Boba tea (also known as bubble tea) has been popular across Asia for decades, but the chilled milk tea with tapioca pearls (boba) has become extremely popular in the U.S. over the last several years. In 2019, the bubble tea industry was worth $2.02 billion, and by 2027, Fortune Business Report predicts its global market share will reach $3.39 billion. Because of this, boba tea shops have become an increasingly popular business idea. If you’re interested in opening your own bubble tea business, keep reading as we’ll cover the steps you can take to open and run a successful shop.
8 Steps for Opening a Successful Boba Shop
If you’re a passionate entrepreneur looking to expand into the boba business, there are eight steps we recommend taking to start your business successfully.
1) Understand Your Demographics and Identify Your Potential Customers
When opening a boba tea shop, the first step is to research and understand your demographics to identify your potential customer base. In the U.S., boba tea is most popular amongst younger generations and college-aged adults. In fact, a survey from CLSA finds that 94% of people aged 20 to 29 have purchased boba tea in the last three months. This isn’t to say that older generations won’t be interested in boba — just be sure to do your research. You can then apply your demographic research when choosing the types of teas and treats you serve in your boba shop.
2) Write a Business Plan & Determine Startup Costs
No matter what type of business you're starting, it has little chance of succeeding without a plan, so it’s important to create a solid business plan for your boba tea shop. Beyond helping to organize your vision for your boba shop, a business plan is essential for determining how much money you’re going to need to start your business and estimate how much you’ll need to run it. This information is vital to your plan, especially if you’re pitching to potential investors. Analyzing finances can also help you predict profit margins — another key element of a thorough business plan.
3) Decide Between a Carry-Out or Dine-in Location
Next, you’ll need to decide if you want your shop to be only carry-out or if you will also offer dine-in service. This needs to be decided upfront because it determines how large of a space you’ll need, how many staff you’ll need to hire, and how you'll decorate your store. If you're unsure which is the best option for you, here are some pros and cons of carry-out-only and dine-in shops.
Pros of a Carry-Out Location
Smaller storefront
Won’t need to hire as many staff members
Has a better chance of withstanding a pandemic
Cons of a Carry-Out Location
Fewer upsell opportunities since people aren’t sitting around in-store
Not conducive to gatherings
Lack of physical space may mean you need to do more digital and online advertisements
Pros of a Dine-In Location
Customers may spend more money if they spend more time in your shop
Can be used as a community gathering place (which can boost business success)
More in-store advertising opportunities
Cons of Dine-In Location
Pandemic or COVID restrictions could hurt business if you’re known as an in-person gathering spot
Customers may take advantage of the community space by spending all day at your shop
Higher operating costs (space, materials, ingredients, and staff)
4) Choose a Busy & Open Location
Even if you choose to open a boba tea shop with in-store dining, you still need to think about location. Compared to large restaurants, boba shops are fairly small, so choose a location in a busy, open area, which will increase the chance of walk-ins. For example, selecting a location across from a park in a college town could be ideal since students will be walking around and hanging out in the park. Or, if you’re opening a shop in a large metropolitan city, choose a known tourist area that already sees a lot of traffic.
Another thing to consider is if you choose a busy location populated with your target demographic, you will have to rely less on additional advertising.
5) Design Your Menu To Cater to Your Demographics
Next, think about your boba shop’s menu and what people in your target market want to see. The demographic research you did earlier will come in handy for this process. Generally, bubble tea is very customizable, so you can go in many directions when it comes to menu options. Regardless of what specific ingredients and drinks you include on your menu, just make sure they are organized and easy to understand. Here are some ways you can organize drinks on your bubble tea menu:
Type of drink: Milk tea, milk tea with powder (taro milk tea), fresh tea drinks (green or black tea or fruit-infused tea), and smoothies
Ice and sugar levels: No ice, a little ice, regular ice, and no sugar, a little sugar, or regular sugar
Tapioca options: Original, blueberry, honey, kiwi, mango, pomegranate, coffee jelly, lychee jelly, etc.
Though your teas will be the bulk of your business, you may want to think about including other sweet treats such as Taiwanese snow ice, Hong Kong bubble waffles, or ice cream. You could even partner with a local bakery to create custom treats for your bubble tea shop.
Beyond the contents of your menu, you’ll want to align the design of your menu with your target demographics and branding. Traditionally, boba tea shop menus are colorful and embody a pop art style that appeals to a younger generation.
6) Find a Reliable Cassava Root or Tapioca Starch Source
One of the more basic yet extremely important tasks when opening a boba tea shop is finding a reliable cassava root or tapioca starch source. These two items are key ingredients for boba tea, so you’ll want to ensure they are high quality and accessible. When you're working on your business plan, research potential distributors. If you’re in a relatively large metropolitan area, you may have a distributor nearby. But if you’re in a more rural area, you may have to identify a reliable online source.
Keep in mind that a cassava root or tapioca starch distributor may also sell boba straws, syrups, creamers, tea leaves, stirrers, shakers, sealing film, and other products you’ll need for your shop. Finding one vendor with everything you need could save your business time and money.
7) Invest in the Right Technology
There are hundreds of technology options for businesses in today's market. However, not all of them are created equally, so you'll need to choose your boba tea shop's technology strategically. Once you determine whether your shop will be carry-out or dine-in (or both), you can begin looking into technology options that work for your chosen setup.
