How Much Does It Cost To Open A Bubble Tea Shop?

Quick Summary
The average cost to open a boba tea shop can vary based on the size of the shop, location, and the scope of the menu. It can cost anywhere from $15,000 to more than $200,000 to open a bubble tea shop, with an average for an independent shop ranging from $40,000 to $50,000.

Bubble tea (or boba tea) is an increasingly popular cold beverage that originated in Taiwan. While boba tea shops were once limited to more urban areas, they can increasingly be found in small towns and even rural areas across the country. If you want to get in on the bubble tea trend, you might be thinking about exactly how much it would cost to open your own boba tea store. 

The total cost to open a bubble tea shop will vary based on factors such as the cost of real estate in your area, the variety and size of your menu, and the number of employees that you will need. The potential investment range for opening a bubble tea shop is $15,000 to over $200,000, although the average is closer to $40,000 to $50,000. There are ways to keep your initial startup costs lower and to raise funds to support your new venture.

At Disposable Design, we are proud to offer high-quality promotional products at fair prices. Our products include options for bubble tea shops, including custom boba tea cups in a variety of sizes and custom boba cup sealing film. If you are thinking about opening up a boba tea shop, reach out to learn more about how we can help you get the products that you need at a fair price.

Common Expenses for a New Boba Tea Shop

Before starting any new business, you will need to figure out exactly how much it will all cost you. Typically, this is included in a business plan. This plan is a key document that is used not only to attract investors but to set up a blueprint for how you will run your bubble tea shop.

To make sure that your business plan is accurate (and that you have enough funding to make your dreams a reality), you will need to do a lot of research. For a bubble tea shop, you might start by figuring out whether you want a physical location, like a cafe space, or to operate out of a mobile food truck. You can then price out the cost of buying a truck versus renting or buying a commercial space for your bubble tea shop.

For any food service business, there are both initial startup costs and ongoing expenses. Below, we get into some of the costs that you should consider when researching your budget for your business plan.

One-Time Startup Costs

Equipment

Average Cost: $12,000 – $100,000

One of the first startup expenses that many boba tea shop owners will face is purchasing the equipment. Bubble tea requires some different kitchen equipment in addition to standard items that can be found in most commercial kitchens. The equipment list may include:

• Commercial refrigerators and freezers
• Dishwashers
• Bubble tea sealer machine
• Bubble tea shaking machine
• Bubble tea fructose dispenser
• Automatic tapioca pearl maker and/or cooker

Some of these items, such as tapioca pearl makers, may not be necessary if you buy pre-made boba. However, it may ultimately be cheaper in the long run if you invest in equipment to make your own boba as opposed to buying pre-made tapioca pearls. You will also need equipment to keep the ingredients at the proper temperature.

In addition to this equipment, you will also have to buy kitchenware to prepare the beverages and any food that you may offer alongside the boba tea. For example, if you want to offer bubble waffles, you will need the special waffle irons and bowls, and utensils to mix up the batter. Commercial dishwashers are also a good idea to make sure that any equipment that you use is properly cleaned and sanitized.

Any kitchen should also have basic food preparation and storage supplies, such as first aid kits, fire extinguishers, and bins and labels for storing food. While boba tea is usually served in disposable cups sealed with film, you may also need to purchase some tableware, particularly if you plan to offer food or other types of drinks.

Budget-Saving Tip: While there isn’t as much of a market for used or refurbished boba tea equipment, you may be able to purchase other kitchen appliances at a discount from sites like Caplan Cookware or Central Restaurant Products. You can also make decisions about whether it makes more sense to do things like shake bubble tea yourself or spend several thousand dollars on a boba tea shaking machine.

Furniture and Decor

Average Cost: $5,000 – $20,000

Most boba tea shops are relatively small. Typically, they are more the size of a small cafe than a full restaurant. After all, boba tea is generally served in a disposable cup and taken to-go instead of being enjoyed on the premises.

That being said, some patrons will want to hang out in your cafe to enjoy their bubble tea and other menu options. You will need to budget for tables, chairs, and decor for the interior of your shop. You will also want to purchase various equipment for ambiance and convenience, like a phone system, a sound system, benches for outside of the shop, and signs.

Budget-Saving Tip: It is often possible to source gently used furniture from restaurants that have closed or even from thrift stores or resale shops. You might even be able to use sites like Facebook Marketplace to find used furniture that suits your vibe for far less money than purchasing new. 

Renovations

Average Cost: $2,000 – $50,000

Many people search for a commercial space that is more or less turnkey. If you are lucky enough to find such a place, you might spend just a few hundred or thousand dollars to paint and otherwise update the look and feel of the restaurant. If you need more extensive renovations, you might be looking at spending $50 to $250 per square foot. Because boba tea shops tend to be smaller in terms of square footage compared to traditional restaurants, you might spend from $50,000 to $250,000 to renovate a 1,000 square foot space.

