The Samovar Tea Lounge Growth Plan: one slow sip at a time

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The Samovar Tea Lounge Growth Plan: one slow sip at a time
By. Searchrankpros1

Thanks to amazing support from our customers, vendors, and employees, Samovar Tea Lounge hasgrown from a little tea spot in the Castro, to becoming a huge presence in the tea industry, with our new location in Yerba Buena Gardens, a great online store, plans for regional rollouts, and phenomenal national, and international press. From the Dutch foodie community surrounding Bouillon Magazine, to the Chicago Tribune, to the Japanese tourist industry featuring us in Figaro Magazine, the world has received us with a warm embrace. Thank you.

Because of this strong public reception, we are constantly asked "Are you going to grow? Are you planning on becoming the Starbucks of tea?" I actually saw a recent reference in an online blog that suggested we are in fact owned by Starbucks, and that Starbucks is testing out the tea market by going undercover in "stealth mode" as Samovar Tea Lounge!

I was amazed, surprised, and slightly alarmed, and, felt it was very important to respond.

First, to set the record very straight: Samovar Tea Lounge is NOT owned by Starbucks. It is owned by Paul, Robert and Jesse, and a few of their friends. That's it.

Coming out of the hyper-speed, consumer-frenzied, coffee-fueled dot com bomb era, we three wanted to do something that made a difference to us, to our community, and to the world. A tea lounge was that special something that we conjured up that would serve these needs. And it has made a difference!

498 Sanchez Street was a love of labor. We three built it with our hands, and we were the first staff: cook, dishwasher, and tea-maker. There's been lots of changes in how we do things and in what we offer. But the core, to deliver the ultimate tea experience to make the world a better place, has remained the same. And fortunately for everybody, we now have an amazing staff that is much better than us three at making and serving tea!

Now about growth...
The mission of Samovar is to make the world better place by delivering the ultimate organic tea experience. And, we're only effective if as many people as possible experience what we offer. If it were possible to accomplish our mission by maintaining our single original location at 18th and Sanchez, then, that is what we would do--have just that single store. However, the tea lounge business is a very physical, visceral experience, and we accomplish our mission by spreading this experience as far and wide as possible. So, to accomplish the goal, we've got to spread it far and wide and and as deep as we can through additional locations.

How do we do that?
That's the business part. For us to grow as "far, wide, and deep" it takes money. Money is the lifeblood of business, and there are three ways for us to get money to grow:

1. Wait until our two locations yield enough money to allow for more locations.
Pro: We own the company, and this is a super slow, natural, organic growth.
Con: This is really, really, really....(maybe even too) slow. We are in a tight margin business, so to expect our margins to fund our growth would take a really long time. So long in fact that we might miss out on the momentum we've created thus far.

2. Get loans to grow.
Pro: We own the company, and get necessary money to grow it.
Con: Repaying loans takes away from the money we use to run the business. Paying interest on loans isn't good. And, getting loans is a very lengthy process that generally doesn't fully fund our needs anyway. Also, you have to put your first born children on the line in addition to everything else you own.

3. Get investors.
Pro: People aligned with our vision, our mission, and whom we get along well with invest money in Samovar because they want to be part of something good, exciting, and to contribute to what we're doing. And they want to know they are contributing directly to making the world a better place through our expansion. And of course they want a return on their investment.
Con: Investors own part of the company. How much depends on the investors.

That's it. Those are the ways we can spread the gospel of tea and accomplish our mission. It is my belief that there are a lot of people out there who want to make a difference. And, it just so turns out that by joining us, they will make a difference, because we're making a difference.

The constant question then is "how fast do we grow?" I can openly state in response to the "Starbucks thing" that we will never be the Starbucks of fair trade tea.Starbucks is all about churning people through a line as quickly as possible (to ensure hitting estimates and projections for the stock market's expectations) at counter service delivering highly addictive milk and sugar loaded caffeine beverages. That is the modern commodity of coffee shop business: churn the customers through asap, get their money, send them on their way, and welcome them back for the 4pm slump.

Therefore, it would be to our immediate demise if we were even to attempt becoming the "Starbucks of tea." Personally, that's an oxymoron that I don't think is possible.

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