How to Start a Tea Shop ? :Detailed Steps, Cost : Comprehensive Guide 2025

How to Start a Tea Shop : Starting a tea shop in India is one of the most profitable small business ideas in 2025. Tea is not just a beverage but a daily habit deeply rooted in Indian culture, making the tea stall business a high-demand and high-volume opportunity. Anyone looking for a low-investment, high-profit business model will naturally come across popular search queries such as how to start a tea shop, tea stall business plan, tea shop cost in India, chai shop profit margin, and best small business ideas for 2025. This detailed guide explains every step involved in starting a tea shop, including location, setup, menu design, cost calculation, licenses, daily operations, profitability, and government support schemes.

A tea shop can be started in just 100–150 sq ft space, with a monthly rent of ₹5,000–₹10,000, and only one tea master + one helper as staff. Daily operational expenses are extremely low compared to income potential, and a well-located tea shop can easily generate ₹5,000 net daily profit, making it one of the most lucrative micro-businesses today. This essay also integrates the most searched keywords like tea shop business plan 2025, chai stall setup cost, chai business profit calculation, FSSAI for tea stall, Mudra Loan for small business, Udyam Registration for tea shop, and tea kiosk business model to ensure strong search performance.

1. Understanding the Business Potential in 2025

Tea consumption in India continues to rise every year. Even in 2025, tea remains the most preferred hot beverage across all age groups, professions, and social classes. Whether in metros or villages, tea shops consistently attract customers from morning to late evening. The low price of tea encourages repeat purchases throughout the day, which increases daily sales volume significantly.

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1.1 Why Tea Shop is a Profitable Business Idea

A tea shop thrives because:

• Tea is consumed multiple times a day.
• Customers are consistent and come back daily.
• Investment is small but returns are high.
• Operational costs are low.
• The business is simple to manage.

A typical customer buys tea at least 2–3 times a day, which makes footfall predictable and stable. People also buy snacks like biscuits, samosa, vada, puffs, and bread omelettes, increasing total revenue.

1.2 Rising Trend of Kiosk and Micro Tea Cafés

The kiosk-based tea shop model is becoming extremely popular. With only 100–150 sq ft of space required, entrepreneurs can start operations quickly without investing heavily in interiors. The ability to start in a small shed, container kiosk, or small cabin makes this model flexible and scalable.

2. Choosing the Right Location for Your Tea Shop

Location is the most critical factor for the success of a tea business. A tea shop survives on daily footfall, not occasional customers.

2.1 High-Performing Tea Shop Locations

Some of the best-performing locations in 2025 are:

• Bus stands, railway stations, and metro stations
• Office clusters and tech parks
• College and school areas
• Markets, shopping streets, and commercial complexes
• Residential junctions with daily morning and evening traffic
• Hospitals, clinics, and industrial areas

2.2 Why 100–150 Sq Ft is Ideal

A 100–150 sq ft space is enough to:

• Set up a counter
• Keep stoves or induction units
• Store milk, tea powder, sugar, and utensils
• Keep a small snack display
• Provide a small standing space for customers

This compact size reduces rent and allows efficient operations.

2.3 Rent Expectations

You can comfortably find such spaces for:

• ₹5,000–₹10,000 per month
  This keeps monthly overhead low while allowing higher profit margins.

3. Setting Up the Tea Shop: Equipment & Interior

The charm of a tea shop is simplicity. You do not need luxury interiors or expensive equipment unless you want to run a premium tea café.

3.1 Basic Equipment Required

The essentials include:

• Gas stove or induction
• Gas cylinder
• Tea kettle, pots, ladles
• Stainless steel counter
• Water cans and RO water
• Milk boiler
• Snack display unit
• Paper cups, glasses, sugar jars
• Cleaning supplies

These items are inexpensive and easy to maintain, making the business beginner-friendly.

3.2 Staffing Requirements

Your preferred model:

• 1 Tea Master
• 1 Helper

This is enough to run a busy shop from morning to evening efficiently.

4. Daily Operating Expenses (Your Provided Figures)

Your tea shop business model has one of the cleanest and simplest expense structures.

4.1 Daily Expense Breakdown

Raw Materials: ₹4,000
This includes milk, tea powder, sugar, spices, cups, and snacks.
Labor + Rent: ₹1,500
Daily share of staff salary and rent combined.
Fuel/Electricity: ₹500
Gas refill daily share or electricity charges.

4.2 Total Daily Operating Cost

₹6,000 per day

This low operating cost is the core strength of the tea business model.

5. Daily Income Potential (Your Exact Numbers)

5.1 Income Breakdown

Tea (500 cups): ₹5,000
This means ₹10 per cup, which is standard pricing for non-premium kiosks.
Snacks (400 pcs): ₹5,000
Highly profitable category because snacks have excellent margins.
Other Items: ₹1,000
Water bottles, cold drinks, small add-ons.

