Researching the market is a vital first step in setting up your ice cream shop.

At the core, you will want to identify your target market and understand the demographics of the customers you want to attract. Are you aiming to cater to families, teenagers, or perhaps health-conscious customers who prefer vegan or low-fat options? Your product line should be aligned with the preferences of your target market. Are there enough of the customers you want to target in your area to support your ice cream shop?

Once your customer base has been identified, it’s time to research your competitors. Visit other ice cream shops in your potential area. Understand their business models, pricing, and offerings. Pay attention to what works well for them and areas where they might be falling short. You can also look at their customer reviews online to glean insights about their strengths and weaknesses.

Armed with this information, you can start to make informed decisions about your business, what products to offer, how to price, market, and more.

After looking at the market and having the data to support the need for an ice cream shop in your community, the next step in starting your business should be to write a business plan. A business plan is not only necessary if outside funding is needed, but it also helps you define and articulate your vision and assess the financial feasibility of the shop. It allows you to outline your goals, target market, and unique selling proposition.

Some important things to keep in mind when writing an ice cream shop business plan include:

Demonstrate industry knowledge: Show your understanding of the ice cream industry with the work you did earlier by researching market. This knowledge will instill confidence in lenders or investors that you have a solid foundation for success.

Create a realistic financial forecast: Develop a detailed financial forecast that includes projected revenue, expenses, and cash flow. This will help you determine the amount of funding required and convince potential funders of the profitability of your ice cream shop.

Highlight unique selling points: Clearly articulate the unique aspects of your ice cream shop that will set it apart from competitors. This could be a specialty flavor, innovative product offerings, sustainable practices, or a unique customer experience. Emphasize how these factors will attract and retain customers.

Related: How to write a business plan

Now that you are lining out your business idea, it’s time to start researching where you want to be located.

Start by considering the demographics of your target market – your location should be easily accessible and highly visible to them. High foot traffic areas, especially those near other complementary locations such as restaurants, parks, or schools, are usually desirable for ice cream shops.

You should also look for a location that has enough space to house the appliances, a serving area, and possibly a seating area for customers. Additionally, you will want to make sure you aren’t locating too close to a competitor.

In this stage, you are only researching available properties, verifying that a food service can be operated, and getting rough costs. While it is tempting to sign a contract to secure your property, you should wait until clearing the next step which is making sure you have the funding to start your business.

Now that you are well on your way, the concept should be worked through and the business plan completed. With this, it’s time to make an appointment and talk with a lender.

Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start an ice cream shop is another. Funding to start an ice cream business can be difficult due to the often high cost of building renovations, furniture, and equipment. In order to get a small business loan, the borrower(s) will need to have good credit and be able to personally invest 15-25% towards the total start-up costs.

In your business plan, you should have calculated the total funding required to start and operate your ice cream shop. Equipment and furniture costs can run quite high, but another option would be to look at leasing and save on upfront costs.

When approaching potential funders, be ready to provide detailed documentation, such as financial statements, business plans, market research, and legal compliance. Anticipate and address any concerns or questions they may have during the due diligence process.

Related: Finding the money to start a business

Now that funding is in place, it’s time to secure your location. At this stage, it’s important to begin optimizing the flow of customers and staff within the shop by designing a functional and efficient layout. You can use free online floor plan creators like Floorplanner or SmartDraw to create a virtual floor plan for your shop.

In the shop design, consider the different areas of the shop, including the customer ordering area, production area, and storage space. Also, ensure that equipment placement allows for easy access, maintenance, and efficient workflow.

Spend time creating an inviting and visually appealing display area for showcasing ice cream flavors and products since this is where customers will focus their attention.

Last, take into account the safety and accessibility requirements, including compliance with health and safety regulations and ADA guidelines.

Registering and setting up your ice cream shop legally is an essential part of starting your business. While the specific regulations and requirements can vary by state, here is a general guideline to get you started:

Form a business structure: The first thing you’ll need to decide is what legal structure is best for your business. This could be a sole proprietorship, a partnership, a limited liability company (LLC), or a corporation. Each of these structures has different implications for liability, taxes, and administrative complexity. Many small business owners opt for an LLC because it provides personal liability protection and has fewer administrative requirements than a corporation.

