Tea, also known as the Hindi word ‘Chai’ is one of the oldest and most traditional beverages of India. India is the second-largest producer of Tea in the world. Tea can be consumed at any point of the day, irrespective of being morning as bed tea or afternoon as post-lunch tea. Running a tea stall or establishing a tea-selling business is considered a viable profit-making venture.
Tea franchise businesses can also opt as a startup for first-time business owners, as well as for established businessmen. Setting up a tea stall or starting a franchise business can be rewarding, depending on its physical location and its customer base.
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Know How to Start a Tea ‘Chai’ Business in India
1. Finding Target Customers
Tea business can be started with a lesser investment that can be targeted to customers in metro cities, as well as smaller cities and remote villages. Starting a tea business can be also termed as a Small Business Idea that can be run and managed by women entrepreneurs. Therefore, business owners need to finalize on serving the type of customers residing or working in specific locations or areas.
2. Starting a Tea Stall or Franchise Business
The amount of investment decides whether a business owner wants to open a tea stall or franchise business. Tea stalls can be started with low investment, as compared to franchises wherein more money is required to be invested. Franchise business models help business owners in promoting and selling various types of tea that can be served from tea bars or counters. Some of the popular tea types include Green Tea, Herbal Tea, Cardamom Tea, Black Tea, Fermented Tea, Iced Tea, Aroma Tea, Kesar Tea, Tandoori Chai, etc.
3. Components required to start a Tea Stall/Business
Tea making process can be completed only if these equipment, utensils, and raw materials are handy, such as Tea itself, Tea making utensil, kettle, LPG cylinder, stove, serving glasses, glass holder, milk, sugar, water, tea powder/masala, other related ingredients, etc. Additional to these, laborers or workers are required to serve or deliver tea to several places like shops, markets, offices, complexes, commercial locations, etc. as per the requirements.
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4. Searching and Finalizing a Location/Area
Location decides the fate of the business, whether it will be a success or failure. It plays a vital role in almost every business, so it is recommended to thoroughly research before finalizing any location for a tea stall or franchise business. If it’s a tea stall then a small area can be sufficient to start, however for a tea bar approximately 500 sq. ft. area is essential to place and operate equipment, utensils, and raw materials. Sitting arrangements can be made according to space or location.
5. Legalizing your Tea Shop Business
To legalize the business there are certain permissions and licenses to be obtained from respective authorities are mentioned below:
a) Finalizing a Name for your Tea business
Make sure that the finalized name does not match any already registered company or enterprise in India. It should be a unique name and only related to the concerned business.
b) Company Registration
Small to medium tea stall businesses can get registered as a Sole Proprietorship or Partnership Firm, if applicable. If there is also a ‘Partner’ involved, then the firm can be registered as a Limited Liability Partnership (LLP) or Private Limited Company registered under ROC.
c) GST Registration
Obtaining a GST number is compulsory to start a tea business as per GST law defined by the Government of India.
d) MSME/SSI Registration
Micro-Small and Medium Enterprise (MSME)/ Small Scale Industry (SSI) registration allows any registered business entity to avail government schemes and subsidies under certain guidelines mentioned under MSMED Act, 2006.
Also Know: How to register an MSME online?
e) Obtaining a Trade License
Trade License is state-specific that shall be obtained from the particular state where the tea business is about to set up and commence operations.
f) Getting Food Safety and Standard Authority of India (FSSAI) License
Getting FSSAI License is mandatory for any business, enterprise, or business entity engaged in manufacturing, processing, production, or distribution of food items.
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Comparison of Business Loan Interest Rates offered by Top Banks/NBFCs – April 2023
|Axis Bank||14.95% - 19.20% p.a.||Apply Now|
|Bajaj Finserv||9.75% - 30% p.a.||Apply Now|
|Flexiloans||1% per month onwards||Apply Now|
|HDB Financial Services Ltd.||Up to 36% p.a.||Apply Now|
|HDFC Bank||10% - 22.50% p.a.||Apply Now|
|IDFC First Bank||10.50% p.a. onwards||Apply Now|
|Indifi||1.50% per month onwards||Apply Now|
|Kotak Mahindra Bank||16% - 26% p.a.||Apply Now|
|Lendingkart||12% - 27% p.a.||Apply Now|
|Mcapital||2% per month onwards||Apply Now|
|NeoGrowth Finance||19% - 24% p.a.||Apply Now|
|Tata Capital||12% p.a. onwards||Apply Now|
|UGRO Capital||14.90% p.a.||Apply Now|
Note: Business loan interest rates are updated as on April 2023.
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