Tea Shop Business Plan

Introduction

Almost every person in India starts their day with a hot beverage, and most often it is tea. Although coffee is also a choice of beverage, the India population is said to consume about 30 cups of tea for every cup of coffee. Besides, people also prefer beverages during the evening and sometimes as according to their mood during the day.

Therefore, an average adult India consumes about 2 cups of tea on a daily basis and it may exceed depending upon the weather and his/her mood. This makes tea business one of the most prospective businesses. A tea shop business is one of the simplest businesses if a person is in interested in start a business on one’s own especially in India. 

It is also advantageous that the size of the tea shop can be according to the investment budget of the entrepreneur. Further, usually tea shops have a routine set of consumers who would buy from them regularly if they like it and find it convenient to besides new customers who may visit rarely or only for one time. Ergo, once a person opens a tea shop and establishes good reputation in the area for the quality, price, etc. of the tea, then people would regularly buy from that tea shop.

Requirements For a Tea Shop Business

The following are the basic requirements for starting any tea business,

  1. Vending Machine for the tea
  2. Ingredients to make tea such as tea leaves, sugar, milk, etc.
  3. Kettle
  4. Stove
  5. Teacups
  6. Tea making pans
  7. Chairs and tables or benches

Steps to be Followed to Start a Tea Making Business India

Researching the market:

Market research is one of the most essential steps that needs to be taken before starting any business, and it is no different for a tea business. This includes understanding the need of the market i.e., the places where tea would be regularly demanded like hospitals, courts, MNCs, railway stations, etc. Secondly, the competition in the area around which one wants to start the business must be analyzed. 

Lastly, a survey is one of the ways in which the needs of the people for the product in the particular area can be understood better so as to succeed in the market.

Coming up with a good plan:

The next important step to be taken before staring a tea business is to come up with a good plan. This includes analyzing the investment and the set-up that would be a fit for the budget. Secondly it is also important to decide the products which are to be sold in the tea shop. This includes deciding amongst the different types of tea, what other products can be sold like coffee, biscuits, mixture, etc. 

Deciding the price of one cup of tea which may vary according to the size of the glass if it is decided to be sold in different types of glasses. It is also important to decide the brand of the tea leaves and the supplier as having the same supplier would help in maintaining credit.

Improving the product:

Tea is a regular product, and in any business, it is important to improve such regularly used products in order to attract customers and in order to make the tea shop uniquely known for their product. This could include adding any extra ingredients such as thulasi to the tea in order to make it more soothing or the manner in which tea is served, etc. The person is required to analyze the improvement that would be liked by majority of the customers.

Loan:

If a person does not have enough resources to start a tea business, then he/she can take a detailed business plan and model to a bank or investor or any other financial lender who may offer to lend a loan in case the business plan seems rational and likely to be successful. Such a loan may either be with or without collateral, and it will also depend on various other aspects such as the credit score of the borrower, etc. Besides, the person may also borrow under any of the various schemes of the government of India for starting a small-scale business.

Registration and license:

For every business, it is important for it to be registered and licensed. The licensing conditions will differ for different types of business models like sole proprietorship, partnership, company, etc. 

This includes obtaining a trade license from the government of the state in which the tea business is about to be set-up, and also an FSSAI or Food Safety and Standard Authority of India License as is compulsory to be obtained for any business that is engaged in either manufacturing, production, processing or distribution of any food products. A registration of any business is better for the entrepreneur as well for many reasons such as security, benefits, etc.

GST Registration

Apart from registering the business, it is also compulsory to obtain a GST registration for the business because according to the prevailing GST law in the country, every new tea business must register itself under the GST Act.

MSME/SSI

An MSME is a Micro-Small and Medium Enterprise and an SSI is a Small Scale Industry. Although registration if any entity falls under either of the category is not compulsory, it is beneficial to the business if such are registered as there are many schemes, guidelines and other advantages that are provided to MSME and/or SSI entities.

MARKETING

Once any business starts, marketing is an essential element that helps develop the business. In fact, marketing can even be started before starting the business as it ensures that the business is known to people and it is also a way in which goodwill of people can be obtained depending on the marketing techniques that are used. For instance, a tea business can organize a tea-tasting or can even supply sample tea for a day. Apart from this, brochures can be distributed and even ads can be put up in order for people to know about the business.