Related: Comparison of business structures

Register your business name: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state.

Related: Tips for naming an ice cream shop

During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.

Related: Finding a domain name for your business

Obtain business licenses and permits: Depending on your location and the nature of your business, you may need certain general business licenses or permits to operate. This could include a business license, Seller’s Permit and Employer Identification Number (EIN).

In addition, ice cream shops will usually need food licensing (typically from the local health department). Along with licensing, there will be different regulations and regular inspections.

Related: State guides for business licensing

Things are coming together quite nicely (hopefully), and now we are looking at the suppliers you will use for the ingredients and other items like dishes, utensils, lids, straws, etc.

Choosing the right ingredient suppliers for your ice cream shop is a critical aspect of your business that directly impacts your product quality and consistency, customer satisfaction, and overall profit margins. When choosing a supplier, a few things to keep in mind:

Quality: Always prioritize quality over cost. High-quality ingredients result in a superior product that customers can taste, which in turn builds your reputation and customer loyalty. Request samples from potential suppliers to assess the quality yourself.

Reliability: Your supplier must be able to deliver consistently and on time. Unreliable suppliers can lead to inventory issues and potential interruptions in your business, which can negatively affect your customer service.

Sustainability: Consider sourcing from suppliers who prioritize sustainability. This could mean using organic ingredients or those with a lower carbon footprint. This not only can be a selling point for your customers but is also a responsible business practice.

Locally sourced ingredients: Local suppliers can often provide fresh ingredients and also allow you to support other local businesses. Customers often appreciate and support businesses that use locally sourced ingredients.

Pricing: While quality is key, the cost is an important consideration. Make sure that the prices allow you to maintain a healthy profit margin. Be sure to understand the supplier’s pricing structure and whether they offer discounts for larger orders.

Terms and conditions: Before committing, make sure you understand their terms and conditions. Can you order as needed, or are there minimum orders? What are their payment terms? Do they offer returns or credits for unsatisfactory products?

Relationship: A good supplier is a partner that wants to see your business succeed. Look for suppliers who are supporting you during the research phase, as they tend to be the best to work with over the long term.

Diversity of products: Depending on your ice cream shop’s concept, you may want a supplier who offers a wide range of products – different types of dairy, unique flavors, or specialty items like vegan or lactose-free options.

Remember, it’s also a good idea to have backup suppliers in case your primary one has issues.

When it comes to setting pricing for an ice cream shop, there are several items to consider:

Understand your customer: The price of your ice cream gives your customers information about how you see your product and what type of target market you expect to buy your offerings. Some customers will select a brand of ice cream because of its low price while others will be drawn to a higher-priced product because of their perception that cost correlates with quality.

Analyze your competition: An ice cream pricing strategy should take into account the prices that your competition is charging. This does not mean that the neighborhood ice cream truck should charge more because the upscale ice cream shop has a more expensive product. Rather, the ice cream truck catering to a cost-conscious clientele should adjust its prices relative to other businesses targeting the same market while the artisan ice cream shop might even raise its prices to signal that its owners believe their product to be worth more than the competition.

Understand your costs: When pricing your ice cream, it’s critical that you first identify all of your costs and consequently mark up your ice cream so you can factor in a profit. The actual cost of your ice cream may include things like the actual cost to make the product and operating costs to run your business.

When setting up a menu for an ice cream shop, there are several things to consider. A few things to consider include:

Plan your menu: Planning your menu will help determine the layout of your store. For example, if you plan to offer 20 flavors of ice cream, you’ll need sufficient space for the dipping cabinets necessary to hold them all.

Reflect your shop’s personality: Your menu should reflect your ice cream shop’s personality or ties to the local area. Consider incorporating these words and phrases into your menu to be unique.

Design best practices: Whether printed, online, or on the wall of your shop, your menu is an important tool for communicating your shop’s identity, driving customer engagement, and maximizing profits. Unless you have a design background, hiring a graphic designer or working with a sign shop will result in the best outcome. For inspiration, you can look at Toast POS’s guide on how to make an ice cream shop menu from scratch in 10 steps or Pickcel’s list of 5 irresistible design ideas for your ice cream shop menu.

