An ice cream shop is a business that prepares or serves ice cream, ice cream treats, sorbet, and gelato. Purchases may be consumed on-site, taken out, or delivered. Ice cream is made from dairy products or dairy alternatives, such as soy milk.
Gelato generally has a lower butterfat content than ice cream, while sorbet is sweetened water that is flavored with fruit. Most stores offer ice cream, ice cream treats, and ice cream with toppings. The ice cream industry is growing and statistics have it that the global ice cream market is expected to grow at a CAGR of over 5.71 percent from 2022 to 2026.
Ben & Jerry’s was the top-ranked ice cream brand in the United States with about 936 million U.S. dollars’ worth of sales for the 52 weeks that ended on September 5, 2022. Total ice cream category sales amounted to about 6.76 billion U.S. dollars.
Steps on How to Start an Ice Cream Shop Business
Table of Content
- Conduct Market Research
- Memorable Ice Cream Shop Business Names
- Register Your Business
- Cost Analysis and Budgeting
- Write a Business Plan
- Marketing Plan
- Financial Projection
- Set Up your Shop
- Hire Employees
- Launch the Business Proper
Conduct Market Research
It is important to state that conducting market research before starting any business is key to the success of a business hence you must not open an ice cream shop without conducting market research. This is because Market research provides critical information about your market and your business landscape.
It can tell you how your business is perceived by your target customers. It can help you determine who and where your customers are, and which customers are most likely to do business with you. Also, thorough market research will help you understand how your target customers think in order to turn them into regular customers and brand advocates.
a. Who is the Target Market for Ice Cream Shop Business?
The truth is that ice cream and related products are widely consumed, with half the population eating ice cream regularly. Children 6-12 years of age have the highest uptake (62%), followed by adults over 75 years of age (58%). Otherwise, ice cream consumption is distributed evenly across household income brackets, education levels, and gender.
However, households with children have higher rates of consumption (51%) than those without children (46%). The average ice cream consumer eats ice cream 1.6 times per week. Female ice cream consumers of 65 years of age and older eat ice cream about twice per week.
b. Is Ice Cream Shop a Profitable Business?
Yes, the ice cream shop business is quite profitable because the industry is valued at over $6 billion, and at least 40 percent of Americans eat ice cream once during a two-week period.
c. Are There Existing Niches in the Industry?
Yes, there are existing niches when it comes to ice cream shops. Here are some of them;
- Brick and mortar ice cream shop
- Drive through ice cream shop
- Kiosk ice cream shop
- Mobile ice cream shop (ice cream carts or ice cream trucks)
d. Who are the Major Competitors?
- Ben & Jerry’s Homemade Holdings Inc.
- Berkshire Hathaway Inc.
- Cold Stone Creamery Inc.
- Dunkin’ Brands Inc.
- Sweet Republic
- Bi-Rite Creamery
- Kelley Country Creamery
- Creole Creamery
- Jeni’s Splendid Ice Cream
- Ted Drewes Frozen Custard
- Chinatown Ice Cream Factory
- Penn State Berkey Creamery
- Crank & Boom Craft Ice Cream
- Richardson’s Ice Cream
- Boardwalk Waffles & Ice Cream
- Ample Hills Creamery
- Pumphouse Creamery
- Amy’s Ice Cream.
e. Are There County or State Regulations or Zoning Laws for Ice Cream Shop Business?
Yes, there are county and state regulations and zoning laws for ice cream shops in the United States. Please note that the Food and Drug Administration (FDA) sets the federal Food Code, but it doesn’t oversee individual ice cream shops. Instead, the various states use the Food Code as the basis for their own food codes. They may adopt its rules, interpret them differently or set their own rules.
Please note that in the United States, you are required to follow your own state’s food service code. Visit the FDA website for a list of food service codes by state. Use this to find the state authority handling ice cream shop business and view the laws that apply in your state.
f. Is There a Franchise for Ice Cream Shop Business?