Read More – MSME & Small Businesses – How Can They Scale-up Business Online

ONLINE –

One can also sell tea online by establishing an online platform instead of setting up a shop. This can be done by hosting a website from where people can order for tea and the tea is to be delivered at their doorstep. This can either be a stand-alone way of a tea business, or it can even be run along with a physical tea shop where people visit and consume the beverage.

Tea shop business can therefore be one of the most profitable businesses. In addition, the investment for a tea business ranges according to the prospective size of the business, hence making the opportunity open to many more people. 

For this investment, one can rely on banks, financial institutions or any other financial lenders, and even under government schemes which are becoming more prominent given their utility to small-scale businesses. Further, tea is not a very seasonal business even though more tea is sought during winters, on a regular basis, people prefer to drink tea at least once or twice a day making the business less risky in terms of whether there would be sufficient demand for tea. 

Tea has demand but whether the shop does well or not depends on the quality of their product, their price and their marketing techniques. A person starting a tea business can promote it through traditional and online marketing techniques in order to attract the target audience and to make better profits.

Tea Shop Business Plan FAQs:

1. Is selling tea a good business opportunity?

Yes, selling tea could be a good business opportunity especially in India where most population consumes tea on a day-to-day basis. The health benefits and aesthetics of tea have also risen in the recent times making it a great choice for businesses.

2. How much does it cost to set-up a tea business?

The cost to set-up a tea business depends upon the intended size of the tea business, the location of the tea shop and all such related aspects. Therefore, there can be no properly determined cost to set up a tea business. However, a tea business can be started with a minimum investment of 1 lakh.

3. How do you price your tea?

A typical tea stall in India sells tea from Rs. 10 and the price may increasingly vary on other factors. A person intending to start a tea business can price the tea according to the cost incurred in procuring materials, wages/salary from those working in the tea stall and any other such consideration. The price of the tea also depends on the size of the tea cup that is the quantity of tea.

4. Can you sell tea online?

Yes, tea can be sold online. An online platform or website and mobile application can be set-up in order for tea business to be set-up online. Further, there are also some existing portals that pick up tea from businesses and deliver it to customers through which businesses can sell their tea online.

5. Is it necessary to sell any other products other than tea in a tea business?

It is not necessary to sell any other products in a tea business other than tea. However, it may be profitable to the entrepreneur to also sell some other snacks as those who visit a shop to drink tea, often also order other snacks to eat along with the tea.

6. How to increase tea sales?

Tea sales can be increased by utilizing marketing techniques to let people around the location of the tea shop to know about the tea business. Further, for increasing tea business, it would also help if the tea provided there is unique and if there are various kinds of teas.

7. Can I also sell tea leaves along with ready-made tea? Will that be profitable?

Selling tea leaves or tea powder in a tea business, along with ready-made is tea can be profitable if customers really love the tea in that shop and are willing to procure the tea leaves used in that tea for their household use. For it to be profitable, it is important for the customers to like the ready-made tea of the business itself. Another upside to selling tea leaves is that, even if it is not sold, then it can be used by the shop for making tea and selling the tea.

8. What kind of locations are best for starting a tea shop?

The locations that are best for starting a tea shop are in locations where good tea is not available, because several people drink tea and if they get good tea in locations where it wasn’t available before, then the people would welcome such business. Besides, another aspect of choosing a location is to identify those places which are used by public more frequently such as hospitals, railway stations, parks, next to colleges/corporate offices, courts, etc.

9. What are the expected profit margins for a cup of tea?

The costs to make a cup of tea usually ranges from Rs. 3.5 to 5, and if a tea business sells that tea for even Rs. 10, then a minimum of Rs. 5 can be made from every cup of tea. The business can even sell the tea for Rs. 15 or Rs. 20 depending on the rent and ambiance according to the location, which would provide for a profit Rs. 10 to Rs. 16.5.

10. What are the different kinds of teas that can be sold? Should the price of all varieties of tea be the same?

There are many varieties of tea, however the most popular varieties that can be sold in a tea business include regular tea, ginger tea, black tea, lemon tea, green tea, herbal tea and masala tea. The price of all the varieties of tea doesn’t have to be the same as the cost incurred in making each of the tea may be differ, and the tea business must price each of the teas according to the respective cost incurred.