Do you want to start a kombucha drink business? If YES, here’s a complete guide to starting a kombucha drink business with NO money and no experience.
If you want to start a small scale business that has the capacity to grow big and become an international phenomenon, then you should think of starting a kombucha drink production cum bar business. Just like the coffee bar business, kombucha drink business is a business that is open to all and sundry irrespective of financial capacity and business training.
Kombucha drink is a foamy, fermented beverage that is made from tea. As a matter of fact, kombucha drink bar business is one of those businesses that an entrepreneur can commence in the corner of a busy street or in a mobile shop without breaking the bank for cash.
At the same time, big – time investors can also leverage on the increasing awareness and demand for healthy drinks to set up their own kombucha drink bars in strategic locations all around key cities in the United States of America.
One good thing about this type of business is that kombucha drink bars can be positioned in any part of town as long as there are people living or working there.
Just like smoothie and juice bars, kombucha drink bars can be located in airports, sea ports, shopping malls, hotel lobbies, railway stations, bus stations, campuses, hospital lobbies, sports centers and in any public facilities as long as you are given the permission to locate your bar there.
On the other hand, if you operate a mobile kombucha drink shop, then there won’t be any restriction to the places you can sell your kombucha drinks just like the conventional food truck business. Opening a kombucha drink bar just like starting any other business might not be entirely easy, but one thing is certain, it is a straight-forward business that can generate huge and steady profits if well positioned and properly managed.
Though starting a kombucha drink bar does not require any professional skills, but you would still need good business skills and of course customer services skills if indeed you want to build a profitable business.
So, if you are considering opening a kombucha drink bar business, all you would need are some capital to purchase or lease/rent a suitable facility (if you are not settling for mobile kombucha drink shop), the required equipment, utensils and furniture.
You would also need some additional capital to purchase the initial supply of kombucha tea, pay your employees at least for the first 3 months, and also to pay your utility bills.
Steps to Starting a Kombucha Drink Business
Table of Content
- 2. Conduct Market Research and Feasibility Studies
- 3. Decide What Niche to Concentrate On
- 4. Know the Major Competitors in the Industry
- 5. Decide Whether to Buy a Franchise or Start from Scratch
- 9. Discuss With an Agent to Know the Best Insurance Policies for You
- 10. Protect your Intellectual Property With Trademark, Copyrights, Patents
- 11. Get the Necessary Professional Certification
- 12. Get the Necessary Legal Documents You Need to Operate
- 13. Raise the Needed Startup Capital
- 14. Choose a Suitable Location for your Business
- 15. Hire Employees for your Technical and Manpower Needs
- 16. Write a Marketing Plan Packed With ideas & Strategies
- 17. Work Out a Reasonable Pricing for your Services & Products
- 18. Develop Iron-clad Competitive Strategies to Help You Win
- 19. Brainstorm Possible Ways to Retain Clients & Customers
- 20. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
1. Understand the Industry
Kombucha drink is an assortment of fermented, lightly effervescent sweetened black or green tea drink that is commonly seen as a beverage because of its acclaimed health benefits. The drink is produced by fermenting tea using a “symbiotic ‘colony’ of bacteria and yeast” (SCOBY).
Kombucha drink is one commodity that is consumed not just in Japan, China and in the United States of America, but in most countries of the world and of course those that are in the business of producing kombucha drinks are known to generate sales year in year out if the business is well – managed.
As a matter of fact, economic downturn hardly affects the consumption of kombucha drink because it is a commodity that is affordable and considered a healthy substitute to soft drinks and other processed juices.
Kombucha drink can be prepared at home as a homemade drink despite the fact that some companies are into full – time production of kombucha drink. In the United States, commercially bottled kombucha drink became available in stores in the late 1990s.
In 2010 in the United States of America, increased alcohol levels were found in many bottled kombucha products, hence retailers including Whole Foods have to temporarily pull the drinks from store shelves. This development led kombucha drink suppliers to go back to the laboratory to reformulate their products to have lower alcohol levels.
