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How Much Profit Do Bubble Tea Shops Make?

How Much Profit Do Bubble Tea Shops Make

How Much Profit Do Bubble Tea Shops Make?

You May Be Asking, “How Much Profit Do Bubble Tea Shops Make?”

In case you didn’t know, boba shops are a big deal. They’re basically these adorable little cafes that serve up sweet and chewy tapioca balls in all sorts of flavors, and people can’t seem to get enough of them!  But how much do boba shops actually make and are bubble tea shops a good investment?

To answer these questions, we need to look at the potential total revenue, expenses, and then bubble tea shop profits.

 

How Much Revenue Do Boba Shops Generate Annually?

To figure out the annual amount of revenue, you just need to take your average selling price/cup times your average amount of cups sold/day and then multiply that by about 350 days.

So bubble tea shops that have an average selling price of $5.00/cup of bubble tea and sell about 100 cups per day would make about $500/day x 350 days = $175,000 in annual revenue.

Now that we have the yearly revenue, we need to subtract our expenses to get the yearly profit.

Typical boba shop expenses include:

-Rent or lease for the business space

-Employee salaries

-Ingredients (tea, syrups, tapioca pearls)

-Equipment costs (bubble tea machines, ice maker, etc)

-Marketing costs (logo design, custom cups, social media)

So if our yearly expenses are $75,000/year then we take our revenue of $150,000 – $75,000 = $75,000 profit for only selling 100 cups/day.

 

Most boba shops can sell well over 100 cups per day and busy tea shops regularly sell over 1,000 cups/day!

 

How Much Does it Cost to Make a Cup of Bubble Tea

 

How much profit for each cup of boba tea?

Another way to figure out your bubble tea shop’s profit potential is to figure out your profit for each cup that you sell. Then you can estimate your revenue and profit based on daily cup sales.

First, you need to start with your cost per cup of bubble tea and then add in your expenses. The good news is, is that a lot of your expenses will be fixed costs, meaning that they don’t change every month. For example, your rent will be a fixed cost.

If your rent is $2000.00/month then it will be the same if you sell 100 cups/day or 1,000 cups/day. So once you sell enough to cover your fixed costs, then you will begin to make a lot more profit per cup of boba that you sell.

Next on the list are variable costs, these are things that change each month like how many ingredients you use. These will be directly proportional to the amount of boba that you sell.  The more cups of boba you sell, the more you will need to spend on ingredients.

 

But as long as you make a profit for each cup of bubble tea you sell, then the more you sell, the better!

 

Find Your Break-Even Point

We created a spreadsheet here where you can input all of your expenses so you can calculate your potential profit and break-even point.

Tea Shop Break Even Analysis

 

Should you hire a manager?

One decision that can have a large impact on your bottom line is who will manage your bubble tea shop. If this is your first store, then it makes sense to manage it yourself at the beginning. This will help ensure that your boba business runs smoothly and eventually you can train a manager to run the store for you. Most bubble tea shop owners do this once they want to open their 2nd store with the goal being to open 3-5 stores and then run the businesses as more of a CEO role without actually being in the stores.

 

To Franchise or Not to Franchise?

Another important big impact on how much your bubble tea shop will cost is if you want to franchise or open your own store. Franchise bubble tea shops will cost you more money to start with some franchise fees starting out as high as $100,000! The benefit of starting a franchise is that you have a well-oiled machine with an already established brand and customer base.

Opening your own bubble tea store will give you a lot more control over your brand and the daily decisions in your boba shop. However, this also means that you have more responsibility to make sure your bubble tea shop is successful.

We have helped supply products to both franchise owners and independent bubble tea shops alike. Some bubble tea shops do very well for themselves, but there are also some bubble tea stores that struggle to make it in the industry due to a lack of customer base or poor management skills.

 

Costly Mistakes to Avoid

The biggest mistakes we see from new boba tea store owners are picking a location that is too expensive, bad customer service, and no marketing. 

You want to pick a good location for a good price and the easiest way to do this is to start small. Rent is usually calculated by the price/square foot so if you start in a smaller location, your rent will be less expensive. It is much better to have a small boba shop in a great location than a massive boba shop in a bad location.

Bad customer service is the quickest way to lose customers. Focus on treating your employees well and then training them to treat your customers the same way. You can also read through these common customer service mistakes to make sure you have all of your bases covered.

