So, you've decided to dive into the world of frozen desserts by starting your own ice cream shop? The ice cream industry is quite lucrative in the United States, with Americans showing their love for these frosty treats through a combined total sales of $13.1 billion in 2019.
Many people dream about opening their very own ice cream shop, but how difficult is it, and what do you need to know? If you're interested in starting your own ice cream business, we've got you covered with these 9 crucial steps!
1. Decide what kind of shop you want to have
The first question you need to ask yourself is “What kind of ice cream shop do I want to run and what kinds of products do I want to sell?” Answering this question isn’t all that easy, and you'll need to consider various factors, such as:
Customer preferences: Are you going to sell froyo, traditional ice cream, gelato, Italian ices, gelatis, or something else? Conduct surveys and ask people about their preferences to determine which one you should sell. Learn about the differences between ice cream, gelato, and custard.
Competition: Scope out your competition by visiting other ice cream shops in your area. What are they offering and why? What can you learn from them?
Service style: Consider whether you want to offer self-serve options and charge by weight, or have employees serve the ice cream and charge per scoop or cup size.
Location: Do you want an ice cream truck or a brick-and-mortar location? Trucks offer more location flexibility, while a physical store can accommodate more storage and machines.
Franchising: You could also join an ice cream shop franchise to benefit from their established name and systems, but this option can be pricey.
2. Seasonal or year-round operation?
Since most ice cream sales happen in the summer, you'll need to decide whether to operate seasonally or year-round. This decision will depend on factors such as demand, available resources, and your location's climate.
For example, if you're in a warm state like Florida, you might consider operating year-round. On the other hand, if you're in a colder state like New York, you could pivot to offering winter-friendly products like hot chocolate and baked goods or operate seasonally.
3. Profitability of your ice cream shop
According to Ice Cream University, a standard ice cream shop has a profit margin of about 25%. To break even, you'll need to sell at least $4 worth of products for every $1 spent.
To boost your profitability, consider offering artisanal ice cream, ice cream cakes, unique shakes, or other frozen treats. The key is to create products with high perceived value, allowing you to charge more and increase your profit margin.
4. Navigating local licensing laws
Local governments have their own rules regarding licenses and permits for ice cream shops, so consult with city officials to ensure you're following all necessary regulations. You may need permits for food processing, business insurance, and a business bank account.
5. Make or buy your ice cream?
Decide whether you'll make your own ice cream or purchase it from a supplier. Making your own can save on overhead costs and add value to your brand but requires more time and expertise.
6. Equip your shop with necessary supplies
Your ice cream shop will need essential equipment and supplies, such as:
Ice cream making machine: If you're making your own ice cream, consider the capacity and cost of the machine.
Refrigeration: Ensure you have enough fridges, freezers, and display cases to store and showcase your products.
You'll also need other equipment like blenders and scoopers.
7. Hire the right employees
Your employees can make or break your ice cream shop, so carefully consider who you'll hire, how many hours they'll work, and their pay rates.
8. Market your ice cream shop
Develop a marketing strategy to attract customers and stand out from the competition. Offer unique flavors, host events, and use coupons and discounts to entice new customers. Utilize flyers, posters, online directories, and social media ads to promote your business.
9. Secure funding for your ice cream shop
Opening an ice cream shop requires a significant investment, so you'll need to secure funding through personal savings, loans, or lines of credit. Be prepared to get creative with cost-saving measures like buying used equipment or starting small.
With these tips, you're well on your way to creating a successful ice cream business!
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