How to Start a Tea Shop Business [Cost, Plan & Investment]

Tea Shop Business

Looking for business ideas with small investments? Why not start a Tea shop business? In today’s time, no business is small or big, it all depends on our thinking that how everyone views any business.

Starting a tea shop is very easy and it does not require high investment. Hence, you should consider starting a small tea stall.

For this article, I personally talked to a tea vendor in my street about business strategy and then writing this article. If you are thinking to start a tea shop business then you are in the right place.

In this article, I’m going to answers all your questions related to a tea shop business like:

  1. How to start a tea business?
  2. Market potential & demand
  3. Investment in tea shop business
  4. Licenses & Registration
  5. Profit margin in tea making business

When we wake up in the morning, we need tea and there are many people who do not make tea at home. Hence, we go to the market tea shop to satisfy our tea craving.

#1. How to Start Tea Shop Business?

The tea business is very simple and easy to start and you can start with less money. You can open a “chai ka dukan” in less than 10,000 rupees. Opening your own shop for less is considered a good idea for a tea shop in business.

For a tea shop, you must first rent a shop, unless you own one. If you do not want to rent a shop, then you should make your own system that you can take home daily, you can also build a wooden or iron tea cart shop. Here are a few tea business ideas for your convenience.

Types of Tea Business models available in India

  • Small Tea Stall
  • Tea Franchise
  • Tea Manufacturing
  • Coffee & Tea Café

To open a tea shop, you have to search for a shop where more customers come. I recommend you to open your tea stall where you get the most customers. For example; hospitals, schools, colleges, housing colony areas, etc. If you open your shop in such a place then you will get more income.

Market Research & Analysis: Before opening a tea shop, it is very important to do market research. You can take an example of other running tea shops near you to do market research.

Try to analyze your competitor’s shop. See how their tea tastes and try to improve the taste of your tea. To increase your income, you can also have omelets, cigarettes, toasts, noodles, along with tea.

Tea Making Ingredients: After visiting the shop you will have to collect the tea making items. Also, I’m giving you this information in the list below, which will work in the shop.

  • Gas stove and cylinder
  • Milk container
  • Aluminum kettle
  • Steel spoon
  • Box for tea and sugar
  • Teabags
  • Paper & Plastic glasses
  • Pottery

#.2 Market Potential & Opportunity

Till a few years ago, tea shops were not considered good business. But today the tea shop is counted as a good employment category. Whenever a guest comes or a person, they are given tea.

When you have to overcome laziness or the staff in the office, we prefer to drink a cup of tea to get energized ourselves. And today, you get to see the tea shop at every corner of the roads, colleges, schools, and hospitals.

The tea shop is easily available all over these places because it’s high demand and the profit potential is highest in a tea shop.

#3. Tea Shop business plan

You may be thinking “business plan for tea stall”? But trust me making a business plan is very important for any business.

It gives you an estimated idea of how you can execute your business, investment cost, deciding the area, estimate monthly profit from the business, and much more.

Also, consider your menu for the tea stall. If you only sell tea in your stall then you won’t be able to make good returns.  You can decide and customize your menu according to your customer’s requirements.

#4. Registration & Licenses

Honestly, no license is required to start a small tea stall. But doing little charity by paying little money to the local authority helps. But if you want to open a tea shop, you will need a license

Registration & Licenses Required:

  • GST – Goods and Services Tax
  • FSSAI – Food Safety and Standards Authority of India
  • Shop Act Registration

Note: Most of the License is required only for big tea shops or tea franchise businesses only. As I mentioned before you don’t really need a license to start a small tea shop. But make sure you talk to the local authority to overcome any further issue.

#5. Area & Location Selection for Tea Stall Business

The choice of place for a tea shop is very important. Hence, you should always choose a crowded place for your tea shop.

For opening a tea shop, you can choose a school, bus stand, railway station, college, etc. So you always have to chase for your shop to choose a crowded place

#6. Tea Franchise Options

Tea Franchise Options

If you want to get rid of all this mess then you can also open a tea franchise. There are many tea franchises are available in India

The biggest advantage of opening a tea franchise is that the franchise company does everything for you like marketing, business planning, providing raw materials, etc. In addition, they also provide training for your employees. However, you must have a proper location and capital investment for the franchise.

You can choose any one of these franchises:

In addition, there are more tea franchises available in India like Café Amul franchise, Costa Caffee, Brewberrys Café, etc

#7. Profit Margin in Tea Business in India

The estimated profit in a small tea stall is about 50% to 70% of the total sales. When you earn money by selling tea, you will spend around 50% of your expenses. If you have an income of Rs 2500 per day, then you will have an income of 1000. And the rest of the money will be your net profit. And from this way you can open a tea shop

Tea Shop Profit Margin Breakdown

1 Tea Sold Daily x 200 5 Rs x500 = 2,500 Rs
2 Snacks (omelet, cigarette, toast) 10 Rs x 200 = 4000 Rs
3 Total Sales 6,500 Per Day
4 Monthly Sales 1,95,000 Rs
5 Profit Per Month 111500 Rs

#8. Investment in Tea Shop Business

The very first question which comes in the mind is how much investment does it require to start a tea stall business right? Here is a simple answer for you.

There is no fixed investment cost for starting a tea stall. Therefore, you can start a tea stall in a cycle with 5 thousand rupees too. But I’m going to give you a rough idea of a good tea stall business model.

To start a tea shop, you will need about Rs 50,000 to Rs 80,000 thousand rupees.

The investment amount can be different recording to your requirements, location as well as on the type of business model. To understand is simple. In addition, here’s the investment table for you.

Investment Cost Required Breakdown

1 Rent Per Month 10,000 Rs Per Month
2 Deposit – Optional 50000 Rs
3 Gas stove and cylinder 5,000 Rs
4 Raw Ingredients 7,000 Rs Average
5 Electricity 1,500 Rs Per Month
6 Labor – optional 10,000 Rs Per Month
7 Total 83,500 Rs Per Month

 The investment cost includes:

  • Raw Ingredients
  • Rent of stall
  • Licensing
  • Seating arrangements
  • Electricity bill
  • Labor


I hope you have liked our information about how to open a tea shop. Also, if you want any kind of information related to opening a tea shop, then you can ask by dropping a comment down below

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