It’s time to make a cup or Tea, preferable a cup of Chai and sit back and enjoy the next 30 minutes with Fatema from The Chai Room
Like all great loves, my love of chai began when I was a child.
The smell of chai brewed by my mother meant comfort and company to me. Drinking chai meant sharing a moment with important people and easing the stresses of the day. Our guests would be seated in the formal ‘chai room’ while my sister and I served up hot spicy chai in mum’s best Royal Albert porcelain teacups!
When I moved to Sydney from the UK in 2008, I started brewing chai as a connection to home. Re-connecting with how amazing and full of goodness this drink was, I was inspired to start sharing this cup of amazing fragrant spicy tea with others. The product of that dream: The Chai Room.
Growing up, my mother would always cook using fresh raw ingredients. It is from her that I learnt the art of how to hand dry and make my own spices, a technique that has been inherited by The Chai Room and we still use for our Chai room ginger masala blend.
We first set up at the markets in Sydney and sold fresh hot spicy chai out of big pots. We made some great connections over brewing big vats of chai from our fresh blends. We had an amazing response and fell in love with being out there talking to people and sharing experiences of first sips of chai.
From the great support of our customers, we decided to venture out and start selling into cafes. The response was incredible. We were so happy that people wanted to share our passion for chai! We love talking to people when we do tastings at the cafes and stores that we sell at; it is by far one of the best parts of the job!
Fatema tells her Business StartUp story:
To listen to the interview click right here on the Healthy Numbers blog
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Or you can read the entire transcript of Fatema’s interview here.
My guess is that you are here because you are curious about what it might be like to start a business?
Perhaps you’ve been wondering if you have what it takes? If your idea will work or even how much it actually costs to build a successful business?
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Happy reading! Now here is the full transcript of the podcast.
Ingrid: Hello and here we are with Fatema from The Chai Room. Good morning Fatema.
Fatema: Good morning Ingrid.
Ingrid: We are in Fatema’s home, because one of the joys of owning your own business is that we can work from home, and we’re enjoying a lovely cup of tea. Fatima, can you tell us what business are you in?
Fatema: First of all I’d like to say thank you for having me Ingrid, its lovely to be here.
Ingrid: My pleasure.
Fatema: My business is a tea business, essentially. And the reason I call it The Chai Room is because I started off with gorgeous homemade chai blends, which are from my childhood, and I’ve decided to bring them all together, put them in little loving packages.
Ingrid: And people buy them.
Fatema: And people buy them.
Ingrid: Lots of people buy them, it’s beautiful, beautiful tea. So when did you actually start your business?
Fatema: I started my business in January 2014 and the way I started my business was actually quite grassroots. I started at the markets and I’d make up the blends at home and take my big pots to the markets and brew them up, and have big boiling pots of chai and sell them to the public and it was great. I had a great response, and still do, and from there I’ve created a lovely little following.
Ingrid: And why did you start your business in the first place?
Fatema: One of the main reasons I think with any small business is, especially when it’s something that you’re creating on your own, it’s something that has to come from the heart, and it did for me. It came from very passionate beginning, something that I really wanted to feel like I could connect to, and create in a way that would help people enjoy it in the same way I do. So it’s definitely from a passionate point of view and something I enjoy doing.
Ingrid: What did you want your business to give you? It was going to satisfy your passion, but what did you want from your business from day one?
Fatema: There are a number of things, I think as somebody who does work from home and someone who has other commitments in life, and family and so on I think one of the things was definitely some kind of flexibility. But really it was about feeling I would be able to create something that I could feel like I could tailor make and also just direct in a way I wanted to, so I guess I’m saying I love being my own boss and just being able to see something grow from very small beginnings and follow the direction of it, just to feel quite alive. I think it was important to me to make sure it kept me stimulated which it has done.
Ingrid: When did it feel like you were in business? You were making your chai, and at some point you might like to tell us some of the story of how the recipe came about, so you’re making your chai, and you’re at the markets, but when did it feel like a business to you? What was the trigger that was the difference between making chai and being at the markets and actually being in business?
