Business Plan Exploration Report
Running Head: INDIAN SENSATIONAL TEAS
Indian Sensational Teas
Business Exploration Report
Business Communication (BA 324)
Southern Oregon University
February 28, 2017
Table of Contents
Executive Summary
Introduction
Evaluation of the Market
Competition in the Market
Tea Industry Performance
Legal Consideration
Methods for marketing
Labor Climate
Startup Cost
Pricing
Recommendations
References
Appendix
Executive Summary
Tea is the most widely consumed beverage in the world next to water, and can be found in almost 80% of all U.S. households. According to research conducted across Northern America in late 2015, over 158 million Americans drink tea daily (Tea Association of the U.S.A, 2015). My name is Naif Alosayl and I want to create a relaxing tea shop called Indian Sensational Teas, in Ashland, OR. This business will primarily offer a wide array of popular teas imported from India and Indian subcultures. I chose to go into the Indian tea business because it is a big part of my culture and family’s diet. They always count on me to bring different types of teas back home when I visit another country. As of right now, I have collected about seventy-five flavors of tea. Why Indian teas? I believe that India makes the best teas in the world.
I have a friend in India that I have visited several times over the years and often walks through his family garden where he grows plants to make tea. My favorite part of visiting India is sitting with my friend’s father and chatting about teas. These conversations led to my desire to learn more about tea and the tea industry, specifically Indian teas. What kinds of plants are used to make teas? What is the best time to harvest the plants? How is tea made? I wanted to know everything.
Introduction
Indian Sensational Teas will be a tranquil environment for customers to enjoy tea and relax. The interior décor will be Indian inspired, and have elements such as colorful stones and ornaments on the walls and ceiling. We will offer traditional style seating which consists of cushioned floor mats and decorative pillows. The business will be located at 1604 Ashland St. Ashland, OR 97520. Customers will have the option to drink their cup of tea inside or order their drink to go. The business will offer a wide array of teas imported from India including: black, white, green, and red. Business hours will be Tuesdays through Sundays from 6:00AM to 4:00 PM.
Evaluation of Market
The city of Ashland, Oregon has about 20,412 people (Ashland Chamber, 2016). The Ashland market only has a few tea shops, but many coffee houses. Indian Sensational Teas will differ from competitors because of the exceptional customer service. The Shakespearian festival brings many tourists who are excited to try new places, especially ones that are trendy. According to the city of Ashland, the current ratio of ethnic groups is 91% White; 2.2% Black or African American; 2.2% Asian; and 4.3% Hispanic or Latino (Ashland Chamber, 2016). 
Target customers include: College Students looking for quiet place to study, retired/semi-retired individuals looking for quiet places to chat, and tourists who want to experience a different culture. College Students may be interested in trying teas from the Indian culture. They may also wish to have beverages with health benefits which Indian Sensational Tea will offer. Great care will be taken to maintain a relaxing and quiet environment. Similar to college students, retired individuals look for quiet places to chat. Retired people can gather at Indian Sensational Tea during the day and enjoy a cup of tea either alone or with friends. Tourists visiting from other states may want to experience a different culture.
Competition in the Market
There are a handful of competitors in the Ashland market within 5 miles of my location. Some of my competitors are local companies and others are national or global companies.
The following businesses compete with my business:
Dobra Tea opened their Ashland shop in the Summer of 2014. They have six other shops spread throughout the US region. The atmosphere at Dobra Tea is probably the closest to what I will offer at Indian Sensational Teas. I will have offering a similar ambiance with an eclectic mix of cultures ranging from Middle Eastern to Asian (Dobra Tea Ashland, n.d.).
Chozu Bath & Tea Gardens offers home brewed tea and a bathhouse. Their differential factor is that they offer spa services, such as massage therapy, while you have your tea. Chozu tea is primarily a Japanese style setting, but is also a place where couples might want to go for a tranquil environment. They want their customers to experience the traditional Japanese philosophy of self-care, relaxation, and rejuvenation (Chozu Bath & Tea Gardens, n.d.).
Dragon Gong Fu Tea House is a phone free environment; this allows their customers to simply enjoy each other’s’ company and focus on the moment. Dragon Gong Fu offers a selection of Pu-erhs tea and healing elixir tonics. The Pu-erhs tea is the most oxidized form of tea, often aged, and sometimes very expensive. Unlike other teas, that get stale over time, Pu-erhs tea can mellow and improve with age like fine wine. Dragon Gong Fu has this specialty tea for a more acquired taste (Dragon Gongfu Tea House, 2014).
