Selling tea. It sounds like a wonderful idea: would could be better than making a living doing what you love? But opening a tea room is a risky business venture, with a lot of upfront costs. OK, fine … so what about just selling tea online, right from your own kitchen? It could work, but … well, face it: working from home has its perks, but it’s a pretty lonely existence. For most of us, much of the appeal of opening a tea room is being able to share with other tea lovers.
If you were thinking of opening a tea or coffee shop but are scared by the commitment and the set up costs, here’s an alternative idea: why not open a mobile tea room? A mobile coffee/tea business sells the same types of products sold by storefront shops; the big difference is, you’re working from a vehicle fitted with equipment for brewing and steeping. You’ll be able to mingle with your customers, like you would in a static tea room, but you’ll have a fraction of the investment.
In the first post of this multiple-part series, we’ll be looking at the advantages–and disadvantages–of operating your own mobile tea room business.
As we’ve already mentioned, one of the main advantages of going mobile is the low start-up costs. You can go into the mobile coffee/tea business with very little upfront. There are plug-and-play packages that can be had for as little as $10,000, or franchises that include monthly support payments. Other advantage include:
- High Profits – The tea and coffee business is growing. Specialty stores like Starbucks have conditioned customers to demand higher quality products, and teas can offer gross profit margins over 75%. Having a mobile shop means you control the location, and that location can change based on conditions.
- Non-seasonal Products – Some products–Halloween supplies, or plant nurseries, for example–are very seasonal; the demand for coffee and tea goes year-round. If you operate in an area with dramatic season changes, you may need to change your offerings from time to time, but the market will still be there.
- Flexibility – Many people choose to run a mobile business, because it can fit around their lifestyle. You can have a daily route or a specific location on days of the week, or only open at flea markets, concerts, or other events. The minimal investment makes it easier to operate part time, if that’s what you need.
The big disadvantage here is that this is not a new idea. While more people are willing to spend more money on tea or coffee, there’s also a good deal of competition for that business. Your product will either have to be competitively priced, of a higher quality, or operate in an under-served location. Even at exclusive events, you could see issues: you may have the sole coffee concession at a show, but that doesn’t stop the burger van next to you from selling instant coffee or generic teabags at half your price. A few other disadvantages:
- Skill Level – It takes skill to make a consistently good cup of coffee or brew an excellent tea. And if you’re running the concession, YOU are the barista. You’ll need to do a lot of research and get in a lot of practice before you open. Your level of skill and understanding of your products are key to ensuring that your business is successful.
- Limited Sales Times – Even in our coffee-crazy world, the vast majority of coffee and tea sales take place in the mornings. Sure, there’s a growing acceptance of “afternoon tea,” but there is still an element of formality to those occasions–something not easily supplied by a mobile unit. This means to be profitable, you’ll need to start early and keep regular morning house so your customers can get their morning fix on their way into work or shortly thereafter.
- Many Hats to Wear – Not only will you need to be a top-notch barista, you’ll also be the driver AND the sales rep AND the buyer AND the bookkeeper … you get the idea. That means you’re in charge of acquiring licenses, purchasing supplies, and doing all the financial work, from applying for loans to dealing with customer chargebacks. It’s a lot to consider.
Owning and running a mobile tea shop business can be great, but it can also be very difficult. Our job here is to make sure you don’t go into it blind. In our next post, we’ll take a look at the various components you’ll need to get started.