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How To Start An Ice Cream Truck In 2023

How To Start An Ice Cream Truck In 2023

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How To Start An Ice Cream Truck In 2023

How To Start An Ice Cream Truck

There was nothing more exciting than hearing the sound of the ice cream truck driving through your neighborhood as a kid. While ice cream trucks bring joy and much-loved traditions to kids each summer, they also bring potential business opportunities.

The thrill of driving a mobile dessert parlor is shared by many, but getting there takes more than just a love for ice cream. This guide is your one-stop shop to get your wheels turning!

Business Overview

An ice cream truck, also known as a frozen dessert truck, is a commercial vehicle that sells prepackaged frozen treats like ice cream bars, popsicles, and ice cream sandwiches. Operators drive their colorful, music-playing trucks through neighborhoods looking for customers. This type of business model is well-suited for warm weather seasons when demand for cold treats is high.

Ice cream trucks offer convenient, tasty products to customers. Unlike brick-and-mortar ice cream parlors, trucks can travel to a variety of locations and offer more of a grab-and-go service. While quickly serving customers is a priority, trucks can also offer custom-made products, like sundaes and milkshakes. Some trucks offer pre-packaged ice cream bars and treats, while others essentially act as full-service ice cream parlors on wheels.

Because they are mobile, ice cream trucks may market to customers in many different locations. Beaches and festivals are popular options, but some trucks also do private events like employee appreciation days and parties. Many trucks park and remain in one place, but others may take a more mobile approach, traveling regular routes through neighborhoods.

With food trucks growing in popularity, competition within the ice cream truck industry is increasing, too. When designing your business model, look for a way that you can make your truck stand out. Consider offering specialty products or a special experience, like hand-dipped and custom-topped ice cream bars, to appeal to customers. Stocking products that other trucks don’t have, like dairy-free ice creams, can encourage repeat business when your truck follows a reliable route or can frequently be found in particular locations.

Ice Cream Truck Industry Summary

The ice cream truck industry brought in revenues of $1.5 billion during 2022 and is expected to grow by 9.3% annually through 2030. Though demand declines in colder months, peak summer months account for over 50% of yearly sales. Most ice cream trucks are small, family-owned businesses serving local communities. Competition can be stiff, so marketing and developing a loyal customer base is key.

The ice cream industry is evolving, and an ice cream truck that can embrace some of the newest trends can stay competitive and appeal to consumers. Classic flavors like vanilla and chocolate are hugely popular, but there’s increased demand for low-calorie ice creams that consumers can enjoy with less guilt. Similarly, non-dairy ice creams allow consumers who are on specialty diets to enjoy this treat. Some consumers are now seeking out ice creams that have added health benefits, including ingredients like probiotics, protein, fiber, and even CBD.

While healthier options are on-trend, rich indulgences are also gaining in popularity. An ice cream truck may want to offer indulgent mix-ins for both ice creams and milkshakes to take advantage of this trend. Savory or salty add-ins, like potato chips and salted pretzels, are popular at the moment. Customization options are also increasingly valued. Trucks can embrace this trend by offering personalized dipped and topped bars, and sundaes and shakes that are made to order.

Many ice cream truck owners are also expanding into catering events for increased revenue streams.

Steps to Start An Ice Cream Truck

Starting an ice cream truck business takes careful planning, adherence to regulations, and a passion for serving customers. To help you get started, take a look at the steps to get your truck up and running.

Step 1: Research

So you’ve got this great idea to start an ice cream truck. Before you dive in, pump the brakes a bit. The first essential step is to see if people even want another ice cream truck around. Even though you can’t be 100% sure your business will take off, doing some initial market research can save you from launching a business no one is interested in. Here’s some ways to go about it.

