How to Start an Ice Cream ShopLast updated on 6/02/2021
Ice cream is a classic summer treat that is enjoyed by children and adults alike. The industry has expanded in recent years, thanks to many new flavors and types of ice cream, the growth of the food truck industry, and the normalization of pop-up and seasonal shops. For many, getting ice cream with friends and family is a summer ritual, meaning there is plenty of demand and interest in local ice cream shops. If you’re looking to open your own ice cream shop, check out our ice cream shop startup guide.
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What Type of Business Is an Ice Cream Shop?
An ice cream shop is a business that primarily sells ice cream, but may also specialize in other frozen treats such as milkshakes, gelato, frozen yogurt, and sorbet. These frozen dishes are often prepared in a variety of different ways and with a wide array of toppings. One of the biggest appeals of ice cream shops is the aspect of customization because customers can order their favorite frozen treats exactly how they prefer. For owners, opening an ice cream shop is an attractive option since they don’t require expansive kitchen or seating areas, and ice cream remains an extremely popular food, especially in the summer.
Opening an Ice Cream Shop
Opening an ice cream shop may seem like an overwhelming task at first, however breaking down the process into steps makes it much easier to tackle. Follow our ten-step guide to prepare for the many aspects of opening an ice cream shop.
1. Ice Cream Shop Concepts and Branding
Deciding on what type of ice cream shop concept and brand you want to choose is the beginning stage of opening an ice cream shop. It is here where you’ll decide how your shop serves customers and what type of industry trends you incorporate into your ice cream shop’s business model. When it comes to ice cream shops, there are a few major concepts and branding options you need to consider before moving onto the next steps of planning.
Seasonal vs. Year-Round
Ice cream is often considered a seasonal good that is mostly consumed in the spring and summer. As a result, your ice cream sales will likely greatly diminish during the fall and winter months. Many ice cream shops are only open seasonally, opening around the first day of spring and closing during the waning days of summer. Alternatively, your ice cream shop can stay open during the colder months, hoping that a solid product, loyal customer base, or diverse menu can continue bringing people through the door when the weather gets colder.
Ice Cream Trucks
Food trucks are gaining traction in the broader food industry, but they aren't a new concept in the ice cream industry. A neighborhood ice cream truck is iconic, and a visit from one is the highlight of a summer day for children. Operating a food truck over a traditional brick-and-mortar location gives you the chance to be mobile and go directly to consumers. Doing so can increase impulse sales and lower overhead costs. However, ice cream trucks must deal with inconveniences such as limited space, parking regulations, permits, and insurance.
Traditional vs. Modern
One of the newer trends in the ice cream industry is the idea of a self-serve ice cream shop. Traditionally, ice cream shop customers order from a menu of select items. However, a new wave of modern ice cream shops has changed the formula, allowing customers to make their own frozen treats at various stations, before charging customers based on product weight.
2. Ice Cream Shop Business Plans
Writing an effective business plan is a critical part of starting an ice cream shop. A business plan gives you a medium to outline your goals, strategies, and plans all in one location. A financial document like a business plan will come in handy down the line when you’re attempting to impress lenders and investors to secure funding for your ice cream shop. To create a comprehensive overview of your ice cream shop, your business plan should contain:
- Executive Summary - The executive summary is written last, because it provides a brief overview of all of the information included in your business plan.
- Company Description - In this section provide a written description similar to your executive summary, but expand upon specifics such as strategies and projections.
- Concept and Menu - This section explains what concepts you have chosen for your ice cream shop and outlines the items you plan to offer on the shop’s menu.
- Management and Ownership Structure - Discuss what type of ownership your ice cream shop will have, as well as how your management team will be set up.
- Employees and Staffing Needs - This section should outline how many employees you’ll need to operate your ice cream shop, as well as what positions need to be filled.
- Marketing and Competitor Analysis - Identify a target market and complete a comprehensive analysis of nearby competitors to find potential competitive advantages.
- Advertising and Marketing Strategies - List potential advertising and marketing methods to entice customers and establish brand loyalty.
- Financial Projection and Summary - In this section, outline sales projections, perform a break-even analysis, and list potential expenses.
If you’re looking for a complete in-depth guide for writing business plans, check out our restaurant business plan guide.
3. Ice Cream Shop Start-Up Costs
While not necessarily as pricy as opening a restaurant or some other foodservice locations, opening an ice cream shop still comes with some expenses. Typically opening an ice cream shop will cost you anywhere between $20,000 to $50,000. However, this figure can vary based on whether you decide to buy or rent a location, as well as whether you purchase new equipment or cheaper used equipment. Here are a few of the most important expenses you’ll have to pay during the process of starting an ice cream shop.
- Down Payment - Purchasing a food truck or brick-and-mortar for your ice cream shop will be a major expense. Although a loan is usually taken out for such a large expense, a down payment of around 15-20% of the cost should be expected.
