Starting A Bubble Tea Business

You’ll bring the Taiwanese drink to the notice of clients in a retail setting if you own a bubble tea company. The drink is quite popular across most of Asia, although it is still in its early stages in the United States. It is gaining popularity among a trend-conscious millennial population, especially in university settings. Bubble tea is also known as boba tea, boba juice, pearl milk, or bobi, among other things.

Follow these ten steps to start a bubble tea business:

Make a plan for your Bubble Tea business.

Make your Bubble Tea Company a Legal Entity.

Fill out a tax registration form for your Bubble Tea business.

Create a Business Bank Account and a Credit Card

Create an accounting system for your Bubble Tea business.

Get the Permits and Licenses You Need for Your Bubble Tea Business

Purchase Bubble Tea Business Insurance.

Define your Bubble Tea Company Brand

Make a website for your Bubble Tea Company.

Configure your Business Phone System

Starting a company entails more than just registering it with the state. This straightforward guide to beginning your own bubble tea company has been put together by us. These stages will guarantee that your new company is well-planned, correctly registered, and legally compliant.

STEP 1: Make a business plan.

A well-thought-out strategy is vital for entrepreneur success. It will assist you in mapping out the intricacies of your organisation and uncovering some unknowns. Consider the following crucial topics:

What are the initial and continuing expenses?

Who is your intended audience?

How much money may you charge your customers?

Fortunately, we have done a lot of the legwork for you.

What are the expenses of starting a bubble tea business?

Depending on your region and product mix, your beginning expenses might be as little as $15,000 or as high as six figures. The cheap cost may be achieved by incorporating secondhand equipment into a portion of an existing business that sells pastries, cookies, smoothies, coffee, books, presents and souvenirs, and so on. Here’s how your expenses may look.

Rent: $50,000 or more per year Remember to look for a spot where your target demographic congregates. That might be a college campus or another youthful and lively atmosphere. Rent in such areas is often high. Do you prefer a kiosk, a pick-up, or a sit-down setting? Will you be offering any more dishes or beverages? All of this will have an effect on your rent.

$10,000 or more in equipment Gas or electric stove, blender, stirrers, shaker cups, sealer machine, refrigerator, and ice maker are the essentials. The majority of these equipment can be purchased online from places like Boba Tea Direct. Alternatively, look for secondhand equipment on the internet.

Ingredients – $2,000 or more for an initial supply of tea, milk, fruit, and flavour powders You will be charged an extra fee for any materials or supplies required for the sale of bubble tea, if any.

Logo development, signage and marketing materials — Up to and including $10,000 – This might entail anything from designing your logo to purchasing retail signs and printing business cards, leaflets, and other sales and marketing materials.

Licensure, certification, and liability insurance are estimated to cost $750 or more. Depending on your area and the items you sell, you will almost certainly need a company licence and a health permit. To learn about the licencing requirements in your state, go to the U.S. Small Business Administration (SBA) website.

$25,000 or more in staffing – Initially, this may just represent what you, as the lone employee, need from the company. If you have a working partner, savings, or a second source of income, you will spend less than this. And you’ll pay more as your personnel requirements grow.

It is also feasible to purchase a bubble tea franchise and have the majority of your starting requirements met as a package. However, franchise fees and expenditures may easily exceed six figures. Examples of such chances may be found here and here.

What are the continuing costs of running a bubble tea business?

After you’ve established a presence, your recurring expenditures will include ingredients, store employees, and operating expenses. These variable expenses will be determined by the amount of business you perform in your shop.

Who is the intended audience?

Depending on where you are, an important part of your audience is likely to be early adopters. These are folks who are open to trying new items or activities. Their recommendation might be really beneficial to you. If you create your company in an area where most prospects are acquainted with bubble tea, your client base may include individuals who wish to compare your tea and entire product mix to the competition.

Customers will anticipate a pleasant and reasonably priced respite from their day, regardless of your location.

How does a bubble tea company generate revenue?

You’ll brew a bubble tea drink for around 75 cents and sell it for a few bucks. Depending on your competitors and price sensitivity, you may generate a 350% or more markup on the drink. Other meals, beverages, or products you offer may provide additional cash.

How much money may you charge your customers?

What do the coffee shops in your area typically charge for premium drinks? This gives you an idea of what you may be able to charge. It’ll most likely cost between $3 and $5. Set a pricing point and watch what happens. Also, keep a watch on the price of rivals, whether direct (other bubble tea merchants) or indirect (coffee houses, smoothie shops, etc.).

How much money can a bubble tea shop make?

A 350% markup on a beverage is not excessive. In the food and beverage retail business, gross profit margins of 75-80 percent are very uncommon.

How can you increase the profitability of your company?

Consider what else you can prepare with the same or comparable equipment you bought for the bubble tea. Consider adding smoothies, coffee, or ice cream to your menu. Alternatively, purchase cookies, pastries, and other dessert goods from neighbouring sellers to sale. Consider selling t-shirts, mugs, posters, CDs, and other items to your existing consumer base. For a period, test out new things to determine whether they sell. If they don’t, change your recipe.

STEP 2: Establish a legal entity

Sole proprietorship, partnership, limited liability company (LLC), and corporation are the most frequent business structure forms.

If your bubble tea company is sued, forming a formal business organisation, such as an LLC or corporation, prevents you from being held personally accountable.

STEP 3: File your taxes

Before you can begin for business, you must register for a number of state and federal taxes.

To register for taxes, you will need to get an EIN. It’s really simple and completely free!