Fatema: I think the most significant moment was actually being at a tea festival. Before that I had online orders and that made me feel very fulfilled, but I think being at the Sydney Tea Festival in 2014 was the first one, and just being in Carriage Works under a roof with lots of other businesses that were all in the ‘business of tea’, and people just flocked through the doors and it was just crazy, after every single cup of tea that they could possibly find and everyone seemed to find their true taste. It was a very individual experience for everyone but at the same time quite a collective, and I think when I noticed how much chai I was making, how many litres we sold, I think it was about 150 litres of chai through the whole day. I had a friend of mine stand back and he said to my husband “I think it’s a viable business” (laughs).
We were all a little bit sceptical because we did have sort of a little chuckle now and again, chai, who’s going to drink chai, why would you want to go and buy a cup of chai early in the morning or even make it yourself, but at that point I think we all realised there was something quite special.
Ingrid: “I think it’s a viable business” (laughs). So I guess you love chai. What do your customers say? How did you know your customers wanted your product? I know you’ve done some work in creating new products, so how did you know what customers wanted?
Fatema: From the very beginning, since starting at the markets I quickly realised that it’s the customers actually that do a lot of the talking, giving you that feedback, and it’s just asking simple questions: “Do you like it? Would you buy it? What’s your favourite blend? How do you make it? Where do you buy tea, if you buy tea?” I think really that’s the most important thing is to be in touch with them all the time, and at the time it was at the markets and we’ve moved on through to cafes and various stores. I’ve had the same experience, I think it’s always important to be on the pulse of what they want, and listen, and really carefully understand what they desire, and it’s not always what you want to hear, but it’s just nice to get an overview and just to see what’s trending and what really interests people, what draws them to your product, and if it’s actually what you’re giving out.
Ingrid: When you say ‘it’s not always what you want to hear’, what do you mean when you say that?
Fatema: Well it can be something personal about a product, it’s not for everybody, and I think that’s something I realised very quickly that not everybody loves chai, not everybody loves, say a cashew milk or a certain texture. That’s not to say its personal, I think different people have different tastes, but it doesn’t mean that you still can’t have a business and you still can’t make money from it. You can’t be everything to everyone, and I think that’s what I really enjoy about the business, just moving with it, and understanding people and to a certain extent, educating people because there are certain people who’ve never tried it and then when they have it for the first time and you give them the story and the experience I think it’s quite satisfying when you see someone that can actually understand it and sometimes even be converted.
Ingrid: In the early days, how did you fund your business? I know you’ve created a website, and when you’ve branched into some of your new products, you’ve had to find funding for manufacturing, for production. Where does the money come from? What do businesses do, how do they fund and how did you get funding?
Fatema: The beauty of starting small and starting from home, you have very little overheads. It’s lovely to be able to connect with other people, and I’ve had friends who were also in a similar position, in fields of website design and photography that also were starting out, so it was almost like doing a bartering exchange, so my very first website was from a friend who wanted to build a website who wanted to start her own company building websites. So she helped me build my first website and it was a great experience for her and I think it’s a lot of give and take initially, and just being smart about what you want and being careful about not overusing your resources, like your cash resources and using them for something that you really can’t outsource.
Generally at the beginning it was really about getting help from friends, and as I moved on in the markets and so on, there was very little overhead so I didn’t have to worry about consistent rent. I didn’t have to get money from making chai to then build it up slowly, and then I guess you get to a certain point where you feel like you need to invest a little bit more and then I think by starting that way you realise how valuable certain things are, because of the effort it takes. So then I very carefully used funds that I’d already had in savings to invest in things that I really believe were important and needed to be fed. Initially it was trying to be as careful as possible in terms of the overheads and the unnecessary costs.
Ingrid: Now customers, new customers. At the markets people come to you, but you’ve indicated that you’re in stores, and you’re in cafes. How do you go about finding customers? What’s part of your process, how do you identify them, how do you go about engaging with them?