Yes, there are franchise opportunities for the ice cream shop business, and here are some of them;
- Cold Stone Creamery
- Rita’s Italian Ice
- Sub Zero Franchise Inc.
- Dippin’ Dots Franchising LLC
- The Haagen-Dazs Shoppe Co. Inc.
- Tasti D-Lite
- Marble Slab Creamery
- Bruster’s® Real Ice Cream
- Ben & Jerry’s.
g. What Do You Need to Start an Ice Cream Shop Business?
- A Feasibility Report
- Business and Marketing Plans
- Business Licenses and Permits
- A Good Shop facility
- EIN (Employer Identification Number)/Federal Tax ID Number.
- A Corporate Bank Account
- Startup Capital
Memorable Ice Cream Shop Business Names
- Your Sweetness© Ice Cream Shop, Inc.
- The Treat™ Ice Cream Shop, LLC
- Elena Davies© Ice Cream Shop, Inc.
- Mickey Mouse House® Ice Cream Shop, Inc.
- Regina Frances™ Ice Cream Shop, Inc.
- Topmost™ Ice Cream Shop, LLC.
- Boyd Landers© Ice Cream Shop, LLC
- Kendra Norman® Ice Cream Shop, Inc.
- Ice Base© Ice Cream Shop, Inc.
- Rita Smith© Ice Cream Shop, Inc.
- Kristy® Ice Cream Shop, LLC
- White Label® Ice Cream Shop, LLC
- Mira Angel™ Ice Cream Shop, LLC
- Headstone© Ice Cream Shop, Inc.
- Celebrations® Ice Cream Shop, Inc.
- Sean Venus™ Ice Cream Shop, Inc.
- Light House™ Ice Cream Shop, Inc.
- Cold Serve© Ice Cream Shop, Inc.
- Ruben Dowell® Ice Cream Shop, LLC
- Silver Linning™ Ice Cream Shop, Inc.
Register Your Business
a. What Type of Business Structure is Best for Ice Cream Shop?
When it comes to starting an ice cream shop business, you have several options when it comes to the business structure, but the one most players in this line of business consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits.
Please note that an LLC will need an EIN if it has employees or if it will be required to file any of the excise tax forms listed below.
b. Steps to Form an LLC
- Choose a Name for Your LLC.
- File Articles of Organization.
- Choose a registered agent.
- Decide on member vs. manager management.
- Create an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports.
c. What Type of License is Needed to Open an Ice Cream Shop Business?
- General Business License
- Health and Safety Permit
- Food and Drinks Handlers’ License
- Zonal Permits
- Signage Permit
- Operational State Facility Inspections
- A music license if you want to play live, recorded, or streaming music in your shop
- A dumpster placement permit that specifies where you can put your dumpster outside your shop
d. What Type of Certification is Needed to Open an Ice Cream Shop Business?
You don’t need any certifications to open an ice cream shop business.
e. What Documents are Needed to Open an Ice Cream Shop Business?
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit and Building Approval
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Contract Document
- Company Bylaws
- Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?
If you are considering opening an ice cream shop business, usually you may not have any need to file for intellectual property protection or trademark. This is so because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
Cost Analysis and Budgeting
a. How Much Does It Cost to Start an Ice Cream Shop Business?
The cost required to open an ice cream shop business may vary significantly, but basically, opening an ice cream shop will cost you anywhere between $20,000 to $50,000.
b. What are the Cost Involved in Starting an Ice Cream Shop Business
- Business Registration Fees – $750.
- Legal expenses for obtaining licenses and permits – $1,300.
- Marketing, Branding and Promotions – $1,000.
- Business Consultant Fee – $2,500.
- Insurance – $1,400.
- Rent/Lease – $15,000.
- Other start-up expenses like commercial satellite TV subscriptions, stationery ($500), and phone and utility deposits ($1,800).
- Operational Cost (salaries of employees, payments of bills et al) – $30,000
- Start-up Inventory – $5,000
- Store Equipment (cash register, security, ventilation, signage) – $1,750
- Furnishing and equipping the shop – $10,000
- Website: $600
- Opening party: $3,000
- Miscellaneous: $2,000
c. What Factors Determine the Cost of Opening an Ice Cream Shop Business?