  1. Surveys and questionnaires: Use online tools like Google Forms or SurveyMonkey to create a short survey. Share it on local social media pages to gauge people’s interest. It’s a simple, fast way to get opinions.
  2. Talk to other food truck owners: They’ve got hands-on experience and can provide insights that data might not reveal. They can tell you if the market is too saturated or still has room for another truck. You may be concerned that they could steal your idea, but that is unlikely. They have already probably thought about the potential of an ice cream truck but are too busy running their truck to start another business.
  3. Observe existing trucks: Spend some time near other ice cream or food trucks. See how much foot traffic they get, what they’re selling, and for how much. Observation gives you a real-world feel for demand.
  4. Social media insights: Looking at various platforms like Facebook, Yelp, and others can provide insights into people’s desire for an ice cream truck and feedback on how they feel the competition is doing. What are they doing well? What can you do differently or better? This can give you a sense of the market’s size and the strategies that work.
  5. Google Trends: A free tool that shows you search interest in a specific area. If people are searching for ice cream or food trucks, that’s a good sign.

Step 2: Write a Business Plan

So, you’ve done your market research, and you’re feeling good about the demand for your ice cream truck. The next step is creating a business plan. This document serves as both a roadmap for your business and it’s also what you’ll present to lenders if seeking funding.

Here are the sections you should focus on, especially when it comes to impressing a bank or another lender.

Market Analysis

The market analysis section should provide insight into why your ice cream truck business will succeed. This includes details about your target customers, competition, and the overall market environment. For an ice cream truck, highlighting seasonal demand, unique offerings, or a niche market can help show why your business stands out. Lenders want to see that you understand your market and have identified strategies to get customers.

Management Team

The management team section is of significant interest to lenders, as they often associate the success of a business with the people behind it. This section should detail the experience, skills, and qualifications of the business owners and any key team members. Demonstrating experience in the food industry, customer service, or business management can be particularly helpful when starting an ice cream truck business.

Location, Location, Location

The right spot can do wonders for a business, especially an ice cream truck. In this section, discuss your proposed locations and explain why they are ideal for your business. You might highlight factors like high foot traffic, proximity to parks or tourist attractions, or a lack of competition. Lenders will want to see that you’ve chosen locations with a high potential for sales.

Financial Projections

If there’s one thing a lender will zoom in on, it’s this section. They want to know your business won’t just generate revenue, but also profit to repay the loan. Your financial projections should be reasonable and well thought out. More importantly, be ready to explain how you arrived at those numbers. You’ll be far more convincing if you can clearly explain your revenue model, costs, and profitability.

Before You Present Your Plan

Before you take your business plan to a lender, it’s a good idea to get a second opinion. Maybe ask a seasoned business owner or an accountant to review your plan. They can help identify any weak spots or areas for improvement that you might have overlooked. This gives you a chance to refine your plan before it’s put under the lender’s microscope.

Related: How to write a business plan

Step 3: Secure Funding

After validating your market and polishing your business plan, it’s time to talk about money. Ensuring you have the necessary funds in place before diving into other steps is important because, without the funding in place, your dreams can crumble before getting to the finish line.

The first pool of funds to look at is your personal savings. The more you can contribute from your own pocket, the less you’ll have to borrow. But if your savings aren’t enough, you’ll need to look for external funding.

A few of the most common sources of outside funding include:

Bank loans: Getting a loan from a bank is a standard route, but it comes with its own set of challenges. Banks usually want you to invest at least 15% of your personal funds into the total project cost. You’ll also need a strong credit score and sufficient collateral, like property or other valuable assets. Sometimes, a bank might find a loan too risky but still believe in your business; in such cases, they might secure the loan with an SBA (Small Business Administration) loan guarantee, which makes them more willing to lend to you.

Friends and family: Another source of funding can be friends and family. They know you well and might be willing to invest in your business vision. However, treating these informal loans or investments like any business transaction is necessary to protect these relationships. That means putting all agreements in writing to avoid misunderstandings or strained relationships later.

Microloans: If the amount you need isn’t too large, or if you’re finding it hard to get funding from a traditional lender, you might consider a microloan. These are smaller loans offered by local economic development organizations. The added bonus? Some of these organizations also offer business training to help you manage your ice cream truck more effectively.