Budget-Saving Tip: If you are handy, you might be able to do some of the work yourself. You can come up with a design that minimizes structural changes (like moving walls or the placement of a bathroom) to keep costs lower. Improvements that are primarily cosmetic will be less expensive than a full gut renovation.

Staffing & Training 

Average Cost: $1,000 – $5,000

The key to a successful bubble tea shop isn’t just having a great product. You also need well-trained staff who know how to make the drinks and how to deal with customers. Depending on the number of employees that you will need, you should budget between $1,000 and $5,000 to cover recruiting and hiring, onboarding, and the first month or two of payroll.

Budget-Saving Tip: To save money, take your time to screen job applicants carefully. Job seekers with prior experience in the service industry may require less training. Also, if you hire carefully, then you can avoid the expenses associated with having to find and train new workers.

Hardware (Displays & POS Software)

Average Cost: $500 – $2,500

A boba tea shop will typically need some sort of point of sale system to run efficiently. Fortunately, smaller bubble tea shops will probably need just one POS terminal, a receipt printer, and potentially a kitchen display screen.  This may cost anywhere from $500 to $2,500, depending on the amount of equipment needed.

Budget-Saving Tip: It may be possible to purchase less expensive options, such as a tablet and a Square card reader, to save initial costs. This might be a good choice if you want to save money upfront and see if you truly need the more expensive hardware.

Initial Licenses & Permits

Average Cost: $500 – $2,500

Before you can start serving customers, you will need certain licenses and permits. At a minimum, you will need a business and occupancy permit from your town or city, plus a food service license. The cost for these licenses can vary considerably depending on your location.

Budget-Saving Tip: You might choose to spend a little extra and get a consultant to help you through the process of figuring out what permits and licenses you need and applying for them.

Opening Inventory & Supplies

Average Cost: $2,000 – $10,000

Next, you will need inventory so that you actually have a product to sell. You will need all of the supplies necessary to make boba tea, which includes the ingredients as well as the cups, sealing film, and straws to serve the drinks. You will also need other paper products, such as custom napkins, cleaning supplies, and any other food that you may serve. You might spend between $2,000 and $10,000 on these products. 

Budget-Saving Tip: Try to keep your menu limited at first to avoid spending too much on inventory before you have a good idea of demand for different menu items. 

Pre-opening Marketing & Branding

Average Cost: $1,000 – $10,000

Whenever you launch a new business, it is always a good idea to do some marketing and promotions to generate a buzz. This could include things such as social media campaigns, Google Ads, and other promotions for your grand opening. This may cost between $1,000 and $10,000. 

Budget-Saving Tip:  If you have any skill with social media, you can start to build a following online through clever TikTok videos and posts on other platforms. You can also use these sites to help build an email list and network with other businesses in your area.

Security Deposit or Leasehold Costs

Average Cost: $2,000 – $12,000

When you rent a commercial space, you will likely need to put down a security deposit and pay for other expenses, such as utility deposits. This could be anywhere from $2,000 to $12,000 in upfront costs. 

Budget-Saving Tip: You might be able to negotiate with your landlord on some of these costs, which can help reduce the amount of money that you need to spend upfront.

Professional Fees

Average Cost: $1,000 – $20,000

There are certain things that you probably just shouldn’t do yourself without the right level of expertise. You might choose to hire a lawyer to handle setting up your business entity and review your lease and other contracts, an accountant to handle finances and taxes, and an architect for renovations. Depending on who you hire and the extent of work done, this might cost anywhere from $1,000 to $20,000.

Budget-Saving Tip: Be sure to talk to several different professionals before hiring anyone. Rates and fee structures can vary dramatically. Something like a flat fee arrangement for a business lawyer might make more sense compared to paying a steep hourly rate.

A Cash Cushion

Average Recommendation: $10,000 – $20,000 

Just as it is a good idea to have a rainy day fund for yourself, you should also have a cash cushion for your business. Even if you have immediate success as a boba tea shop, you have likely invested tens of thousands of dollars into the business. It can take some time before you start turning a profit.

The exact amount of money that you will need to set aside will vary based on your monthly operating costs. A good rule of thumb is to set aside at least 6 months of operating expenses (including rent, labor, inventory, and other bills) as a financial safety net.

Fixed Recurring Costs

Physical Location

Average Cost: $20,000 – $75,000 per year

For any food service business, one of the biggest ongoing expenses will be the rent or mortgage payment. This payment may vary considerably based on your location, the size of the shop, and whether you are renting or paying a mortgage. 

Location is one of the biggest factors influencing this expense. We all know that certain areas of the country – like San Francisco, Los Angeles, and New York City – are just more expensive than other areas. You might pay 10 times as much per square foot in rent for a space in a major metropolitan area compared to a smaller city or town.

