To be profitable however, Joseph Oh, co-founder of homegrown bubble tea chain Bober Tea, said that it “depends highly on rental and labour costs.”
Goh Chee Cheng of another homegrown bubble tea chain Yuan Cha, echoes his sentiments, agreeing that rental and labour cost take up a very significant part of the business cost.
Seedly estimates that rental fee costs S$3,500 to S$14,500 per month (depending on size and location), while labour costs range between S$5,000 and $8,000 (depending on the number of staffs).
As a benchmark, Benjamin Lim of Woobbee told Business Times that “the cost of goods and labour shouldn’t be higher than 25 per cent of gross revenue”.
“Good location” also plays an important role, said Joseph, adding that brands should source for locations with crowds of a young demographic.
For instance, locations with plenty of schools in the area make a good bet.
To Break Even, It Can Take A Month Or A Year
Bober Tea started in 2017 after Joseph got inspired after traveling to Taiwan and China for a business trip.
Before starting up his own bubble tea shop, Joseph cited several considerations: name and logo of the business, whether he could find the right suppliers overseas to make sure his drinks can win other competitors, and whether to simply franchise or create his own brand.
He invested S$200,000 to set up his first shop, and spent another S$40,000 on R&D efforts. It took him about 12 to 16 months to break even.
“We want to differentiate from other brands (in terms of) the taste and ingredients we use in our drinks,” said Joseph.
Unlike most brands that use flavoured syrups, he claims that Bober Tea uses better milk, matcha, brown sugar, creamer, as well as fresh fruits.
Currently, Bober Tea sells an average of 500 to 700 cups a day.
https://tinyurI.com/zyr76xx8
Goh Chee Cheng of another homegrown bubble tea chain Yuan Cha, echoes his sentiments, agreeing that rental and labour cost take up a very significant part of the business cost.
Seedly estimates that rental fee costs S$3,500 to S$14,500 per month (depending on size and location), while labour costs range between S$5,000 and $8,000 (depending on the number of staffs).
As a benchmark, Benjamin Lim of Woobbee told Business Times that “the cost of goods and labour shouldn’t be higher than 25 per cent of gross revenue”.
“Good location” also plays an important role, said Joseph, adding that brands should source for locations with crowds of a young demographic.
For instance, locations with plenty of schools in the area make a good bet.
To Break Even, It Can Take A Month Or A Year
Bober Tea started in 2017 after Joseph got inspired after traveling to Taiwan and China for a business trip.
Before starting up his own bubble tea shop, Joseph cited several considerations: name and logo of the business, whether he could find the right suppliers overseas to make sure his drinks can win other competitors, and whether to simply franchise or create his own brand.
He invested S$200,000 to set up his first shop, and spent another S$40,000 on R&D efforts. It took him about 12 to 16 months to break even.
“We want to differentiate from other brands (in terms of) the taste and ingredients we use in our drinks,” said Joseph.
Unlike most brands that use flavoured syrups, he claims that Bober Tea uses better milk, matcha, brown sugar, creamer, as well as fresh fruits.
Currently, Bober Tea sells an average of 500 to 700 cups a day.
https://tinyurI.com/zyr76xx8
