A tea business plan sets out what you'll blend, who will buy it and how often, what each pouch and tin costs and sells for, where you'll buy, blend and store the leaf, and the first year month by month. Loose-leaf tea is unusual among small food businesses: a cup's worth of leaf costs pennies, the margins are wide, and almost nothing is fixed, so the plan's real question is repeat customers. A pouch lasts a tea drinker a few weeks, and the business depends on them coming back. In the example below, a tea blender reaches 250 retail pouches, 400 wholesale pouches and 60 tins a month by month 11, makes a profit from month 1, and ends the year about $27,600 ahead on top of paying for the blending. Below is a description example, each part of the plan, the projection, and a free template.
The short version
- Describe the business in a paragraph: the blends, the customers, the sourcing, the goals.
- Cost a pouch and a tin from the kilo of blend to the package.
- Price for retail and wholesale, and count the repeat customers you need.
- Plan your leaf stock: how much you buy at once, and how long it stays fresh.
- Lot every blend, so a botanical with a problem can be traced.
- Project 12 months with sales ramping up.
- TaroStack costs every blending batch and keeps every tea lot traceable. More below.
Part 1: the business description
Māmaki Mana Tea, a made-up tea company I use in these examples, is starting out. Its description reads:
Māmaki Mana Tea blends loose-leaf herbal teas with māmaki, hibiscus, lemongrass and ginger, in small batches on Oʻahu, sold in 2 oz pouches and tins at two Saturday markets and online, and wholesale to cafés and gift shops. Every package carries its blend lot and best-by date. In the first year we plan to build 150 regular customers and 20 shops, and to sell about 700 packages a month by month 11.
Part 2: what a package costs
The costs come from tea business profit margin, where a kilo of blend is worked out line by line. For the plan, the overhead share moves to the monthly costs:
| Per 2 oz package | Pouch | Tin |
|---|---|---|
| Tea, 57 g at $48.06 a kg, after fines | $2.74 | $2.74 |
| Package and label | $0.45 | $1.72 |
| Blending and filling, 50 an hour at $20 | $0.40 | $0.40 |
| Variable cost | $3.59 | $4.86 |
Retail packages also pay a 3% card fee: $4.01 for a retail pouch, $5.40 for a retail tin.
Part 3: customers and prices
| Channel | Price | Variable cost | Contribution | A month at full speed |
|---|---|---|---|---|
| Pouch, retail | $14.00 | $4.01 | $9.99 | 250 |
| Pouch, wholesale | $8.25 | $3.59 | $4.66 | 400 |
| Tin, retail | $18.00 | $5.40 | $12.60 | 60 |
Two hundred and fifty retail pouches a month is about 150 regular customers buying a pouch every three weeks or so, plus market walk-ups. That's the plan's real number: how you'll find them, and what brings them back, like a subscription, a refill pouch for the tin, or a blend that changes with the season.
Part 4: operations
| Area | In the plan |
|---|---|
| Sourcing | Leaf and botanicals by the kilo, importers and local growers, minimums and lead times |
| Stock | How much leaf you hold, how it's stored, how long it stays at its best |
| Blending | Batch size, fines lost, a lot code for each blend |
| Packaging | Pouches, tins and labels; reorder points |
| Labels | Ingredients in order, net weight, your name and place of business |
| Records | Each blend's botanical lots, so a supplier's recall can be traced |
How lots work from ingredient to package is in track ingredients by lot.
Part 5: the first year, month by month
Sales start at 15% of full speed and reach 100% by month 11, against $600 of fixed costs a month: insurance, the website and online shop, market booths, marketing and samples, software and card fees, and packing space.
| Month | Retail pouches | Wholesale pouches | Tins | Sales | Profit | Cash, year to date |
|---|---|---|---|---|---|---|
| 1 | 38 | 60 | 9 | $1,189 | $173 | $173 |
| 2 | 50 | 80 | 12 | $1,576 | $424 | $596 |
| 3 | 63 | 100 | 15 | $1,977 | $684 | $1,280 |
| 4 | 75 | 120 | 18 | $2,364 | $935 | $2,216 |
| 5 | 100 | 160 | 24 | $3,152 | $1,447 | $3,663 |
| 6 | 125 | 200 | 30 | $3,940 | $1,959 | $5,621 |
| 7 | 150 | 240 | 36 | $4,728 | $2,471 | $8,092 |
| 8 | 175 | 280 | 42 | $5,516 | $2,982 | $11,074 |
| 9 | 200 | 320 | 48 | $6,304 | $3,494 | $14,568 |
| 10 | 225 | 360 | 54 | $7,092 | $4,006 | $18,574 |
| 11 | 250 | 400 | 60 | $7,880 | $4,518 | $23,091 |
| 12 | 250 | 400 | 60 | $7,880 | $4,518 | $27,609 |
With $600 of fixed costs, the business covers them in its first month. The numbers depend on the customers coming back: if the regulars buy every six weeks instead of three, retail pouches halve and the year makes about $8,500 less. Leaf bought by the kilo is the other cash question: the first $1,200 of leaf is months of stock at the start, and it has to stay fresh while it sells. How much to keep on hand is in how much inventory to keep on hand.
Part 6: the startup budget
| Item | Example |
|---|---|
| Scale, scoops and blending bins | $300 |
| Heat sealer | $150 |
| First bulk tea and botanicals | $1,200 |
| First pouches, tins and labels | $900 |
| Label design | $500 |
| Business license | $200 |
| Market tent and table | $300 |
| Website and photos | $400 |
| Samples for shops | $150 |
| Working cash | $1,500 |
| Total to start | $5,600 |
Get the template
Download the tea business plan template. Type your packages with their price, variable cost and monthly volume at full speed, your fixed costs and startup budget, and how fast customers will come; it works out each month's sales, profit and cash, the first month with a profit and the lowest cash point. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The plan's $2.74 of tea per pouch is one blend at one price. In practice there are eight blends sharing botanicals bought from four suppliers at prices that move, fines that vary by leaf, and a hibiscus lot that sat too long. The spreadsheet can't say what each blend costs this month, which lot of māmaki is in which pouch, or which botanicals are running low.
How TaroStack does it
TaroStack costs every blend from the leaf you bought and keeps every lot traceable.
Every blending batch, costed. Each blend is a recipe, with units converted: buy leaf by the kilo, use it by the gram. Recording a blending batch takes each botanical off stock from the lot used, at what you paid, and divides by what came out good, so fines and price rises are in the cost the day they happen. Packing into pouches and tins takes the packaging off stock too.
Every lot, traceable. Each blend goes into a lot with a best-by date, sold first-expired-first-out, and one report walks any lot to the shops and customers who got it and back to the botanical lots inside. Stock that isn't moving shows how long since it last went out, so the hibiscus that sat is visible before it's stale.
And the plan, checked. The reorder list shows botanicals, pouches and tins in days of cover at the rate you use them, with a red line where an order placed today would arrive too late. Margins are reported by product and by customer, so you see which blends and which shops earn.
| The plan's line | In the spreadsheet | In TaroStack |
|---|---|---|
| Tea per pouch | $2.74, one blend | Every batch, each blend, at what you paid |
| Which māmaki is in this pouch | Unknown | The lot, from the blending batch |
| Leaf running low | Found when the bin is empty | Days of cover, before you run out |
| Which blends earn | Unknown | Margins by product |
Lots, receiving, recipes, blending batches, the reorder list and margins 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.