How to Start a Bubble Tea Business

Bubble tea is a popular drink in certain locations around the world and it’s gaining some traction in the United States, especially in the southeast. It’s a drink that has tapioca pearls that are chewy and saturated with the flavors of the drink itself to make for an engaging experience. There’s very little competition for this drink, it can come in typical milkshake flavors, and offers a lot of potential. That’s why knowing how to start a bubble tea business is good knowledge to have.

It all begins with how you plan to make the bubble tea. You’ve got three options.

1. Make the bubble tea from scratch every day for a truly authentic product.
2. Join a franchising arrangement that will give you products and trademarks that you can use to promote yourself locally.
3. Purchase ready-made bubble tea from a supplier and then re-sell it locally.

Decide which path you’ll want to follow and then you’ll be ready to follow these additional steps to create a foundation for success.

1. Let people get to know this exciting new product.

The average person in the US isn’t even going to know what bubble tea is. Since they aren’t sure about the experience, they aren’t going to be likely to make a purchase on the spur of the moment. You’ll need to educate them about how great this drink happens to be. Offer samples to people once you get your business licensed, incorporated, and inspected so you can operate legally.

2. Make sure you are properly insured.

Because tapioca is a starch product, there is the possibility of a food allergy. The same is true with dairy allergies as condensed milk is used in many recipes. Being properly insured will protect you against unintended medical issues or accidents that may occur while at your business location. You’ll also want to have an allergen notice posted somewhere prominently to reduce liability risks.

3. Secure the supplies that you’re going to need.

Most of the bubble tea process is pretty basic. You’ll need a refrigerator to keep the drink cold, a stove to make the tapioca, and some way to crush ice if you’re making the bubble tea from scratch. Blenders help to create a smooth drink. Having a supplier provide fresh fruit can help to create more flavor options. Large straws and cups of different sizes are essential for customers to have a customized experience. You can even add in different enhancers, like vitamins or additional flavors, if you wish to offer them.

4. Know your price points.

Most bubble tea options sell for less than $5, even at their largest sizes. Considering the average price to make bubble tea per 16 ounce serving is $0.75, that’s a pretty good profit margin. To achieve that price per serving, however, you’ll need to know your wholesale price points and where you can secure ingredients at the best price possible. You’ll also need to know what price point your community will support. There’s a big difference between $3 and $5 in many consumer’s minds.

5. Consider adding in other business opportunities.

A bubble tea business works very well with other business opportunities. It can be added as an option at a restaurant – especially a Thai restaurant since that’s where this drink was initially invented in the 1980s. Other drinks, like smoothies or floats, can also be included on the menu. This way you’ll be able to meet more customer needs and have a diverse set of revenues supporting your business.

6. Get your food handler’s permit.

Because you will be serving food, even if you choose pre-packaged bubble teas to sell at retail prices, you will need to have a food handler’s card. These are offered locally a few times per month and often requires at least a half-day class. There is usually a fee involved as well. This will be the final step needed in order to legally conduct business. Then just make sure you keep your kitchen and preparation services clean to pass health inspections.

Knowing how to start a bubble tea business isn’t a guarantee of profitability. With a markup of up to 350%, however, this opportunity is one that is difficult to ignore. Take a look at your local market, incorporate bubble tea with an existing business, or open up a dedicated shop, stand, or kiosk if it makes sense by following the steps above to make the most of this exciting opportunity.