Ice cream parlors are undoubtedly one of the most visited shops by kids and adults alike. No wonder ice cream is the most popular frozen dessert in the US. In fact, an average American consumes ~23 lbs of ice cream and related frozen desserts every year. In 2020, the US ice cream industry produced more than 1 billion gallons of ice creams generating around USD 5.6 billion in revenue, and the number has been growing every year for more than a decade now. The fact is that Americans love to eat ice cream, which makes starting an ice cream parlor in the US a pretty sweet and profitable idea.
All You Need To Know To Start A Profitable Ice Cream Parlor In The USA
To start an ice cream parlor, you have to do much more than just appreciate ice creams for what it is. You need to understand the business aspects of it before you can scoop out your own niche in the US ice cream industry. But no need to worry. This blog post will give you a clear idea of precisely what you need to do to turn your sweet dream into a freshly served reality. So, let’s begin.
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Prepare A Business Plan
Many ice cream businesses fail due to one simple reason – the lack of a plan. So, it is crucial to develop a sound business plan, which will serve as the blueprint of your business idea. You have to devote sufficient time and effort to research and create a business plan that will ensure that you don’t need to think about what to do at every turn once you start the ice cream parlor.
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Pick An Ideal Location
If you choose to start with a brick-and-mortar set-up, you have to look for a location that attracts plenty of foot traffic and isn’t too close to your competitors. The location should have good visibility to attract customers from off the street. You will need an 800-1,100 sq. ft. space, depending on the scope of your business. You may either purchase a retail shop or decide to rent one. The rent will probably fall in the range of USD 1,800 to USD 3,000 per month.
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Purchase Equipment
Once you are done with the location, you can start designing the interiors and procuring the necessary equipment. In this stage, you should be ready to break the bank as the cost of even one piece of equipment can exceed USD 8,000. In fact, many shop owners report an initial investment of somewhere in the range of USD 25,000 to USD 50,000, while some others go way beyond that.
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Obtain The Permits
All the states have their own set of requirements. So, let us look at some of the common permits and licenses you will require before setting up an ice cream parlor.
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Employer Identification Number
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You will be the EIN by the Internal Revenue Service (IRS), and you will need it while applying for any license, permit, or other state-related paperwork.
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Business License
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You need a business license to run a business within any state legally. The application process may vary depending on your location. Check the US Small Business Administration (SBA) website for more details.
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Food Service License
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The state health departments will issue you the food service license, which varies depending on the type of establishment. Check the US Food and Drug Administration (USFDA) website for more details.
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Occupancy Permit
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If you plan to operate your business out of a commercial location, you will require an occupancy permit. Even enterprises operating out of personal residences need a home occupancy permit in some municipalities.
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Food Handler’s Permit
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In some states, you will need to ensure that one or more of your employees have the food handler’s permit, wherein these employees are required to take food safety classes.
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Sales Tax Permit
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Most states require you to get the sale tax permit (also known as seller’s permit) to avoid paying taxes on purchased foods.
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Get Business Insurances
As an ice cream parlor owner, you will need several insurance policies to protect your sweet business. The cost of insurance policies may vary depending on the shop’s location, the building’s value, the number of employees, etc.
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General Liability Insurance
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It protects your shop if any customer is ever hurt on your property, say by slipping. It usually covers the legal and medical expenses.
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Commercial Property Insurance
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It protects your business against any accidental damage to your premises and equipment due to events, such as fire.
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Worker’s Compensation Insurance
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It helps your business cover employee expenses, such as their medical bills or lost wages, if they are hurt while working.
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Hire Staff
You will need a few employees to keep up with the demand during busy times. On average, you will need to pay them around USD 8-12 per hour, which may vary depending on the minimum wage in the state in which you operate.
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Promote And Market The Ice cream Parlor
You can host an opening day event where prospective customers can taste-test your offerings. Also, you should share your specials on social media platforms to reach out to a broader customer base. Besides, you should also create a website for your ice cream business.
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Invest In POS System
In this age of technology, it is best to invest in a good ice cream shop POS system, and it will allow you to focus on your core business activities while it will take care of the peripheral activities of the business. Some of the key benefits of an efficient POS system include production management, system-based ordering, loyalty program integration, real-time analytics & reports, and centralized control in the case of multiple outlets.
There is no doubt that opening an ice cream parlor is a lot of work. But if you can do it in the right way, it can be rewarding and fun at the same time. If you can successfully fulfill unmet customer needs, you stand the best chance of becoming profitable. However, the profits will vary depending on the competition and the shop’s size and location.