The location of your shop within a geographic area will also affect its cost. A cafe in a busy shopping center or mall might cost a lot more in terms of monthly rent compared to a shop alongside a highway with minimal foot traffic. You will have to balance the cost of rent or mortgage against the potential profits for any physical location.

Generally, if you choose to buy a commercial space, you will have greater upfront costs and ongoing maintenance and related expenses. However, you will be building equity over time, which can help your business grow and profit, particularly once you have paid off your mortgage.

Budget-Saving Tip: Consider a smaller physical space to save on rent or mortgage costs.

Ongoing Marketing & Branding

Average Cost: $3,000 – $18,000 per year

Marketing isn’t something that you do once before opening. A good marketing strategy will plan for long-term growth with both digital and traditional media strategies. As a boba tea shop, you might spend $250 to $1,500 per month on various forms of advertising. 

Budget-Saving Tip: Marketing can include ads as well as more organic forms of advertising. You could run a promotion where customers get a free bubble tea for posting a picture of their drink on their social media and tagging the shop or even form a partnership with another local business. 

Software Subscriptions

Average Cost: $1,200 – $6,000 per year

You will have spent a chunk of money upfront to purchase hardware like tablets and displays for your boba tea shop. This technology will almost certainly require subscriptions for the software that is necessary to run it. You can expect to pay anywhere from $100 to $500 per month on software subscriptions. 

Budget-Saving Tip: You may be able to reduce software subscription costs by looking for free options for smaller users. You may also eliminate certain costs, such as scheduling software, if you have few enough employees that you can do the work manually.

License & Permit Renewals

Average Cost: $500 – $2,000 per year

Many health, business, and occupancy licenses and permits require renewals. While the exact amount will depend on your location, you should budget between $500 and $2,000 annually for license and permit renewals.

Insurance

Average Cost: $700 – $2,000 per year

As a business owner, you will likely be required to obtain certain types of insurance, either by the state or by your landlord or another entity. This may include liability insurance, property insurance, and workers’ compensation insurance. Depending on your coverage, you might spend between $7000 and $2,000 annually on insurance.  

Budget-Saving Tip: Get a few quotes before committing to any insurance carriers. Bundling your policies with one insurance company can often lead to discounts.

Variable Recurring Costs

Inventory & Supplies

Average Cost: $12,000 – $50,000 per year

You can expect to spend between 30 to 35% of your annual sales on inventory. This includes both the ingredients needed to serve your tea as well as disposable products like boba cups, sealing film, and straws.

Budget-Saving Tip: Focusing on menu items with a high profit margin, tracking inventory, and making sure that your recipes are standardized can help to keep ingredient costs under control. 

Labor

Average Cost: $20,000 – $100,000 per year

On average, you can expect to spend between 30 to 35% of your annual sales on labor. This includes wages as well as benefits and taxes. This cost may be higher or lower depending on where you live, as the minimum wage varies significantly by location.

Budget-Saving Tip: Many boba shops have somewhat limited hours. You might be able to staff your shop leanly in the first few months until you get a better idea of demand. You can then use software to schedule more efficiently. 

Utilities

Average Cost: $6,000 – $15,000 per year

Utilities like electricity, gas, water, and the internet are a necessity for any business. For a boba tea shop, you will need all of these basic utilities to run your equipment and keep customers happy with options like free WiFi. Generally, you might spend anywhere from $500 to $1,250 per month on utilities. 

Budget-Saving Tip: You can keep costs low by using energy-efficient appliances when possible and avoiding waste. For example, don’t prop open the doors to avoid losing heat or cool air.

Payment Processing Fees

Average Cost: $3,000 – $22,000 per year

Offering the option of paying with a credit card is convenient, but it can be costly. Typical transaction fees add up to 2 to 3% of sales. 

Budget-Saving Tip: You might offer a discount to customers who pay with cash to reduce the amount of money that you pay to credit card processing services.

Maintenance & Repairs

Average Cost: $3,000 – $12,000 per year

The average boba shop will have multiple expensive appliances, including refrigerators, dishwashers, boba sealing machines, and perhaps even a commercial range. You will likely need to pay for maintenance and repairs throughout the year, although if you purchase new equipment, these costs might be lower up front.

How Much Should I Expect to Spend to Open a Bubble Tea Shop?

It isn’t easy to offer an average of how much it will cost to open up a boba tea shop because there are so many variable factors. Right off the bat, it will often be a much bigger initial investment to purchase a franchise as opposed to opening up an independent bubble tea store. Of course, buying a franchise generally is easier in terms of the work that you will have to do to set it up and get it launched, but it can easily cost you well over $200,000.

