Tea Business Plan: How To Start Your Own Tea Shop

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Introduction

In India, tea is available at all times. Mornings aren’t complete without a cup of chai. Tea has surpassed coffee in popularity. The Indian population consumes 30 glasses of tea for every cup of coffee. Every Indian adult drinks at least two cups of chai every day. It can occasionally reach 4 to 5 cups.

India is the world’s largest tea consumer and, after China, the world’s second-largest tea producer.

Tea, also known as ‘Chai‘ in Hindi, is one of India’s earliest and most popular beverages. India is the world’s second-largest tea manufacturer. Tea can be consumed at any time of day, whether it is in the morning for bed tea or in the afternoon for post-lunch tea. The operation of a tea shop or the establishment of a tea-selling business is considered a profitable investment.

Opening a small tea shop is a profitable and self-satisfying venture. Depending on your financial means, you can open a store of any size. You might also consider buying a franchise. To establish a tea business in India, you’ll need to learn about the market, your target audience, and the product you’ll be selling.

Tea market in India

India is the world’s second-largest tea producer after China and the world’s second-largest tea consumer. Due to its added health advantages and taste, tea is one of the most popular beverages eaten by the general public on a regular basis.

To begin with, a tea stall is an excellent method to launch a small business. It will make money not just in big cities, but also in little towns. The country’s market is expected to expand further during the forecast period of 2022-2027, rising at a CAGR of 4.2 percent. The tea industry in India is estimated to reach 1.40 million tonnes by 2026. After China, India is the world’s second-largest producer of tea.

In addition, the country is a major consumer of beverages, accounting for about a fifth of global consumption in 2016. In 2017, India had the greatest tea exports in over four and a half decades. However, due to strong domestic consumption, the country’s exports grew only a little each year. Domestic consumption accounts for over 80% of total output in India.

Creating a business plan for Tea Shop

Setting up of Tea Stall/Shop

Whether a business owner wants to create a tea stall or franchise business is determined by the amount of money they have to invest. Tea stalls can be launched with a modest capital, as opposed to franchise stores, which demand a larger expenditure. Business owners can use franchise business models to promote and sell various types of tea that can be served at tea bars or counters. Cardamom Tea, Black Tea, Green Tea, Herbal Tea, Aroma Tea, Kesar Tea, Fermented Tea, Iced Tea, Tandoori Chai, etc.

Only if equipment, tools, and raw materials are available, such as tea, tea making utensil, kettle, LPG cylinder, burner, serving glasses, glass holder, milk, sugar, water, tea powder/masala, and other relevant ingredients, can the tea making process be completed. In particular, laborers or workers are required to serve or bring tea to a variety of locations, including stores, marketplaces, offices, complexes, and industrial locations, as needed.

Figuring out the Location

The success or failure of a firm is determined by where it is located. Because it is so important in almost any operation, it is advised that you do your homework before deciding on a location for a tea stall or franchise. If you’re starting with a tea stall, a little space will suffice, but for a tea bar, a 500 sq. ft. area is required to place and run equipment, utensils, and raw materials. Seating layouts can be adjusted to suit the available area or location.

Manpower required for a tea shop

Because a tea business does not have a lot of work or space, you only need 1-2 cooks who must be available at specific times. Make sure you approach other cooks and maintain their contact information in case your main hires are unavailable.

You may need to hire help depending on your operation and other criteria in order to keep the shop clutter-free, tidy, and, most essentially, sanitary. tea can be sold online. An online platform or website and mobile application can be set up in order for the tea businesses to be 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.

Branding, Marketing, and PR

Include your social networking accounts in your branding and marketing strategy so that people can find you and see what you’ve been up to online. It’s also crucial that you maintain your social media presence. Nothing bothers consumers more than an account that hasn’t been updated in days or even weeks. Many customers will assume you’re closed if you don’t appear to be active online.

If you can acquire local press, that’s also worth pursuing. It’s good notifying the weekly arts and culture papers about your presence. Consider your personal story – what makes you unique? What distinguishes your cuisine? What made you decide to open a tea shop in the first place? Everybody has a story to tell, so share yours and see if you can gain some media attention that will attract people to your truck.

Find your USP (Unique Selling Proposition)

A USP is extremely important, and usually equally difficult to find. As the name suggests, it is a one-of-a-kind quality, service, or product that only you will bring into the market. Something which will set your company apart and help you reach more consumers, and solidify your consumer base simultaneously.

Stall business registration and license

Making Your Tea Business Legal

The following approvals and licenses must be secured by the appropriate authority in order to legalize the business:

  1. Choosing a Name for Your Tea Company- Ensure that the finalized name doesn’t really conflict with any other corporation or enterprise that has already been registered in India. It should be a one-of-a-kind name that is only relevant to the company in question.
  2. Business Registration- If suitable, small to medium tea stall enterprises can register as a Sole Proprietorship or Partnership Firm. If a ‘Partner’ is also concerned, the company can be established as a Limited Liability Partnership (LLP) or a Private Limited Company under the ROC.
  3. Registration for GST- According to the Government of India’s GST law, obtaining a GST number is required to start a tea company.
  4. MSME/SSI Registration- Micro-Small and Medium Enterprise (MSME)/ Small Scale Industry (SSI) registration let any registered business organization take advantage of government schemes and incentives under the MSMED Act of 2006.
  5. Getting a Business License- A state-specific trade license must be secured from the state where the tea business will be established and activities will begin.
  6. Getting Food Safety and Standard Authority of India (FSSAI) License (FSSAI)-  Any business, enterprise, or business entity engaged in the manufacturing, processing, production, or distribution of food items must get an FSSAI license.