5.2 Total Daily Revenue

₹11,000 per day

5.3 Daily Net Profit

Income (₹11,000) – Expenses (₹6,000) =
₹5,000 Net Daily Profit

This means your monthly profit can easily reach:
₹5,000 × 30 = ₹1,50,000 per month

6. Menu Planning: Keep It Simple and Fast

A winning tea shop menu balances taste, speed, and affordability.

6.1 Recommended Menu Structure

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Tea Varieties:

• Regular tea
• Masala chai
• Ginger tea
• Elaichi tea
• Strong kadak chai
• Lemon tea & black tea

Snacks:

• Samosa
• Parippu vada / dal vada
• Egg puff / veg puff
• Bun maska
• Bread omelette
• Cutlet
• Biscuits, rusk

These items maintain high turnover and low waste.

6.2 Why Snacks Are Important

Snacks contribute up to 40–50% of total daily income.
Customers rarely buy only tea; they prefer pairing it with something light.

7. Legal Requirements & Government Support

Your model includes three major support options that are extremely important in 2025.

7.1 FSSAI License

Even a small tea shop must get:

• FSSAI Basic Registration

This ensures:

• Legal approval to sell food
• Increased customer trust
• Eligibility for listing on food apps

7.2 Mudra Loan

Under Pradhan Mantri Mudra Yojana (PMMY):

• Small businesses can get up to ₹50,000 under the Shishu category
• No collateral required
• Ideal for buying equipment, raw materials, and setting up the kiosk

This scheme helps first-time entrepreneurs who want to start with minimal financial risk.

7.3 Udyam Registration

Registering as an MSME provides benefits like:

• Priority loan approvals
• Lower interest rates
• Easier Mudra loan eligibility
• Government subsidies

Udyam registration is free and can be completed online.

8. Step-by-Step Process to Start a Tea Shop

Step 1: Market Research

Study footfall, competitors, and customer demand in your area.
Note peak hours, pricing patterns, and snack preferences.

Step 2: Choose the Location

Pick a spot with high daily traffic.
Finalize your 100–150 sq ft kiosk or shed.

Step 3: Register and Obtain Licenses

Apply for:

• FSSAI basic license
• Udyam registration
• Local municipality permissions

Step 4: Purchase Equipment

Get stove, utensils, counter, containers, snack showcase, etc.

Step 5: Hire Staff

1 tea master + 1 helper is sufficient.

Step 6: Stock Raw Materials

Buy milk, tea powder, sugar, cups, spices, snacks, and water.

Step 7: Set Pricing

Affordable prices ensure high volume and repeat customers.

Step 8: Launch the Tea Shop

Promote with:

• Opening offers
• Combo prices
• Loyalty cards

9. Quality Control and Hygiene

9.1 Taste Consistency

Taste is the biggest driver of repeat customers.
Maintain the same recipe daily.

9.2 Cleanliness

Hygiene is essential for:

• FSSAI compliance
• Customer trust
• Long-term business growth

10. Marketing Strategies for Tea Shop Growth

10.1 Local Visibility

Use:

• Bright signage
• Clean counters
• Attractive snack display

10.2 Digital Presence

Set up:

• Google Business Profile
• WhatsApp status promotions
• Instagram reels

10.3 Customer Retention

Offer:

• Bundle offers
• Loyalty cards
• Combo pricing (tea + snack)

11. Scaling & Expansion Opportunities

Once the first outlet becomes profitable, consider:

11.1 Opening Multiple Kiosks

Use the same 100–150 sq ft format.

11.2 Delivery-Only Tea Kitchen

Partner with food delivery apps.

11.3 Creating a Franchise Model

Standardize:

• Taste
• Process
• Branding

12. Why Tea Shop is the Best Low-Investment Business in 2025

Tea shops are:

• Simple
• Profitable
• Low risk
• Scalable
• Easy to operate

A daily net profit of ₹5,000 with a low investment makes this business one of the top choices for new entrepreneurs in India.

How to Start a Tea Shop – Conclusion

Starting a tea shop in 2025 is one of the most rewarding small business opportunities, especially for first-time entrepreneurs looking for low investment and high daily income. With just 100–150 sq ft of space, a rent of ₹5,000–₹10,000, and two staff members, you can easily run a profitable tea stall. Your daily expense of ₹6,000 and daily income of ₹11,000 gives a net daily profit of ₹5,000, translating to a strong monthly income. Government schemes like FSSAI License, Mudra Loan, and Udyam Registration make the process smoother, legal, and financially supported. With the right location, consistent taste, hygiene, fast service, and simple marketing, a tea shop can grow from a small kiosk to a chain of profitable outlets.