The Spice & Tea Exchange of Ashland is a franchise company that specializes in their own signature blend. They have a nationwide brand with over 50+ stores spread over 26 states and the District of Columbia. The Spice & Tea Exchange has a target market in areas that have high-traffic tourist attractions and want to provide their customers with an interactive, and entertaining experience (The Spice & Tea Exchange, 2016).
Starbucks is a worldwide roaster, marketer, and retailer of specialty coffees, but also offer teas. Starbucks already has an established brand name so it could be that my potential customers will opt to go with a brand they are familiar with. They offer a variety of beverages along with pastries and other food items. People traveling in groups of two or more who want a diverse selection might chose Starbucks because they offer multiple items (Starbucks Company Information, 2017).
Indian Sensational Tea shop will be offer lower prices than the competitors cost. The cost of goods will be low and the sales revenue will be higher than the rest.
Tea Industry Performance
Ibisworld reports for the tea industry, state that the barriers to enter the market are low, this means that a new company can enter the market. “Industry Revenue is therefore projected to grow at an annualized rate of 1.6%, which totals a projected 1.4-billion-dollar revenue by 2021. The industry is becoming larger due to the growing variety of flavors. The top performers are Lipton, Starbucks Corporation, and Tazo to name a few which have a large customer loyalty. The healthy lifestyles of the U.S citizens has made people want to change to healthier beverage options. One of the benefits of drinking tea is that tea is lower in sugar and has the positive affect of lowering cholesterol, and green tea may help to prevent and treat cancer.
Legal Consideration
Indian Sensational Tea will be a Sole Proprietorship, which can be the simplest form of business due to its ease of set up and inexpensive cost (compared to other types business). A distinct disadvantage of a sole proprietorship is that I will be personally liable for all the business’s debts. This means that if the business loan goes in default, the creditor can legally come after my home or other personal assets. The sole proprietorship is not a legal entity. It will be operated under the DBA (“doing business as”) which is Indian Sensational Tea. The tax effects I’ve taken into consideration is that the income earned by the sole proprietorship is income earned by the owner and will be reported quarterly.
Methods for Marketing
Indian Sensational Teas will have full color page ads posted on SOU campus (as approved by administration) and down town Ashland. There will be a seasonal marketing budget during the Shakespeare festival when tourists are abundant around town. These will be the primary forms of advertisements to create awareness. In addition to traditional ads, there will be a larger push on social media on popular sites such as Facebook, Instagram, Snap chat, and Twitter. The posts will consist of any specials or featured teas for the week. Customers will be encouraged to “tag” the company name in their posts to receive discounted drinks or coupons.
Labor Climate
As the owner, I will be the general manager for the shop. I will be the face of the shop and I plan on hiring two part time employees and one intern to fill necessary positions. The part time employees will make, serve, and conduct daily transactions and the intern will ensure the premises remains clean. In the early stages of the business, I will be available in the store daily for most of the business hours to observe and ensure the employees are performing to my standards.
Startup Costs
References
Ashland Chamber. (2016). Demographics & Housing. Retrieved February 10, 2017 from
http://www.ashlandchamber.com/Page.asp?NavID=1143
Chozu Bath & Tea Gardens | Spa, Soak & Sauna | Ashland, OR. (n.d.). Retrieved February 13, 2017 from http://www.chozugardens.com/
Dobra Tea Ashland. (n.d.). Retrieved February 13, 2017, from http://www.dobrateaashland.com/
Dragon Gongfu Tea House (2014). Dragon Gongfu. Retrieved February 13, 2017 from http://www.dragongongfu.com/
Schölin, T., Ohlsson, H., & Broomé, P. (2017). The role of regions for different forms of business organizations. Entrepreneurship and Regional Development, 29(3-4), 197-214. doi:http://dx.doi.org/10.1080/08985626.2016.1257072
Starbucks Company Information. (2017). Retrieved February 13, 2017 from https://www.starbucks.com/about-us/company-information
The Spice & Tea Exchange. (2016). Find Your Way to Flavor. Retrieved February 21, 2017, from https://franchise.spiceandtea.com/
Tea Association of the U.S.A. (2015). Tea Fact Sheet. Retrieved February 21, 2017, from http://www.teausa.com/14655/tea-fact-sheet
