 One of the most popular profitable and in-demand items is bubble tea, boba. So today I'm going to be sharing with you how to start a boba shop in less than 20 minutes. So in that way you can start making some serious money. Hello friends, my name is Wilson, your friend in helping you build a profitable small business and a thriving food business. Out of curiosity, do you want to start a bubble tea restaurant? Definitely let me know in the comment section below. Now, I get a lot of people asking me how to start a bubble tea shop because of this video, we talked about why it is so profitable to start a bubble tea shop. First off, it is because it's low cost to start up. The equipment cost is very very little. Second, it's high margins as an item because a lot of times you're selling just water and third, it is very easy to operate and that's the reason why I really enjoy building out bubble tea shops. In my career, I've definitely built at least 10 bubble tea shops and that's the reason why I'm going to be sharing a lot of fundamentals with you and on top of that as a disclaimer, I cannot share too much details with you because I do have a non-compete after we sold our business. Now without further ado, let's dive right in. First thing you need to know is to know your customers. Know exactly who is it that you're trying to serve because that will dictate your menu item. For example, when you're serving to Caucasian people, they're looking for a little bit more of a sweeter palate whereas if you're serving to an Asian demographic, they're looking for more of a tea-based flavored item and the reason why I know is because we operate out of the Richmond night market and usually at those locations, we serve taro, mango and also regular bubble tea because those are the most popular item and they're looking for more of a sweeter palate. Now at our standalone location at 720 Suites, we serve much more of a tea-based item such as ulong tea, such as puer tea because those people have much more sophisticated palate and desire for tea. Now the whole point of saying this is because when you know your customers, know exactly who you're targeting, then you can tailor the marketing, you can tailor their menu item, even for bubble tea, there is a lot of nuance so definitely understand exactly who is it that you are trying to serve in your city. Now in addition to that, you must align your values with your customers values. As a quick example, let's say if your customers value sustainability and you use glass jars, then that's a match and you're aligned in values so then that way you can turn them into raving fans that will always support you. Now you can connect with them on a much more personal level and then you can explode in revenue. A lot of people fail to do that because they lack the fundamentals. Align, connect and explode and if you fail on the fundamentals then you're not going to set your business up for success and that's the reason why you should definitely check out the free masterclass we have in the link below which is an hour of free masterclass that talks to you and shares with you about the fundamentals of building a profitable restaurant. Now after you identified your customers, it is time to choose your concept. What do I mean by concept? Is your concept a sit in and dine in location or is it going to be a grab and go location? Are you going to be purchasing a franchise or are you going to be building your own brand? Now the pros of purchasing a franchise is the fact that you're buying a brand name. That means you don't need to worry about menu, you don't need to worry about your demographic, you don't need to worry about the location because they do all the work for you. The downfall of that is that there's a lot of cost involved 30 to 50 thousand dollars franchise fee and on top of that you're paying six to eight percent royalties every single month. Now as a brand, you don't need to pay all those fees however it is up to you to have the business acumen to create your brand, to create your menu item and to create the internal decor that matches the people that you want to serve. So definitely choosing the right concept to build right from the get-go is very very important. Now that you have chosen your concept, it is time to choose your location. Location matters a lot in today's world because with running a bubble tea concept, the trick to actually make money is volume. If you don't have enough volume, then you don't have enough profitability because bubble tea is already a very very low ticketed item. That means you need a lot of bubble teas that you're selling on a daily basis for you to actually make money. So how do you do that? Choose a location that is around a lot of high rises. I would stay away from office buildings right now because we don't know when people are going to go back to office buildings whereas high rises where people are living. They always need a treat especially if they're stuck at home all the time. They need to buy food to make themselves happy. They need to go out for a stroll. They can actually order from third-party apps. That's the reason why choosing a location at high rises where it's a very high density of residential people is very very important. In addition to that, choosing a neighborhood that has more of an Asian demographic is also very important. Now you might be asking why. It is because bubble tea is still a very strong and leaning more towards an Asian culture drink. That's the reason why choosing a neighborhood that actually accepts this item is very very important. If you guys enjoyed this video and find value in this video, make sure you guys smash the like button and let me know. This is the type of content that you enjoy. Now back to regular programming. Now that you have chosen your location, it is time to figure out your menu. When it comes to menu choosing, if you're purchasing a franchise then you don't need to worry about that. Why is that the case? Because