How To Open an Ice Cream Shop: A 9-Step Guide
Are you thinking about opening an ice cream shop next season, or are in the process of reinventing your current store? Opening an ice cream shop, or any business for that matter, involves careful consideration of many factors. What is the mission of your shop? What makes you different? Who are your customers? Will you operate out of a truck or brick and mortar storefront? Be open seasonally or year-round? Will you have a fixed menu with behind the counter staffing, or be self-serve where customers help themselves and are weighed-in by a cashier?
Our simple 9-step guide can help in your planning process!
1. What kind of shop will you be? Ideas, Concepts, Themes & Branding
- Make it instagrammable. Feature giant, picture worthy unique offerings.
- Offer more than just ice cream. Increase your appeal with Italian Ice, gelato, sorbet.
- Try for the Guinness Book of World Records as the shop with the “Most Commercially Available Flavors.”
- Model yourself as an old-fashioned fountain.
- Make artisanal ice cream & offer dairy-free options
- Serve up local and seasonal flavors
- Use unique ingredients
- Create a sundae bar experience with endless toppings
- Offer Freak Shakes and Blendables
- Turn to science with liquid nitrogen to create richer, denser treats.
- Be pet friendly with special scoops and treats
- Use donuts, croissants, tacos as containers for your ice cream instead of cones & cups
- Deep-fry your ice cream
- Open a pick-up window with Take-Out ready treats
- “Take Flight” with customers choosing 3, 4, 5 small scoops.
2. Ice Cream Shop Business Plans
Once the concept of your shop is established, developing a financial business plan outlining goals, budgeting, and strategies is critical, especially for securing funding for your dream. Your business plan should contain the following:
- Company Description – Includes strategies and projections.
- Concept and Menu – The list of products and services you will offer the marketplace.
- Management and Ownership Structure – Position responsibilities and duties.
- Employee Staffing Needs – Hours of operation, number or shifts and employees per shift.
- Market and Competition Analysis – Identification of a target market and a complete competition/ competitive advantages analysis.
- Advertising and Marketing Strategies – How you will maximize brand awareness in your target market.
- Financial Projection and Summary – Forecast sales projections, perform a break-even analysis, and list potential expenses.
3. Ice Cream Shop Start-Up Costs
Typically, opening an ice cream shop will cost you anywhere between $100,000 to $150,000 based on whether you buy or rent a location and whether you purchase new or used equipment. Here are a few of the most important expenses you’ll have to cover:
- Down Payment – Loans withstanding, around 15-20% of the cost for the purchase of a food truck or brick and mortar store.
- Property Renovations/Construction Costs – varies based on purpose-built construction or renovation of an existing location.
- Ice Cream Shop Equipment - Ice cream makers, refrigerators, and freezers to produce, store, and sell ice cream.
- Buying all the necessary ice cream ingredients, containers, and utensils.
- Employee Wages – For managers, employees, and staff.
- Advertising - An advertising budget to run marketing campaigns and bring new customers through the door.
- POS System - A POS system for streamlining the ordering process, inventory management, and sales reporting.
- Permits and Licensing - Opening an ice cream shop requires you to receive several permits and licenses, some of which come with fees.
4. How to Secure New Business Funding
Once you determine how much money will be required for the initial start-up, the figure will determine what funding option best fits your needs.
- Self-Funding - You may be able to fund portions of your ice cream shop with your personal funds by tapping into savings accounts and retirement plans. This can leave you open to significant risk.
- Lenders - Small business loans and traditional commercial loans. Interest rates may mean you’ll be paying more in the long run, but you won’t need to immediately put up your personal finances or give away equity.
- Venture Capital - Finding an investor for your business is a great way to secure the funds required, but giving up equity and other concessions are major drawbacks.
- Crowdfunding - Crowdfunding involves a community of people pooling together payments to reach a goal. Contributors are often rewarded with special prizes or discounts.
5. Business Licenses and Permits
Prior to opening your shop, you need to obtain the appropriate permits and licenses to be a legal business venture. Double-check with local laws and seek legal counsel to ensure you are properly prepared.
- Business License
- Employee Identification Number – this is a nine-digit employee identification number needed before you can hire employees and staff.
- Seller’s Permit - A seller’s permit legally authorizes your business as a collector of sales tax.
- Health Permit - To sell any prepared food product, a health permit confirming safety and sanitation is required by county and local governments, meaning laws and regulations regarding health permits can vary greatly depending on location.
6. Location, Location, Location
Location is crucial to your business survival! Analyze the following features while looking for an ice cream shop location.
- Space – Wil you have enough space to house several appliances, a serving area, and possibly a seating area for customers. Can you add a Drive-thru or Take-Out window?
- Foot Traffic – Ice cream is an impulse item and you need an area that receives plenty of foot traffic
- Seasonal Traffic – Ice cream is usually a summer treat. Look for a location that receives more traffic in the summer, like a shopping center across from a public pool or beach access point.
- Overhead Costs – Rent and utilities. Lack of sales during the fall and winter months means an ice cream shop location should have low overhead costs to offset low sales.
7. Products and Prices – Your Ice Cream Shop Menu
Putting together a solid menu is critical to attracting customers and ensuring that they come back. Menu pricing should be affordable for consumers but generate profits for your business. Keeping in mind your original product concept, you will want to be sure to feature classic ice cream flavors customers expect, while also providing unique items to maximize your competitive advantage.
- Sundaes, Milkshakes, Floats, Italian Ice, Gelato, Frozen Yogurt.
- Popular Ice Cream Flavors: Vanilla, Chocolate, Strawberry, Cookies and Cream, Mint Chocolate Chip
- Lactose Free Ice Cream, Dairy Free Ice Cream
8. Décor for your Ice Cream Shop
The setup, design and functionality of your shop helps to project your unique brand. Pastel, retro, primary-colored, or multi-hued décor is popular, however current trends lean to a more modern streamlined aesthetic.
- Remember to differentiate yourself from the competition.
- Serving/dispensing/ cashier stations with require the largest square footage, keeping in mind the flow of customer traffic during peak hours. This includes the space for batch machines and freezer cabinets.
- Most shops have indoor and outdoor seating areas.
- Depending on your business model, you may also have a Drive-thru window.
9. Marketing and Advertising Ideas
Now that you have gone to all the trouble of creating an amazing ice cream shop, you need to ensure customers actually know about your business. Here are a few suggestions:
- Create Clear and colorful Signage on the exterior of your business.
- Establish a Strong Website
- Perform Social Media Outreach
- Maximize your Digital Presence on Google, Yelp...etc.
- Create Exciting Promotions and Sales Loyalty Programs.
- Publicize your shops Grand Opening (only after you worked out all of the kinks in your operation such as employee scooping and cashiering, and product replacement.)