Pao was the owner of the Pao Family Tea House in the Lower Ring of Ba Sing Se, although it is implied he was not necessarily talented at brewing tea. Pao was a courteous man who was protective of his business and appreciated his employees. He held Iroh in very high esteem and valued Iroh's tea making skills above all else.
After Pao hired Iroh and Zuko, his business began to prosper due to Iroh's remarkable talent for brewing tea. Everything went well until Quon came along. Quon was a higher class citizen who had heard about Iroh's magnificent tea-making skills. When he offered Iroh his own tea shop and an apartment in the Upper Ring of the city, Pao tried everything he could to keep Iroh, including offering numerous job promotions, all to no avail. Excited, Iroh accepted Quon's offer, much to the distress of Pao.