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Old 08-25-2011, 01:05 PM
 
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From the 2 lists it appears there are at least 70 tea houses operating in the state. Don't know what their total revenue is (from tea, retail sales, special events, etc.) or their operating margin. I doubt there would be 70+ if they were all treading water or losing money. I assume some share are successful, at least in their eyes.

It appears they operate 20-60 hours per week with some reductions in off-season in more rural places. It appears they typically have 5-20 tables. If you operated 40 hours per week on average with 10 available tables and had an average of 5 in use and got an average of $30 per table hour in total sales (1 party, typically of 2-4 people ordering tea and usually food too and leaving a tip and some share of them making a retail purchase or two) you are at $300,000 total revenue.

Increase the tables, degree of usage, hours or average bill from all sources (retail sales- directly tea related or not- might be a pretty large component of the business) and the total revenue could go up. If average table usage is too high due to seasonality or limited peak hours of strong patronage or average bill assumptions are too high, adjust downward.

Increase the operating margin and the personal income goes up. Not sure if it is 10% or higher; given that it is an upscale boutique business with apparent need for a higher margin, it might be higher. If a person was serious about entering the business, they could probably get a better sense of the typical numbers involved thru inquiries within the industry.

I'd think a tea house business would need 9-12 months of good business and could get that in good locations. Do tea house patrons make the effort in winter? Townies vs visitors? I don't know but folks in the business do.

Special events could be another significant revenue stream in some places & plans. Real estate appreciation would be another thing that some operator / building owners would hope for and new entrepreneurs might eventually get to later in their career once their establish the business under a lease.

A tea house in a small town sounds like a very challenging proposition, more challenging than in bigger cities. I noted from the start that lists of towns without tea houses include places that likely wouldn't be viable at this time. Still about 20% of the places on the lists are in very small towns. They tend to have less tables, less hours and more off-season. It would probably be better as a second income in a household instead of the primary or only one.

I wouldn't recommend such a venture in a place with much under 10,000 population nearby unless the tourist market was sufficient to compensate and I'd lean toward a somewhat bigger place. Still it is worth noting the original poster asked about towns and not about the tea business. Tried to offer suggestions on both to see what kind of dialog the poster wanted. No follow-up public responses or further questions from the OP so far, but all the responses in the thread are there and can be read and used by the OP to whatever extent they wish or perhaps others to some degree in thinking about small town businesses.

I am fine with posts that include points about facing facts and tough times in general and the rural west in particular but there can be a balance. I think folks also deserve some attempts at help and some open-mindedness about the possibility that maybe they can make their plans work for them. In a small western town or elsewhere.

Last edited by NW Crow; 08-25-2011 at 01:49 PM..
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Old 08-25-2011, 01:48 PM
 
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Quote:
Originally Posted by NW Crow View Post
I doubt there would be 70+ if they were all treading water or losing money. I assume some share are successful, at least in their eyes.
That may be an over-optimistic assumption. Rural Colorado is rife with people who try to "buy themselves a job" by starting some nature of small business. A relative few are successful. Most only manage to buy themselves a damned expensive and very time-demanding hobby. They last a few years, until either their money, fortitude, or patience is gone, then they move on. A "greater fool" is often waiting in the wings to take their place, and the cycle starts again. I've seen this firsthand for decades, including having spent a stint on the Board of Directors on a business incubator. The failure rate of small businesses in rural Colorado has been astronomically high over the past 30 years or so--that in one of the most prosperous periods in rural Colorado's history. That has all changed now--the business environment in most of rural Colorado is now returning to the far more rigorous and difficult environment that it endured for nearly three-quarters of a century after the Silver Panic of 1893. Even well-established and well-capitalized businesses are now having trouble in many parts of rural Colorado--there is no doubt that we are now entering a period of severe contraction and consolidation.
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Old 08-25-2011, 04:20 PM
 
Location: Mesa
24 posts, read 59,194 times
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Default Thanks, everyone!

I should have put this in my original post, but I am NOT here to discuss my tea house. I have been planning this for 4 years and think I'm aware of the HUGE risk I'm taking, so trying to dissuade me from a path I've already put so much time and effort into is totally pointless... I'm not trying to be harsh but I am not looking to be discouraged about the rates of small business failure etc.
What I'm looking for are some towns to use as a jumping-off point so when we visit Colorado in the next few months we're prepared with a list of possibilities.
I also should have added that we aren't planning on randomly showing up and opening our doors, we have over a year planned for finding the perfect location, so we'll be visiting several states and many towns before even narrowing the list down to 2-3 places to do intense, tedious research before we move.
Thanks to everyone who made suggestions, and also thanks for the advice, I genuinely appreciate it. We've both grown up in small businesses (my fiance's parents own a health food store, a holistic rehab center and used to own a restaurant and my parents own a store, my brothers each own their own business, landscaping and consulting firm, respectively) and I have a degree in small business management, as well as countless hours spent studying tea houses specifically. I'm not trying to "toot my own horn" I just want to stress how much experience I have in this field so I don't get any more questions about it.
Thanks again, I'll be looking into the towns that you've suggested!
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Old 08-25-2011, 04:48 PM
 
Location: Mesa
24 posts, read 59,194 times
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Default Oh, and...

