Let’s start with the simple facts: ice cream is delicious, everyone loves ice cream, owning an ice cream store would be the best thing ever. If you’ve recently found yourself standing in your local artisanal ice cream shop has a similar stream of thoughts, the next logical pieces may have been something along the lines of, ‘I should open an ice cream store,’ followed by, ‘How do you open an ice cream parlor business?’
Opening an ice cream store is a sweet adventure. But, it is isn’t all hot fudge sundaes and gummy bear toppings. There’s a lot more to running an ice cream shop than just picking flavors, perfecting the scoop and sprinkling on toppings!
You may be the greatest ice cream indulger in your hemisphere, but that doesn’t mean you’re going to like making and selling ice cream. At its core, an ice cream shop is the same as the shoe store, Italian restaurant that you envision flanking your parlor; it’s a business.
How will you make your ice cream unique? What kinds of ice cream shop equipment will you need? Who will supply the toppings? How do you keep track of money coming in and money going out? What point of sale software will you use? Where is the best location for your ice cream shop? The list of need-to-answer questions continues, but don’t let it deter you from your dream.
If you are passionate about ice cream and opening an ice cream parlor business, this guide will help you make sense of the business side. So, you can return your focus on creating the next greatest flavor combination (maple syrup licorice, if you want our suggestion).
Ice Cream Business Overview
There’s a lot to think about when opening an ice cream business, evidenced by the above list of questioning. It’s easy to be overwhelmed, especially in the beginning. The best way to ensure you don’t lose the path is to plan how you’ll walk it. So, start with a business plan before anything else.
Pull from your group of friends and family members. Someone in your circle has started their own business, and their insight is invaluable. You can also leverage the help of a Certified Public Accountant (CPA), particularly one that has experience dealing with a niche business like an ice cream parlor.
Next, think about how you’ll make your ice cream unique. As an ice cream connoisseur, you know there’s a lot more to this dessert than just the flavors and toppings. The ingredients and process you use to make the ice cream goes a long way in determining its texture, taste, and scoop-ability.
If you aren’t sure how to distinguish yourself in the ice cream market, then look at all of the ice cream businesses in your area. Taste test their products and see how the qualities of their products compare. Is there a style of ice cream or a way to make your business stand out amongst all of these future competitors? It’s also smart to look at things beyond their ice cream, like the decor they use, how their shop is set up, what sort of marketing gimmicks they use, etc.
Once you’ve formulated a plan and found a niche within the ice cream parlor business, your next step is finding a location. The location you choose will largely be determined by available retail spaces in the area, but also the type of ice cream business you plan to operate.
Will your sales strictly be in-house, or will you package and sell ice cream through various vendors as well? Do you expect to sell your frozen product from a window or from behind a counter?
You need to make sure that your future store location has the space and amenities you need it to have. If renovations or changes need to be made to the building structure, be sure to clear those through the proper zoning channels.
With a physical location secured, now you need the proper ice cream shop equipment. The first equipment that comes to mind is the kitchen appliances that allow you to make your ice cream and refrigerators to store and keep product/ingredients cool. You also have to think about furniture and the decor of your ice cream shop business.
Another essential part of the equipment you need is a point of sale system for small business ice cream stores. This valuable piece of equipment allows you to accept payments for your ice cream, as well as some other key benefits for your new business.
The final steps to opening your ice cream parlor business are the parts you’ve been waiting for, like designing the menu and filling it with your ice cream flavors, developing cool marketing campaigns to build buzz, connecting with neighboring businesses and more.
At the end of this journey, you’ll find yourself standing in a crowded ice cream parlor watching patrons satiate their sweet tooths with the product and flavors that you created.
How Much Does It Cost To Start An Ice Cream Shop?
If they took the time to read each step in the Ice Cream Business Overview above, you probably saw dollar signs inside your head. Opening a business is expensive and opening an ice cream parlor is costly. Not only do you have to pay the cost of renting, buying or building a store (each varying greatly in expense), but there’s also equipment costs to think of. That’s just the bare minimum.
Next, you have to think about the values of the ingredients to make your ice cream, paying the staff that sells it, the utilities to keep the lights and refrigerators running and other upkeep expenses.
There’s a lot of different variables that significantly affect how much it costs to start an ice cream business. So the answer depends on your unique business and its needs. That said, it’s important to track every cost that your business demands, as this helps you track how much you’re investing in the ice cream parlor business.
