Table of Content

    Do you want to start bubble tea shop business?

    Starting a bubble tea shop business is very easy and extremely profitable as well. If you don’t know how to open a bubble tea shop, just go through this business plan template. It will guide you through everything which you need to know for starting this venture.
    The first thing you should do is to develop a comprehensive plan for your tea room business model. The business plan will not only help you in startup but it will also help you in taking important decisions for your company over the next years. In case you don’t know how to write a good business plan, we are providing a detailed business plan template of a bubble tea shop startup ‘Sam’s Stop’ to help you avoid the trouble of making a plan yourself.

    Executive Summary

    2.1 The Business

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    Sam’s Stop will be a licensed and ensured tea shop located in Downtown Manhattan. We will be strategically located in the most suitable place for opening a bubble tea shop business plan.

    2.2 Management

    The business will be solely owned and operated by Sam Kin who is a graduate from Harvard University and is known for his sharp business acumen and exceptional management skills. Sam will hire a small team comprising of chefs, waiters, assistants and cleaners for operating and managing the shop.

    2.3 Customers

    Our customers will primarily be the residential community living near our shop. We will offer high-quality and healthy tea latte, milk tea, fruit flavored tea, brown sugar milk, macchiato and slush to our esteemed customers.

    2.4 Target of the Company

    Our primary target is to become the best tea shop in the New York City within next 3 years of our launch. Our secondary target is to achieve the net profit margin of $10k/month by the end of the first year, $15k/month by the second year, and $25k/month by the third year.

    milk tea business plan template

    Bank/SBA Business Plan
    Document for raising debt funding from financial institutions to meet the expectations of the banks, SBA, and government agencies.

    Company Summary

    3.1 Company Owner

    Sam is a business graduate of Harvard University. After completing his Bachelor’s, he worked with a couple of fast food restaurants at executive positions. He is known for his sharp business acumen and exceptional management skills.

    3.2 Why the Business is being started

    The main motive behind Sam starting a bubble tea business plan is his intense passion for tea room business model. Sam has exceptional business skills and this venture is just his first step into the business world. Within next three years he plans to open five more bubble tea spots in different cities, and after that, he will move towards business plans for restaurants. So, this venture is where Sam will enter the corporate sector.

    3.3 How the Business will be started

    Sams’s Stop will be launched in a 200-square-feet shop located in the main commercial market of Downtown Manhattan. The shop was previously used as a grocery store, so a lot of work needs to be done for turning it into a tea shop. The company’s financial experts have forecasted following costs for the start-up:

    tea room business plan template pdf

    The detailed start-up information is as follows:

    Start-up Expenses  
    Legal $55,300
    Consultants $0
    Insurance $32,750
    Rent $32,500
    Research and Development $32,750
    Expensed Equipment $32,750
    Signs $1,250
    TOTAL START-UP EXPENSES $187,300
    Start-up Assets $0
    Cash Required $332,500
    Start-up Inventory $32,625
    Other Current Assets $232,500
    Long-term Assets $235,000
    TOTAL ASSETS $121,875
    Total Requirements $245,000
    START-UP FUNDING $0
    START-UP FUNDING $273,125
    Start-up Expenses to Fund $11,875
    Start-up Assets to Fund $15,000
    TOTAL FUNDING REQUIRED $0
    Assets $23,125
    Non-cash Assets from Start-up $18,750
    Cash Requirements from Start-up $0
    Additional Cash Raised $18,750
    Cash Balance on Starting Date $21,875
    TOTAL ASSETS $0
    Liabilities and Capital $0
    Liabilities $0
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $0
    Other Current Liabilities (interest-free) $0
    TOTAL LIABILITIES $0
    Capital $0
    Planned Investment $0
    Investor 1 $332,500
    Investor 2 $0
    Other $0
    Additional Investment Requirement $0
    TOTAL PLANNED INVESTMENT $695,000
    Loss at Start-up (Start-up Expenses) $313,125
    TOTAL CAPITAL $251,875
    TOTAL CAPITAL AND LIABILITIES $251,875
    Total Funding $255,000

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    Services for customers

    It is wiser to plan your services or menu before you think about how to start a milk tea business plan template. You can only plan subsequent things after you know what you will be providing to your customers. Sam’s Stop will offer following products to its customers:

