How To Start a Small Ice Cream Business – Part 1

Ice cream businesses are probably the most visited shops by kids and adults alike.  Understandably so as ice cream is one of the most popular desserts in the world. It’s been around since the 1500s as a treat for royalty in Europe. But thankfully, now anyone can get a scoop of rocky road whenever they want!

However, an appreciation for ice cream isn’t enough to qualify you to start an ice cream shop. There’s a lot of business aspects you need to understand before you scoop out your own niche in the ice cream industry.But don’t freeze up now!

By the time you finish reading this post, you’ll have a clear idea of exactly what you need to do in order to make your love of soft serve into a freshly served reality.

Step 1: Learn How an Ice Cream Business Works

The best way to learn something is by doing, and that goes double for the ice cream business!

Honestly, you can read a book about ice cream shops and ice cream businesses, but until you work at one, you won’t fully understand what it means to welcome a customer or what the perfect consistency of ice cream should be when you serve it.

If you really want to understand the ice cream industry, you need to go work at an ice cream shop.

Get a feel for staffing, for ordering, for marketing, for inventory. The list goes on and on, and no one can teach you better than an industry veteran who’s been running her own shop for years.

While there are lots of ice cream franchises around, the majority of ice cream shops are mom and pop family owned shops which have a lifespan of decades, so it shouldn’t be hard to find a great shop to learn from.

You don’t need to go work for them for a long time.  Of course, the more time you spend under a successful business owner, the more you learn on how to run your future shop the right way. So utilize the time you do spend with them wisely. Ask questions. Take on as many responsibilities as you can. Look for ways to make the business more efficient.

Really talk to customers!

Ask them why they shop at this store as opposed to others. What do they love about it? What would they improve?

Learn about the legal requirements of owning your own ice cream business. What permits do you need? What certifications does each employee have to have?

Figure out what equipment you’ll need (and how much it’ll cost)!

Everything you’re doing here is market research, so the more of it you do, the better. Ultimately, it will all boil down into understanding the ice cream business, and this will help you create a solid plan.

Step 2: Create a Plan

Why do ice cream businesses fail? The truth is, ice cream businesses fail for the same reason as many other businesses – the lack of a plan.

Your plan is your road map. Invest sufficient time, effort, thought, and research into creating your business plan so that when you start an ice cream shop you don’t have to think about what to do at every turn.

This is when you decide what kind of ice cream business you want to be.

Independent ice cream parlor?

Franchise?

Specialty ice cream shop?

Maybe you prefer to have an ice cream truck or stand?

What kind of business entity will your ice cream business be?

Sole proprietorship, partnership, or a corporation?

By mapping out every decision, cost, and expectation ahead of time. As a result, you’d be saving yourself time and money down the road by allowing yourself to budget accordingly and price compare options. For example, if you know exactly how much you need of specific ice cream flavors and toppings, then when it comes time to order, you won’t panic and order too much ice cream. Moreover, you’ll know exactly how much to order because you will have already planned it out against your sales projections.

Step 3: Decide Which Products to Offer

This is where the fun comes in!

Deciding which products you want to carry determines what kind of store you want to be. Here’s the step where you figure out if you’re a high-end, artisanal shop, a frozen yogurt shop, a custard store, a creamery, a trailer, truck, or any other variation of ice cream business. Just dump out all your ideas and then pick out what most excites you.

If you try being all things to all people, you may have the opportunity to draw in more people, but run the risk of equipping your store to do too much, making it less efficient and costing you revenue in lost time.

If you pick a specialty, such as hand-dipped adult milkshakes, you can offer a product a small group loves and build yourself a loyal following as a hand-dipped adult milkshake authority! And by doing so, you can charge significantly higher margins for your specialty product.

You’ll also want to think about what to charge for each product.

As with other food service businesses, your cost should generally run about 25 to 30 percent of the total charge customers pay, so that you also cover waste, samples, and overhead expenses.

Here’s a rough calculation:

• Average cost per 3-gallon tub of ice cream: $30
• Scoop size: 4 ounces
• Servings per container: 55
• Cost per scoop: $0.47
• Add $0.13 per scoop to cover additional costs (waste, samples, cups, spoons, cones): $0.60
• Multiply by 3.33 to 4.16 depending on the markup your market will support

Your price would then be $2.00-$2.50 per scoop.

But again, that’s for a standard ice cream shop. You can charge more (or less) depending on your ability to control costs based on your business model and efficiency.

Figure out what you can offer that nobody else can.  Maybe it’s you, maybe it’s your service, maybe it’s your experience. Whatever your unique selling point is, figure it out, write it down, and make it your store’s centerpiece, literally and figuratively.

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