A bubble tea shop, of bubble tea café or bubble tea bar, is a small, informal restaurant where bubble tea and light refreshments such as light snacks, sandwiches, muffins, fruit, or pastries are served to customers. Bubble tea shops sell bubble tea, a Taiwanese tea-based drink with a variety of toppings.

Bubble teas are described as “sweet teas in a thick Styrofoam cup, mixed with non-dairy creamer, ice, and a spoonful of black tapioca pearls. Some of the most recent reports released shows that the market size of the bubble tea industry in the US has grown 2.8 percent per year on average between 2017 and 2022.

Fortune Business Insights says that the global bubble tea market size was valued at USD 2.02 billion in 2019 and is projected to reach USD 3.39 billion by 2027. There are about 3,392 bubble tea shops all across the United States and they are responsible for employing 22,217 people.

Steps on How to Start a Bubble Tea Shop Business

  1. Conduct Market Research

Conducting market research before starting any business is key to the success of the business hence you must not open a bubble tea shop without conducting market research. Market research provides critical information about your market and your business landscape. It can tell you how your business is perceived by the customers and clients you want to reach.

It can help you determine who and where your customers are, and which customers are most likely to do business with you. In essence, thorough market research will give you the ability to understand how your target customers think and help you adapt to their needs.

a. Who is the Target Market for Bubble Tea Shop Business?
  • Sportsmen and women
  • Corporate executives
  • Socialites
  • Students
  • Migrants
  • Entrepreneurs
  • Business people
  • Celebrities
  • Military men and women
  • Tourists
  • Every adult in the neighborhood where your bubble tea shop will be located.
b. Is Bubble Tea Shop a Profitable Business?

Yes, the bubble tea shop business is profitable. The industry is valued at nearly $2.5 billion around the world, and it is expected to continue experiencing significant growth throughout the next decade. So, if you are looking to capitalize on a growing global trend, bubble tea may be the perfect business opportunity for you.

c. Are There Existing Niches in the Industry?

Yes, there are existing niches when it comes to bubble tea shops. Here are some of them;

  • Brick and mortar bubble tea shop (sit-down bubble tea shop)
  • Drive through bubble tea shop
  • Kiosk bubble tea shop
  • The Grab-and-Go bubble tea café
  • Upscale bubble tea shop
  • Mobile bubble tea shop (bubble tea carts or bubble tea trucks)
d. Who are the Major Competitors?
  • Wushiland
  • Cowcow’s Tea
  • Mi Tea
  • Plentea
  • Fat Straws
  • Chun Yang Tea
  • Teapioca Lounge
  • Kung Fu Tea
  • Happy Lemon
  • RedStraw Teabar
  • Brew Tea Bar
  • Yaya Tea
  • Buddy’s Lounge
  • GuilTea Cravings
  • Taproot
  • Pearl’s Finest Teas
  • Vivi Bubble Tea
  • Gathers Tea Bar
  • Cafe Zio
  • Spot of Tea.
e. Are There County or State Regulations or Zoning Laws for Bubble Tea Shop Business?

Yes, there are county and state regulations and zoning laws for bubble tea shops in the United States. Please note that the Food and Drug Administration (FDA) sets the federal Food Code. However, the FDA doesn’t oversee individual bubble tea shops. Instead, the various states use the Food Code as the basis for their own food codes. They may adopt its rules, interpret them differently or set their own rules.

Please note that in the United States, you are required to follow your own state’s food service code. Visit the FDA website for a list of food service codes by state. Use this to find the state authority handling restaurants and bars and view the laws that apply in your state.

f. Is There a Franchise for Bubble Tea Shop Business?

Yes, there are franchise opportunities for a bubble tea shop, and here are some of them;

  • 7 Leaves Cafe
  • Bee & Tea
  • Happy Lemon
  • Gong Cha
  • Bubbleology
  • Bambu Desserts & Drinks
  • Boba Loca
  • Kung Fu Tea
  • Jazen Tea
  • Chatime
g. What Do You Need to Start a Bubble Tea Shop Business?
  • A Feasibility Report
  • Business and Marketing Plans
  • Business Licenses and Permits
  • A Good Shop facility
  • EIN (Employer Identification Number)/Federal Tax ID Number.
  • A Corporate Bank Account
  • Equipment
  • Supplies
  • Employees
  • Startup Capital
  1. Memorable Bubble Tea Shop Business Names