    • Milk Tea: Bubble Milk Tea, Brown Sugar Milk Tea, Almond Milk Tea, Hazelnut Milk Tea
    • Tea Latte: Black Rose Latte, Oolong Latte Float, Matcha Latte, Tie Guan Yin Latte
    • Fruit Flavored Tea: Peach Green Tea, Mango Green Tea, Honey Green Tea, Fresh Lemon Green Tea
    • Brown Sugar Milk: Black & Yellow Milk, Black Babo Milk, Red & Yellow Milk
    • Macchiato: Rose Tea Macchiato, Jasmine Green Tea Macchiato, Milk Tea Macchiato
    • Slush/Milk Shake: Oreo Milk Shake, Mango Slush, Passion Fruit Slush, Ice Cream Shake

    Marketing Analysis of bubble tea shop business

    Note

    The most important component of an effective milk tea business plan is its accurate marketing analysis that’s why Sam acquired the services of marketing experts to help him through this phase. It is only after this stage that a good bubble tea business plan template could have been developed. After identifying the local market trends in Manhattan, the marketing experts and analysts also helped him in developing the bubble tea marketing plan.

    5.1 Market Trends

    As for a general trend, the market demand for bubble tea businesses is on the rise. Bubble tea is one of the most popular drinks with Americans. The biggest reason behind the popularity of this bubble tea shop business plan template is that people are becoming more health conscious day by day.

    As a result, people have started avoiding carbonated drinks and have leaned towards healthy alternatives such as smoothies, slushes, milk and fresh fruit juices. That’s why the number of bubble tea shops has been increasing during the last few years. In short, this industry has a lot of potential and even a small bubble tea shop can yield immense profit provided that you successfully plan it and target your customers.

    5.2 Marketing Segmentation

    Our marketing experts have identified following type of target audience which can become the potential customers of our tea shop.

    Bubble Tea Shop Business Plan - Market Segmentation

    The detailed marketing segmentation comprising of the company’s target audience is as follows:

    Strategic/Operational Business Plan

    5.2.1 Working Community:

    The first category includes the workers and employees who work in the businesses or offices located in the vicinity of your milk tea business plan template. This group leads a strenuous life, burdened with plenty of work and thousands of matters to think upon. It has been observed that this group often takes soft drinks, especially coffee and bubble tea to take a break from their hectic routine. Our tea shop will be the perfect place for them to rest while on their way home.

    5.2.2 Residential Community:

    The second group of our target customers will be the community residing in the vicinity of our restaurant. Bubble tea is one of the favorite drinks of American teens so we hope to have a lot of sales due to them. Not only teens, adults and middle-aged people also love smoothies, slushes and fresh tea due to health benefits, that is why we classify this group as our second target group.

    5.2.3 Passers-by:

    The third category includes those people who do not live or work near our tea room business model but have come to the area for any business purpose or commercial activity. We also hope to attract these passers-by with our economical and delicious smoothies, milkshakes and tea.
    The detailed market analysis of our potential customers is given in the following table:

    Market Analysis
    Potential Customers Growth YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 CAGR
    Working Community 45% 11,433 13,344 16,553 18,745 20,545 13.43%
    Residential Community 38% 22,334 32,344 43,665 52,544 66,432 10.00%
    Passers-By 17% 8,322 9,455 10,655 12,867 14,433 15.32%
    Total 100% 42,089 55,143 70,873 84,156 101,410 9.54%

    5.3 Business Target

    Our business targets are as follows:

    • To become the best bubble tea shop in Manhattan within next 3 years of our launch
    • To recover the initial investment within next 1 year of launch
    • To open two more tea shops by the end of the second year and three more shops by the end of the third year

    5.4 Product Pricing

    After considering the market demands, we have priced all our products in the similar ranges as of our competitors. Our product pricing is as follows:

    • Small Serving: $3/serve
    • Regular Serving: $4/serve
    • Large Serving: $5/serve
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    Strategy

    Sales strategy is also an important component of a bubble tea shop business plan template and hence it must be developed with great care and attention must be paid to every detail.