In the United States, sale of bottled kombucha was at $400 million in 2014 and a large chunk of the earnings, $350 million to be specific was earned by Millennium Products, Inc. which sells “GT’s Kombucha”.
In 2014, the market was projected to have 30 percent growth, and companies that make and sell kombucha formed a trade organization called Kombucha Brewers International. In 2016, PepsiCo purchased kombucha maker KeVita for approximately $200 million.
With this kind of business, if you want to start on a small scale, you can choose to start servicing your local community. All you would need are contacts, packaging, networking and good marketing and customer service skills.
However, if you intend starting your kombucha drink business on a large scale, then you should consider spreading beyond your local community to the state level and even national level with adequate structure for chains of outlets and distribution networks.
If you are contemplating starting your own kombucha drink business in the United States, you should ensure that you carry out a thorough market survey. If you get some key factors wrong before starting your business, then you are likely going to struggle to stay afloat.
The kombucha drink business will continue to blossom because people will always want to drink kombucha when they are thirsty and can’t afford to go home to fix it for themselves. It is a growing line of business and it is pretty much open for entrepreneurs to come in and start their kombucha drink business.
Some of the factors that encourage entrepreneurs to start their own kombucha drink business could be that the business is a green business and it is easy to setup and manage with minimal startup capital and manpower.
Over and above, kombucha drink business is indeed a profitable line of business and it is open for any aspiring entrepreneur to come in and establish his or her business; you can choose to start on a small scale servicing a community or you can choose to start on a large scale with several outlets in key cities all around the United States of America.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The structure of those who buy kombucha drink cut across all genders and age groups, hence the demographic composition for kombucha drink bar business is all encompassing.
The truth is that when it comes to selling kombucha drink, there is indeed a wide range of available customers, so your target market can’t be restricted to just a group of people, but all those that reside around the locations where you have your kombucha drink bar and who have purchasing power.
So, if you are thinking of opening your own kombucha drink bar business, then your target demographics should include corporate executives, students, migrants, entrepreneurs, business people, celebrities, military men and women, sports men and women, tourists and every adult in the neighborhood where your kombucha drink bar will be located.
3. Decide What Niche to Concentrate On
It is important to state that there is no known niche area when it comes to the kombucha drink bar business. Every player in this line of business are basically involved in preparing and serving/selling kombucha drinks alongside other types of teas and perhaps other beverages.
The Level of Competition in the Industry
The competitions that exist in the kombucha drink line of business is not tough because it is a business that is still pretty much green and gradually gaining ground in the United States of America.
4. Know the Major Competitors in the Industry
In every industry, there are always brands that perform better or are better regarded by customers and the general public than the others.
Some of these brands are those that have been in the industry for a long time, while others are best known for how they conduct their businesses and the results they have achieved over the years. These are some of the leading kombucha drink bars in the United States of America and in the globe;
- Millennium Products, Inc.
- Kombucha Wonder Drink
- Brew Dr. Kombucha
- Craft Kombucha
- GT’s Enlightened Organic Raw Kombucha
- Lion Heart Kombucha
- Kevita Master Brew Kombucha
- Humm – Lemon Ginger Kombucha
- Health Ade Kombucha
- Live Kombucha Soda
- Reed’s Kombucha
- Unity Vibration
- High Country Kombucha
- Beyond Brewing Company
If you are looking towards successfully launching a business and maximizing profits, then you need to ensure that you get your economic analysis right and try as much as possible to adopt best practices in the industry you choose to build a business in.
Kombucha drink bar business is a growing business and as a matter of fact there are loads of communities in the United States where you can hardly find kombucha drinks to buy.
So, if you are mapping out your economic analysis, you should carry out thorough market survey and costing of what is required to rent a space where you would open your kombucha drink bar business and the amount required to purchase kombucha making machines, refrigerators, coolers, kombucha culture supplies and other supplies and also the running cost of the business.