  • Therasa Ferguson© Bubble Tea Shop, Inc.
  • Out of Taiwan® Bubble Tea Café, LLC
  • Cho Lee© Bubble Tea Bar, Inc.
  • Boba Genius® Bubble Tea Café, Inc.
  • Tim Ming™ Bubble Tea Shop, Inc.
  • The Horizon™ Bubble Tea Café, LLC.
  • Brown Sugar© Bubble Tea Shop, LLC
  • Sweet Life® Bubble Tea Café, Inc.
  • Lu Wang© Bubble Tea Shop, Inc.
  • Red Dragon© Bubble Tea Café, Inc.
  • Chang Li and Sons® Bubble Tea Bar, LLC
  • Tea Lovers® Bubble Tea Bar, LLC
  • Monica Lewis™ Bubble Tea Café, LLC
  • Green Cups© Bubble Tea Shop, Inc.
  • Moon Light® Bubble Tea Café, Inc.
  • Santos Marcos™ Bubble Tea Café, Inc.
  • Golden Cups™ Bubble Tea Bar, Inc.
  • Homeland© Bubble Tea Café, Inc.
  • Full House® Bubble Tea Bar, LLC
  • Tina Tea™ Bubble Tea Shop, Inc.
  1. Register Your Business

a. What Type of Business Structure is Best for Bubble Tea Shop?

When it comes to starting a bubble tea business, you have several options when it comes to the business structure, but the one most players in this line of business consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits.

Please note that an LLC will need an EIN if it has any employees or if it will be required to file any of the excise tax forms listed below.

b. Steps to Form an LLC
  • Choose a Name for Your LLC.
  • File Articles of Organization.
  • Choose a registered agent.
  • Decide on member vs. manager management.
  • Create an LLC operating agreement.
  • Comply with other tax and regulatory requirements.
  • File annual reports.
c. What Type of License is Needed to Open a Bubble Tea Shop Business?
  • General Business License
  • Health and Safety Permit
  • Food and Drinks Handlers’ License
  • Zonal Permits
  • Signage Permit
  • Operational State Facility Inspections
  • A music license if you want to play live, recorded, or streaming music in your bar or restaurant
  • A dumpster placement permit that specifies where you can put your trash dumpster outside your bar or restaurant
  • A valet parking permit if you plan to offer valet parking for customers
  • Sidewalk permits if you plan to offer outside seating
d. What Type of Certification is Needed to Open a Bubble Tea Shop Business?

You don’t need any certifications to open a bubble tea business.

e. What Documents are Needed to Open a Bubble Tea Shop Business?
  • DBA
  • EIN
  • Business and liability insurance
  • Federal Tax Payer’s ID
  • State Permit and Building Approval
  • Certificate of Incorporation
  • Business License
  • Business Plan
  • Employment Agreement (offer letters)
  • Operating Agreement for LLCs
  • Insurance Policy
  • Online Terms of Use
  • Online Privacy Policy Document
  • Contract Document
  • Company Bylaws
  • Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?

If you are considering opening a bubble tea business, usually you may not have any need to file for intellectual property protection or trademark. This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.

  1. Cost Analysis and Budgeting

a. How Much Does It Cost to Start a Bubble Tea Shop Business?

The cost required to open a bubble tea shop business may vary significantly. A sit-down bubble tea shop typically costs between $200,000 and $375,000 to set up. A large drive-through shop can cost between $80,000 and $200,000. A small kiosk bubble tea shop may cost between $25,000 and $75,000. A franchised sit-down bubble tea shop can cost up to $673,700.

b. What are the Costs Involved in Starting a Bubble Tea Shop
  • The total fee for registering the business in the United States of America – is $750.
  • Legal expenses for obtaining licenses and permits as well as the accounting services totaling – $1,200.
  • Marketing promotion expenses (2,000 flyers at $0.04 per copy) for the total amount of $80.
  • The cost for hiring a business consultant (writing of business plans inclusive) – $2,500.
  • Insurance coverage at a total premium – $2,400.
  • The cost of accounting software, CRM software, and payroll software – $1,500
  • The cost for payment of rent for 12 months at $1.76 per square foot in the total amount of – $35,600.
  • The cost for shop/facility remodeling – $25,000.
  • Other start-up expenses including stationery – $500
  • Phone and utility deposits will cost – ($2,500)
  • Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $30,000
  • The cost for start-up inventory – $16,027
  • Storage hardware (bins, utensil rack, shelves, glasses case) – $3,720
  • The cost for counter area equipment (countertop, sink, ice machine, etc.) – $6,000
  • The cost for serving area equipment (glasses, flatware) – $3,000
  • The cost for store equipment (cash register, security, ventilation, signage) – $3,150
  • The cost for the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $8,000.
  • The cost of launching an official website – $600
  • The cost for our grand opening party – $3,000
  • Miscellaneous – $2,500
c. What Factors Determine the Cost of Opening a Bubble Tea Shop Business?
  • The size of the bubble tea shop
  • The choice of location
  • The required licenses and permits
  • The type of facility
  • The type of related products retailed in the shop
  • The cost of hiring and paying a business consultant and attorney
  • The cost for branding, promotion, and marketing of the bubble tea shop business
  • The cost for furnishing and equipping the bubble tea shop business – facility
  • The cost of insurance policy covers
  • The cost for registering the business
  • Source of your supplies and ongoing expenses
  • Cost of recruiting and training your staff
  • The cost for the purchase and customizing of uniforms, shoes, and caps for your employees
  • The cost of opening the bubble tea shop business
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?

