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How much profit can a bubble tea business make?

Updated: 6 days ago


Well, this is the most commonly asked question.


A 300% markup on a beverage is the industry standard.


Keeping the gross profit margins in the 75-80% range are essential in FnB retail industry.



What are the costs involved in opening a bubble tea business?


Depending on your shop size, complexity of your drinks menu and other factors, you could spend as little as 10k and as much as 6 figures on setup costs.

Here's the breakdown of our analysis based in Singapore Bubble Tea Shop market in 2021:


Rent

We have seen our clients paying for rental for as low as $1200 for a 20 meter square shop in neighbourhood and as much as $6-8k for the same size in town.


Machines & Equipment - $12,000 and above - The basics include tea barista machines, tea blender, dispensers, shaker cups, sealer machine, refrigerator and ice maker.

Ingredients -- $5,000 or more for the start - This includes tea, milk and fruit and flavoured syrups. Cups, straws, paper bags, lids etc.

Marketing materials - Up to $10,000 or more - This is a key element which many starters neglect.

Running Facebook marketing campaigns, Google search campaigns, outdoor display ads and influencer marketing campaigns are the most common practice for big brands like KOI, Gong Cha.

As a recipe specialist in Bubble Tea industry for many years, we can easily replicate any popular drinks in the market.

Big brands are successfully for a reason. Gong Cha's budget on marketing is easily over a million yearly when they sponsored Jay Chou's concert in year 2013.







Well, don't be stressed over the marketing budget.

For smaller brands your marketing budget will be minimal, this include creating your logo, store signage, business cards, digital ads campaigns etc.


Licence, certification and insurance - around $8000 including inspections from NEA Singapore.


Staffing -- $20,000 or more - Initially, this might simply reflect what you -- as your sole employee -- need to take out of the business. You’ll spend less than this if you have a working mate, savings or second source of income. And you’ll spend more as your staffing needs increase.




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