Tea is undoubtedly a go-to beverage for many people around the globe, including in Singapore, thanks to its innumerable health benefits and delectable flavors. While there is a whole gamut of teas that you can find—from green tea to black tea to oolong tea—there’s a particular variety that’s stealing hearts in many places. It’s bubble tea, also known as boba tea. Let’s get to know more about the drink here.
A peek into bubble tea
Bubble tea finds its roots in Taiwan and has come to become the favorite drink of many consumers. Essentially, bubble tea has a base of tea, milk, chewy tapioca pearls, and fruit. The discovery of this drink is believed to be accidental. It apparently emerged when a woman at a Taiwanese tea café dropped her Tapioca pudding accidentally into her tea. Surprisingly, the taste of the drink was plain amazing.
Since then, there’s no looking back. The drink became an integral offering of the café and people simply loved it. Ingredients like tapioca have certainly made the concoction popular amongst lovers of sweet tea, children, and adults alike. Over time, the drink evolved in taste owing to people’s experimentation with different ingredients besides tapioca, such as fruit jelly, popping boba, chia seeds, fruit pudding, and many more. It is served in clear cups that allow you to see the color of the drink and most importantly, the pretty tapioca pearls.
In addition to being a delicious drink, bubble tea is packed with many health benefits. It’s seen as an intense energy booster, especially when caffeine and raw sugarcane are included. Moreover, the drink can boost your immune system, strengthening it with antioxidants like polyphenols and catechins, which prevent oxidative stress.
Starting a bubble tea café
If you have always aspired to start your own café or restaurant business in Singapore, you should consider offering boba tea to your people. It is expected that the worldwide bubble tea market would grow at a compound annual growth rate (CAGR) of 8.9 percent from 2020 to 2027. It is expected to hit USD 4.25 billion by the end of the reporting period (Source). Also, the global consumption of the drink is projected to hit 475,501 tons by 2032. These impressive figures can certainly convince you to embark on your venture.
Singaporeans love their tea, and when it comes to bubble tea, there’s certainly a sweet spot in their hearts. So, starting a bubble tea café in Singapore is a lucrative business opportunity that you should tap into. However, just like starting any other business, you will require a strategic approach. When you have a solid plan and a clear-cut business idea, you are sure to succeed. If you are clueless about where to start, then below are a few tips that should give you some clarity. Check them out:
#1 Come up with a business plan
First and foremost, you need to come up with a clear business plan that outlines your business idea and your strategy. A business venture without a plan is no less than a ship lost at sea. Always remember that starting a bubble tea café involves a significant monetary investment. Without having a solid plan, your investments would be all over the place. When you put in the time to create a business plan, you get a strategic roadmap. It builds credibility and makes it easier to communicate your business goals to banks, venture capitalists, manufacturers, suppliers, and other stakeholders.
A business plan for your bubble tea café should have an executive summary, which gives lenders and investors an overview of your business. It’s essentially a summary that outlines key points related to your business and gives stakeholders the clarity they need. You also need to perform a market analysis to know your strengths, weaknesses, opportunities, and threats and provide a clear roadmap for your business operations, marketing, management, and logistics.
#2 Conceptualize your café’s brand
After you come up with a robust and clear business plan, your next step should be to develop the core concept of your bubble tea café. Your café is not just a business, but it’s poised to become a brand. There’s no limit to experimentation. You always have the option to think out of the box and incorporate the many ideas that you have. However, you should work with a concept that reflects your innate creativity. Think about the kind of café you wish to establish. Does it have an extensive menu? Is it a carry-out or a sit-down café?
Once you have developed the concept of your café, you should proceed to brand it. Think of a catchy name that defines the characteristics of your bubble tea café. Also, you will have to develop a distinct brand identity that differentiates you from your competitors. This includes a logo, storefront design, and other in-store elements. When you create a memorable brand, your café is more likely to enjoy footfalls and ultimately, become a successful business venture.
#3 Choose a good location for your café
Believe it or not, the location of your bubble tea café can either make or break your business. You may come up with the most unique storefront design and concept for your café, but everything will go in vain if you choose the wrong location. People look for convenience and ease in everything. Going out to a café is not an exception. Your choice of location will greatly determine the footfalls your café gets and how efficiently you can manage the logistics and operations of your business. It’s a critical decision but not necessarily a tough one to make.