- Property Renovations/Construction Costs - Purchasing a location or food truck is rarely enough to get it ready for opening, so you’ll likely have to spend money on renovations and construction.
- Ice Cream Shop Equipment - To produce, store, and sell ice cream, investments into a variety of appliances and equipment is needed. Required equipment includes ice cream makers, refrigerators, and freezers.
- Ice Cream and Supplies Inventory - Buying all the ingredients, ice cream utensils, and containers needed for your ice cream shop can be costly.
- Employee Wages - Running an ice cream shop will require a handful of managers, employees, and staff who need to be paid a reasonable salary.
- Advertising - An advertising budget is needed to run marketing campaigns and bring new customers through the door.
- POS System - A POS system is a big help in streamlining the ordering process, inventory management, and sales reporting, making it a great investment for new ice cream shops.
- Permits and Licensing - Opening an ice cream shop requires you to receive several permits and licenses, some of which come with fees.
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4. How to Secure Funding for a New Business
Paying for all of the costs associated with opening an ice cream shop appears to be a daunting task at first. However, there are several ways that you can secure funding and ensure that your dream of owning an ice cream shop becomes a reality. Determine how much money will be required for the initial start-up, as 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. Tapping into savings accounts and retirement plans can provide you with funds and control over your business, but means you assume all of the risks yourself.
- Lenders - Small business loans and traditional commercial loans can provide you with enough funding to get your business started. Interest rates may mean you’ll be paying more in the long run, but a loan means you won’t need to immediately put up your personal finances or give away equity.
- Venture Capital - Venture capital is a form of private equity financing that is usually given to new businesses in exchange for equity. Finding an investor for your business is a great way to secure the funds required for an ice cream shop start-up. An investor can prove to be a valuable business partner, however giving up equity and other concessions is a major drawback.
- Crowdfunding - Crowdfunding involves a community of people pooling together payments to reach a goal. Contributors are often rewarded with special prizes or discounts, incentivizing consumers to contribute.
5. Business Licenses and Permits
Before you can legally open your ice cream shop and begin making sales, you'll need to acquire the right business licenses and permits. A few of the most important ones are listed below, but be sure to double-check with local laws and seek legal counsel to ensure your ice cream shop has everything it needs to open.
- Business License - Business licenses are the legal requirements for you to operate in your industry and location, and as a result, they may vary based on location.
- Employee Identification Number - Your ice cream shop will require a nine-digit employee identification number before employees and staff can be hired. Every business in the United States has a unique employee identification number for identification purposes.
- Seller’s Permit - A seller’s permit legally authorizes your business as a collector of sales tax. Many states and local areas require a seller’s permit, so be sure to double-check your state and local laws.
- Health Permit - To sell any prepared food product, a health permit confirming safety and sanitation is required. Health permits are usually handled by county and local governments, meaning laws and regulations regarding health permits can vary greatly from location to location.
6. Ice Cream Shop Locations
The location you choose for your ice cream shop is an important part of executing your vision and making your initial concepts a reality. While those that are looking to start an ice cream food truck business don’t need to worry about location too much, for brick-and-mortar stores a good location is important. A location analysis to determine the best location to maximize profits and attract customers is highly recommended. While looking for an ice cream shop location, there are several features that you should keep in mind.
- Space - Your ice cream shop location needs to have enough space to house several appliances, a serving area, and a seating area for customers.
- Foot Traffic - An ideal ice cream shop location is an area that receives plenty of foot traffic, resulting in a lot of impulse buying from customers.
- Seasonal Traffic - Ice cream shops make the vast majority of their profits during the summer months, so a location that receives more traffic in the summer would be ideal.
- Overhead Costs - Lack of sales during the fall and winter months means an ice cream shop location should ideally have low overhead costs to offset low sales during tough times. Some of the most common overhead costs you should look to save on include rent and ulitily payments.
7. Ice Cream Shop Menu
Putting together a solid selection of items for your menu is critical to bringing customers through the door and ensuring that they come back. You'll want to make sure that your menu pricing is on point, being affordable for consumers yet still generating a profit. Creating an ice cream shop menu is a tight balancing act, as you need to bring classic ice cream flavors customers expect while also being unique and standing out from the competition. Outside of ice cream, there are a few different items that you should consider adding to your menu.
- Milkshakes - Sweet drinks made by blending a mixture of ice cream, milk, and various flavorings. Milkshakes are a classic ice cream shop menu item.
- Floats - A unique creation that consists of a large scoop of ice cream served in a glass with root beer or another soda.
- Italian Ice - A classic way to cool off on a hot summer day, Italian ice is made from water, sugar, and natural or artificial fruit flavorings.
- Gelato - Similar to ice cream in look and taste, but gelato often contains less fat, churned at a slower speed, and served at a warmer temperature.
- Frozen Yogurt - As the name suggests, frozen yogurt is made with yogurt, milk, and cream, resulting in a tangier taste than ice cream.
