Business Overview

Tea is the second most popular beverage in the world, and it’s quickly growing in popularity within the United States. Tea shops provide people with a place to enjoy tea in a social setting.

Tea shops are opening in both large cities, like San Francisco, Vancouver and New York City, and small towns, and the future looks promising for these shops. According to the Tea Association of the U.S.A., the overall tea industry grew an estimated 4 to 5 percent in 2015, and the retail tea sector is expected to have a compound annual growth rate (CAGR) between 5 and 6 percent through 2020.

Who is this business right for?

Anyone who loves tea and socializing with others may be well-suited for running a tea shop. The business involves lots of hands-on work, namely brewing tea, as well as regular interaction with employees and customers.

Tea shops are often open during the morning and afternoon, and shop owners should be prepared to work when their shop is open (unless they have employees).

What happens during a typical day at a tea shop?

In a tea shop, day-to-day activities revolve around serving tea to customers. When not brewing or packaging tea for customers, downtime is often spent washing dishes, cleaning the shop, and placing orders for tea and supplies.

What is the target market?

Tea shops’ customers are usually people who like tea and have discretionary income. While some teas are extremely inexpensive, tea shops usually offer higher-priced specialty teas. Consumers with less discretionary income aren’t able to spend as much on these more expensive teas.

How does a tea shop make money?

Tea shops make money by selling brewed tea, food and packaged tea to customers.

What is the growth potential for a tea shop?

A tea shop business can be as small as a single location or as big as an international chain. Some of the largest chains have hundreds of locations.