they give you the menu for your location and you just follow their system. Now I know a lot of you guys here are here to create your own brand and that's the reason why it is super important for you to pay attention right now. When crafting your menu item for your own brand, you need to always go back to your customer demographic. Understand exactly who is it that you're trying to serve and target and sell to. If you're targeting very highly sophisticated tea drinkers then you must offer different types of tea. For example, purer, jasmine tea, oolong, roasted tea. These are just black teas that I'm just sharing with you. Now there's a lot of other tea flavors and I've seen this being a very successful model for highly sophisticated tea drinkers. Whereas if you're tailoring to people that are liking bubble tea as a dessert, that they want taro, that they want mango, that they want milk tea slushes, then that's a very different type of demographic that you are catering to and the offering, the menu that you're serving and crafting is also need to be able to tailor to that demographic. So understanding exactly who you sell to allows you to craft your menu properly. In addition to that, because bubble tea has a low ticket value, what do you need to do? You must try everything in your best efforts to increase your average order value. Now what do I mean by that? When people come and purchase their bubble tea, a lot of times they may be looking for a snack, so perhaps you can offer waffles. Bubble waffles is a very culturally accepted item as well that would also allow people to increase the average order value. And at the same time, if people are looking for a quick bite, maybe a panini, maybe some other add-ons would allow you to build out your menu item, so then that way you can become more profitable. Next up after you've decided on your menu, you must start creating a system. A system so that not with anyone that comes into your operations will know exactly how to make the drink. Now why is that super important? It is because quality assurance is number one when it comes to any types of food business. Every time I come into the shop, I'm expecting the same flavor profile to hit the spot that I'm craving for. And if there's discrepancy every single time I come in, then I wouldn't enjoy my experience with you. Why is McDonald's the number one franchise in the world? It is because every burger that you eat doesn't matter which city you're in, doesn't matter which country you're in. The same cheeseburger tastes the same. And that's what we want to be able to strive for when creating our bubble tea shop. Especially when it comes to a bubble tea shop, creating a system allows you to actually hire less people, which we'll dive into just a sec. So what do I mean by a system? System means that every time people come in, your cashier does the same thing. They greet the customers in the same way. They enter through the order the same way. And when your barista gets the order, how are they making the drinks? How are they receiving the drinks? What does that flow look like? If you don't have a system and a process for each of these steps, what's going to happen is that you're not going to be able to serve that many people. And once again, as I'm sharing with you, bubble tea is a high volume game. As an example for you, at one given time, we're able to serve over 100 bubble teas every single hour. What does that mean? That means that we're serving two bubble teas every single minute. How do we do that? It is through systems and processes. It means that we take out any unnecessary frictions. That means we're efficient with every single process that we have. And that's how we're able to serve more than two bubble teas every single minute by having systems. An example of how you can actually start creating your own system, what you need to do is to break down the different steps that your staff goes through. The little minute steps, every single steps you need to break it down and look for inefficiency, look for who's responsible, and look for how you can increase and take out any friction that there is. And that's how you can create that system, log it down and continue to improve that. And in time, you're going to be able to create a system that works for your shop. Now after you have your systems created, it is time to think about labor. When it comes to labor, hire based on values, just the same thing as when you connect to your customers through having the same values, you must hire based on the same values. You might be asking, why is that the case? It is because if your people that work for you don't have the same values as you do, what's going to happen is that there's going to be friction and they're going to leave. And that's going to cost you money through training and through investment as well. So you must hire based on values. And on top of that, when you work with people that have the same values, they're going to care about your business much more. They're going to be able to have common sense and care for your business like their own. So definitely hire based on value. Now earlier, I touched up upon why systems is so important when it comes to labor, because when you have right systems, then you can have very efficient labor. That means that two people can do the job of four people. So definitely make sure you focus on having great systems so that in that way it can minimize your labor costs. Now speaking about costs, you must calculate your costs that you are planning to start up with. First big cost is your equipment. Now when running a bubble tea shop, you don't need that much equipment. First of all, you need your POS system. Second is that you need your cup sealers for your cups. And third, you're going to need your ice machine. You're going to need under counter cooler. You're going to need a sugar dispenser. You're going to need a stand-up freezer. And on top of that, you're also going to need some