Related: Finding the money to start a business

Step 4: Purchase a Truck & Equipment

Alright, you’ve got your funding sorted, and now comes the fun part: buying your ice cream truck and stocking it with equipment!

Your first task is to find a truck that meets your needs. You have a couple of options: buying a new truck or going for a used one. A new truck will be more expensive but will also be more reliable and customizable. A used truck can save you money, but be cautious; always get it checked by a mechanic before sealing the deal.

Next up is equipping your truck. You’ll need freezers to store the ice cream, a cash register or point-of-sale system, and perhaps a small generator for power. Consider sketching out the truck’s interior footprint and make sure the equipment you buy will fit comfortably without making it difficult to move around.

Don’t forget that all the equipment you buy for your business is tax-deductible. That means the money you spend on your truck and equipment can be subtracted from your income, lowering your tax bill. To take advantage of this, keep all your receipts. Every nut, bolt, and scoop you buy for your business should be documented. This can add up to substantial savings when tax time rolls around.

Step 5: Register the Business

So, you’re ready to make your ice cream truck dreams a reality? Before you start serving those cones and sundaes, let’s talk about the legal steps to get your business up and running. These steps will vary depending on where you’re located because each state has its own rules and regulations.

Business structure: The first thing you need to decide is what kind of business structure best suits your needs. The four most common types are:

  1. Sole proprietorship: This is the simplest and least expensive option. You own the business outright, but you’re also personally responsible for any debts or legal issues.
  2. General partnership: This is similar to a sole proprietorship but involves two or more people. Like the sole proprietorship, each partner is personally liable for business debts.
  3. Corporation: A corporation is a separate legal entity from its owners. This means that the business itself is responsible for debts and liabilities, offering the owners personal liability protection.
  4. Limited Liability Company (LLC): An LLC is a sort of hybrid, offering the liability protection of a corporation but the ease of operation of a sole proprietorship or partnership.

For an ice cream truck, many owners choose to go with an LLC as it offers a good balance of protection and simplicity.

Related: Comparison of business structures

Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.

Some popular LLC formation services include:

IncFile - $0 plus state fees & free registered agent for 1 year!

ZenBusiness - Best for beginners. $0 plus state fees & free registered agent for 1 year!

Northwest - Best privacy protection. $39 plus state fees & free registered agent for 1 year!

Business name registration: 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 during the formation process.

Related: 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: Operating an ice cream truck often requires multiple licenses and permits. In addition to the general business registrations, such as a business license, sales tax permit, and Employer Identification Number, you’ll need to apply for a food service permit and pass health inspections from the local health department.

You may also need additional permits that are specific to the location where you will be selling, such as a mobile vendor license or street vendor license.

Also, check with your local Department of Motor Vehicles to see what licensing is required for your truck to operate as requirements will differ from one state to another.

Related: Common business licenses, permits, and registrations by state

Step 6: Source Suppliers

So, you’ve got your business structure in place and your licenses are good to go. What’s next? Let’s talk about where you’re going to get all that delicious ice cream, cones, and toppings. This step is essential for keeping your truck stocked and your customers happy.

First off, it’s important to know that most suppliers won’t even talk pricing or set up an account with you until you’re officially registered as a business. They often ask for your business license and Employer Identification Number (EIN). So make sure you have those ready before you start your search.

When researching suppliers, you’ll likely deal with a few different types of suppliers:

  • Ice cream manufacturers: These are companies that produce the ice cream you’ll be selling. Brands like Blue Bunny and Good Humor are common choices for ice cream trucks.
  • Food distributors: Companies like Sysco or U.S. Foods can provide not just ice cream but also other supplies like cones, napkins, and disposable utensils.
  • Specialty suppliers: If you’re going for a gourmet touch, you might work with suppliers who offer unique or artisanal flavors.

