A Bubbly Biz: Milk Tea Business Plan Guide and Examples

It’s no wonder why milk tea is a big industry here in the Philippines. The country is in the tropics, which explains Filipinos’ need for thirst quenchers. On top of that, this beverage also satisfies our innate sweet tooth. 

Various international milk tea brands, mostly from Taiwan, have flocked to the Philippines, giving enthusiasts a wide range of options. The industry also teems with local shops that provide equally refreshing and delicious concoctions. 

You, too, can join the bubble tea market as a shop owner. It’s a huge and serious undertaking, but you can increase your odds of success if you have a sound and practical strategy. Get the ball rolling by drafting your milk tea business plan. 

Why Milk Tea is a Good Business Idea 

There are plenty of reasons to start a milk tea business in the Philippines, such as the following:  

✔️ There Will Always be Demand for It 

As mentioned, the Philippines is a tropical country. There will always be people looking for ways to cool themselves down. The market size of milk tea in the Philippines typically increases during the hot, dry season. 

Moreover, the beverage has been ingrained within the country’s food culture due to its sweetness and compatibility with Filipinos’ palates.  

✔️ It’s Easy to Prepare

Unlike other offerings in the food biz, milk tea is easy to make. You can steep the tea or boil the tapioca on your own. You can easily source milk tea powder mixes through a number of suppliers you can find online and offline. And if you have a preparation system in place, you can make your operations efficient.  

✔️ It Offers Room for Creativity 

Love exploring and sharing new flavors? A milk tea business gives you opportunities to experiment with ingredients and create new concoctions. 

✔️ It’s Scalable 

A milk tea shop is a highly scalable business. You can even start your own shop at home. Once you generate huge sales, you can expand your business by opening kiosks or even shops in various locations. 

Read more: Selling and More: Business Ideas with 50K Capital in the Philippines

How Much Does It Take to Start a Milk Tea Business? 

Milk tea costing in the Philippines will greatly depend on the size of your business. If you’re starting a shop at home, you may need a milk tea business capital of at least ₱30,000. But if you’re setting up your beverage business in a profitable location, the milk tea business capital is roughly around ₱250,000 to ₱350,000. 

How Much is the Potential Income of a Milk Tea Shop? 

Is a milk tea business profitable? Generally, yes, but it will still depend on a few important factors, such as your location and the quality of your product. 

If you scan various milk tea shops in your community, you may find that on average, a cup costs between ₱85 to ₱120. Factoring this average milk tea price in the Philippines, you can get expected daily sales of milk tea worth ₱4,250 a day if you sell at least 50 cups. That’s around ₱127,000 a month, assuming your shop is also open during weekends. 

But don’t get excited yet. That’s just the gross income. To compute the net profit, you have to deduct the expected daily expenses of milk tea shop operations, such as manpower, ingredients, packaging, rent, and electricity.  

How to Write Your Milk Tea Business Plan: 4 Steps to Take

What is a milk tea business plan? It’s a proposal that covers all the details of your milk tea business. It shows the feasibility and profit potential of your enterprise. In other words, it shows you, your lender, and your investors that your business can actually happen. 

A business plan breaks down your grand vision into actionable steps. It also includes your short-term and long-term goals. Think of your business plan as a compass. 

It’s important that you know how to write this document. Here’s how to draft your milk tea shop business plan in the Philippines. 

Step 1: Know the Industry and Your Competition 

Before finalizing your business concept, you need to check if your idea has a chance of surviving and thriving in the competitive milk tea industry. You need to conduct market research. 

Get the right answers by asking the right questions. The data that you’ll get from the following questions will help you come up with practical steps for establishing your foothold in the industry: 

• Is the milk tea industry in your community increasing or declining? 
• Who are the top competitors in your community? 
• What is the prevailing milk tea price in the Philippines, especially in your community? 
• How much do your competitors earn on average? 
• What types of customers do your competitors serve?
• What do the customers love about your competitors?
• What do the customers dislike about your competitors?
• Do your competitors offer products other than milk tea?
• How is your competitors’ customer service? 
• Who will be your milk tea equipment supplier in the Philippines?

The good thing about market research is that you can do it on your own. You can buy products from your competitors, read feedback on their social media pages, and even talk to their customers.  

Step 2: Pin Down Your Business Concept 

Now that you know the industry landscape, you can come up with a feasible business idea.  Your business idea goes beyond building a storefront; you have to add some depth and purpose to it. Your business concept should include the following: 

• Mission and vision – This should explain the reason you’re starting your milk tea business. 
• Target market –  Your business will flourish if it serves the right customers. Check out your target market, their needs, their wants, and even the things they thought they would never need. 
• Product – This will be the core of your business. Invest time and money in developing a product that will keep customers coming back. 
• Value proposition – Other than marketing your product’s strengths, you should also highlight its unique selling points to make it a better choice than your competitor’s. 
• Branding – Your business should have an image that customers can relate to. Branding efforts include the creation of the business name, logo, tagline, and your brand’s tone and voice in marketing materials. 

