What to Consider When Opening a Bubble Tea Shop

Thinking of opening a bubble tea shop in Singapore? When it comes to starting this new business, you want to look at a variety of factors. One of the most crucial factors to look into is the location of your shop.

Here are some of our insights into choosing a good location for your bubble tea shop:

Storefront

The ideal storefront should be facing a main entrance, and not facing another store (e.g. avoid stores that are located side by side in corridors). However, these store locations tend to cost 30 per cent more at least, on a per square foot basis. You can make up for this somewhat by the smaller size you need (see below).

Other key traits to look for are:

• Storefronts that face traffic light crossings or other places where people stop (they may be tempted to buy a drink from you while they wait)
• A storefront that is facing the elevators or escalators, so you’re immediately visible when customers come up or down
• High levels of foot traffic passing by the storefront (this can vary in different parts of the mall)
• Avoid storefronts next to loud or “cluttered” businesses (e.g. next to storefronts that are chock full of flashing lights and neon, as they drown out yours in their garishness).

If it’s possible, pick a mall over a standalone location

It’s not always true that Bubble Tea Shops will do better in malls; but it’s mostly true. There are a few simple reasons for this:

First, malls are more weatherproof. When it rains, you don’t lose customers – this is different from little shops along the street, where people may decide not to walk over and buy in bad weather. Also, foot traffic doesn’t decrease by as much in malls, due to the rain. It will in more open areas.

Second, the better-run malls may be more expensive; but they also run more aggressive marketing campaigns. They often have mall-wide promotions, such as deals with credit card companies or gift vouchers; they also conduct shows and events during Christmas. Chinese New Year, or other major consumer seasons. It’s unlikely that you could afford to conduct these sorts of promotions on your own dime.

Third, Bubble Tea Shops are often complementary to malls, because people stop to get a drink before they carry on shopping. This is especially true if there’s no supermarket nearby, to grab something out of a fridge (they’re not going to go into a restaurant just to buy a drink, usually).

Size of store

For Bubble Tea stores, the bulk of the customers will be of the take-away variety. As such, you typically want no more than enough space for your equipment. Look for around 600 square feet; you can focus on expanding the store later.

If you do want to have seats (generally only if you have snacks as well), you should work out the number of customers you need per day, based on required revenue. For example, if your sales per customer is about $5, and you need at least $1,000 per day, that’s 200 customers.

That may come to about five to eight tables, assuming 20+ turnovers per table (each table is used by 20+ separate groups). You’ll need to work out sufficient floor space for that many tables.

Aim for ground floor locations, at the exists nearest taxi stands, bus stops, or other waiting areas

These tend to be good locations because people grab drinks while they wait. And because they slow to a stop, they’re more likely to observe the area and see your store. If you’re allowed to, you can also place standees nearby, to draw attention to your store (such as it it’s behind the taxi pick-up point).

Ground floor units are also ideal because you get the customers both as they head in, and as they head out (not everyone may visit the third or fourth floor, but everyone always visits the ground floor).

Look for schools nearby

Any area near schools, such as Secondary schools or Polytechnics, are a good bet for Bubble Tea shops. That’s because students constitute the main demographic.

And if you’re not thinking students, you should: they’re well positioned to afford your product, are more likely to buy it than to head to, say, Starbucks, and here’s the best part: Students tend to come in groups.

It’s also great to be nearby, when student events (like orientation day at polytechnics) take place; this periodically sends groups of customers your way (make sure you know the school’s timetable, so you can prepare your supplies accordingly).

Don’t forget, a successful bubble tea shop not only requires a good location, but proper equipment, training and high quality ingredients!

What do you think about opening a bubble tea shop in Singapore? Voice your thoughts in our comments section or on our Facebook community page. You can find the best commercial property locations on 99.co.