If you plan to open a dine-in boba shop, consider utilizing a self-service ordering solution, like INFI’s self-service kiosk. With all of the customization options available for bubble tea, it could boost customer satisfaction and store efficiency if you give customers the option to place their own orders. Schedule a demo of INFI’s self-service kiosk to find out how it can streamline your boba shop's ordering process.
If you plan to open a takeout-only boba shop, you can utilize INFI’s technology to manage your shop's online ordering feature. Online ordering has become a preferred (and even expected) function for restaurants today, so it’s wise to incorporate technology solutions to make it possible. Online ordering management solutions like INFI's can connect with third-party food delivery apps and even integrate with your point of sale (POS) system and shop website. Read more about managing your shop with online ordering.
8) Open up Shop & Create Buzz Using Marketing Efforts
Finally, once you’re getting close to opening your shop, you’ll want to implement a marketing plan to get people in the doors. This could mean starting to tease your shop’s opening a month or two before opening day, displaying physical advertising in the area, or mailing coupons to homes in the area. Additionally, it is important to start mingling with other small business owners, which helps with word-of-mouth marketing and provides an additional layer of community support.
Best Practices: Boba Shop Edition
Now that you know how to go about opening your boba shop, let’s dive into some best practices that can help keep things running smoothly and successfully.
Use Instagram To Increase Engagement
Instagram can be an excellent tool to tease the opening of your bubble tea shop and continuously engage with customers once you’re open. Because Instagram is image- and video-based, it's a perfect social media platform to show off your boba tea offerings. You can create an extremely colorful Instagram grid just by creatively capturing the various tea offerings in your shop.
Beyond sharing content, you can use Instagram to share new drinks and gather input from customers about what drinks they like and what they’d like to see in the future. You can even participate in giveaways or share promotions with your followers on Instagram to keep customers coming back.
Create a Rewards Program
A rewards program is a low-cost way to keep current customers engaged and happy. In fact, 75% of consumers say they favor companies that offer rewards, according to Small Biz Genius. Here are some tips you can use to create your boba shop rewards program:
Decide how you want your rewards program to work. What is your goal? How will the program be structured? How will you measure results?
Determine how to track these rewards. Do you want a simple punch card? Do you want rewards tied to customers’ email addresses that you can track digitally?
Choose the rewards. What is the reward? A free boba tea of the customers’ choosing for every 10 boba teas they purchase?
Consider Installing Digital Signage
Digital signage is no longer just for large companies — businesses of any size can utilize digital signage effectively for an affordable price. Having an LCD monitor display webpages, videos, menus, or marketing messages can be a game-changer and an efficient way to market your boba shop’s menu items and store updates.
For example, instead of changing a physical sign every time your menu changes, you can make the changes online that reflect on your LCD monitor instantly. You can add promotions just as easily, which will help keep customers engaged. Learn more about the benefits of digitalization for the restaurant industry here.
Provide Excellent Customer Service
Lastly, excellent customer service is necessary when running any type of small business. As a new business owner in your area, you have an extraordinary opportunity to become known within the community and be seen as a leader — but you must start with great customer service.
Simply remembering customers' names or their favorite drinks is a powerful way to provide a great experience. In fact, research shows that providing customers with a personalized experience helps them feel more engaged with your business. Remember, the little things go a long way!
FAQ: Opening a Boba Tea Shop
1. What are the key factors to consider when choosing a location for my boba tea shop?
When choosing a location, consider factors such as foot traffic, visibility, and proximity to your target demographic. Ideally, choose a high-traffic area near colleges, parks, or shopping districts. Additionally, assess the competition in the area and ensure the space fits your desired shop size and layout, whether it’s for carry-out only or dine-in service.
2. How can I effectively manage startup costs for a boba tea shop?
To manage startup costs, create a detailed business plan that includes an estimate of initial expenses such as rent, equipment, ingredients, and staff salaries. Research suppliers for cost-effective ingredients and equipment, and consider options for financing or seeking investors. It’s also important to budget for marketing and any unforeseen expenses that may arise.
3. What should be included in a boba tea shop's menu to attract customers?
Design your menu based on the preferences of your target demographic. Offer a variety of drink options such as milk teas, fruit teas, and smoothies, with customizable sugar and ice levels. Consider including popular toppings like tapioca pearls, jelly, and puddings. Additionally, offering complementary items like pastries or snacks can enhance your menu appeal.
4. How can technology improve the efficiency of my boba tea shop?
Technology can streamline operations through self-service kiosks for order customization, online ordering systems, and digital payment options. Implementing these technologies can reduce wait times, improve order accuracy, and enhance the overall customer experience. Additionally, digital signage can help update your menu and promotions in real-time.
5. What are some effective marketing strategies for a new boba tea shop?
To market your new boba tea shop, leverage social media platforms like Instagram to showcase your offerings and engage with customers. Consider hosting a grand opening event, offering promotions or discounts, and creating a rewards program to encourage repeat business. Collaborating with local influencers or businesses can also help increase visibility.
Take Your Boba Shop to the Next Level With INFI
When planning to open a boba tea store, there are many things to consider, but it all boils down to thoughtful planning and strategizing. To help make this process a bit easier, think about utilizing technology — whether self-service kiosks, an app, or online ordering — to streamline your processes and ensure a standout customer experience that leads to a successful bubble tea shop. Exceed customer expectations from the start with self-service options from INFI — schedule your demo today.