Fatema: Being at markets and being in the stores you very quickly understand who you can approach and who’s going to be receptive. I have identified the market, and it’s really been through the hard core training where, initially you think it’s everybody but then you see there are certain types of person that keeps coming back to you. When I’m in stores, people are less tolerant than when they are at the markets, they’re in a rush, they’re there for a hundred different things, so you have to be very mindful of that. I find that because I’ve identified my market through being at the markets, I just tend to approach people who I think would be receptive and also just asking questions, very open ended questions, not always would you like to try a sample, sometimes it’s “Hi, how are you?” and then you grab them in and then you kind of ask them very key questions like, “Do you drink chai?” “Where do you shop?” or eventually further into the conversation. Really it’s quite confronting when you’re in a store with lots of people and they’re all different types of people and there’s some people that reject you and some people that glance at you very quickly.
Ingrid: And how do you respond to rejection? If somebody doesn’t want to taste the chai, or if somebody doesn’t like the taste when they do, how do you respond to that?
Fatema: In a positive way. Quite often I’ll say “That’s great. Thanks for trying. I appreciate that, I know it’s not for everybody.” And then you move on really. People very often don’t have really a lot of time and it’s very much about that first ten seconds that you talk with somebody whether they’re going to stay or not. And then through that, you try and, if you’re able to have a conversation, try to engage with them on social media. Then through social media it can always expand because there’ll be other friends that have similar tastes who’ll come to the page or, so create a following and trying to engage them back with you.
Ingrid: And you have quite a following on social media don’t you?
Fatema: Yes, I’m pleased to say, there are a lot of people that have come back and are quite loyal to The Chai Room.
Ingrid: Often when one starts a business, they’re not really quite sure how to go about pricing their products or their service. How did you decide your pricing?
Fatema: It is quite confusing and it is a bit of a minefield, and I think you do need some guidance when it comes to pricing, because there are various ways you can do it. You can do it by just looking at your base costings and then reworking out what kind of margins you’d like, or you can look at your competitors, and there are some formal terms used for different pricing structures. I’m very lucky that I did engage with a great community at the very beginning when I started The Chai Room at a Community College, through a course, a 101 Business Course, and I met you Ingrid, actually, which was wonderful.
The most valuable lesson I had over the course was the accounting part of the course and just getting the basics of what pricing was about. And it’s not really just about picking a number out of thin air, you have to really work out all of your costs and it’s not always about the ingredients. The way that I do it is really by working out my costs and working out the margin that I would like to have, and there are different margins for different markets. For the markets I had different margins because I had less overheads, I didn’t have delivery. For the stores I have different margins and also for the cafes. And I always make sure that I have a certain amount of margin for myself which would give me a profit, so really that’s really one of the key ways. And also looking at your competitors and seeing what they are charging in retail prices. So in some areas I’m not making as much, for instance compared to the markets where I have a high margin, but then you think about volume.
Ingrid: And also the idea of what the market will be for a product. Do you take that into account as well?
Fatema: Yes absolutely, I think you always have to be on board with what your competitors are doing and what they’re selling their products for even not the obvious products. It could be another snack item which is not related to tea or coffee.
Ingrid: Your competitors aren’t just other chai sellers, it’s a whole range of things. How did you come to that conclusion? Not every business person understands that.
Fatema: I think it was also one of the ways I realised that people were drinking the chai and when they were drinking them, so my idea of having a chai is to replace that with a snack that you’d have mid-morning instead of going for that muesli bar, or going for something that isn’t healthy like a muffin, you then realise that that is also one of your markets.
Ingrid: And the afternoon snack as well.
Fatema: And the afternoon snack as well, and also evenings, the chai could even be replacing an ice cream at some point.
Ingrid: Actually, did you try and make chai ice cream at one stage?
Fatema: We did, we tried a few products actually and that’s another great thing about having your own business and having a product that’s so versatile and so flavoursome, you can incorporate it in lots of yummy treats and snacks.
Ingrid: So we’ll look out for some chai ice cream.
Ingrid: Do you have an exit strategy? Do you see where this is going?
Fatema: I must admit, being a start-up you never really think that you can possibly have an exit strategy but it is important to believe that you will be big enough to be able to have one. Everyone needs to work out where they want business to go, so my idea is really is to build up the brand and to have a following, and to use that as my IP, and to hopefully have that sold on at some point to another company, and yes, I think that’s my overall view. You’ve got to have some idea of a way out and also how you’re going to benefit from that, otherwise, it just seems a little bit pointless.