If you decide to open up an independent bubble tea shop, then you will likely spend between $40,000 and $50,000 in initial startup costs (according to BobaEmpire, a manufacturer of equipment for bubble tea shops). This cost can go up significantly based on factors such as:

• Your location;
• The size of your shop;
• Whether you are offering food or beverages other than boba tea;
• The amount of staffing that you will need; and
• The amount of renovation work that you will need to do to get your shop ready to open.

Some of these factors are within your control, such as how expansive your menu is. Typically, it will cost more in both initial costs and ongoing expenses to have a varied menu. Other factors are outside of your control, such as the minimum wage in your city or state. While there are some things that you can do to reduce your total initial investment, you will likely need at least $20,000 to $30,000 to fund your bubble tea shop.  

How To Fund Your Bubble Tea Shop

The average person does not necessarily have tens of thousands of extra dollars around to put into a new business. While some people may work and save for years to fund their bubble tea shop, most will need some sort of funding to get their business off the ground. This money often comes from a combination of loans, investors, and even crowdfunding. Below, we lay out some options for getting funding to start your boba tea shop.

Apply for a Loan

Many entrepreneurs get their start through loans. One great option is a small business loan from the U.S. Small Business Administration (SBA), which offers specific programs designed to help new business owners get financing with lower interest rates and longer repayment terms compared to conventional loans. 

You may also get a loan from a bank, although it may be harder to qualify and come with a much higher interest rate. Keep in mind that for any type of loan, you will need a solid business plan, good credit, and assets that can be used as collateral.

Ask for Support from Family and Friends

If you have family and friends with disposable income, they might be a good place to start for funding for your bubble tea venture. Seed capital can come from family, friends, or even professional contacts. In many cases, this money is offered without the higher interest rates and repayment schedules required by banks.

Of course, there are many potential pitfalls associated with borrowing money from loved ones. To avoid problems, you should have an agreement in writing related to the terms of the loan or the investment. If it is a loan, then that should be spelled out in a contract. If it is an investment, then the terms should also be made clear in a document to reduce the risk of problems later.

Take on a Business Partner

One great idea for getting funding for your bubble tea shop is to share the costs. A business partner can help financially and logistically can help you get your business off the ground. However, you should choose wisely when selecting a business partner.

You want to make sure that you trust the other person and share similar values. For example, if you know that the other person tends to sit back and let others do the work while they direct them, think carefully about whether or not you’d be able to work with someone like that. Don’t be so tempted by a potential cash infusion that you make a bad business decision.

If you have found someone who you think would be a good partner, consider consulting with a lawyer to draft a contract and establish the formal legal entity. This will help to protect all parties’ interests in the business.

Look for Investors

If you don’t have one person in mind to be your business partner, you might look for investors. Many investors are interested in the food service industry, particularly in concepts with potentially high profit margins (like boba tea shops). You might talk to other restaurant owners in your area to learn about prospective investors and reach out to talk to them about your plan.

You will need a strong business plan and pitch to attract investors. Investors want to be sure that they are making a good investment, so you have to do your homework and have detailed exactly how you plan to turn a profit and what kinds of returns an investor can expect.

Consider Crowdfunding

Most people think of crowdfunding as something that you do after a tragedy. Yet crowdfunding can also be used to fund a new business. In fact, there are websites like Kickstarter and Indiegogo that are specifically geared towards raising money for a new business idea.

Generally, crowdfunding will either offer rewards or incentives to supporters or give them a stake in the business. For example, a community crowdfunding might offer perks like a free drink every week for people who donate a specific amount of money to the cause (like $100). If someone puts in a larger amount of money (say, $5,000), then they might get a percentage of your business in return, making it an investment opportunity.

It isn’t easy for any entrepreneur to completely fund a new business on their own. Fortunately, there are many options available for raising money for a boba tea venture. If you do some hard work of developing a business plan and nailing down the details, you might be able to secure funding from investors, your personal network, members of the community, or a bank.

Grow Your New Boba Tea Business with Disposable Design

There is no doubt about it: opening a bubble tea shop takes vision, some tolerance for risk, and a dream. It will also take a fair amount of funding for both initial startup costs and ongoing expenses. One way to reduce your ongoing costs is by ordering all of your boba shop promotional products from Disposable Design.

Based in Michigan, Disposable Design provides high-quality custom disposable products to independently owned and operated food service businesses throughout the United States. We specialize in providing premium branded products in smaller quantities and at great prices. Whether you need custom plastic cups, custom napkins, or custom deli containers, we can help you get the products that you need to make your marketing dollar go further.

If you’d like to learn more about our custom-printed items for boba tea shops, we’re here to chat and offer advice. To learn more about our custom-printed boba cups, cup sealing film, and other disposable products or to speak to a member of our branding team, fill out our online contact form or hit the live chat button at the bottom of the screen.