By and large, if you want to start a kombucha drink bar business, your concern should not be limited to the cost of renting a shop facility and purchasing kombucha drink making machines and other supplies, but also on branding and on how to build a robust clientele base. The truth is that if you are able to build a robust clientele base, you are sure going to maximize profits in the business.
5. Decide Whether to Buy a Franchise or Start from Scratch
There is no hard and fast rule when it comes to choosing how you intend starting a business. Basically, you should be guided by your overall business vision and mission statement.
If you want to start your own kombucha drink business in the United States or any country of the world, you are expected to start from the scratch. This is so because from available research conducted, there is no kombucha drink company that is into selling of franchise.
6. Know the Possible Threats and Challenges You Will Face
If you decide to start your own kombucha drink bar business today, one of the major challenges you are likely going to face is the presence of well – established kombucha drink bars and other outlets that also sell kombucha drink. The only way to avoid this challenge is to create your own market.
Some other challenges and threats that you are likely going to face is economic downturn; if the economy is in bad shape, businesses such as kombucha drink makers usually struggle to maintain their old customers or even welcome new customers.
Also, unfavorable government policies can hamper the growth of your kombucha drink bar business. There is nothing you can do as regards these threats and challenges other than to stay positive that things will work well for you.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
When intending to start a kombucha drink bar business, the legal entity you choose will go a long way to determine how big the business can grow.
Generally, you have the option of either choosing a general partnership, limited liability Company, or even a sole proprietorship for a kombucha drink bar business.
Ordinarily, sole proprietorship should have been the ideal business structure for a small scale kombucha drink bar business especially if you are just starting out with a moderate startup capital in a small neighborhood and with just one outlet. But people prefer limited liability Company for certain reasons.
As a matter of fact, if your intention is to grow the business and have chains of kombucha drink bars across the United States of America and other countries of the world via franchising, then choosing sole proprietorship is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
8. Choose a Catchy Business Name from the ideas Below
When it comes to choosing a name for your business, you should be imaginative because whatever name you choose for your business will go a long way to create an opinion of what the business represents. Usually it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
If you are considering starting your own kombucha drink bar business, here are some catchy names that you can choose from;
- Tracey Jules Kombucha Drinks ®, LLC
- Green Life® Kombucha Drinks, LLC
- Tanya Gibson© Kombucha Drink Bar, Inc.
- Delaware Hanks® Kombucha Drink Bar, Inc.
- Caroline Nelson™ Kombucha Drink Bar, Inc.
- Greenish Cup ™ Kombucha Drink Bar, Inc.
- Lilly Valley© Kombucha Drink Bar, Inc.
- Wellington Baisley® Kombucha Drink Bar, LLC
- G – Brand™ Kombucha Drink Bar Inc.
- Brownie’s Place© Kombucha Drink, Inc.
9. Discuss With an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your kombucha drink bar business.
Here are some of the basic insurance covers that you should consider purchasing if you want to start your own kombucha drink bar business in the United States of America;
- General insurance
- Health/Medical insurance
- Liability insurance
- Workers compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own kombucha drink bar business, usually you may not have any need to file for intellectual property protection/trademark. This is so because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
But if you just want to protect your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO.
11. Get the Necessary Professional Certification
When it comes to operating a kombucha drink bar business, you do not need to have any formal training or special certification before you can be allowed to open and operate a kombucha drink bar business in the United States of America.
All you need is informal training that will expose you to the in and out of preparing varieties of kombucha drink flavors and effectively running the business. On the other hand, if you come across any form of certification that can aid you to conduct your kombucha drink bar business successfully, then by all means try and pursue such certification.
12. Get the Necessary Legal Documents You Need to Operate
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized.