Ingrid: So you are not planning on doing it forever.
Ingrid: Thinking back to the beginning, what is something you wish you had done differently?
Fatema: I think I was very lucky, that I had a lot of support around me, and I’d always connected myself with people through networking and through various courses and surrounding myself with other small businesses. That was really important. I think it’s very easy to lose confidence in your first few years of being a start up. And you can easily fall into traps and things and feel that you just can’t compare to some of the bigger brands. I think having more confidence probably, is something that I could have done slightly differently, but as time has gone on and I think my confidence has actually improved, and I’ve been taking on bigger risks. I think I’ve always been quite cautious. Because I’ve been in businesses before and I have worked out what’s not working for me, I have definitely learned from that. So for instance I did have a partner in one of my former businesses and it really didn’t work out very well, and I know why. I think working out exactly what you want from the business and if you do go in with a partner, what your roles are and what the structures are, and where the funding is coming from, and that was one of the things where it fell apart. So this time around I guess I haven’t had my fingers burned as much.
Ingrid: You’ve learned from previous businesses. Is there anything you wish you’d known? Your previous businesses were not in Australia, were they?
Ingrid: So it’s a different marketplace here. When you started The Chai Room, is there anything that you didn’t know that you found out later, and thought ‘I wish I’d known that’?
Fatema: I think it would have helped to maybe really look into more government funding and grants, that would have probably helped. There’s so many things out there and you really don’t think you have that financial support, you think you have to do it all on your own and that’s not completely true. I think that’s one of the differences I thought there were between Australia and the UK, because there was so much support for grants and funding and so on, I didn’t know that I had access to all of that. I think if I had delved into that earlier, it may have helped with certain other areas. For instance there are grants that can help you with employment, like if you are earning under a certain amount you can actually get some money towards employing someone to help you, and that would have helped me.
Ingrid: Apart from yourself, I know you’ve had tireless energy in your business, I have known you for a number of years so I know some of what you’ve been through. Who has been of greatest assistance to you? You’ve talked about the person who helped you with your website, but in general, who have you looked to? You’ve looked to your networking, can you talk a little bit about, who’s sort of helped you along the way? Either their specific name or in general?
Fatema: I think I’d have to say my husband, I would say he’s been an immense support. And you have to have that support behind you if your family is involved, and they very inevitably will be if you have a business from home. He’s been tirelessly supportive of everything that I’ve wanted to do and achieve in terms of just general advice, or physical help. I would say he probably has been the one that’s been the most consistent. Obviously I’ve had lots of help from friends and obviously yourself, you’ve been a great source of support as well. But when it comes to behind closed doors and really what goes on, I think really he’s been an immense help. It’s important that you both know that you want the same things and have a balance.
Ingrid: And, and maybe this is the same person, but who can give you valuable feedback? Who do you listen to that can give you useful feedback.
Fatema: Yes, I would say he’s great at giving me feedback. It’s not always again what I want to hear. Some things we do disagree on, but I think when somebody sees you in the business role and outside of that role and can see really the challenges you face, he’s really good at giving objective advice and feedback. But then I would also say in terms of the product, my customers would be the most important people in my business, and it’s so important for me to try and meet them every week. If it’s not at the market it’ll be at the store, because I find it so inspiring, so refreshing, and also it’s quite nice because you get such a lovely response from them.
Ingrid: So you get a lot of the good feedback as well?
Fatema: Yes, absolutely, and ideas from people, and I’ve actually met people that wanted to do different things, and talk about the way that they’ve used their chai and that’s inspired me and given me ideas for how to develop the business further. I want to give back to my customers, because that’s what I see they need. For instance I’ve had a lot of children that have really enjoyed the chai, which I was quite surprised, even though my son is my biggest fan, he’s only three years old, the children have loved certain aspects of the super chai for instance. Parents have been quite surprised, and I’ve been mildly surprised by that too. So it’s just been really important because it gives you ideas, you have to be renewed and refreshed, especially when you’re working on your own, because it can be a very lonely business. So I know that’s what I’ve loved about the business from the beginning is that interaction with public from the markets right through to where I am now and I’ll continue that in whatever capacity I can.