- The size of the ice cream shop
- The choice of location
- The required licenses and permits
- The type of facility
- The type of related products retailed in the shop
- The cost for branding, promotion, and marketing of the Ice cream shop
- The cost for furnishing and equipping the ice cream shop
- The cost of insurance
- The cost for registering the business
- Source of your supplies and ongoing expenses
- Cost of recruiting and training your staff
- The cost for the purchase and customizing of uniforms
- The cost for the grand opening of the ice cream business
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
No, it is not compulsory to build a new facility for your ice cream shop, but if you have the required finance, it will pay you to build your own facility. The truth is that building or reconstructing a facility will help you come up with a facility that will perfectly fit into your overall business goals.
e. What are the Ongoing Expenses of an Ice Cream Shop Business?
- Supplies (inventory expenses)
- Utility bills (internet subscriptions, phone bills, signage and software renewal fees et al)
- Maintenance and repair of equipment
- Salaries of employees
f. What is the Average Salary of your Staff?
- Shop Manager (Owner) – $45,000 Per Year
- Accountant – $30,630,000 Per Year
- Ice Cream Makers and Servers (Confectioner)- $27,100 Per Year
- Cleaners – $25,000 Per Year
g. How Do You Get Funding to Start an Ice Cream Shop Business?
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank/banks
- Source for soft loans from your family members and friends.
Write a Business Plan
a. Executive Summary
Cold Serve© Ice Cream Shop, Inc. is a standard ice cream shop that will be based in Maplewood, Missouri, and will cover a wide range of clients. We will operate both ice cream shop and ice cream truck and our mobile ice cream trucks will be customized to fit into what a first-class mobile food truck business should look like.
When it comes to hygiene and proper packaging, we have put plans, processes, and structures in place to make sure that we are always on top of our game. We have been able to secure permits from all relevant departments in Maplewood, Missouri.
b. Products and Service
- Soft-serve ice cream or hard ice cream (homemade or pre-packaged, blended with toppings, shakes, or sundaes)
- Frozen Yogurt
- Frozen Custard
c. Mission Statement
Our mission is to build an ice cream business that will meet the needs of our customers and potential customers in the regions/cities where we have our outlets and to sell franchises all across the United States of America and Canada.
Our vision is to be among the top 3 ice cream shops in the United States of America.
d. Goals and Objectives
The goals and objectives of an ice cream shop business are to provide a retail outlet where patrons can go to buy different flavors of ice cream.
- Shop Manager (Owner)
- Ice Cream Maker and Server (Confectioner)
a. SWOT Analysis
- Ideal location for an ice cream shop business
- Highly experienced and qualified employees and management
- Access to finance from business partners
- Access to ingredients and supplies
- A reliable, clean, healthy, and efficient method of preparing ice cream.
- Financial constraints may restrict the publicity and branding of the business
- A new business that will be competing with well-established ice cream shops and production franchises in the city.
- Inability to retain our highly experienced and qualified employees longer than we want during the teething stage of the business.
- A rise in the number of ice cream lovers within our market space
- Online market, new services, new technology, and of course the opening of new markets.
- The arrival of a new ice cream shop within our market space
- Weather uncertainty
- Economic uncertainty
- Liability problems
- The U.S. Food and Drug Administration (FDA) could change its regulatory status and decide to enforce strict regulations that can strangulate new businesses like ours.
b. How Do Ice Cream Shops Make Money?
Ice cream shops make money by selling the following products;
- Soft-serve ice cream or hard ice cream (homemade or pre-packaged, blended with toppings, shakes, or sundaes)
- Frozen Yogurt
- Frozen Custard
c. Payment Options
- Payment via bank transfer
- Payment with cash
- Payment via credit cards/Point of Sale Machines (POS Machines)
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
- Payment via bank draft
d. Sales & Advertising Strategies
- Introduce your ice cream shop business by sending introductory letters alongside your brochure to households, schools, and other key stakeholders throughout the city where your ice cream shop business is located.
