reason to believe you are going to be successful.
Initial
Funding
All start up ventures require initial funding
to pay the start up costs and other required working capital items.
You
must have equity capital (money that is not borrowed) as part of the startup funding
in order for the tea room venture to get started. This is a must. Equity capital
can be combined with a certain amount of bank borrowings to supplement funding.
Tea
Room Tip: Do NOT over leverage or over borrow funds as part of your initial
funding. Borrowed funds must always be paid back and if you over borrow you will
be "undercapitalized" and this can severely reduce your chances of success.