It is a fact that you cannot successfully run any business in the United States without the proper documentations. These are some of the basic legal document that you are expected to have in place if you want to legally run your business in the United States of America;
- Certificate of Incorporation
- Business License
- Tax Payer’s ID/Tax Identification Number
- Foods and drinks handler certificate
- Health inspection Certificate
- Proof of district-issued food and drinks manager identification card
- Copy of license for the service support facility and/or a recent inspection report
- Business Plan
- Non – disclosure Agreement
- Employee Handbook
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
- Building License
- Franchise or Trademark License (optional)
13. Raise the Needed Startup Capital
Starting a kombucha drink bar business can be cost effective especially if you choose to start on a small scale by running a small kombucha drink bar business in a street corner.
Securing a standard and well – positioned store and purchasing kombucha drink making machines, refrigerators, ice block making machines, coolers, kombucha supplies and other supplies are part of what will consume a large chunk of your startup capital.
If you choose to start the business on a large scale, you would need to source for fund to finance it because it is expensive to start a standard large – scale kombucha drink bar business.
When it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for startup capital for your kombucha drink bar business;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell of shares to interested investors
- Applying for loan from your bank
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends
14. Choose a Suitable Location for your Business
When it comes to choosing a location for your kombucha drink bar business, the rule of thumb is that you should be guided by the demand for kombucha drink and easy access to wholesale purchasing of kombucha supplies. If you are able to secure a central location for your kombucha drink bar business, it will give people easy access to locate your bar.
It cannot be overemphasized that the location you chose to open your kombucha drink bar business is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people with the required purchasing power and lifestyle.
If you make the mistake of renting or leasing a facility for your kombucha drink bar business in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more in promoting the business and perhaps giving direction to potential customers.
It is important to note that a business facility in good location does not come cheap hence you should be able to allocate enough fund for leasing/renting in your budget.
If you are new to the dynamics of choosing a location for a business such as kombucha drink bar business, then you should feel free to talk to a realtor who has a full grasp of the city and perhaps country you intend starting your kombucha drink bar business.
These are some of the key factors that you should consider before choosing a location for your kombucha drink bar business;
- The demography of the location
- The demand for kombucha drinks in the location
- The purchasing power of residents of the location
- Accessibility of the location
- The number of kombucha drink bars and other outlets that also sell kombucha drink in the location
- The local laws and regulations in the community
- Traffic, parking and security
15. Hire Employees for your Technical and Manpower Needs
On the average, there are no special technologies or equipment needed to run this type of business except for kombucha drink making machines, storage hardware, counter area equipment (counter top, sink, ice machine, etc.), receipt issuing machines, sound system, Point of Sale Machines (POS Machines), and flat screen TVs.
You will also need computers, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.
As regards leasing or outright purchase of a bar facility, the choice is dependent on your financial standing, but the truth is that to be on the safe side, it is advisable to start off with a short term rent/lease while test running the business in the location. If things work out as planned, then you go on a long term lease or outright purchase of the property.
When it comes to hiring employees for a standard kombucha drink bar business with more than one outlet, you should make plans to hire a competent Chief Executive Officer (you can occupy this role), Admin and Human Resources Manager, Merchandise Manager, Bar Manager, Kombucha Drink Machine Operators, Sales and Marketing Officers, Accounting Clerk and Cleaners.
On the average, you will need a minimum of 5 to 10 key staff members to run a small – scale but standard kombucha drink bar business.
The Service Delivery Process of the Business
It is important to first establish that kombucha drink is produced by fermenting tea using a “symbiotic ‘colony’ of bacteria and yeast” (SCOBY). But when it comes to running a kombucha drink bar business, there are no hard and fast rules about it.
Basically, it is the duty of the merchandize manager to help the organization purchase kombucha culture supplies and other supplies. They go out there to source for good purchasing deals and they also ensure that they only purchase at the right prices that will guarantee them good profits.
Once the kombucha drink bar business is in full operation, the kombucha drinks are prepared and they are either bottled or served in tea cups. If the kombucha drinks are bottled, it means that they can be distributed to outlets such as stores and bars et al.
