Earn More Money, InvestingMay 10, 2021June 20, 2021

Is Opening Up An Ice Cream Shop A Good Idea?

With spring and summer around the corner, people will want to go out. This means restaurants, escape rooms, etc. However, one place that many people go to, especially during the summer, is ice cream shops. While there are many places that serve ice creams such as Baskin Robbins and Dairy Queen, there are many other places you can visit. Furthermore, some of these shops will have a better quality product. However, even if the quality isn’t better, they can make up for it with variety, price, convenience, and many other factors.

However, every business comes with a cost. Therefore, would opening up an ice cream shop be a good idea? Well, the answer is not always so black and white. There are many aspects to think about when opening up any business. Furthermore, if you’re opening a business that deals with food and beverages, you may have to deal with problems such as smaller profit margins. However, is this true when it comes to ice cream shops? That is what we are going to take a look at in this article. The requirements, how much would it cost, and the potential earnings.

Requirements To Open An Ice Cream Shop

To open an ice cream shop, there are not many “requirements” that need to be met. That means you do not need to do any sort of schooling to own and operate an ice cream shop. To be honest, this can be seen as an advantage to many people. This is due to the fact that you can save up money and with a little bit of business know-how, you can own an ice cream shop.

While you may not need any particular formal schooling to own and operate an ice cream shop, like any business, you will need permits. Along with capital. However, we will talk about the permits you need as the costs will be covered in the next section.

First are music permits. Of course, if you are letting people in to your establishment, music is essential as it gives the customers some sort of entertainment. Furthermore, if you have an area where people can sit and eat, this point becomes more apparent. I cannot remember a time where I went into any establishment, whether it be an ice cream shop or local grocery store and they didn’t have music playing. While this can be advantageous to your business, it is not 100% needed. There are many stores that opt-out of having music played, especially smaller ones. If your establishment is small and you get a lot of foot traffic, no one is going to stay long enough to listen to the music. Therefore, getting a permit to play music may not be in your best interests.

Aside from that, there will most likely be other factors such as restrictions, and laws pertaining to opening a business. This goes for purchasing business licenses which may be different depending on the state and province you live in.

How Much Would An Ice Cream Shop Cost?

Opening an ice cream shop can have a wide array of costs. These costs can range from tens to hundreds of thousands of dollars. Just like any other business, the amount you spend will depend on size, equipment, product, and inventory, to name a few.

In terms of equipment, you will have to purchase utensils, build sinks, refrigerators, ice cream machines, dishwashers, computers, cooking equipment, and much more equipment. The cost of these will depend on the amount you acquire and the quality. As some brands are more expensive. Of course, the part that is going to cost you the most amount of money is going to be the location. You can save money by having your business in a shopping center or plaza, where it is attached to other businesses. However, a freestanding business in a prime location will cost you a considerable amount of money.

If you’re looking to keep costs down, you are able to lease a smaller area, purchase equipment, hire staff for under $50,000. If you can manage to get this shop running in the downtown of your local area, you can most likely make a large profit margin. This is due to the fact that you’ll have a lot of foot traffic and your business is relatively inexpensive. Although, there is a caveat to spending $50,000. The caveat is that this will most likely be an existing location. Therefore, a lot of the equipment and other necessities will already be there, for the most part.

If you’re looking to start a new brand inside a mall, for example, that’ll most likely cost you $100,000+. Of course, this is an area that has a ton of traffic. Furthermore, when you acquire an area within the mall, you will need to buy all the equipment.

Lastly, what if you want a new, free-standing location? That would most likely cost you the most amount of money as it’ll be built from the ground up. Typically, free-standing locations are larger. Therefore, it’ll require more maintenance, equipment, and fees pertaining to the establishment. In short, constructing a free-standing building, and purchasing all the equipment in a high-traffic area can cost you $1,000,000. This is definitely the riskiest move. This is due to the fact ice cream shops have the most traffic during the warmer seasons. There are many businesses that struggle to stay afloat due to the lack of business in the off-seasons. However, there are many places that remain successful regardless of that fact.

How Much Money Can You Earn?

Now, here is where it becomes quite tricky. This is because not many family-owned ice cream shops release that sort of information. However, there are some aspects that can help us determine a ball-park figure. First, how are you keeping costs down? If you’re a local chain, there is a good chance that you will make everything yourself. Doing this will greatly decrease the costs of your business as you won’t have to pay a vendor. However, this is extremely labor-intensive. Next, are you staying open year-round? This is a critical aspect of the business because its peak performance is determined by the season. Assuming you keep costs down and have a lot of foot traffic, you, as an owner, can most likely earn $60,000 – $150,000 per year.

There are many things to consider. If you stay open all year, you can still earn sales. However, you will most likely be spending money on inventory and labor, which may outweigh the sales. Let’s say your business performs extraordinarily well for 6 months out of the year. However, your business is closed for the remaining 6. The rent will remain the same which means that money will come out of the profit. Remember, you’re the boss which means you are paid last. If the business begins to lose money, the comes out of the business funds as well as your own.

Whether or not this is a good idea is up to you. However, while searching through various forums and other people’s experiences there is one thing I’ve noticed. The business will only be prosperous if it’s something you love to do. Owning an ice cream shop is very hands-on and requires a lot of risk to be successful. You are also depending heavily on seasonal sales. Therefore, starting a different business might be more lucrative and less of a headache.

Shameed Chris Khan

Shameed is just a man on a mission to help those around him gain financial success. Obsessed with writing about all things finance, this GTA native is constantly learning and sharing his experiences with others.