How to Start an Elite Ice Cream Business in 3 Steps
Did you ever dream about owning an ice cream business as a child? If you still have a sweet tooth, this dream has probably followed you into adulthood. And why wouldn’t it? A lot of people would enjoy being surrounded by ice cream all day long.
You could just get a job at an established ice cream business, but as the ice cream shop owner, you would get to choose the flavors, be among the first to learn about any new products in the ice cream world, and, of course, be your own boss.
Sounds pretty great, doesn’t it? Before you dive into everything ice cream and frozen dessert, though, let us take you through the basics of how to start an ice cream business.
Step 1: Do Your Research
What Does an Ice Cream Business Do?
An ice cream shop business typically sells either homemade or store-bought ice cream to customers. In addition to selling just traditional ice cream, they may also offer other variations and frozen desserts, such as:
- Soft serve
- Frozen yogurt
- Milkshakes
- Smoothies
- Floats
- Sorbet
- Gelato
- Ice cream sandwiches
- Specialty ice cream (gluten-free, sugar-free, vegan, etc.)
Ice cream businesses will also often offer a wide variety of toppings and flavors that will please children and adults alike. In addition, businesses may have servers prepare and serve the ice cream and other frozen desserts to the customers themselves or adopt a self-serve model where the customers can make their own treat.
However, the self-serve model and business idea really only works if the ice cream business is being run out of a brick-and-mortar storefront. One of the nice things about the ice cream business is that, if you wanted to, you could start much smaller. Ice cream stands and ice cream trucks are also very commonplace, especially if you are just looking for more of a part-time summer job.
Do I Need Any Licenses or Permits to Open an Ice Cream Business?
You will almost certainly need a business license, and then depending on where you live, you may also require permits and licenses from your local sales tax agency (if you need to collect sales tax on your products), legal division (you may need, among other things, a criminal record check), and health department.
It is a really good idea to contact your local health department directly to find out everything that you need to do to pass an inspection from them – they can close your business before it even really starts if everything is not up to code.
The exact requirements for these licenses and permits can vary depending on where you plan on operating your ice cream business, so get in touch with your local county clerk or other government officials to find out what you need in your particular situation.
What Are Some Skills and Experiences That Will Help You Build a Successful Ice Cream Business?
If you have worked specifically in the ice cream business before, it would certainly be helpful, but any food-related work experience would serve you well. That means you probably already have an idea of the procedures for safe food handling and storage, which will be essential in obtaining licensing from your local health department. If you don’t already have this knowledge and the proper food safety certification, you may be required to obtain it before opening for business.
Safe food-handling skills are also important if you are planning on making your own ice cream. Ice cream making experience and a willingness to experiment and develop new flavors would certainly be something that could set you apart from all of the other ice cream businesses out there. If you are going the homemade route, make sure you have already perfected your basic recipes before opening up shop.
Customer service skills are also a nice thing to have when venturing into the ice cream business. After all, you will be working directly with customers, and maintaining a good rapport with them may gain you a good reputation and loyal following.
Finally, business and management skills are definitely helpful when opening up an ice cream business, especially if you already have experience working at a startup. As the owner, you are ultimately responsible for the success of your business, so make sure you do your research and are making smart and informed decisions.
Step 2: Figure Out Your Costs
What Are the Startup Costs for an Ice Cream Business?
The bulk of your startup costs depend on whether you are planning on operating your business from a stand, truck, or store:
- Ice cream stand: $2000 – $10,000
- Ice cream truck: $5000 – $20,000
- Ice cream store: $50,000 – $1,000,000
As you can see, there is quite a jump in costs as you increase the size of your business! However, there is a lot of variation even within each category as the actual price depends on a lot of different factors, such as the location of your business, whether you are buying out an existing ice cream business or starting from scratch, whether you plan on owning or leasing your place of business in general, etc.
After you have decided on your location, you still have to purchase the equipment needed for your ice cream business. Again, this will partly depend on whether you are working out of a stand, truck, or store, but generally, you may require the following:
- Sinks
- Walk-in freezer
- Display freezer
- Soft-serve machine(s)
- Cash register
- POS machine for processing payments
- Cone holder
Then you still have to buy your supplies. You may need toppings, napkins, cones, cups, spoons, and most importantly, ice cream, or if you’re making it yourself, the ingredients for ice cream.