It is not compulsory to build a new facility for your bubble tea business, but if you have the required finance, it will pay you to build your facility. The truth is that building or reconstructing a facility will help you come up with a facility that will perfectly fit into your overall business goals and vision.

e. What are the Ongoing Expenses of a Bubble Tea Shop Business?
  • Supplies (inventory expenses)
  • Utility bills (internet subscriptions, phone bills, signage and software renewal fees et al)
  • Salaries of employees
f. What is the Average Salary of your Staff?
  • Shop Manager (Owner) – $45,000 Per Year
  • Accountant – $30,630,000 Per Year
  • Bubble Tea Makers and Servers – $27,100 Per Year
  • Cleaners – $25,000 Per Year
  • Security Guard -$24,000 Per Year
g. How Do You Get Funding to Start a Bubble Tea Shop Business
  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell shares to interested investors
  • Applying for a loan from your bank/banks
  • Source for soft loans from your family members and friends.
  1. Write a Business Plan

a. Executive Summary

Our bubble tea shop is a neighborhood bubble tea business that will be located in a fast-growing community in Edison, New Jersey. We have been able to secure a two-year lease agreement for a vacant shop within the city’s largest shopping mall.

We are fortunate to secure a facility with an option of renewal for 5 years at a rate that is favorable to us. Our bubble tea shop business is designed to meet both the health and safety standards as recommended by the local authority. Our customers are going to be treated with good music at all times.

b. Products and Service
  • Bubble tea.
  • Snacks
  • Drinks and water.
c. Mission Statement

Our mission is to build a bubble tea bar business that will meet the needs of our customers in regions/cities where we have our outlets and to sell franchises all across the United States of America and Canada.

Vision Statement

Our vision is to grow our business all over the world and be the brand for quality bubble tea, a great crew, cool culture, and active community involvement. We want to be known as the bubble tea brand with the triple threat- nutritious, aesthetically pleasing, and delicious.

d. Goals and Objectives

The goals and objectives of a bubble tea business are to provide a retail outlet where patrons can go to buy and drink bubble tea.

e. Organizational Structure
  • Shop Manager (Owner)
  • Accountant
  • Bubble Tea Maker and Server
  • Cleaners
  • Security Guard

Marketing Plan

a. SWOT Analysis
Strength:
  • Ideal location for a bubble tea shop
  • Highly experienced and qualified employees and management
  • Access to finance from business partners
  • Access to ingredients and supplies.
  • A reliable, clean, healthy, and efficient method of preparing bubble tea.
Weakness:
  • Financial constraints may restrict the publicity and branding of the business
  • A new business that will be competing with well-established bubble tea shops and bubble tea franchises in the city.
  • Inability to retain our highly experienced and qualified employees longer than we want during the teething stage of the business.
Opportunities:
  • A rise in the number of bubble tea lovers within our market space (The surging popularity of bubble tea is expected to benefit the industry and attract new operators)
  • Online market, new services, new technology, and of course the opening of new markets.
Threat:
  • The arrival of a new bubble tea shop within our market space
  • Steady wage expenses and increasing prices of gas amid the low demand during the pandemic will reduce industry profitability.
  • Economic uncertainty
  • Liability problems
  • The U.S. Food and Drug Administration (FDA) could change its regulatory status and decide to enforce strict regulations that can strangulate new businesses like ours.
b. How Do Bubble Tea Shops Make Money?

Bubble tea shops make money by selling the following products;

  • Bubble tea.
  • Snacks
  • Franchise
c. Payment Options
  • Payment via bank transfer
  • Payment with cash
  • Payment via credit cards
  • Payment via online bank transfer
  • Payment via check
  • Payment via mobile money transfer
d. Sales & Advertising Strategies
  • Introduce your bubble tea shop business by sending introductory letters alongside your brochure to corporate organizations, households, sports organizations, gyms, schools, socialites, celebrities, and other key stakeholders throughout the city where your bubble tea shop business is located.
  • Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
  • Create a basic website for your business to give your business an online presence
  • Directly market your products.
  • Join local bubble tea shop associations for industry trends and tips
  • Provide discount days for your customers
  • Advertise our business in community-based newspapers, local TV and radio stations
  • List your business on yellow pages ads (local directories)
  • Encourage the use of word-of-mouth marketing (referrals)

Financial Projection

a. How Much Should You Charge for your Product/Service?