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across.
- Create a basic website for your business so as to give your business an online presence
- Directly market your products.
- Join local ice cream shop associations for industry trends and tips
- Provide discount days for your customers
- Advertise our business in community-based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of word-of-mouth marketing (referrals)
a. How Much Should You Charge for your Product/Service?
Retail prices of ice cream in the United States have been trending upwards since the mid-’90s. They peaked in 2011 at 5.52 U.S. dollars per half a gallon and have settled at an average of 4.75 over the last four years.
b. How Much Profit Do Ice Cream Shop Owners Make a Year?
It depends, but the available report shows that on average, a small to medium-sized ice cream shop can earn anywhere from $50,000 to $120,000 for the shop owner.
c. What Factors Determine the Amount of Profit to Be Made?
- The capacity of the ice cream shop
- The types of related products retailed in the shop
- The location the ice cream shop is covering
- The management style of the ice cream shop
- The business approach of the ice cream shop
- The advertising and marketing strategies adopted by the ice cream shop.
- The number of years the ice cream shop is in business
d. What is the Profit Margin of an Ice Cream Shop?
The average profit margin of ice cream depends on the number of materials you use in producing the ice cream, but available data shows that on average it is around 40 percent.
e. What is the Sales Forecast?
Below is the sales forecast of an ice cream shop. It is based on the location of the business and other factors as it relates to such startups in the United States;
- First Fiscal Year: $150,000
- Second Fiscal Year: $240,000
- Third Fiscal Year: $360,000
Set Up your Shop
a. How Do You Choose a Perfect Location for an Ice Cream Shop?
- The demography of the location
- The climatic condition of the location
- The demand for ice cream in the location
- The purchasing power of businesses and the residents of the location
- Accessibility of the location
- The number of ice cream shops in the location
- The local laws and regulations in the community/state
- Traffic, parking and security et al
b. What State and City are Best to Open an Ice Cream Shop?
- Middleton, Massachusetts
- Maplewood, Missouri
- Omaha, Nebraska
- Lexington, Kentucky
- Edison, New Jersey
- Washington, D.C.
- Chicago, Illinois
- Philadelphia, Pennsylvania
- Los Angeles, California
- New York City, New York
- Dallas, Texas
- Las Vegas, Nevada
c. What Equipment is Needed to Operate an Ice Cream Shop?
- Ice cream makers, refrigerators, and freezer.
When it comes to hiring employees for a standard ice cream shop, you should make plans to hire a competent shop manager (you can occupy this position), account clerk, ice cream maker, servers, and cleaners.
Launch the Business Proper
No ice cream shop opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening if you are operating on a low budget or you can go for a grand opening party.
The bottom line is that with a proper launching of the ice cream shop, you will officially inform people in your city that your ice cream shop is open for business.
a. What Makes an Ice Cream Shop Business Successful?
- Choose a good location and shop facility to launch the business
- Make sure your shop has different flavors of ice cream (give your customers options)
- Be deliberate with your marketing sales approach
- Encourage the use of word of mouth to promote your ice cream shop business
- Leverage on all available online and offline platforms to promote your ice cream business
b. What Happens During a Typical Day at an Ice Cream Shop?
- The shop is open for the day’s work
- Ice cream making ingredients are ordered for and prepared
- The serving areas, chairs, and tables are properly arranged
- Walk-in customers are attended to
- Deliveries are made
- Stocks are taken and reports are written
- The business is closed for the day.
c. What Skills and Experience Do You Need to Build an Ice Cream Shop Business?
- Excellent customer services skills
- Interpersonal skill
- Accounting and bookkeeping skills
- Business management skills
- Bargaining skill
- Work experience in a shop environment
- Experience in managing people
- Experience in business administration
- Experience in making different flavors and types of ice creams and also handling different types of commercial ice cream making equipment.