Taking everything into consideration, starting an ice cream business can be quite expensive! If you don’t have a lot of money to invest in it now, then consider starting out small or look into bank loans in your area.
What Are the Ongoing Expenses for an Ice Cream Business?
Fortunately, the ongoing expenses for an ice cream business are not nearly as much as the startup costs. Once you have your location and equipment, it is mostly a matter of restocking your supplies and paying for your utilities and rent (if applicable). If you plan on running an ice cream truck, you will also be paying for gas and maintenance as needed.
While you may choose to run your ice cream business yourself, at least when you first start out, you may eventually want to hire employees. You will then also have to pay their wages on a regular basis, so make sure you are making enough money before adding anyone else to your team.
Finally, once you get up and running, you may want to invest in a website for your ice cream business. This doesn’t necessarily have to cost you a lot, though, so do your research and purchase a domain name and web hosting service within your budget. These typically come along with fees that you will need to pay either monthly or annually.
Step 3: Make a Profit
How Much is the Ice Cream Industry Worth?
The global ice cream market was worth about 69.79 billion USD in 2020.
What is the Growth Potential for the Ice Cream Industry?
The global ice cream market is expected to grow at a CAGR of 4.01% from 2020-2027, meaning it will be worth about 91.90 billion USD by 2027.
How Do You Market an Ice Cream Business?
The first step when considering marketing for any type of business is determining your target audience, which in this case will be ice cream lovers. There are lots of different ways to try and reach this type of client base. You can use traditional marketing methods such as posting flyers, ads in newspapers, and handing out information and coupons outside of your store. You may also consider bringing your product right to customers by entering ice cream and food truck competitions and/or setting up your truck or even a small stall at festivals and fairs.
Another key marketing technique these days is giving your ice cream business an online presence. Most businesses these days have a website that customers can log onto to find out more about their products and services. A great way to direct people to your website is by linking it to your business’s social media pages.
Consider setting up social media accounts on all major platforms to advertise your services and interact with current and potential customers. Make sure you publish your menu online along with your hours and location and keep people up to date on any new developments or specials that you are running at your business.
While it is not exactly social media, you should also consider registering your business on Yelp and maybe even offering customers a discount or some other bonus for posting reviews. Word-of-mouth advertising can have a powerful effect, whether people hear rave reviews about a business through online posts or in person.
How Much Should I Charge for Ice Cream?
The average price for ice cream seems to be somewhere around $2.50 per scoop. When considering prices, though, keep your profit margins in mind. You need to make sure you cover the cost of production, overhead, labor, etc., while still making a profit. Also, if you have premium flavors or types of ice cream, it is perfectly fair to charge more – your customers will likely expect a bit of a jump in price for certain kinds of ice cream.
Any Other Tips for Jump-Starting an Ice Cream Business?
You know it! Here are some other tips for getting your ice cream business off the ground:
- If you plan to offer alternative kinds of ice cream for those with dietary restrictions, like gluten-free or vegan, then make this clear in your advertisements. You may attract customers who otherwise may not have considered frequenting your business, as many places do not necessarily think to cater to this type of clientele.
- Whether you are running your ice cream business from a stand, a truck, or a store, consider investing in an ice cream cart on the side. This way, you can easily get your products directly to the customers while spreading the word about your business. You could even rent out your cart for birthday parties, corporate events, and other occasions.
- If you live somewhere that typically experiences all four seasons throughout the year, you need to be prepared for your business to wane in the colder temperatures. Some ice cream businesses close entirely during this time, but they do still need to pay for their rent and utilities if they are operating out of a store. If you plan to operate your ice cream business year-round, consider selling ice cream cakes, whole tubs of ice cream, and maybe even branch out to coffee and/or other desserts and sweets until your business can pick back up in the warmer weather.
- For those who make their own ice cream, think about reaching out to local grocery stores to see if they would be willing to stock your product. Many people like to support local small businesses when they can, and if they like the product, they may come right to your ice cream shop the next time they want ice cream.
- Be sure to check out our other posts for more ways to start your side hustle!
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