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How to Open an Ice Cream Shop : A Step-By-Step Guide

January 09, 2024

11 Min Read

how to start an ice cream shop
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Have you ever dreamed of opening your ice cream shop? You’re not alone! Seeing those colorful scoops and happy faces can make anyone’s heart melt. And guess what? It’s a pretty lucrative dream!

The US alone makes $6.4 billion annually, with over 11,000 shops scooping up an average of $460,000 annually. It sounds like Americans love their frozen treats!

But let’s face it, America’s love for ice cream alone won’t guarantee smooth sailing as a shop owner. Passion is just the cherry on top – you need a solid foundation to scoop up success. Enter this guide, your cheat sheet to launching a thriving ice cream business. So, grab your metaphorical sprinkles, and let’s get started!

Ice Cream Industry Outlook

Ice cream is getting more popular! Over the next five years, ice cream sales are expected to grow by around 2.5%. This is mainly because people love fancy ice cream flavors and experiences. Think sprinkles, mix-ins, and unique toppings!

There were almost 20,000 ice cream stores in the US in 2023, which generated over 5 billion dollars. That was a lot of scoops!

But here’s the twist: not all ice cream is made the same anymore. More and more people are looking for options not made with dairy. This means ice cream made with oats, almonds, or even bananas is coming in demand!

People are also interested in healthier treats, so options like lactose-free and low-fat ice cream are getting popular, too.

For ice cream shops, it’s wise to serve flavors that tell a story about where they are, especially in places where tourists hang out. They want to taste something that screams “local.”

If you can come up with fun flavors with local names, you’re golden. Shops that whip up their own ice cream? They’ve got a head start. But any shop can stir up a special sundae or shake that gives a nod to local tastes.

Now that we know the important ice cream industry insights, let’s learn about how you can set up your dream ice cream shop in 9 easy steps.

1. Select an Ice Cream Concept

The first thing to do is to pick an ice cream shop concept and brand. This is where you decide how your shop will treat customers and what cool trends you’ll use in your business. There are a few major concepts to choose from:

Seasonal vs Year-Round Ice Cream Shops

With its refreshing coolness, ice cream is often associated with the warm days of spring and summer. But what happens when the temperature dips and the leaves turn brown?

Ice cream sales tend to drop during the fall and winter. It is why many other ice cream shops choose to close their doors seasonally. They open around the first day of spring and say goodbye to customers by the end of summer.

On the flip side, your shop could stay open in colder months. You can provide excellent products and a varied menu to keep folks coming in when it’s chilly outside.

Ice Cream Trucks

Food trucks are hot right now, but they’re no strangers to the ice cream world. Those colorful trucks playing jingles are a summertime tradition, and kids go crazy for them! Starting an ice cream truck instead of a brick-and-mortar shop lets you be mobile, bringing your treats straight to the people.

This can mean more sales and lower costs, too. But it’s not all sunshine and rainbows. Ice cream trucks can be cramped, and parking regulations, permits, and insurance can be a headache.

Fixed Menu vs Self-Service Ice Cream Shops

Forget waiting in line for a scoop of your favorite ice cream! The new trend taking over the frozen treat world is all about self-serve shops, where you get to be the ice cream artist. Imagine rows of fro-yo machines like this:

Each one churns out delicious flavors like creamy chocolate, tangy raspberry, or even something unexpected like avocado!

Then, picture a topping bar overflowing with a rainbow of choices.

From classic candies and syrups to fresh fruit, crunchy nuts, ice cream cakes, and savory options like pretzels and bacon bits!

The best part? You get to pile on all the toppings you can dream of, creating a mixture that’s uniquely yours. Just twist the dispenser handles, fill your cup, and pay by the weight.

2. Write an Ice Cream Business Plan

Now that you’ve prepared your ice cream menu, it’s time to turn it into reality with a business plan.

Our sample ice cream shop business plan template will help you get started.

This plan lays out everything: your vision for the shop, ways to bring up customers, and, most importantly, how you’ll handle the money side of things. Investors love seeing business plans, especially the part about your money magic.

Here’s the smart tip: ask for less money at first. Just enough to get your first scoops sold, then you can show the investors you’re making profits and ask for more later. 

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3. Pick the Right Location

Picking up the right spot for your ice cream shop is a huge deal. You want a spot that’s a hit with them and easy to get to.

And when you’re ready to start looking, decide if you’re going solo or teaming up with a commercial estate agent to find that sweet spot.

Once you’ve decided on your team, exploring potential locations is time. Here are some key factors to consider:

Foot traffic

Look for areas with high foot traffic, especially during peak hours for ice cream lovers. This could include busy streets, parks, and shopping centers.

Surrounding businesses

Check out the types of businesses around your potential location. Are there restaurants, bakeries, or other ice cream shops that could attract customers to your ice cream haven?

Renting options

Look for leases, especially those from previous restaurants or sweet shops.

4. Ice Cream Shop Registration

Before churning out delicious ice cream, there are some crucial legal and administrative steps.

First things first, let’s ensure your business is a legal entity. Refer to our comprehensive business startup checklist for a step-by-step guide. It covers everything from choosing a unique name to registering your business structure and obtaining a tax ID.