Step 7: Develop a Menu & Set Pricing

Creating a menu and setting prices are key steps when starting an ice cream truck business. When developing the menu, a few things to consider:

  1. Identify your audience: Are you targeting kids, families, or maybe young adults looking for gourmet options? This will guide your menu choices.
  2. Talk to your suppliers: Many suppliers offer resources for startups, including pricing, flavor trends, and popular product recommendations for your area. Take advantage of this insider info.
  3. Simplicity is key: Don’t go overboard with options. A menu that’s too complicated can overwhelm customers and complicate your inventory.
  4. Extras and toppings: These can add flair to your offerings and encourage upselling. Think beyond sprinkles; offer options like cookie crumbs, fresh fruit, or even a dollop of whipped cream.

After the menu is ready, the next step is to develop the pricing. It may seem like overkill, but you need to know how much each scoop of ice cream costs. That is easy to calculate, but you also need to include any associated costs like toppings, packaging and utensils, fuel for your truck, permits, and insurance. Understanding these costs at the unit level will help you set prices that ensure profitability.

Step 8: Create a Marketing Plan

With the steps winding down, it’s time to start thinking about how customers will find out about your ice cream truck. Having a plan to market your truck is essential for drawing a crowd and keeping your wheels turning.

You can start by researching and planning to attend community events or local fairs, where you can introduce people to your flavors and start building a loyal customer base. Coupons and loyalty cards can give people an extra nudge to make a purchase or come back for more.

On the online side, having a strong social media presence is key. One of the most popular ways to market an ice cream truck business is through social media. Platforms like Facebook, Instagram, and Twitter allow you to reach a wide audience and engage with customers. You can use these platforms to share updates about your location, showcase your products, and build a loyal following with discounts and special offers. Email newsletters can help you update your fans on upcoming routes, new menu items, or special events.

Another effective marketing strategy is branding your ice cream truck. A unique and recognizable design can help you stand out from the crowd and attract more customers. This could include a colorful paint job, an eye-catching logo, or even a memorable name for your truck.

But don’t stop there. Claiming your business on relevant online business directories, like Google Business Profile, Yelp, and TripAdvisor, is another key step. These platforms can increase your visibility online and provide a platform for customers to leave reviews, which can help attract more customers.

Related: Low-cost ideas to market a new business

Step 9: Hire Staff

Starting out, many ice cream trucks decide to operate with only the owner. If your plans include hiring right away, there are a number of things to know about as an employer. A few of these requirements include:

  1. Obtaining an EIN: An Employer Identification Number (EIN) is a unique number assigned by the IRS that you’ll use when paying taxes and reporting on your employees.
  2. Employment eligibility: Before hiring, you must verify that each employee is legally eligible to work in the U.S. This typically involves completing an I-9 form.
  3. State reporting: Each state has different requirements for reporting new hires. Check with your state to learn more.
  4. Worker’s compensation: Most states require businesses to carry worker’s compensation insurance, which covers medical costs and lost wages for work-related injuries or illnesses.
  5. Labor laws: Be familiar with both federal and state labor laws, which cover things like minimum wage, overtime pay, and working conditions.

Related: Hiring your first employee

Step 10: Prepare to Launch!

Before you rev up your truck’s engine, there are probably a few more steps to finish up. Every business has unique needs, but here are some common areas you’ll likely need to address:

Business insurance: It’s important to protect your business from potential risks. Invest in business insurance to cover any damages to your truck, equipment, or in the case of liability claims.

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

Bookkeeping: Set up a bookkeeping system to track your income and expenses. This will help you monitor your financial health and make tax filing easier. You can hire an accountant or use software like Wave Accounting (FREE) or Quickbooks.

Establish a route and schedule: Plan out your daily, weekly, or monthly routes and schedule. This will help you maximize your exposure to potential customers and ensure you’re operating efficiently.

Bank account: Open a separate bank account for your business to keep your personal and business finances separate.

Point of sale software: Consider investing in POS software like Toast, Square or Stripe, which is perfect for accepting credit cards and managing mobile businesses.

Pricing: Your prices should cover your costs and leave room for profit without scaring off customers. Keep an eye on what competitors are charging, too.

Industry associations: Joining associations like the North American Ice Cream Association, the International Association of Ice Cream Distributors & Vendors, or the National Food Truck Association can provide networking opportunities, industry insights, and resources to help your business grow.