tea brewers and blenders. And on top of that, all the different utility and utensil costs is what you need. So when you add everything up, it really isn't that much compared to starting a restaurant. And that's the reason why this model is so popular. Next up, you need to account for your inventory costs. And typically, I would account around $2,000 to $3,000 for inventory costs. You don't want to overstock inventory. At the same time, you don't want to understock so that way you sell out within a week or two weeks. Definitely $2,000 to $3,000 is a sweet spot when it comes to inventory. Next up, you need to account for your marketing costs, your initial launch. And I would account for around $2,000 when it comes to marketing. Something I forgot, rent and franchise fee. Depending on where location you're at, that's your rent costs. And on top of that, franchise fee is around $30,000 to $50,000 depending on the franchise if you were to purchase a franchise. And again, typically, franchise is around 6% to 8% royalties. That means every dollar you make, you need to give them 6 to 8 cents, depending whether or not you are subscribing into a franchise model. Quick story that I want to share with you is that you must account for a buffer. And what does that mean? That means additional money that you haven't budgeted for. Just put that aside. Why is that the case? It is because it's super important when running a business is to have that additional runway in case of emergency. Quick story, when we first started our ice cream shop 720 suites, we budgeted for $100,000 so that way we can open our doors. After two weeks of opening, we were so slamming busy that we realized our ice cream machine was not the right model. It didn't create enough ice creams per hour and our machine was just too crappy. And that's the reason why we need to upgrade and to spend an additional $30,000 to upgrade to a higher level machine. And if we didn't account for enough capital on the side, we wouldn't be able to upgrade our machine and we won't be able to serve and make back our money even faster. Long story short, you must have a buffer when calculating your startup cost. And finally, the next step is to market your bubble tea shop. It is super, super important for you to actually get your fundamentals right, get your alignment right, align your values, connect with your customers and then we explode in revenue and then we deal with marketing. That's the fundamental that you must follow if you want to create a profitable bubble tea shop. And once again, the free masterclass is in the link below. Definitely go check it out. When we're talking about marketing, what are some of the tactics that you can use to market for your bubble tea shop? First up, still utilize Instagram. It is one of the biggest platforms out there that everyone is on. Definitely utilize that. Second, TikTok. Be on TikTok and create viral engaging content. Content that allows people to loop 10 to 15 seconds are the best format on TikTok. And lastly, make sure you utilize UGC. What is UGC? User generated content. What does it mean? That means when people come into your bubble tea shop, when they purchase from you, when they post about you, you must save those posts and repost them on your Instagram, repost them on your TikTok, repost it on your website. This way it allows people to see how credible you are because once again, what you say about your shop doesn't carry as much weight as what other people say about you. So definitely utilize UGC. And on top of that, something that you must start looking into is also Google My Business because a lot of people rely on reviews before they go and check out your shop or not. So definitely Google My Business is a very underrated platform that not a lot of people use. So if you want to learn how to optimize your Google My Business, check out this video right here. And lastly, view third-party delivery apps as your friend. Utilize it. Sign up for all of them. Use it so then that way you can get more people in the house. Don't view it as a profit-generating center. Use it as a marketing tool. Now you might be asking, what does that mean? That means that when people are coming through the doors through delivery apps, it is your responsibility to actually get them to buy from you off the delivery apps. Some ways to do that is to slip a coupon and an insert card into the delivery package that you're sending to the delivery customers. So in that way, when they see that card, when they see that hate, when they come in and purchase through your website or if they walk in, they're going to get 10% off. Or if there's going to be other promotions, or if they follow your newsletter, or if they follow your Instagram or your TikTok, they get 10% off, then they're much more likely to go into your own funnel, your own platforms, your world. So then that way you can market to them. You can send them to your website to purchase. You can send them to walk into purchase, or you can just send them your way. So then that way you can skip the 20, 30% fees after they have been your customer once or twice. So there you guys go, the formula in starting a profitable bubble tea shop. Now I just scratched the surface for you. And if you want more in-depth training on how do you start one and the full on roadmap, the mistakes that you need to avoid, then definitely check it out in my free master class where I cover the A's formula to show you the step-by-step process and how you can create a profitable restaurant using Align, Connect, and Explode. Aligning your values, connecting with your customers so then that way you have loyal customers who choose you over your competitors every single time and then exploding in revenue. Tactics and strategies that you can use in your new bubble tea shop. Definitely check it out in the link below. Otherwise, I hope you enjoyed this video. If you guys do, smash the like button. Otherwise, I'll see you guys in the next video.