    6.1 Competitive Analysis:

    We have a really tough competition because bubble tea shops are nearly everywhere in Manhattan but none of our competitors is offering as much high quality and delicious drinks as ours. Our high-quality, healthy and economical drinks, combined with the unparalleled customer service of our staff will give us an advantage over other tea shops in the region.

    6.2 Sales Strategy

    We will target our customers by following three ways:

    • Conducting seminars, webinars, and workshops in different institutions to emphasize the health benefits of bubble tea and other similar drinks.
    • Advertising our tea shop in food magazines, newspapers, TV stations, and social media.
    • Offering a 20% discount on all drinks for the first three months of our launch.

    6.3 Sales Monthly:

    milk tea business plan - Sales Monthly

    6.4 Sales Yearly:

    tea business plan Business Plan - Sales Yearly

    6.5 Sales Forecast

    Our forecasted sales pattern is given in the following column chart:

    bubble tea business plan Business Plan - Unit Sales

    The detailed sales forecast is given in the following table:

    Sales Forecast      
    Unit Sales Year 1 Year 2 Year 3
    Milk Tea 1,887,030 2,680,320 2,588,240
    Tea Latte 802,370 815,430 823,540
    Fruit Flavored Tea 539,320 770230 1,002,310
    Brown Sugar Milk 265,450 322,390 393,320
    Macchiato 143,530 125,030 176,240
    Slush/ Milk Shake 134,240 394,340 842,230
    TOTAL UNIT SALES 3,771,940 5,107,740 5,825,880
    Unit Prices Year 1 Year 2 Year 3
    Milk Tea $140.00 $150.00 $160.00
    Tea Latte $600.00 $800.00 $1,000.00
    Fruit Flavored Tea $700.00 $800.00 $900.00
    Brown Sugar Milk $650.00 $750.00 $850.00
    Macchiato $140.00 $120.00 $100.00
    Slush/ Milk Shake $150.00 $1,300.00 $1,450.00
    Sales
    Milk Tea $2,149,800 $2,784,000 $3,383,200
    Tea Latte $120,050 $194,500 $268,500
    Fruit Flavored Tea $50,110 $71,600 $93,000
    Brown Sugar Milk $139,350 $194,600 $249,850
    Macchiato $62,350 $72,300 $82,250
    Slush/ Milk Shake $229,500 $365,500 $501,500
    TOTAL SALES
    Direct Unit Costs Year 1 Year 2 Year 3
    Milk Tea $0.70 $0.80 $0.90
    Tea Latte $0.40 $0.45 $0.50
    Fruit Flavored Tea $0.30 $0.35 $0.40
    Brown Sugar Milk $3.00 $3.50 $4.00
    Macchiato $0.70 $0.75 $0.80
    Slush/ Milk Shake $3.00 $3.50 $4.00
    Direct Cost of Sales
    Milk Tea $989,300 $1,839,000 $2,679,700
    Tea Latte $66,600 $119,900 $173,200
    Fruit Flavored Tea $17,900 $35,000 $52,100
    Brown Sugar Milk $19,400 $67,600 $115,800
    Macchiato $27,700 $69,200 $110,700
    Slush/ Milk Shake $64,200 $224,700 $385,200
    Subtotal Direct Cost of Sales $1,294,100 $1,699,400 $2,104,700

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    Personnel plan

    It is highly advisable to prepare a personnel plan before you think about how to start a business plan templated bubble tea shop since it is one of the biggest contributing factors of the success of any business. The personnel plan of Sam’s Stop is as follows:

    7.1 Company Staff

    Sam will act as the CEO of the company and will initially hire following people:

    • 1 Manager to manage the overall operations
    • 1 Cashier to receive cash from the people
    • 2 Accountants to maintain financial records
    • 4 Sales Executives responsible for marketing and advertising the tea shop
    • 10 Chefs for preparing drinks
    • 10 Waiters to serve the customers
    • 8 Cleaners to clean dishes and other facilities at the tea shop

    7.2 Average Salary of Employees

     Personnel Plan      
    Year 1 Year 2 Year 3
    Manager $85,000 $95,000 $105,000
    Cashier $66,000 $73,000 $80,000
    Accountants $45,000 $52,000 $59,000
    Sales Executives $145,000 $152,000 $159,000
    Chefs $550,000 $650,000 $750,000
    Waiters $410,000 $440,000 $480,000
    Cleaners $60,000 $63,300 $70,000
    Total Salaries $1,280,000 $1,430,600 $1,598,000

    Financial Plan

    The final thing to do before you think about how to open milk tea room business model is to develop a comprehensive financial plan which will cover the detailed costs of startup.