When considering a location for your bubble tea café, you should go for a place where people love to spend maximum time. A busy area that receives high foot traffic can be an ideal location. But you will have to care about the convenience factor. Does the place have parking spaces? Is the space big enough for large crowds? How safe is the neighborhood? How are businesses in and around the area doing? Answering these questions can help you settle on an ideal location for your bubble tea café.
#4 Figure out your financing options
Finance is the lifeblood of any business. Most people fail to realize their dream of owning a business because of a lack of finance. Although some of them may choose to bootstrap their venture, it does not always work that way. There is a range of fixed and operating expenses that have to be borne by business owners. That’s possible only when they have sufficient funds in hand. The idea of starting a bubble tea café can be realized only when your financing options are in place.
If you are unable to fund your venture, you always have the option of external financing. There are many banks, private investors, and small business agencies in Singapore that provide loans and financing options to aspiring business owners. You can always approach them with your business plan to secure funding for your bubble tea café. You can even consider online lending, crowdfunding, and business grants as feasible financing options for your business. Just make sure you are clear about periodic installments and interest amounts so that nothing burdens your pocket.
You may consider tapping on government grants such as PSG to subsidize some of your kitchen equipment or digital ordering systems and POS system. There are some basic criteria to meet, such as your company is registered and owned by a Singaporean or Singapore Permanent Resident, or your business has not received any government funding before. You can find out more from IMDA's CTOaaS to find out more.
#5 Design your café and the menu
After you secure funding for your business, it’s time for some creative play. Think of what your bubble tea café should look like? The design of your storefront has a huge role to play in grabbing eyeballs and drawing people in. There’s no one-size-fits-all approach to designing the café, but your ideal approach would be to strike a balance between visual appeal and comfort. You can decorate the space in your own unique way and make sure your customers’ needs are met properly.
The next element to focus on is the menu of your bubble tea café. The menu is one of the many elements that define the brand identity of your café. So, make sure you get it right. The menu of your café should reflect that concept of your business and carve out a memorable brand personality. The fonts of your menu should be clear and legitimate. Also, you should consider including visual elements in your menu to entice your customers. When you get the design right, much of your café’s marketing battle is already won.
#6 Get the required equipment and technology
It’s not enough to create a café space by spreading around a couple of tables and chairs. For your boba store café to run properly and profitably, you need to have the right equipment handy. In a typical bubble tea café, electric induction heaters or gas stoves are pretty much unavoidable investments. You need them for brewing tea and cooking tapioca pearls. Also, you need a refrigerator to store all your ingredients. You will have to set aside some funds to buy this equipment.
Another must-have piece of equipment in a boba tea store is a water filter system. This equipment ensures that your café has safe and clean drinking water. A commercial ice machine has also become a mandate for bubble tea cafes because the drink is always served cold. Let’s not forget tea cups, plates, and other essential kitchenware, such as a cup sealer, fructose dispenser, POS system, Self-Ordering Kiosk, or tea espresso machines. All these commercial equipment are crucial investments for a successful bubble tea café.
#7 List down and source all ingredients and supplies
The quality of bubble tea you serve in your café will depend largely on the quality of ingredients you use. Making a cup of boba tea requires fine quality tea (green tea, for example), fruit, milk, and other sweet ingredients. The number of ingredients required to make boba tea is limited. So, you should take your time exploring your options and investing in the best quality ingredients.
Firstly, you should list down the ingredients that you need. Then look for suppliers and sources that can offer what you need. When you source milk for bubble tea, you should consider non-dairy options. When it comes to supplies, you will have to invest in boba straws, cups, and takeout bags. Singapore will have a range of suppliers who deal in these ingredients and supplies. You can get in touch with them and negotiate a deal. Just make sure you choose a reliable and affordable supplier that reduces your burden and your business cost.
#8 Acquire necessary permits
Every business in Singapore—irrespective of its nature and size—requires a license to operate. The rule applies even to fledgling bubble tea cafes. Failing to obtain the necessary permits and licenses can stand in the way of setting up your business venture. In the worst-case scenario, operating a café without the necessary permits can elicit legal action against you, burdening you with hefty fines. You certainly don’t want that to happen, right? So, your best bet would be to research and obtain all the permits and licenses that you need for starting your bubble tea café in Singapore.