Ingrid: So if someone came to you and said they’re thinking about starting a business, what would you say to them?
Fatema: I would say look into what you’re doing, and write down a list of a few things of why you want to do it and what you love about it and then try and see that idea in say five years’ time. If you still love that idea compared to where you want to be in your own life, because it’s very much about a balance when you have your own business, it’s more so than if you work for a corporation because then you can really switch off when you go home. But this is something that really you’ve got to be passionate about that can be sustainable and something that you want to continue in time or is this something that you want to dedicate most of your life to, and if so, what are the consequences around you. For me, I think those were the most pressing questions, and I think that’s what I would have asked myself, because all of a sudden things started to snowball beyond my expectation and it was very demanding and really satisfying at the same time, and I had to look at what else was going on around me, and it is tricky, it’s tricky trying to get everything. So yes, think about really why you want this business and what you want from it, and then you can just take it from there. All the other things are really quite self-explanatory, you can connect yourself with business courses and groups and tap into so many things online, but the thing that won’t give you is your own idea of what you want.
Ingrid: That’s lovely advice Fatema, thank you. Can you tell us three key characteristics of yourself that have contributed to your success?
Fatema: I think it’s the, definitely one of the first things would be the creativity. I’m definitely a creative person, and that’s really helped me to believe that I can do all these things, because creativity is not just about making pretty things it’s about how you can be resourceful and work around problems and solutions, so I think that’s really important. And you have to change, and creativity definitely gives you those skills to do that.
The other thing would be tenacity, you have to be tenacious, you have to really work at something and understand the details and perseverance. That is one of the things you told me about which has really helped and you don’t realise you actually are persevering until you look at yourself and all the things that you’ve achieved. And just the belief that you can have that, I think is really a forth thing, but I think it goes hand in hand, I think that tops if off really. It’s very much about having those personal skills that will help you have a successful start up because that’s really the foundation for anything bigger if you want it.
Ingrid: So those are the things you would say someone that’s starting a business needs, as well as that really clear idea of the why and what that is.
Fatema: Yes, I think so. And to have some self belief too. You’ve got to be confident, because you’ll come across lots of things that will set you back and make you wonder why you’re doing something, but something I haven’t mentioned which is really important is the business plan. There are so many templates out there and there’s so much advice about business plans, but it doesn’t have to be complicated. I think a business plan can really help you outline all the things I’ve spoken about, and really throughout the course of starting out a business I’ve always had a business plan that helps you to outline something. The way I like to deal with a business plan is it’s something that you always renew and you refresh and you ask yourself the same questions. It may not be any formal template because it’ll be something else that’ll challenge you, or it’ll happen to be through a very part of your business plan like your brand or your customers and your costings. At some point you’ll come to a point where you’ll think, OK well this is costing me this much, or so on and so on, and your financial part of your business plan will definitely help you see where you’ve been and where you need to be and give you an overview and a perspective. It’s very easy to just be all consumed by what’s happening in that moment in time and it’s good to step back and just see the bigger picture.
Ingrid: Thank you. Is there anything else that you would like to tell aspiring business people? Because the people that are listening to this are people who are either in their early stages or perhaps they’re at that dream up stage where they haven’t quite made that leap about what they’re actually going to do.
Fatema: I think for my own point of view, I’m a bit of a dreamer, but at the same time as being a dreamer I like to see things realised. The lovely thing about having your own business is to have a dream and then to see it realised through your own hard work. I think you should let yourself dream, don’t feel so bogged down by the things that you have to do, let yourself dream, get a notebook or a sketchbook, and pull out pictures and inspire yourself with things, get in touch with who you are, because that will feed your idea and your business idea, and very often the business idea will come from somebody’s passion. That’s what I’ve noticed with the people I’ve surrounded myself by, all these people that have all these businesses, it’s about their own passion. You might not understand that when you see their product, and you strip it back, like every big brand, it comes from a beginning, and that beginning is so important because that’s really your foundation.
Ingrid: That’s lovely, thank you so much Fatema. And we look forward to having more chai tea.
Fatema: Thank you. Thank you for having me.