Is a Bubble Tea Business Profitable? A Month of Numbers

A bubble tea business can be profitable, and the drink itself is the reason: tea, milk, syrup, tapioca pearls, the cup, the sealing film and the straw come to about $1.15 for a drink that sells for $6. What decides whether the shop makes money is everything around the drink: staff from opening to close, rent, and enough customers every day to cover them. In the example below, a small shop selling 150 drinks a day, every day, takes about $28,400 a month and keeps about $4,800 of it, 17% of sales, after paying its staff. It needs 118 drinks a day to break even, and the toppings customers add bring in about $1,000 a month of the profit. Below is a drink's cost, the month line by line, what moves the profit, and a free calculator.

The short version

• A drink costs about $1.15 to make and sells for about $6.
• Staff, rent and the other fixed costs are about $17,100 a month, whatever you sell.
• So profit depends on volume: each drink adds about $4.90 once fees, toppings and their costs are counted.
• The example shop breaks even at 118 drinks a day and keeps $4,800 a month at 150.
• Toppings matter: 40% of customers adding one is about $1,000 a month.
• Cooked pearls go hard within hours, so cook in small batches and count what's thrown out.
• TaroStack costs every drink from its recipe and records what's thrown out, by reason. More below.

What a drink costs

Pearl & Pine Tea Bar, a made-up bubble tea shop in Spokane, Washington, I use in these examples, sells a 24 oz milk tea with pearls as its standard drink:

That's 19% of a $6 drink. Fruit teas with fresh fruit cost more, plain tea less; the average across the menu is what counts. Each drink is a recipe, and costing it is the same arithmetic as any recipe: steps in recipe costing.

A month at a small bubble tea shop

Open 11 to 9, seven days a week, with two people behind the counter and two hours of prep a day:

That's 17.1% of sales, on top of wages for everyone who works there, the owner included if they work a shift. Staff are 41% of sales; drinks and toppings at cost are 19%.

What moves the profit

Volume. Each drink adds about $4.90: $6.00 plus the average topping, less their costs and the card fee. Fifty more drinks a day is about $7,350 more a month, with the same staff and the same rent, until the line gets too long for two people. Fifty fewer is a loss.

Toppings. An extra topping costs about 15 cents and sells for 75. When four customers in ten add one, that's about $1,040 a month, a fifth of the profit, for one question at the till.

Pearls. Cooked tapioca pearls go hard within hours, so shops cook them in small batches through the day and throw out what's left. In the example that's $3 a day, $90 a month: small, but worth counting, because a batch cooked too big every afternoon is a habit, and a waste log shows it. A waste log template records it in a minute.

The break-even

The shop needs 118 drinks a day to cover staff, rent and the rest. Summer days may sell twice that and a cold January weekday half, so the month's average is what has to clear 118. How the break-even works for any food business is in break-even point for a food business.

Get the calculator

Download the bubble tea shop profit calculator. Type your own shop into the shaded cells: drinks a day, the average price and cost of a drink, toppings, pearls thrown out, card fees, days open, staff hours and wages, payroll taxes and each fixed cost. It works out the month's sales, costs and profit, the profit as a share of sales, and the drinks a day to break even. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

Where this stops working

The calculator uses one average drink. A real menu has thirty drinks, a dozen toppings and four kinds of milk, each with its own cost, and the tea, the pearls and the cups come from three suppliers whose prices move. The cost of a taro milk tea is a guess, the pearls run out on the hottest Saturday, and the cups are reordered when someone notices.

How TaroStack does it

TaroStack keeps every recipe costed and every supply counted.

Every drink a recipe. Each drink is a recipe of tea, milk, syrup, pearls, cup and seal, and units convert: pearls bought by the 3-kilo bag, used by the ounce. A drink's cost comes from what you paid for each part, so when the cups go up, every drink's cost follows.

What's thrown out, by reason. Pearls, tea and fruit thrown out go off as adjustments with their reason, reported by reason and item, so the batch that's always too big shows up.

And supplies before they run out. The reorder list works in days of cover at the rate each supply really moves, against each supplier's lead time, so the pearls and the cups arrive before the weekend, and margins are reported by product.

Recipes and margins by product are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.

Questions people also ask

How profitable is a bubble tea business?

In the example, a shop selling 150 drinks a day keeps about $4,800 a month, 17% of $28,400 of sales, after paying its staff. Below 118 drinks a day it loses money.

How much does it cost to make a bubble tea?

In the example, about $1.15: tea, milk, sugar syrup, pearls, a flavor syrup, and the cup, sealing film and straw. That's 19% of a $6 drink.

How much does a bubble tea shop make a month?

In the example, about $28,400 of sales and $4,800 of profit at 150 drinks a day. At 200 a day, the profit is about $12,200; at 100, it's a loss.

What is the profit margin on bubble tea?

On a single drink, about 80% before staff and rent: $6 for $1.15 of ingredients and packaging. For the shop as a whole, after everything, 17% in the example.