While applying for licenses and permits, you should be prepared to wait because getting approval may take some weeks. You will have to produce the necessary paperwork. Some common licenses and permits that you will need while starting a bubble tea café in Singapore are:
a trade license, Food Safety Certification from Singapore Food Agency, ACRA registration, fire license, and GST. When you sort out these, you are good to go. Also, be prepared to shell out some money because these permits entail a cost, which you should include in your total established cost.
You are required to send your staff to Food Hygiene Course to ensure that they are aware of the food safety protocol and stay compliant. Food poisoning can cause huge damages to your business from regulatory and reputation, you should always keep in mind the paramount importance of this area.
#9 Build the right team
When you start your bubble tea café, you cannot expect yourself to be the one-man army taking care of everything. You need support—something which a well-trained team can provide. After you have set up your café and obtained the green signal from the authorities, your focus should be on hiring a team. The team should know the restaurant and hospitality business. It is also important to note that your employees are the face of your boba tea café, playing a significant branding role. It’s not just about serving the right concoction of tea; it’s also about serving it well.
Ideally, the team you hire should be able to pick up the recipes quickly and provide excellent service to your customers. You will have to train them if necessary so that their skills are perfected for success. If you are hiring Singaporeans, then you don’t face to go through the rigmarole of employment procedures prescribed by the Ministry of Manpower (MOM). At the same time, you will have to think of different employee retention strategies, such as perks, employee discounts, health insurance, etc.
#10 Implement a marketing plan
Last but certainly not least, you need to craft a marketing plan for your bubble tea café. In Singapore, you are likely to face a lot of competition in this realm because people have tapped into the demand for the drink. Given how beneficial bubble tea is, it’s natural for many players to ideate a café that brings people the promised benefits. So, it’s essential that you create a solid marketing plan that helps you promote your café and gives you an edge over your competitors in the market. The goal is to create a buzz around your café’s brand and draw customers in for a relaxing time.
In today’s digital world, marketing starts with a well-designed website. If you haven’t created one for your bubble tea café, then it’s recommended that you do so as early as possible. A website is like an online brand identity that informs people about your business venture. So, make sure it's informative, engaging, and aesthetically pleasing.
Another component of your marketing plan is social media. You need to leverage social media networks like Instagram and Facebook to inform people about your café and hold conversations with them. The more buzz you create on social media, the more popular your café becomes. Also, don’t forget to ask for customer testimonials on review platforms because they can incredibly build trust and credibility.
We have done an in-depth survey of 70 Bubble Tea brands in Singapore and up to 95% of the bubble business have a Facebook page or Instagram account.
#11 Launch a Loyalty Membership Program
The ability to engage your customer makes a huge difference to your profit especially when unforeseen changes such as COVID. We found out that food delivery services such as GrabFood, FoodPanda, and Deliveroo receive a higher volume of orders during the COVID lockdown, but the number of orders decline significantly when the restriction eased. The food delivery services business primarily focuses on engaging customers, and they are gaining favorable conditions when most of us stay at home and spend more time on the phone.
Even if the lockdown has lifted, most of us are quite acquainted with using our phones to do many things and it is perfect timing for Bubble Tea Café to start a membership loyalty program to engage their customers.
Almost all of the multi-outlets Bubble Tea brands offer a loyalty program and give out some free items to entice their customer to sign up as a member as compared to single-outlet Bubble Tea businesses that mostly rely on footfall traffic or regulars. It is a piece of strong evidence that the Loyalty program has a significant impact to sustain the business growth of the Bubble Tea business.
Conclusion
The aforementioned points are some of the most important steps to take while establishing a bubble tea café in Singapore. It’s a great business opportunity that promises impressive returns and profits, provided you take the right approach. Before concluding, let’s provide a quick recap of the points discussed above:
Always create a business plan to get clarity on the direction you should be going.
Conceptualize a distinct brand identity through the creative play of ideas.
Choose a location that draws in the maximum number of people to your bubble tea café.
Go for feasible financing options
Design your café and the menu by using the attention-grabbing power of visual elements.
Invest in the right equipment and technology for your café.
Choose the right supplier of your ingredients.
Obtain the necessary permits and licenses.
Hire the right team of employees.
Implement a marketing plan to distinguish your café from your competitors.
Launch a membership loyalty program to accelerate your business growth.