1905 saw John close his grocery business in order to pay off debts to the bank. However, he took the opportunity to invest in Typhoo and create a private company. On 29 July 1905, and financed by John's friends, Typhoo Tea Ltd was incorporated.
In the first year, Typhoo managed to show a small profit and silence the critics that said John would never make a business from small-leafed tea. John had, however, drawn attention to tea made from the edge of the leaf. This pure-edge leaf tea produced 80 more cups to the pound than ordinary tea and also cut out the stalk that contained tannin and caused indigestion. John even managed to get his tea recommended by doctors and was able to sell it through chemists' shops.
As early as 1906 John Sumner was having special Typhoo branded teapots made to sell to his customers. He also inserted circulars into the tea packets to highlight its benefits, and included picture cards on a range of subjects, which became very collectable.
Typhoo Tea Ltd made steady progress. In 1909 John had managed to pay off all his debts. He celebrated by travelling to Ceylon to appoint a buying/blending agency to buy the tea directly from the tea auctions, therefore reducing costs. John also moved all his blending requirements to Ceylon, again reducing costs and resulting in a reduction of the cost of Typhoo to the public. The company continued to grow in both size and in the loyalty of its customers.