Read more: Top 5 Business Bloggers: Advice for Budding Entrepreneurs

Step 3: Write Down Your Actual Business Plan 

At this point, you’re going to flesh out your actual business plan. The Department of Trade and Industry (DTI) has developed a simple template that micro, small, and medium enterprises (MSMEs) can use.^[1] 

👉 Executive Summary

This part should give an introduction to your milk tea business, its practicality, and the landscape of the milk tea industry. You should also discuss your competencies and qualifications as a milk tea shop owner. 

👉 Marketing Plan 

Under this section, discuss your main product and all the relevant details to promote it. Take note of the following: 

• Your milk tea’s comparison with your competitors’ offerings in terms of quality and price
• The location of your milk tea shop
• The areas covered by your milk tea shop
• The market share that your milk tea shop is projected to capture
• The number or amount of the products that the shop will sell
• The marketing and promotional strategies to achieve your projected sales
• The marketing and promotional budget 

👉 Production Plan 

In this section, discuss how you’re supposed to produce your product. Cover the following: 

• The production process
• The costs of your machinery and fixed assets
• Sourcing of machinery 
• Maintenance of machinery
• Sourcing of raw materials
• Costs of raw materials
• Cost of labor

To give you an idea of how to build your own shop, here’s a milk tea equipment list in the Philippines: 

• Tea brewers
• Blenders
• Stoves 
• Sealing machines
• Shaking machines
• Pearl or boba cookers
• Measuring cups
• Strainers
• Ingredient containers
• Plastic sealing film
• Straws
• Milk tea cups
• Water dispenser
• Utensils 
• Cash register 

👉 Organization and Management Plan 

This part of your business plan includes the details of your milk tea shop’s operations, such as the following: 

• The structure of the business (e.g., ownership, partnership, etc.)
• How the milk tea shop will be managed and operated
• The qualifications of the business owner
• Pre-operating expenses and activities
• Administrative costs 

👉 Financial Plan 

Discuss how you’ll fund your milk tea business. In your financial plan for a milk tea shop in the Philippines, cover the following items: 

• Total capital amount of milk tea shop and sample costing for milk tea
• Will you need a loan or self-fund your business? 
• The collateral in case of getting a secured loan
• Schedule of loan repayment 
• Projected return on investment (ROI)
• Projected break-even point (BEP)

Read more: Money-Saving Tips for Entrepreneurs

Step 4: Provide Supporting Documents 

Your business plan for milk tea is almost done. If you want to convince your partners, lenders, and banks, you need to include the following documents to substantiate your operational plans and forecasts.  

• Resumes of your employees
• Permits and licenses
• Contracts 
• Bank statements 
• Receipts

Sample Milk Tea Business Plans: 3 Examples for Aspiring Entrepreneurs

If you want to know what a milk tea business plan looks like, here are some milk tea business plan examples to consider. Keep in mind that no two business plans are alike. You're free to tweak some areas depending on your vision. 

• Milk Tea Business Plan Sample #1^[2]
• Milk Tea Business Plan Sample #2^[3]
• Milk Tea Business Plan Sample #3^[4]

My Milk Tea Business Plan is Complete. Now What? 

Say you’ve submitted your business plan to your partners and lenders. What should you do next? How to start and how to promote a milk tea business?

Here are the stages you may need to undergo: 

• Phase 1 (Product development) – Develop recipes for your milk tea. Scout for suppliers. Test products with your target audience and get feedback. 
• Phase 2 (Shop building and marketing planning) – Build your shop and storefront. While you’re at it, you may start drafting your marketing strategy for a milk tea shop in the Philippines (e.g., designing flyers, setting up social media pages, etc.)
• Phase 3 (Forecasting and plan development) –  Create a 90-day plan that includes your short-term goals, projected sales, and relevant strategies. 
• Phase 4 (Launch) – You may choose to do a soft launch where you’ll offer some of your products to get feedback from actual customers. Eventually, you can have a hard launch, open the shop with a blast (i.e., event), and offer your whole range of products. You may also run a week-long discount promo to draw customers in. 

Final Thoughts 

A milk tea shop is a good business idea given the demand for it in a tropical country like the Philippines. But when launching such a venture, you should follow a strategy to minimize costly mistakes along the way. 

A milk tea business plan makes your ideas and tactics concrete, feasible, and workable. Drafting it takes time, but it’ll ultimately help you achieve your goals. 

Sources: 

• ^[1] DTI Business Plan Template
• ^[2] Milk Tea Business Plan Sample #1
• ^[3] Milk Tea Business Plan Sample #2
• ^[4] Milk Tea Business Plan Sample #3