Marketing an ice cream shop effectively requires a blend of creativity, understanding of your target market, and leveraging the right platforms to reach your customers.

Start with creating a strong brand that includes a unique selling proposition – what makes your shop different or better than the competition? This could be unique flavors, locally sourced ingredients, or a distinct ambiance.

Once you have a strong brand, amplify it through various channels. Traditional marketing strategies like engaging signage, local newspaper ads, or in some markets, distributing flyers can still be effective. However, digital marketing is increasingly crucial. A user-friendly website and active social media presence (Instagram, Facebook, Twitter) can help you engage with customers, showcase your products, and announce special promotions. Also, consider targeted local online ads through platforms like Google or Facebook.

Collaborating with local businesses, participating in community events, or sponsoring local sports teams or clubs can increase visibility within your community. Local food and ice cream competitions and festivals also offer a way for ice cream shops to connect with customers in the community.

Customer loyalty programs or promotional events like “flavor of the week” can incentivize repeat visits. Offering regular promotions and special offers will not only attract new customers but keep existing ones coming back.

Last, don’t underestimate the power of word-of-mouth marketing. While this won’t happen overnight, exceptional customer service and a top-quality product can turn your customers into advocates for your shop.

Related: Low-cost ideas to market a new business

Hiring the right team is integral to the success of your ice cream shop. The employees not only help in the day-to-day operations but also serve as the face of your business, interacting with customers and contributing to the overall customer experience.

Common roles in an ice cream shop include ice cream scoopers or servers, a shop manager, and potentially a specialized ice cream maker if you’re making ice cream in-house. Ice cream scoopers and servers typically earn around minimum wage, but this can vary depending on state laws and cost of living.

Shop managers and specialized ice cream makers generally earn more due to their increased responsibilities and required skills.

When hiring for an ice cream shop, consider the following tips:

Look for customer service skills: Since your employees will be interacting with customers, they should have excellent customer service skills. This includes being friendly, patient, and able to handle customer complaints professionally. Personality is something that cannot be taught but it is what’s needed most for your staff to interact with your customers.

Reliability is key: Ice cream shops often have high turnover rates, so look for employees who are reliable and likely to stick around for a while. This could mean focusing on hiring individuals seeking more stable employment rather than temporary or seasonal workers.

Consider the physical demands: Scooping ice cream can be physically demanding and may require employees to stand for long periods. Make sure your potential hires are up for the task.

Create a training program: Have a training program in place so you aren’t always starting from scratch. It’s essential to train your staff in safe food handling practices like proper hand washing, cleaning procedures, and how to avoid cross-contamination, in addition to in-depth customer service training.

Related: Hiring your first employee

As we wrap up our steps, there will be several additional things to work on before having the grand opening. Everyone’s journey and needs will be different, but here are a few other items to consider:

Insurance: Obtaining the right insurance is crucial to protect your business. General liability insurance is a must, but you’ll also want to look into property insurance, workers’ compensation if you have employees, and potentially product liability insurance.

Related: What types of insurance does an ice cream shop need?

Bookkeeping: Good bookkeeping is essential for any business. You’ll want to keep track of all your expenses and revenues for tax purposes and to monitor your business’s financial health.

Related: Setting up the accounting for your business

Bank account: Opening a separate bank account for your business is important for keeping your personal and business finances separate, which is especially important for tax purposes. It also helps you monitor your business’s cash flow more accurately.

Accepting credit cards: Most customers expect to be able to pay with a credit card, so setting up a merchant account to accept credit cards is important. Shop around to find a provider with competitive rates.

Inventory management: For an ice cream shop, managing your inventory effectively is crucial. You’ll need to track your stock of ice cream and other items to prevent shortages or wastage. Inventory management software can be helpful for this.

Health regulations: Food businesses like ice cream shops need to comply with local health department regulations. Make sure you understand these rules and train your staff to follow them. Regular health inspections will be a part of your business, so always be prepared.

Starting an ice cream shop is a lot of work, but with careful planning, a focus on quality, and excellent customer service, it can also be a lot of fun and very rewarding. Best of luck in your sweet endeavor!