On average, a store charges $3.00-$3.50 for a serving of bubble tea (16oz or 20oz serving).

b. How Much Profit Do Bubble Tea Shop Owners Make a Year?

It depends, an online report shows that on average, within the industry, a small to medium-sized bubble tea shop can earn anywhere from $60,000 to $160,000 in personal income for the shop owner.

c. What Factors Determine the Amount of Profit to Be Made?
  • The capacity of the bubble tea shop
  • The types of related products retailed in the shop
  • The location the bubble tea shop is covering
  • The management style of the bubble tea shop
  • The business approach of the bubble tea shop
  • The advertising and marketing strategies adopted by the bubble tea shop.
  • The number of years the bubble tea shop business is in business
d. What is the Profit Margin of a Bubble Tea Shop?

The profit margin of a bubble tea shop is not fixed. However, many stores make $3 or more per serving. And materials can cost $0.75 or less. If you sell 500 products per day, you could bring in more than $30,000 per month before factoring in other expenses.

e. What is the Sales Forecast?

Below is the sales forecast for a bubble tea shop. It is based on the location of the business and other factors as it relates to such startups in the United States;

  • First Fiscal Year: $240,000
  • Second Fiscal Year:  $400,000
  • Third Fiscal Year: $600,000
  1. Set Up your Shop 

a. How Do You Choose a Perfect Location for Bubble Tea Shop?
  • The demography of the location especially as it relates to people that drink bubble tea regularly
  • The demand for the bubble tea and related products offered by bubble tea shops in the location
  • The purchasing power of businesses and the residents of the location
  • Accessibility of the location
  • The number of bubble tea shops, and restaurants that serve bubble tea in the location in the location
  • The local laws and regulations in the community/state
  • Traffic, parking and security et al
b. What State and City are Best to Open a Bubble Tea Shop?
  • Edison, New Jersey
  • Washington, D.C.
  • Chicago, Illinois
  • Philadelphia, Pennsylvania
  • San Gabriel, California
  • Honolulu, Hawaii
  • New York City, New York
  • Austin, Texas
  • Las Vegas, Nevada
  • Denver, Colorado.
c. What Equipment is Needed to Operate a Bubble tea shop?
  • Bubble Tea Sealer Machine
  • Shaker Machines
  • Fructose Dispensers
  • Blender and Extractor
  • Automatic Tea Brewers
  • Automatic Tapioca Pearl Maker
  • Automatic Tapioca Pearl Cookers
  • Boba Tea Shaker Cups
  • Insulated Tea Dispensers
  • Kitchen Equipment Supplies List
  • Electric or Gas Stove
  • Syrup Pump.
  1. Hire Employees

When it comes to hiring employees for a standard bubble tea shop, you should make plans to hire a competent shop manager (you can occupy this position), account clerk, bubble tea maker and servers, cleaners, and security guard.

  1. Launch the Business Proper

In recent times, no bubble tea shop opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening if you are operating on a low budget or you can go for a grand opening party.

The bottom line is that with a proper launching of the bubble tea shop, you will be able to officially inform people in your city that your bubble tea shop is open for business.

a. What Makes a Bubble Tea Shop Business Successful?
  • Choose a good location and shop facility to launch the business
  • Make sure your shop is stocked with different flavors of bubble tea (give your customers options)
  • Throw an open house party before officially opening the bubble tea shop business
  • Be deliberate with your marketing sales approach
  • Encourage the use of word of mouth to promote your bubble tea shop business
  • Leverage on all available online and offline platforms to promote your bubble tea business
b. What Happens During a Typical Day at a Bubble Tea Shop?
  • The shop is open for the day’s work
  • The serving areas, chairs, and tables are properly arranged
  • Walk-in customers are attended to
  • Deliveries of orders are made
  • Stocks are taken and reports are written and submitted to superior officers
  • The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Bubble Tea Shop Business?
  • Excellent customer services skills
  • Interpersonal skill
  • Accounting and bookkeeping skills
  • Business management skills
  • Bargaining skill
  • Work experience in a restaurant or bar environment
  • Experience in managing people
  • Experience in business administration
  • Experience in handling different types of bubble tea-making equipment.