But if you intend serving your kombucha drinks in tea cups, then you should be prepared to open a kombucha drink bar. Just like most retailing businesses, stocks are taken after the close of business every day and accounts are balanced. This will enable the manager of the kombucha drink bar to place demand for more supplies.
It is important to state that a kombucha drink bar business may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated kombucha drink bar business process is not cast on stone.
16. Write a Marketing Plan Packed With ideas & Strategies
Generally, running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a kombucha drink bar business, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands that determine the market direction for the kombucha drink business.
These are some of the marketing ideas and strategies that you can adopt for your kombucha drink bar business;
- Introduce your kombucha drink bar by sending introductory letters alongside your brochure to corporate organizations, transport companies, households, sports organizations, gyms, schools, socialites, celebrities et al throughout the city where your kombucha drink bar is located.
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across, so that those on the social media or those who read blogs will know where to go when they need to purchase kombucha drink within your location
- Joi Kombucha tea business associations for industry trends and tips
- Provide discount days for your customers
- Advertise our business in community based newspapers, local TV and radio stations
- List your business on yellow page adverts
- Encourage the use of word of mouth marketing (referrals)
17. Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you sell your kombucha drink at rock bottom prices is to purchase your supplies directly from wholesalers in pretty large quantities. The truth is the higher the quantity of items that you purchase directly from farmers and wholesalers, the cheaper you tend to get them.
Another strategy that will help you retail your kombucha drinks at the right price is to ensure that you cut operational cost to the barest minimum, and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products.
You can also try as much as possible to work with independent contractors and marketers; it will help you save cost for paying sales and marketing executives.
18. Develop Iron-clad Competitive Strategies to Help You Win
The availability of neatly prepared kombucha drinks in your bar, your business process and of course your pricing model are part of what you need to stay competitive in the industry.
Another possible competitive strategy for winning your competitors in this particular industry is to build a robust clientele base. Over and above, ensure that your organization is well positioned, key members of your team are highly trained and your kombucha drink can favorably compete with the some of the best within your business location.
19. Brainstorm Possible Ways to Retain Clients & Customers
When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps attract new customers is to produce results and satisfy your customers always.
If your customers are satisfied with your products and services delivery, they can hardly source for alternative service provider or products. If you can continue to make available healthy and well – prepared kombucha drinks in your bar, and your customer service delivery is top notch, then you won’t struggle to maintain loyal customers.
Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers and building a loyal clientele base, you should purchase a customized CRM software.
With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized e – mails and above all, you can easily receive complaints and feedback from them).
20. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you are in business and you are not deliberate about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portray your business to be. One of the secret of larger corporations is that they are willing to spend fortunes year in and year out to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them to be.
If your intention of starting a kombucha drink bar business is to grow the business beyond the city where you are going to be operating from to become a national and international brand by opening chains of kombucha drink bars and franchising, then you must be ready to spend money on promotion and advertisement of your brand.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and boosting cum promotion to continue to appeal to your target market.
Here are the platforms you can leverage on to boost your brand awareness and create a corporate identity for your kombucha drink bar business;
- Place adverts on both print (newspapers and food magazines) and electronic media platforms
- Sponsor relevant community based events
- Leverage on the internet and social media platforms like Instagram, Facebook, Twitter, YouTube, Google + et al to promote your kombucha drink bar business
- Install your billboards on strategic locations all around your city or state
- Engage in roadshows from time to time in targeted neighborhoods to create awareness of your kombucha drink bar business
- Distribute your fliers and handbills in target areas
- Contact corporate organizations, transport companies, households, sports organizations, gyms, schools, socialites and celebrities et al throughout the city where your kombucha drink bar is located informing them about your kombucha drink bar business
- List your kombucha drink bar business in local directories
- Advertise your kombucha drink bar business in your official website and employ strategies that will help you pull traffic to the site
- Position your Flexi Banners at strategic positions in the location where kombucha drink bar business is located
- Ensure that all your staff members wear your branded shirts and all your vehicles and trucks are well branded with your company logo et al.