Grand opening: Plan a launch event to generate buzz around your new business. Consider offering special deals or promotions to attract customers.

Greg’s Tip: Ice cream is often a seasonal business, so if this is going to be a full-time business, think of ways to keep revenue coming in during off-seasons, like catering events or parties.

Greg's Business Tip

Common Questions When Starting An Ice Cream Truck

How much does it cost to start an ice cream truck?

Starting an ice cream truck business can typically range from $20,000 to $60,000 in initial costs, depending on various factors like the type of truck, equipment, and the area you’ll operate in.

A few of the most common costs include:

Truck and equipment: The core of your business, the ice cream truck, can set you back anywhere from $10,000 for a used vehicle to $60,000 or more for a new, customized one. Startup costs can be lowered by leasing a truck. You’ll also need freezers, which cost around $1,000 to $3,000.

Startup inventory: Stocking up on ice cream and other goods can cost around $500 to $1,000 initially.

Business insurance: For an ice cream truck, you’ll need specific types of insurance, like general liability and vehicle insurance. Expect $1,000 – $1,500.

Permits and licenses: The cost can vary greatly depending on your city and state, but budget at least $300 to $500 for food vending permits and business licenses.

Marketing: A basic marketing package that includes flyers, signage, and perhaps a modest online ad campaign can start at $200.

These are some of the most common costs when starting an ice cream truck, but your actual costs will probably be different.

How profitable is an ice cream truck business?

The profit potential for ice cream truck owners can vary greatly depending on factors like location, menu prices, and operational costs. However, we can provide a general estimate based on industry statistics.

The average ice cream truck generates around $35,000 to $40,000 in gross annual revenue.

Typical operational expenses like gas, maintenance, insurance, and supplies take up about 30% of revenue. Using a truck leased for $500 per month would account for another $6,000 in expenses per year. Factoring in these average figures, an ice cream truck owner could generate around $25,000 in net profit annually. The math looks like this:

Average Annual Revenue: $40,000
Expenses (30%): $12,000
Truck Lease: $6,000
Total Expenses: $18,000 Net Profit: $40,000 – $18,000 = $22,000

This provides a realistic overview of the earning potential in the ice cream truck business based on typical financials. Profitability ultimately depends on how well the owner minimizes costs and maximizes sales with smart business decisions.

Keep in mind that many factors will affect an ice cream truck’s profits. Holidays and weekends are high income-generating times, and this business is largely seasonal. A truck owner who works almost daily during the summer months can take advantage of the increased business and drive up income. Booking special events, like birthday parties, can also help to boost profits. Being this is a mobile business, if you can create a consistent ice cream truck route or set up at big events, profits will increase as well.

The type of ice cream you sell will also affect profits. Prepackaged ice cream (also referred to as ice cream novelties) is the easiest type of ice cream to sell as there is minimal food handling and inventory management. Scooped or soft-serve ice cream can be sold at a higher price (and profit), though there is more work and potential waste. You can even set yourself apart from the competition by making your own ice cream. To increase profits, you could also sell drinks or snacks.

What skills are needed to run an ice cream truck?

Running a successful ice cream truck doesn’t require a business degree, but certain skills and experiences will be helpful in running this type of business.

Foodservice and handling experience: Experience working in the food service industry is valuable in this field. An ice cream truck owner will need to understand food handling and storage safety procedures, and previous experience in the field can make this easier.

Mechanical and technical skills: Some mechanical and technical knowledge can be useful when servicing and troubleshooting the truck and the machinery, including the freezers, on board.

Customer service skills: With strong customer service skills, a truck owner can build a rapport with customers, encouraging repeat business.

Management experience: If a truck owner decides to expand into a multi-truck operation, experience in hiring and training staff will be valuable.

What is the NAICS code for an ice cream truck

The NAICS code for an ice cream truck is 311811.

The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.

Related: What is a NAICS code?

How To Start An Ice Cream Truck In 2023

How To Start An Ice Cream Truck In 2023

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