Then, you determine how to set your prices, where your profit margin is, your cash flow and the overall health of your ice cream shop.
A Ballpark Investment
At a minimum, your initial investment will cost $20,000, but achieving this level of affordability means buying used equipment and cheaper ingredients. In some cases, it may not even be possible.
For example, if your ice cream parlor is also going to deliver to nearby convenience stores or restaurants, the added cost of a delivery truck and distribution would make it near-impossible to stay under $20,000.
Most ice cream parlor businesses can expect to spend, on average, $50,000, but even this ballpark figure is only applicable to business owners looking to rent the space for their ice cream shop. The cost goes way, way up for those that are buying a retail space or building their parlor from the ground up. That $50,000 average investment covers the costs of everything you could want to operate your shop:
- Rent and utilities
- Minor contracting and cosmetic work
- Ice cream ingredients, topping, and drinks
- Cups, bowls and paper products
- Equipment (including coolers, waffle cone maker, point of sale software and register, hot fudge warmer, etc.)
- Working capital
- Additional fees/permits for opening a business
How Much Money Can You Make With An Ice Cream Shop Or Truck
While this $50,000 average investment might seem steep, the good news is that there’s plenty of revenue to be made in the ice cream game. Thanks to artisanal ice cream shops and vendors, the days of a 99-cent cone are gone.
Consumers are willing to spend much more for a superior frozen product. How much profit you’ll take home at the end of the day is based on your ability to keep costs down while also pricing your ice cream appropriately.
Some risks are unique to the ice cream market. For instance, ice cream is a seasonal treat in many parts of the world. During winter and fall, ice cream sales plummet.
However many sales you make in the heat of August will be far more than your sales numbers from the dead of winter. Many of the operating costs stay the same. Being able to anticipate the high and low points of the year will help your business better prepare and thrive.
Ice cream trucks are a common sight in the ice cream world. Riding off the coattails of the food truck boom, these mobile parlors turn a pretty good profit from their nostalgic popularity. On average, an ice cream truck can make $5,000 in a month, with less than half of that being absorbed by operation costs. That’s a pretty sweet profit!
What Are The Best POS Features To Help You Run Your Ice Cream Business
Before you can determine any profits or sales numbers, you first need a POS system that can help you process transactions and accept more types of payments.
As mentioned before, the POS system for an ice cream small shop isn’t always the first piece of equipment that business owners think about. While it may not add any flavor to your ice cream, it holds a ton of much-needed features and lots of value for a small business.
The first feature that your POS system should have is the ability to accept all types of payments. With the number of digital wallet apps on the marketplace, it’s becoming increasingly crucial for all businesses to recognize these and other NFC, mobile payments. The good news is that these mobile, app-based transactions move the line faster, which can be crucial for a busy ice cream parlor.
For an ice cream shop, many of the best mobile POS systems offer inventory management tools built in. For an ice cream parlor, inventory is crucial. You don’t want to run out of a critical ingredient during a hot weather. By incorporating inventory management software into your mobile POS system, you never have to worry about running out of a key ingredient or losing track of your stock.
Depending on their size, the majority of ice cream parlors don’t employee a large workforce. As a business owner, you try and create the best possible team of workers to support your dream of owning and operating an ice cream parlor business. The employee management tools included with many of today’s POS systems can help ensure that your team operates smoothly.
These features make it easier to track employee times and even see which register they used on their shift. This information might not seem relevant at the time, but if money is going missing and you have a concern about a fraudulent employee, this tool will be able to help identify the culprit.
The most prominent perk to the mobile POS systems that we have today is their reporting capabilities. You can look at sales numbers, inventory levels, current and upcoming orders and more. Not to mention, the data can easily be exported to work with your other sources of data.
This high level of reporting makes it much easier for a business owner to see and visualize how their business is doing. If you have a mobile POS system, like eHopper, then you can access these point of sale software reports from anywhere there’s an Internet connection. This means you can check in on your business if you have to go out of town for an ice cream flavor competition or an ice cream making seminar.
Opening your very own ice cream shop is no easy task. You may already be having some doubts or second thoughts. But, nothing as sweet as owning an ice cream shop ever comes easily. It’s going to require money, hard work, time and planning, but, with a little help from this how-to guide, you’re already on the right track towards realizing your ice cream parlor dreams.