START TEA BUSINESS - How in a small scale on your own?

There are different methods one can start Tea Business either for local consumption or for exports. This page is especially for those who want to start a profitable small time business in buying and selling made tea.

It should be noted many of the largest tea dealers in Sri Lanka have started in a small way and with a very small capital.

The following are the preliminary steps to be taken to enter into Tea Business:

1. To Start Tea Business = Prepare Ground-work:

(a) Register a Name for the Business - In this instance let me name it “SPRING TEA TRADERS” for the purpose of making your study simple. You can therefore name all your tea with the Brand “Spring Tea”, for Dusts and ordinary grades of tea and “Spring Tea Special” for higher grade teas such as BOP, BOPF etc.

The tea you can buy and sell can either be pure, factory fresh or a mixture of BLENDED teas and the fact may be mentioned on the labels for good reasons.

(b) Study rules of the country. In Sri Lanka, all rules and regulations of the tea trade are governed by the Sri Lanka Tea Board under the Tea Control Act (and amended from time to time). Check with your country’s Commerce Department for such regulations.

(d) Look for a small workshop for blending teas, since Blending is going to be the main part of the tea trade. Part of the building can be used as Stores for storing bulk teas. The building must be clean, dry and free from moisture and roof leaks.

(e) In Sri Lanka, bulk teas can be purchased from the Colombo Tea Auction or direct from whole sale tea dealers. There is a certain minimum quantity of tea which can be bought in Colombo Auctions, however, many small timer traders meet this requirement by jointly buying the quantity.

2. Determine Costs

(a) Cost of made tea at Auctions, Whole Sale Sellers or Ex Tea Factory – you may buy well made but costly teas and cheaper teas but having sufficient strength, color and quality.

(b) Transport to your stores

(c) Blending of different teas to make your own Brand. Here care must be taken to keep the end quality of the Blended Tea constant at all times.

(d) Packaging – either loose tea or Tea Bags

(e) Labeling your Brand of Tea according to market requirements

(f) Transport cost for marketing and sales

(g) Rentals and taxes

(h) Advertising and Marketing costs

Below a Sample Tea Label for SPRING TEA – It gives my visitors a fair idea of the business.

Note – the Lion Logo is missing in this sample label, as it has not been registered with the Sri Lanka Tea Board.

3. Before you Start Tea Business, arrive at your Total Cost

4. Determine – Maximum Wholesale Price and Maximum Retail Price (usually printed on labels)

5. Market your product – determine your target customers, e.g.

- Tea Cafes - Retail Dealers - Restaurants - Homes and - For more enthusiastic entrepreneurs - Export Markets

6. CEYLON TEA LION LOGO

In order to ensure consumers identify “Pure Ceylon Tea” in packs which indicate so, the Sri Lanka Tea Board has initiated a Lion Logo to appear on Ceylon Tea packs denoting the country of origin and quality of the product.

The Sri Lanka Tea Board owns the Logo, which has been registered in over 75 countries.

The Board has laid out certain conditions for the use of Lion Logo on Ceylon Tea brands packed in Sri Lanka:

• The logo can be used only on consumer packs, which contain 100% Pure Ceylon Tea

• The brands should be packed in Sri Lanka

• The brands, which use the Lion Logo, should conform to the quality standards set out by Sri Lanka Tea Board.

Therefore, teas packed outside Sri Lanka cannot use this Logo, even if the packs contain the purest item.

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