Ever dreamed of owning and operating your own ice cream shop?
In honor of National Ice Cream Day (July 18th), we’re diving into the numbers behind this offbeat but potentially lucrative side hustle. Here’s everything you need to know about starting an ice cream shop, from initial startups costs to yearly revenue.
Let’s grab a scoop!
What’s Ahead:
Starting an ice cream shop: things to consider
How much you make from an ice cream shop depends on many different factors. These include:
- Whether you work in the shop: You can earn more if you own and manage the shop than if you were to hire another manager.
- Whether you’re open all year: Shops that close in the winter may have less earning potential, but they also eliminate operating costs during the slow season.
- Your location: Shops in walkable locations with frequent foot traffic may have a higher earning potential.
- What makes you unique: If you’re the only ice cream shop in an area, or have a unique product, then you could earn more.
It’s not as simple as deciding where to cut costs and how much to charge, however.
You’ll also have to decide whether you want to start an independent store or become part of a franchise, where to source your ice cream (or if you’ll make your own), and how you’ll staff your shop.
But first: will your customers come to you, or will you bring the ice cream to them?
Deciding on a store type
You’ve got three choices here: you can set up an ice cream stand, ice cream truck, or brick-and-mortar ice cream shop.
Stands and trucks can be great options if you live somewhere with colder winters or a well-defined tourist season. They have the lowest start-up costs compared to an actual storefront, and you won’t have to pay rent during seasonal lulls.
Trucks can hold more equipment and inventory, but stands (or even carts) are easy to set up as popup stores or in locations like beach fronts and malls.
Brick-and-mortar ice cream shops have the highest cost since they’re open year-round, but they also enable you to dish out sweet treats all 365 days if you so choose. Brick-and-mortars can help establish a permanent presence in your community, too, and build up a loyal brand following. High costs aside, they’re not a bad idea if you live in an area with a longer operating season.
Still not sure which is best for you? Take a look at the average cost associated with each choice to help you decide:
- Ice cream stand: Costs range from $2,000 to $10,000.
- Ice cream truck: Costs range from $5,000 to $20,000.
- Brick and mortar ice cream shop: $50,000 to $1,000,000.
Deciding on a location
Along those lines, you’ll need to figure out where to set up shop.
If you opt for brick and mortar, you should look for a location that receives plenty of foot traffic and that isn’t too near other competitors. You may decide to purchase a retail shop or rent one. It should have good visibility and be able to attract customers from off the street.
If you go with a mobile ice cream shop, you’ll have a bit more flexibility here. Look up what permits and permissions you need in your area, then go get that money, honey.
Deciding on an independent or franchise shop
You can choose to either open up an independent ice cream shop or a franchise. An independent ice cream shop requires you to figure out details like pricing and product offerings on your own. You’re basically starting from scratch in this case. However, you also have more freedom and flexibility to create the ice cream shop of your dreams.
If you choose to open a franchise, you’ll need to meet certain requirements in terms of franchise and royalty fees, net worth, and business experience. You’ll also benefit from increased brand recognition and loyalty, as well as an existing, profitable business model to build on.
Making or sourcing your ice cream
You’ll also need to decide whether to make or source your ice cream.
Making your own ice cream may make you more attractive to customers looking for artisanal, homemade ice cream. You also have the freedom to come up with fun, unique flavors and experiment with your own recipes. Making your own ice cream may be cheaper, too, since you won’t have to purchase a finished product from a supplier.
But what you save on the backend might get eaten up before you even get started. You’ll need equipment, ingredients, and a space to make the magic happen.
Sourcing ice cream from other vendors may be easier if you’re not interested in making ice cream on your own, or if space or prep time is an issue.
Hiring employees
Unless you plan to man your ice cream shop on your own, you’ll need to hire employees to help you scoop ice cream and serve customers.
Most ice cream shops pay around $12 per hour, although hourly rates may be higher depending on what the minimum wage is in your area.
Consider how much you can (and should) pay your staff and how much help you’ll need to run your shop. Then, compare that to what you’d save by doing some of the legwork on your own before you post any job ads.
What to do in the winter
Ice cream shops tend to be very busy in the summer, but less busy in the winter. With this in mind, you should be sure to come up with a plan to stock up savings in the summer months to cover costs in the slow season. If you operate an ice cream truck or stand, you may want to consider pausing operations during winter and resuming them again when temperatures warm up.
How much can you make from an ice cream shop?
Ice cream stores in the United States have a market size of about $6 billion dollars, making this a potentially lucrative industry to dive into. Plus, the industry has seen a modest rate of growth of 2.1% from 2016 to 2021.
While earnings vary depending on your location, size, and other market factors, annual profits tend to be in the $20,000 to $49,000 range.
Of course, you can tweak your operations to increase that amount. For example, managerial staff at ice cream parlors typically earn around $25,000 to $38,000 per year. But if you manage your own ice cream shop, you’ll save a bit of dough–and improve those profit margins.
That’s just scratching the surface, though (scooping the surface, if you will). Let’s take a look at what else can impact your future as a self-made ice cream mogul.
Ice cream shop start-up costs
You probably already know that your start-up costs will vary depending on how you operate your ice cream shop.
But you might not be thinking about the miscellaneous expenses you’ll have to take care of before you can even make a sale.
These costs include (but definitely aren’t limited to):
- Deposits and installation fees for utilities, including wifi and phone service.
- Print and media advertising.
- Furnishing your space (if it’s a brick-and-mortar) or customizing your truck’s paint job.
- Operational inventory, like utensils and cleaning supplies.
While these are necessary expenses, they can add up quickly. You’ll want to make sure that you’re financially ready to start a business before you begin.
Summary
Ice cream shops are a lot of work, so they may not be the best option for a low-effort side hustle. They require a significant amount of start-up costs and planning, even for less expensive ventures like a simple ice cream stand.
That said, they can be a rewarding business project if you have the time and money to invest in this unique venture. Plus, all the free ice cream you can eat is a nice added perk!
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