SMALL BUSINESS IDEA: How to open an Ice-cream parlor?
Hello my dear friends, welcome to my blog TEACH BLOG. Today I will give you a complete guide on HOW TO OPEN A ICE-CREAM PARLOR step by step.
We’ve all seen the joy on people’s faces as they enter an ice cream shop and peruse the various flavors. Few don’t enjoy a scoop of their favorite flavor on a hot summer day. Running your ice cream parlor is hard work, but it is a fulfilling career for the entrepreneur with a sweet tooth.
9 easy ways to start your ice-cream parlor.
Plan your Ice-Cream Parlor.
Before starting any business, you need the plan to execute your business so, first, you need to make a good business plan for your business.
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
How much money do you need to open an ice cream parlor?
Ideally, you want a storefront that sees a lot of foot traffic and isn’t overrun with similar businesses. You’ll need 800-1100 square feet, depending upon the scope of your business. Rent can run anywhere from $1,800 to $3,000 per month. Standard leases require first and last month’s rent upon signing.
Once you have your location, you can start designing your shop and purchasing the necessary equipment. Just one piece of equipment can cost upwards of $8,000 used. Shop owners report an initial investment of $25,000, with many spending upwards of $50,000.
What are the ongoing expenses for an ice cream parlor?
Inventory costs vary depending upon the products you offer, typically averaging $5,000-$6,000/month. You’ll want to budget approximately $500 per month for advertising expenses. Labor costs, including cleaning services, payroll, worker’s comp, and taxes will run between $2,000-$4,000/month, depending upon how many employees you hire. Energy bills for similar businesses cost upwards of $600/month.
Who is the target market?
Many customers view ice cream as a special treat. Their visits are sporadic; so consistent quality is important in gaining loyal repeat customers. Your clientele will also be there to fulfill a craving or because they couldn’t resist the temptation. To ensure a steady influx of people, choose a location with a good amount of foot traffic.
How do you make money with an ice cream parlor?
Most ice cream is served by the scoop. Standard serving options include cups, cones, and specialty sundaes. Many parlors satisfy their customer’s sweet tooth by offering a variety of topping options, which are also paid for by the scoop.
The most important thing to note is that the ice cream industry is seasonal. A bulk of your revenue will be generated during the summer, whereas the winter months will be sparse.
How much can you charge the customers?
The price you can charge should be largely dependent upon the demographic, but $2.50-$3 for a 4 oz scoop is a good place to start. In areas like New York, customers are paying up to $5/scoop.
How many profits do you make with an ice cream parlor?
If you’re located in a primarily cold region, off-season will be longer and will negatively impact your bottom line. The variety of products you sell also defines your annual profit. If opening a soft serve ice cream shop, customer options are limited, and you could see a lower profit. Annual gross profit ranges from $19,900 to $49,000. With the proper vision and drive, entrepreneurs have the potential to make significantly more than that.
How can you make your business more profitable?
The following are examples of what other parlor owners have done to improve their annual profits:
Participate in local events like a farmer’s market or fundraiser.
Get creative. Many ice cream lovers crave sundaes, milkshakes, root beer floats, and toppings.
Sell ice cream cakes and offer clients an opportunity to custom order for special occasions.
Let your customers take home ice cream by the pint.
Sell your product in local grocery stores and restaurants.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit us How to Name a business guide or get help brainstorming a name with our Ice Cream Parlor Name Generator
If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.
When registering a business name, we recommend researching your business name by checking:
Your state's business records.
Federal and state trademark records
Social media platforms
Web domain availability.
It's very important to secure your domain name before someone else does.
Form your Ice Cream Parlor into a Legal Entity.
The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your ice cream parlor is sued.
You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
Register your Ice Cream Parlor for Taxes.
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes, you will need to apply for an EIN. It's really easy and free!
Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.
Small Business Taxes.
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corps).
You can learn more about small business taxes in these guides:
LLC Taxes
Sole Proprietorship vs LLC
LLC vs Corporation
LLC vs S Corp
How to Start an S Corp
S Corp vs C Corp
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
Open a Business Bank Account & Credit Card.
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business Bank account.
Besides being a requirement when applying for business loans, opening a business bank account:
Separates your personal assets from your company's assets, which is necessary for personal asset protection.
Makes accounting and tax filing easier.
Open net 30 accounts.
Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.
Net Many net 30 credit vendors report to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Get a business credit card.
Getting a business credit card helps you:
Separate personal and business expenses by putting your business' expenses all in one place.
Build your company's credit history, which can be useful to raise money later on.
Set up Accounting for your Ice Cream Parlor.
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
Make LLC accounting easy with our LLC Expenses Cheat Sheet.
Get the Necessary Permits & Licenses for your Ice Cream Parlor.
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements:
Certain state permits and licenses may be needed to operate an ice cream parlor business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits. In particular, most states require ice cream parlors to obtain a seller’s permit. A seller’s permit allows states to record and collect taxes from goods (and sometimes service) sales.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
In addition, certain local licensing or regulatory requirements may apply. For example, an ice cream parlor will need licensing from a local health department, which will vary from town to town. This is because ice cream parlors sell food; all establishments serving food are required to pass a health inspection.
Furthermore, ice cream parlors may be randomly inspected by the local health department on a regular basis. These inspections will check for compliance with local health laws, typically related to prevention of food contamination.
Tips for faring well on health inspections can be found here.
For more information about local licenses and permits:
Check with your town, city or county clerk’s office.
Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.”
Get Ice Cream Parlor Insurance.
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
Recommended: Learn what business insurance for your Ice Cream Parlor will cost.
Define your Ice Cream Parlor Brand.
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
The Truic Flame Logo
Recommended: Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker.
If you already have a logo, you can also add it to a QR code with our Free QR Generator rotor. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your website.
How to promote your Ice-Cream parlor?
Your goal is to get people in the door. After that, the product should speak for itself. Opening day is a special day for you, so you should share it with prospective customers! Host an opening day event, where customers can come in and taste-test your offerings. Make sure your signage is prominently displayed and properly represents your brand.
Social media should be included in your marketing strategy. You’ll reach a broader audience and can share specials with your regular clients. Be sure you’re listed in all local directories, as well as mobile app tools such as Yelp.
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