In 2022, marketing is more important than ever.  The first key is to focus on what happens in your store.  This includes your internal branding like your store logo and custom products and also includes the quality of your bubble tea, the atmosphere of your store, and your customer service.  If customers have a great experience at your store, they will naturally tell their friends and your store will grow through word of mouth.

The next step is making sure that you have an online presence like social media account and a website. You can read more about the basics of marketing your bubble tea shop here.

Check out How To Open A Bubble Tea Shop

Want to start your own Bubble Tea Business?
Enter Your Info to Receive Our Free Ebook.

Want to start your own Bubble Tea Business? Enter Your Info to Receive Our Free Ebook

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81 Responses

  7. Hello! I appreciate all of this information! May I get a copy of the ebook as well? Thank you in advance!

    Reply

  8. Hi Mike,

    As someone who loves boba teas, and been working in the industry for two and half years, I’m just wondering if there any helpful tips I can research more on to start a small boba business? It’d be greatly appreciated.

    Reply

  10. Hi Mike, Can you send me the ebook as well? I tried sending it using the link at the top of the page but it doesn’t work. TIA!

    Reply

  13. Could I have the e book please? I am still on the fence unable to decide if going the franchise way is the right thing for me.
    Thank you
    Bindu

    Reply

  14. I’m interested in franchising a Boba shop in Atlanta, GA, a somewhat already saturated market but I still would love to see your ebook. Thank you in advance, Mike.

    Reply

  18. Hey great article! I would love it if there were more to read up on so I can consider opening a shop for myself.

    Reply

  19. Hi, thank you for the useful information. I’m still at the researching stage about opening a milk tea shop. It’s a lot to consider. I would love to read more about it!

    Reply

  20. Very interesting and complete article. I’m just about to start my boba business and this is so helpful. I would love to have a copy of your eBook if possible. Thank you!

    Reply

  21. It’s my first time in Boba business, so I don’t know if it’s possible even for beginners.

    Reply

  22. Hi, thank you for all this great information. I’d love a copy of your e book too, please. I don’t have a business yet, I’m doing the research.

    Reply

  23. Hi Mike,

    I am interested in opening a Boba tea shop. I would really appreciate your guidance and help.

    thank you,
    Delia

    Reply

  26. Hi Mike,

    I am interested in opening a Boba tea shop. I would really appreciate your guidance and help.

    thank you,
    Chen

    Reply

  31. Hi Mike!

    I think about opening the Boba tea shop. Can I get more information about that?

    Thank you in advance!

    Reply

  34. Hi there! My friend and I have noticed a need for boba tea in our area, but we don’t really know where to start! Would I be able to get some information?

    Reply

  37. Hi Mike! I’ve been reading a lot through your blog posts and I just wanna say a huge shout out to you. I am starting out with DIY kits then I’ll use the profit to open a store. Needless to say, I am scared lol because this is my first ever business and I don’t know what I’m doing honestly.

    I read your post about the how much it costs to make bubble tea, How do I calculate shipping costs to that to get the price of one 16oz taro milk tea?

    Any tips you’d have for me is greatly appreciated for selling DIY kits as a starter.
    I’m about to start reading your marketing tips because I have zero clue how to market. Thanks in advance

    Reply

    1. Jamila,

      I get it, I know it can be scary starting a new business. We’ve just sent you an email with some thoughts that I hope are helpful!

  38. Hi Mike! I’ve been reading a lot through your blog posts and I just wanna say a huge shout out to you. I am starting out with DIY kits then I’ll use the profit to open a store. Needless to say, I am scared lol because this is my first ever business and I don’t know what I’m doing honestly.

    I read your post about the how much it costs to make bubble tea, How do I calculate shipping costs to that to get the price of one 16oz taro milk tea?

    Any tips you’d have for me is greatly appreciated for selling DIY kits as a starter.
    I’m about to start reading your marketing tips because I have zero clue how to market. Thanks in advance

    Reply

  41. I’ve been researching about how to open a boba shop but I have no idea how to make different bobas and measurements for different cup sizes. Does your compony offer that training? and build a store to

    Reply

  42. I’ve been researching about how to open a boba shop but I have no idea how to make different bobas and measurements for different cup sizes. Does your compony offer that training?

    Reply

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