Taxes on Small Businesses

Depending on the business form you choose, you may have multiple choices for how your company is taxed. Some LLCs, for example, may benefit from being taxed as a S company (S corp).

These guides will teach you more about small company taxes:

Taxes on LLCs

LLC vs. sole proprietorship

Corporation vs. LLC

S Corp vs. LLC

How to Form a S Corporation

S Corporation vs. C Corporation

There may be state taxes that apply to your company. In our state sales tax guides, you may learn more about state sales taxes and franchise taxes.

STEP 4: Establish a company bank account and credit card

Personal asset protection requires the use of distinct business banking and credit accounts.

When you combine your personal and business accounts, your personal assets (your house, vehicle, and other possessions) are at danger if your company is sued. This is known as penetrating your company veil in business law.

Furthermore, understanding how to develop corporate credit may help you get credit cards and other financing in your company’s name (rather than your own), lower interest rates, larger lines of credit, and other benefits.

Establish a business bank account.

Opening a business bank account is not only required when asking for business financing, but it also:

Separates your personal assets from the assets of your firm, which is required for personal asset protection.

It simplifies bookkeeping and tax reporting.

Create a net 30 account.

Net 30 accounts are used to develop and grow company credit while also increasing cash flow. Businesses use a net 30 account to purchase items and refund the whole debt within a 30-day period.

Many net 30 credit suppliers submit information to the main business credit agencies (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how firms establish business credit in order to get approved for credit cards and other lines of credit.

Apply for a business credit card.

Obtaining a business credit card benefits you in the following ways:

Put all of your company’s costs in one location to separate personal and business spending.

Build your company’s credit history, which will be important for raising funds in the future.

STEP 5: Establish business accounting

Recording your numerous costs and sources of revenue is crucial to assessing your company’s financial status. Keeping precise and thorough accounting also makes yearly tax filing much easier.

STEP 6: Obtain all required permissions and licences

Failure to get appropriate permissions and licences may result in significant penalties or possibly the closure of your firm.

Requirements for Federal Business Licensing

Federal laws govern what may and cannot be added to, marketed as, or processed with food. A Food and Drug Administration resource on the procedure of opening a food company is attached: How to Launch a Food Business

Requirements for State and Local Business Licensing

To run a bubble tea business, certain state permissions and licences may be required. Visit the SBA’s reference to state licences and permits to learn more about licencing requirements in your state.

For information on local licences and permissions, visit:

Check with the clerk’s office in your town, city, or county.

Contact one of the local organisations mentioned in the US Small Business Associations database of local business resources for help.

Occupancy Certificate

A storefront is often used to conduct a bubble tea company. A Certificate of Occupancy is often required for businesses that operate from a physical site (CO). A certificate of occupancy certifies that all building rules, zoning laws, and government requirements have been satisfied.

If you intend to rent a space:

In most cases, it is the landlord’s obligation to get a CO.

Before leasing, ensure that your landlord has or can get a valid CO for a bubble tea company.

A new CO is often required after a big remodelling. If your location will be refurbished before opening, incorporate wording in your leasing agreement saying that lease payments would not begin until a valid CO is given.

If you intend to buy or create a location:

It is your responsibility to secure a valid CO from a local government entity.

Examine all building rules and zoning standards for your business’s location to verify compliance and the ability to acquire a CO.

Regulations Concerning Food

When selling food, you must get a licence from your local health authority; all enterprises serving food must pass a health inspection. Tips for Passing a Health Inspection

STEP 7: Obtain commercial insurance.

Insurance, like licences and permits, is required for your company to operate safely and legally. In the case of a covered loss, business insurance protects your company’s financial well-being.

There are several sorts of insurance plans designed for various types of companies with varying risks. If you are unaware about the hazards that your company may encounter, start with General Liability Insurance. This is the most popular coverage required by small companies, so it’s a good place to start for yours.

Workers’ Compensation Insurance is another important insurance product that many companies need. If your company will have workers, your state may require you to purchase Workers’ Compensation insurance.

STEP 8: Establish your brand

Your company’s brand is what it stands for, as well as how the public perceives it. A strong brand will help your company stand out from the crowd.

How to Promote and Market a Bubble Tea Company

The uniqueness of the product might work in your favour. A specific market niche is always looking for new goods and experiences. Share the narrative of how bubble tea could have been originated with local consumers and the local media. Also, be sure to provide complimentary samples. The drink might be so unusual in your area that the media will cover it before you open for business.

How to Keep Customers Returning

Your marketing activities might be as easy as distributing leaflets in your target market. Create a Facebook page for bubble tea fans, and use Instagram to showcase the beverage and your shop. Create a video on YouTube or Vimeo demonstrating how to prepare bubble tea. Serve the drink at municipal festivals, fairs, and other events where you may spread the word. If you do this, make sure to hand out fliers and business cards inviting customers to your main location.

STEP 9: Create your company’s website.

After you’ve defined your brand and designed your logo, the next step is to build a website for your company.

While developing a website is an important step, some may be concerned that it is out of their grasp due to a lack of website-building skills. While this was a fair concern in 2015, online technology has made significant advances in recent years, making the lives of small company owners considerably easier.

The following are the primary reasons why you should not put off developing your website:

Every genuine company has a website, period. When it comes to bringing your company online, it doesn’t matter what size or sector it is.

Social media accounts, such as Facebook pages or LinkedIn company profiles, are not a substitute for your own business website.

STEP 10: Install your company phone system.

Getting a phone for your company is one of the finest methods to keep your personal and professional lives distinct and private. That isn’t the only advantage; it also helps you automate your company, provides it legitimacy, and makes it simpler for prospective clients to identify and contact you.