Sorry it took me so long to respond, I just figured out how to view comments, I'm not too great with the internet.
We've got to agree with one of the posters here, the town should be closer to 10,000 unless it has good tourist action.
As to the type of shop we're looking to open, it is not exactly like a coffee shop OR a Victorian Tea Room, more like the traditional-style Indian/Middle Eastern tea houses with some retail and natural services (ie energy healing, herbal services and yoga classes) plus workshops, special events and live music/belly dancing.

As far as the towns everyone suggested go, I'll be listing them all out and researching them individually.
Oh, and Jazzlover, we are not looking to "get rich quick" or jump into anything. We love the open spaces and mountains in Colorado, but we'd be spending virtually every minute working, so we're not moving there for mountain biking or horseback riding. We believe that Colorado is one of a few places that has a special energy, an aura if you will that draws us to it, but we'll mostly be enjoying it out the window of our tea house. And this is why we're choosing a town right for the business, possibly you're right and Colorado won't be the state we end up choosing, but I assure you we're going to find out how viable it is before we commit to anything.
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Old 08-25-2011, 07:47 PM
 
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Glad to hear that you have the right education, lots of opportunities to gain business insight & perspective and have done extensive research on your target project. Hard to know sometimes from a short post so some people (including me) may guess a bit about what to assume and what to say.


I went back and noticed that the Durango tea operation is quite limited in time.

Glenwood Springs would probably be a very good business location... if you could find an affordable business property and perhaps lived further to the west. Rifle might be another name for the long list of candidate towns. Could possibly start in Rifle and then maybe move to Glenwood Springs later. Just some thoughts, FWIW.


Best wishes with the rest of the planning and then the doing and living.

Last edited by NW Crow; 08-25-2011 at 08:12 PM..
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Old 08-25-2011, 09:01 PM
 
Location: Colorado
486 posts, read 1,236,974 times
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Quote:
Originally Posted by andromeda_k View Post
Sorry it took me so long to respond, I just figured out how to view comments, I'm not too great with the internet.
We've got to agree with one of the posters here, the town should be closer to 10,000 unless it has good tourist action.
As to the type of shop we're looking to open, it is not exactly like a coffee shop OR a Victorian Tea Room, more like the traditional-style Indian/Middle Eastern tea houses with some retail and natural services (ie energy healing, herbal services and yoga classes) plus workshops, special events and live music/belly dancing.
That is a whole different monster... maybe even a tougher sell in this economy - especially in rural Colorado. At least with Victorian tea rooms, you have a very widespread, traveling market (seniors/boomers).

Indian/Middle Eastern/new age concept might only be able to thrive in very specific (wealthy) pockets of Colorado such as Boulder or Aspen but I suspect that those markets are already tapped to the max with such services. Others on this forum could advise better than I could on that. Plus they would not be at all affordable in terms of rent.

There are some smaller, relatively more affordable towns known for new age stuff (such as Manitou Springs, see here: Manitou Springs, Colorado - travel fun, lodging, and attractions at the foot of Pikes Peak - Near Colorado Springs or, Crestone see here: Crestone Colorado)

I don't mean to step on your caterpillar, but I think the concept you are pursuing seems riskier than a Victorian tea room (which is what I originally understood your post to be about). It just seems a little late in the game to be opening up a place like that in Colorado. There have been people doing the new age business thing here since the 1960's. So the market is pretty saturated. Not to mention the currently dismal state of the economy.
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Old 08-25-2011, 11:42 PM
 
Location: Everywhere and Nowhere
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Quote:
Originally Posted by NW Crow View Post
I went back and noticed that the Durango tea operation is quite limited in time.
What do you mean by that?
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Old 08-26-2011, 11:57 AM
 
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One of the guides says of the Durango tea operation (inside another business): "Tea served 3 to 5pm daily." The possibility of private tea parties outside that timeframe is mentioned, but only 2 hours per day is "quite limited in time" ... for regular "operation" or service.

Last edited by NW Crow; 08-26-2011 at 12:15 PM..
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Old 08-26-2011, 01:57 PM
 
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Well, I was following the victorian tea house lead when I recommended Leadville.

So now that we know more about your type of teahouse, I too would say Boulder or Manitou Springs. However, I must ask, what does "affordable" in your original post mean to you!!?

Last edited by bongo; 08-26-2011 at 02:16 PM..
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Old 08-26-2011, 02:56 PM
 
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Oh, I see Boulder already has a pretty fancy tea house:

Order and enjoy unique Yixing teapots and Green, Oolong, and Herbal tea at the Boulder Dushanbe TeaHouse

They just had a big Rocky Mt Tea Festival. That might be fun for you to go to next summer if they have it again.
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