    8.1 Important Assumptions

     General Assumptions      
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 10.00% 11.00% 12.00%
    Long-term Interest Rate 10.00% 10.00% 10.00%
    Tax Rate 26.42% 27.76% 28.12%
    Other 0 0 0

    8.2 Brake-even Analysis

    Bubble Tea Shop Business Plan - Brake-even Analysis

     Brake-Even Analysis  
    Monthly Units Break-even 5530
    Monthly Revenue Break-even $159,740
    Assumptions:
    Average Per-Unit Revenue $260.87
    Average Per-Unit Variable Cost $0.89
    Estimated Monthly Fixed Cost $196,410

    8.3 Projected Profit and Loss

     Pro Forma Profit And Loss      
    Year 1 Year 2 Year 3
    Sales $309,069 $385,934 $462,799
    Direct Cost of Sales $15,100 $19,153 $23,206
    Other $0 $0 $0
    TOTAL COST OF SALES $15,100 $19,153 $23,206
    Gross Margin $293,969 $366,781 $439,593
    Gross Margin % 94.98% 94.72% 94.46%
    Expenses
    Payroll $138,036 $162,898 $187,760
    Sales and Marketing and Other Expenses $1,850 $2,000 $2,150
    Depreciation $2,070 $2,070 $2,070
    Leased Equipment $0 $0 $0
    Utilities $4,000 $4,250 $4,500
    Insurance $1,800 $1,800 $1,800
    Rent $6,500 $7,000 $7,500
    Payroll Taxes $34,510 $40,726 $46,942
    Other $0 $0 $0
    Total Operating Expenses $188,766 $220,744 $252,722
    Profit Before Interest and Taxes $105,205 $146,040 $186,875
    EBITDA $107,275 $148,110 $188,945
    Interest Expense $0 $0 $0
    Taxes Incurred $26,838 $37,315 $47,792
    Net Profit $78,367 $108,725 $139,083
    Net Profit/Sales 30.00% 39.32% 48.64%

    8.3.1 Profit Monthly

    Bubble Tea Shop Business Plan - PROFIT MONTHLY

    8.3.2 Profit Yearly

    Bubble Tea Shop Business Plan - PROFIT YEARLY

    8.3.3 Gross Margin Monthly

    Bubble Tea Shop Business Plan - GROSS MARGIN MONTHLY

    8.3.4 Gross Margin Yearly

    Bubble Tea Shop Business Plan - GROSS MARGIN YEARLY

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    8.4 Projected Cash Flow

    The following column diagram shows the projected cash flow.

    Bubble Tea Shop Business Plan - Projected Cash Flow Diagram

    The following table shows the projected cash flow:

     Pro Forma Cash Flow      
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations
    Cash Sales $40,124 $45,046 $50,068
    Cash from Receivables $7,023 $8,610 $9,297
    SUBTOTAL CASH FROM OPERATIONS $47,143 $53,651 $59,359
    Additional Cash Received
    Sales Tax, VAT, HST/GST Received $0 $0 $0
    New Current Borrowing $0 $0 $0
    New Other Liabilities (interest-free) $0 $0 $0
    New Long-term Liabilities $0 $0 $0
    Sales of Other Current Assets $0 $0 $0
    Sales of Long-term Assets $0 $0 $0
    New Investment Received $0 $0 $0
    SUBTOTAL CASH RECEIVED $47,143 $53,651 $55,359
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations
    Cash Spending $21,647 $24,204 $26,951
    Bill Payments $13,539 $15,385 $170,631
    SUBTOTAL SPENT ON OPERATIONS $35,296 $39,549 $43,582
    Additional Cash Spent
    Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
    Principal Repayment of Current Borrowing $0 $0 $0
    Other Liabilities Principal Repayment $0 $0 $0
    Long-term Liabilities Principal Repayment $0 $0 $0
    Purchase Other Current Assets $0 $0 $0
    Purchase Long-term Assets $0 $0 $0
    Dividends $0 $0 $0
    SUBTOTAL CASH SPENT $35,296 $35,489 $43,882
    Net Cash Flow $11,551 $13,167 $15,683
    Cash Balance $21,823 $22,381 $28,239