Here are some essential items on your business setup checklist:

  • Registering a Business Name
  • Applying for a Federal Tax ID Number
  • Selecting a Business Entity
  • Setting Up Payment Systems

If you need additional guidance, seeking legal counsel is always recommended.

5. Preparing an Ice Cream Menu

Your menu isn’t just a list of flavors; it’s a powerful tool for attracting customers and driving growth. Here’s how to make it sing:

Tailored Treats: Remember, your menu is a love letter to your target audience. Consider their preferences and desires. If you’re scooping in an area filled with families, offer a rainbow of kid-friendly flavors and artisanal ice cream.

Dietary Delights: Remember dietary trends and allergies! Lactose-free and vegetarian options cater to a broader audience. It increases your revenue and makes everyone feel welcome.

Supplier Symphony: Once your delicious menu is set, it’s time to find the perfect partners in ice cream. Negotiate prices, agree on delivery schedules, and formalize your agreements with binding contracts.

6. Get Licenses, Permits, and Insurance

Before opening your doors and scooping up smiles, you must secure the necessary permits and licenses. Each state and county might have its own regulations, so it’s wise to start early and avoid delays.

Here are some key permits and licenses you might need to get your ice cream shop up and running:

  • Sign Permit
  • Mobile food vendor permit (for an ice cream truck shop)
  • Ice cream vendor permit
  • Food handler’s permit
  • Employee Identification Number (EIN)
  • Building health permit (for brick-and-mortar location)

Remember, this isn’t an exhaustive list. It’s always best to check with your local authorities for specific requirements in your area.

7. Estimate Ice Cream Startup Costs

(plan a quick section based on your research, which we’ve done in some of our previous blogs)

The cost of starting a standard ice cream shop varies based on the type of business you plan to run. If you’re considering a small ice cream stand, you might need between $2,000 and $10,000 to start. Choosing an ice cream truck is a similar investment but might cost more.

However, the expenses are much higher if you decide to open a traditional ice cream store. According to the National Ice Cream Retailers Association, you could spend anywhere from $50,000 to more than a million for the location.

Remember, these costs don’t include the money you’ll need for equipment and stock. To understand these costs in more detail, check out the startup cost of starting an Ice cream business.

8. Get Finances in Order

(next step after determining the startup costs, and seeking financing for the business)

Once you know how much it costs to start your business, the next step is finding the money to make it happen.

There are several ways to do this:

  • Bank loans: This is a common choice, but you need a perfect business plan and a strong credit history to get approved.
  • SBA-guaranteed loans: The Small Business Administration can back you up, making it easier to get a bank loan.
  • Government grants: Some government programs give money to help start businesses. Check out Grants.gov to see if any fit your needs.
  • Venture capital: You can offer investors a part of your business in return for their money. Just remember, this means sharing some control of your business.
  • Crowdfunding: Websites like Kickstarter and Indiegogo let people donate to your business idea. Other sites like Fundable and WeFunder let multiple investors support you.
  • Personal: You can also use your own savings, sell things you own, or get help from friends and family.

For an ice cream business, bank and SBA loans are often the best choice, aside from personal funding. Crowdfunding could also work if you have a unique idea.

9. Outline a Marketing Strategy

Getting customers is critical to the success of any business, no matter how great your ice cream is. You should use traditional and modern methods to promote your new ice cream shop.

Start with clear, eye-catching signs to draw attention to your shop. Use appealing, clean photos of your ice cream so people know what you offer.

Stand outside and hand out coupons and flyers to people walking by. Do the same at local sports events and parks.

Going to places where your potential customers are is a smart move. People love a good deal, so consider offering a free scoop of ice cream – it’s a small cost for attracting a new customer, especially if they bring friends.

Also, make good use of social media and digital marketing. Keep your website updated with your menu and opening hours.

Create a Facebook page for your store and actively respond to inquiries and messages. This shows the kind of customer service you provide.

Use online platforms like Yelp to offer special deals for check-ins and reviews. You can also advertise on Facebook and Google to appear in local searches.

When summer comes, if you have the budget, you could even try radio and TV ads.

But remember, plan your marketing and promotional strategies carefully ahead of time!

Conclusion

Opening and running an ice cream business takes a lot of effort. However, if you do it well, it’s not just rewarding but also delightful. Plus, you have the chance to be in charge of your own ice cream business and make people happy every day!

We hope you find this helpful guide. If you liked these tips and want more like them, don’t forget to download the Ice cream business plan template pdf. It’s an easy-to-follow but detailed checklist we created to help you begin working towards your dream of starting a business.

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About the Author

Shyam                                                       
            Dua

Shyam Dua

Shyam Dua is a seasoned tax professional with 40+ years of experience & a mentor at SCORE. He stands out due to his exceptional business planning skills. With a keen eye for detail and a strong financial acumen, Shyam crafts compelling business plans that pave the way to success. A CPA with a philanthropic heart, Shyam's strategic expertise, and dedication make him an invaluable asset in shaping thriving business ventures. Read more

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