Ashley Pan, a Berkeley Women in Business Finance Committee Member and a second year UC Berkeley student pursuing a B.S. in Business Administration, shares her experience managing a small business and her takeaways on exploring the entrepreneurial space:
What motivated you to start a small business?
Coming from a frugal family of seven, $6 for a cup of boba was simply too expensive–that’s $42 each time my family goes out for boba! However, we enjoy the flavor of the milk and tea mixture, the soft texture of the pearls, and most of all, the stories and laughs we shared over boba.
When the whole world was put on pause, my siblings and I didn’t let the pandemic stop us from enjoying boba. We experimented with countless recipes; there were many times where the tea wasn’t strong enough, the brown sugar syrup wasn’t cooked for long enough, or the pearls were too hard.
Eventually, we made a Goldilocks recipe that even our Mama Bear and Papa Bear enjoyed. I wanted to share this taste of home, affordability, and joy with the rest of the world. With that, my siblings and I started PanCha in the summer of 2022.
What are your day-to-day responsibilities as a person who manages the financial aspect of your boba business? How were you able to balance your full-time role as a business owner and also as a student?
Every time cups and straws are purchased on Restaurant Depot or every time an order is placed, I immediately save a digital copy of receipts and invoices and I update the sheets to reflect an up-to-date revenue, accounts receivable, fixed and variable costs, profit margin, and break-even point. Excel is literally my best friend. A business’ finances, especially a small business’, needs to be as detailed as possible in order to make predictions about its future. On the other hand, if any questions or problems arise, it can all be traced back to each journal entry and transaction.
Besides entering numbers, running the financial side of a family business also involves negotiating partnerships with photographers and ambassadors. Currently, I am working on the terms of the ambassador contract. My goal is to minimize monetary compensation and maximize brand awareness, which ultimately may result in our business spending more money overall, just on giving away boba, sponge cake, and plushies to ambassadors. Long story short, a lot of numbers are involved in a cup of pearls.
With PanCha being based in Plano, Texas, managing the financial side of the business is well-suited for me since it doesn’t require me to physically be present during the pop-up. I can still contribute even when I’m states away from home! Each week, I set aside 5 hours for all things PanCha, from designing the order site to holding meetings to budget and plan for new products.
Right now, I manage my time so that I can prioritize my education, because everything I’m learning in the classroom–from managerial accounting to microeconomics–is applicable to PanCha.
What were your biggest takeaways from this experience? Do you have any advice for someone looking to pursue entrepreneurship?
It is okay to take things slow, and you should always be transparent with your customers.
At our grand opening, we had well over 100 customers show up. Although we advertised 100 cups on social media, we still didn’t expect such amazing turnout! We also didn’t expect it to take from morning to afternoon to make 100 cups worth of boba and milk tea. Fortunately from a sales volume standpoint, we sold out within the first 30 minutes and people were happy about the price and supportive of the story behind the brand.
Unfortunately, there wasn’t enough boba for all of our customers, and we received negative reviews about the tapioca pearls being hard. Even though we made as many preparations as possible the night before and even with my entire family in the kitchen, we were still scrambling on the day of. At the time I tasted the pearls, they were soft. However, the amount of time between when the pearls were cooked to when they were served was too long.
We had to make 2 trips to transport all the dispensers, tables, chairs, cups, and signs to the space we set up at. We ran out of milk and brown sugar just two hours before the start of the pop-up, so my dad had to make an emergency run to Walmart. The spigot on our tea dispenser closed up halfway through, so we had to tilt the dispenser a certain way to get the tea out into the cups. We ran out of tapioca pearls for the last 10 cups of boba, which called for lowering prices to serve milk tea. Evidently, there were a lot of things we needed to improve.
The grand opening was our trial and error, but it shouldn’t have been. I got too ahead of myself; I was so excited to start a business that I failed to take into consideration details and what-ifs. So instead of rushing the next pop-up, we took time to find solutions.
We need to set up in front of our house in order to avoid wasting time to travel to the pop-up location and to limit the time between when the boba finishes cooking and the time the boba is served. We need to fill the cups individually with pearls, tea, milk, and brown sugar to avoid transporting heavy dispensers and to preserve the proportions in our original recipe. We need to adopt a pre-order system and have extra inventory of cups, lids, straws, and ingredients so that we don’t lose out on profit that we could have made. We need to offer a variety of menu items so that we can expand our market of potential customers.
We addressed our lack of preparation, and our customers applauded our transparency and had high hopes for our future as a business. Our next pop-up was a huge success, both in sales volume and execution of the event. So a note to myself and all business owners, in the beginning, it is better to take things slow, to take a breather, than to rush things.