Popular Ice Cream Flavors
Ice cream shops offer a wide range of flavors, but there are a handful of common flavors that customers will come to expect. Here are a few of the most common flavors that your ice cream shop should look to serve:
- Cookies and Cream
- Mint Chocolate Chip
Lactose-Free Ice Cream
Lactose intolerance affects millions of people in the United States, directly impacting their ability to enjoy ice cream and other dairy products. Lactose-free ice cream can either be made by filtering the lactose out of the milk used in ice cream, or by adding synthetic lactase enzymes into dairy milk. Offering a selection of lactose-free ice cream on your menu is a great way to cater towards a subsection of the population, and can be a competitive advantage over other ice cream shops that don’t have similar offerings.
Dairy-Free Ice Cream
Similar to lactose-free ice cream, dairy-free ice cream takes the process a step further and eliminates dairy from the recipe. Instead, a substitute is used in its place, usually an ingredient like almond milk or coconut milk. Dairy-free ice cream is a great addition to your menu as it not only appeals to lactose-intolerant customers but also vegan customers. Veganism is a growing dietary trend, and offering a selection of ice creams that vegans are able to order can boost sales and help your ice cream shop establish a niche consumer base.
8. Ice Cream Shop Decor
The setup and design of your ice cream shop are very important in giving off a classic ice cream shop feel. Many people have a specific idea of how an ice cream shop is designed, usually with bright colors and loud cheery music. Common colors used in ice cream shop design include bright reds, pinks, and teals as well as patterns such as polka dots and stripes. However, outside of decorations, there are areas of your ice cream shop that need to be designed with functionality in mind.
- Serving/Dispensing Stations - Traditional ice cream shops will need to dedicate a large area for storing ice cream that is meant to be served. Typically several large freezer ice cream cabinets are required to store all of the flavors. The more modern variants of ice cream shops that charge by weight won’t require this, but they will require ice cream dispensers to be placed all around the store.
- Weighing Stations - Ice cream shops that charge by weight will need several weighing stations for customers to weigh their creations and determine the price.
- Seating - Most ice cream shops require some form of seating area for customers to enjoy their ice cream. Ideally, an ice cream shop should offer both indoor and outdoor seating so customers can choose based on the weather.
9. Advertising Ideas for Ice Cream Shops
When starting any new business, it's important to let people know that you have opened and are ready for business. The best way to do this is by engaging in advertising campaigns with the idea of enticing customers in mind. Thankfully in today’s digital world, there are several ways you can effectively advertise your business and reach your target market. Try generating hype and building excitement with these ice cream shop advertising ideas:
- Establish a Strong Website - In today’s business climate, creating a solid website is a requirement for a business. A website is an easy location for customers to learn everything they need to know about your business. In the past, creating a website was a daunting task, but there are now several platforms on the Internet that can help you design a basic yet attractive website for customers to visit.
- Social Media Outreach - Reaching out to customers via social media platforms like Facebook, Twitter, and Instagram is a great way to secure more business. Social media is becoming more prevalent in our daily lives and requires minimal time and effort to use, making it an attractive advertising option.
- Digital Presence - Several websites such as Yelp , OpenTable, and TripAdvisor play an important role in how customers decide to shop. Ensure that your business is registered on these websites, as well as free tools such as Google My Business so that your brand gets maximum exposure.
- Promotions and Sales - Special deals and sales are a great way to get customers to check out your ice cream shop. The prospect of savings and good deals will catch the attention of consumers, and once they try your quality product there’s a chance they’ll come back for more.
- Loyalty Programs - Rewarding customers for frequently buying your product is a great way of establishing brand loyalty and securing repeat customers. Implementing loyalty programs such as digital punch cards, special member statuses, and targeted deals and promotions will not only attract new customers but will keep those you already have coming back.
10. Ice Cream Shop Openings
As the time to open your ice cream shop to the public nears, you’ll have to decide how you’ll want to handle your ice cream shop opening. The biggest decision you’ll have to make when opening your ice cream shop is whether you want to host a soft opening, a grand opening, or both.
Soft Opening vs. Grand Opening
A soft opening is a simulated opening with real customers that allows your shop to test menu items, service flow, and customer capacity. While a soft opening isn’t required, working out all of the potential kinks before your ice cream shop officially opens can be beneficial.
A grand opening is a special celebration designed to mark the start of your business. Grand openings sometimes have special offers, exclusive menu items, or live events to generate hype and celebrate the opening of the shop. Hosting a grand opening event is a great way to launch your business, and immediately entice customers to check out your new shop.Back to Table of Contents
Ice cream is one of the most popular foods in the United States and brings people together. We all have memories of getting ice cream on hot summer days with loved ones. For those that are looking to offer those experiences to a new generation of people while simultaneously running a profitable business, opening an ice cream shop is the perfect opportunity.