Understanding Customer and Product Marketing Channels

Although tea is consumed in 90% of Indian households, this does not guarantee that your target clients are tea drinkers.

Your audience, and hence your marketing, is dependent on the services that your firm provides.

Several reasons encourage premium tea consumption in India, including:

  1. Tea production is simple and inexpensive, resulting in disposable cash.
  2. A higher level of health awareness
  3. The ability to investigate
  4. The desire to maintain one’s health.

It’s important to figure out what customers want from their tea. This will aid in the identification of one’s target market. It will also assist them in developing a marketing strategy to increase brand awareness and revenue.

Profit earned by tea stalls

A cup of tea costs between Rs. 3.5 and Rs. 5, and if a tea shop sells that tea for even Rs. 10, a minimum of Rs. 5 can be made from each cup of tea. The company may even sell the tea for Rs. 15 or Rs. 20 per cup, based on the rent and ambiance on the site, for a profit of Rs. 10 to Rs. 16.5.

Increasing Profits

A daily cup of tea costs Rs 1 for 30 ml of milk, Rs 0.755 for 2.5 g powdered tea, Rs 0.50 for 10 g sugar, and Rs 0.30 for four g Masala Tea. A cup of tea would cost roughly Rs 3.5-5 even after additional expenses. When you run a tea stand and sell a cup for Rs 10-20, you make roughly Rs 15 for each cup in profit.

Concentrate on increasing profitability until the products are well-known in the market.

This could be accomplished in a variety of ways, including:

  • In response to consumer feedback, introduce a variety of tea types and variants.
  • Begin serving small snacks and meals alongside the tea.

What is the best way to start a tea business from home?

You might form a partnership with a tea maker to receive the necessary raw ingredients for the tea business.

There are many methods for establishing an aesthetically appealing and user-friendly website, whether you are a seasoned web designer or a rookie. Consider using an online platform to help with website design, online store setup, and marketing.

Once your website is established and operating, you can start adding content right away. For example, you can build your audience and promote brand recognition by writing relevant tea-themed blog entries.

When you’re ready to sell your tea, make sure the product pages contain high-quality photographs and clear, useful details.

Supplies and Storage

There is a significant amount of backend work and logistical assistance required to ensure the success of your tea firm. Finding the correct teas from the proper estates is vital, but getting them procured and delivered to India for sale can be much more difficult. Green teas, for example, are subject to a duty of 110 percent. In India, customs authorities are still unfamiliar with the numerous types of tea. This makes them questionable, making the procurement process even more difficult. It is critical that they are treated properly until the teas are transported there to guarantee that they are not infested with insects.

Financial Analysis

Always remember that it will take some time for you to start making money. So, while you’re considering investing, keep three months’ worth of operational cash on hand just in case you need it.

Open a Bank Account For Your Business

  1. This keeps your private assets segregated from the assets of your firm, which is vital for private asset security.
  2. Understanding your company’s financial returns involves keeping track of your numerous costs and income sources.
  3. It also simplifies tax accounting preparation.

Tea startups in India

With such a vast consumer base already in place, India has a slew of tea companies on their way to success. There are loads of chai-lovers in every corner of the city. Tea is associated with a number of snacks, both sweet and savory, so a fresh addition to that rooster, whether it’s a new flavor or a new snack, will do really well in the Indian Market.

Here is a list of some of the biggest chai cafe brands in India as of now:

Chaayos: The tea startup Chaayos was formed in 2012 in Delhi/NCR by two IITians, Nitin Saluja and Raghav Varma, who both graduated from the Indian Institute of Technology in Delhi. In 2019, Chaayos operated 16 tea shops in Delhi and Mumbai.

Chai Point: In Bangalore, Amulik Singh Bijral founded the Chai Point brand in 2010. Investors in this tea firm include Eight Road Venture, DSG Investors, and Saama Capital. Chai Point has expanded its activities to include Delhi and Pune in addition to Bangalore.

Teapot: Teapot was first released in January of 2013. Tea and meals are served in teapot-like chambers via teapots. This business, which was built with Indian tastes in mind, was inspired by the coffeehouse culture in Western countries.

Teabox: Kaushal Dugar, a Siliguri-based entrepreneur, founded the Teabox brand in 2012. TeaBox is a website that allows people to buy tea and tea-related products online.

Conclusion

In India, owning a tea store is a fairly common business. However, it will take a tremendous deal of planning to make it a huge success. This unique post is solely dedicated to the high-demand coffee shop business plan.

This step-by-step tutorial will help you understand the market and how to manage a tea shop. This profession, like any other, demands a high level of devotion, intelligence, and hard work. And everything is structured to make money.

This post is also available in: English

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