    8.5 Projected Balance Sheet

    The following table shows projected balance sheet:

     Pro Forma Balance Sheet      
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $184,666 $218,525 $252,384
    Accounts Receivable $12,613 $14,493 $16,373
    Inventory $2,980 $3,450 $3,920
    Other Current Assets $1,000 $1,000 $1,000
    TOTAL CURRENT ASSETS $201,259 $237,468 $273,677
    Long-term Assets
    Long-term Assets $10,000 $10,000 $10,000
    Accumulated Depreciation $12,420 $14,490 $16,560
    TOTAL LONG-TERM ASSETS $980 $610 $240
    TOTAL ASSETS $198,839 $232,978 $267,117
    Liabilities and Capital Year 1 Year 2 Year 3
    Current Liabilities
    Accounts Payable $9,482 $10,792 $12,102
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    SUBTOTAL CURRENT LIABILITIES $9,482 $10,792 $12,102
    Long-term Liabilities $0 $0 $0
    TOTAL LIABILITIES $9,482 $10,792 $12,102
    Paid-in Capital $30,000 $30,000 $30,000
    Retained Earnings $48,651 $72,636 $96,621
    Earnings $100,709 $119,555 $138,401
    TOTAL CAPITAL $189,360 $222,190 $255,020
    TOTAL LIABILITIES AND CAPITAL $198,839 $232,978 $267,117
    Net Worth $182,060 $226,240 $270,420

    8.6 Business Ratios

    The following table shows data about business ratios:

     Ratio Analysis        
    Year 1 Year 2 Year 3 Industry Profile
    Sales Growth 4.35% 30.82% 63.29% 4.00%
    Percent of Total Assets
    Accounts Receivable 5.61% 4.71% 3.81% 9.70%
    Inventory 1.85% 1.82% 1.79% 9.80%
    Other Current Assets 1.75% 2.02% 2.29% 27.40%
    Total Current Assets 138.53% 150.99% 163.45% 54.60%
    Long-term Assets -9.47% -21.01% -32.55% 58.40%
    TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 4.68% 3.04% 2.76% 27.30%
    Long-term Liabilities 0.00% 0.00% 0.00% 25.80%
    Total Liabilities 4.68% 3.04% 2.76% 54.10%
    NET WORTH 99.32% 101.04% 102.76% 44.90%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 94.18% 93.85% 93.52% 0.00%
    Selling, General & Administrative Expenses 74.29% 71.83% 69.37% 65.20%
    Advertising Expenses 2.06% 1.11% 0.28% 1.40%
    Profit Before Interest and Taxes 26.47% 29.30% 32.13% 2.86%
    Main Ratios
    Current 25.86 29.39 32.92 1.63
    Quick 25.4 28.88 32.36 0.84
    Total Debt to Total Assets 2.68% 1.04% 0.76% 67.10%
    Pre-tax Return on Net Worth 66.83% 71.26% 75.69% 4.40%
    Pre-tax Return on Assets 64.88% 69.75% 74.62% 9.00%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 19.20% 21.16% 23.12% N.A.
    Return on Equity 47.79% 50.53% 53.27% N.A.
    Activity Ratios
    Accounts Receivable Turnover 4.56 4.56 4.56 N.A.
    Collection Days 92 99 106 N.A.
    Inventory Turnover 19.7 22.55 25.4 N.A.
    Accounts Payable Turnover 14.17 14.67 15.17 N.A.
    Payment Days 27 27 27 N.A.
    Total Asset Turnover 1.84 1.55 1.26 N.A.
    Debt Ratios
    Debt to Net Worth 0 -0.02 -0.04 N.A.
    Current Liab. to Liab. 1 1 1 N.A.
    Liquidity Ratios
    Net Working Capital $120,943 $140,664 $160,385 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0.45 0.48 0.51 N.A.
    Current Debt/Total Assets 4% 3% 2% N.A.
    Acid Test 23.66 27.01 30.36 N.A.
    Sales/Net Worth 1.68 1.29 0.9 N.A.
    Dividend Payout 0 0 0 N.A.

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