Ice-cream businesses are good choices for first-time entrepreneurs, but can be heavily affected by seasonal demand
Ice cream is a popular commodity, and one with a significant mark-up. If you’re looking to start an ice cream business, there are a number of different avenues to take, such as going mobile with a van, or opening a fixed location at a beach or on the high-street. Having a solid business plan is essential as ice cream businesses can be heavily affected by seasonal demand
Why start an ice-cream business?
Ice cream is a very saleable commodity, especially during the summer months. The initial start-up costs are not as high as some other businesses and thus may attract first-time entrepreneurs or those not willing to risk large amounts of capital. Ice-cream businesses are also very scalable; you can expand to multiple vans or locations should you succeed. If you’re looking to start your entrepreneurial path and aren’t sure what company to start, consider an ice-cream business. If you can find the right location, and pair it with a solid business plan, you’ll get a great flavour of running a business and will hopefully enjoy profitability too.
Start from scratch or buy?
Selling ice-cream can often be a saturated market depending on the location. This is particularly true around town centres on hot days and near beaches/seaside locations. As such, there are often ice cream businesses for sale that you can purchase directly. This is advantageous because you’ll benefit from already owning equipment and goodwill, as well as existing relationships with suppliers.
There are disadvantages, however. The costs of purchasing an existing ice cream business will naturally be far higher than buying the equipment separately, and if there’s considerable brand loyalty it may be difficult for you to put your individual stamp on the business, or evolve your product range to include more specialised items.
The decision to buy or start from scratch will depend on a range of factors, including start-up capital, location and how long you’re prepared to wait before you start trading.
Mobile or shop?
This is a decision you’ll need to make during market research, which is essential before starting an ice-cream business as you’ll need to make sure there is a large enough potential customer base so you can sell ice-cream in quantity. Both models have advantages and disadvantages, and it’s important to research both ideas fully before committing: there may be a factor that swings the balance. For example, the price of petrol may bump up the cost of running a mobile ice cream business considerably. If the price continues to rise, could you afford to cover the miles you need to cover?
Finding a unique spin
In order to differentiate themselves in crowded markets, some ice-cream businesses put a novel spin on the traditional ‘cone or tub’ model. They may, for example, offer sundaes with a variety of toppings, or unusual ice-cream flavours. This can help draw in new customers and emerge strongly ahead of competitors, but at the risk of turning away ‘one-time’ visitors who may want a more traditional experience. Again, what you choose to offer will demand on the ice-cream market where you choose to set up, the demographic of your potential customers, and the amount of money you have available to brand your business.
You won’t need any specific training to open an ice-cream shop, but having associated health and safety and hygiene training – and perhaps front-of-house experience – will be useful. Spending time working in a busy ice-cream business will give you an idea of what the working day is like, and will also allow you to gain experience actually producing ice creams. You’ll need to be good with figures so taking an accountancy course may be useful, particularly if you’re keen on doing your own books during the initial start-up period.
Start-up costs can be kept down when starting an ice-cream business, although they can be high depending on the business model you choose and the type of shop you want to start. If you’re going for a new take on ice-cream, such as a sundae emporium, you’ll need to invest money into building a strong brand and marketing. If your shop is located on a busy seafront, you will have to spend less on marketing because the natural footfall will be high.
If you don’t buy an existing shop, equipment will most likely be the biggest expense, as you’ll need deep industrial freezers. For mobile ice cream businesses, the van will easily be the biggest cost, but don’t forget to factor in painting/branding and also equipment such as freezers and ‘soft serve’ ice cream machines.
When buying freezers, ensure you buy the right kind for your business. For example, you’ll need transparent-topped freezers so people can easily select their ice-cream. Consider the energy output. Does it have top and side wiper gaskets for cleanliness? Talk to a professional supplier before making a purchase.
Compliance and regulation
Any shop serving food and drink requires high hygiene standards. There are common statutes covering the preparation and sale of food and these must be adhered to at all times.
The Food Safety Act 1990
is a British piece of legislation that provides the framework for all food legislation in the country, while the General Food Law Regulation is a piece of European legislation on general food safety. The General Food Law Regulation 178/2002 covers general food safety. These are ‘food law’ legislation and separate to food hygiene legislation.
With regard to food hygiene, ensure you speak to the Health and Safety Executive
(HSE) to make sure your practices and procedures are fully compliant with food hygiene regulations as the law changes regularly.