Ice Cream Business Costs?

I have a good deal of experience in ice cream.

1. Gross profit - You want about 70% gross margin. That's about true in any food service establishment. You'll need another 25 - 30% to cover associate costs, which leaves you about 40% to cover your fixed costs and have some left over to take home. On a per customer basic, you are probably looking at a ticket average of $5 - $7 (assuming 1.5 - 2 customers per ticket). So, you're looking at $3.50 to $4.90 of gross margin per ticket.

2. Start up costs - Depends on how you go. A full build-out in a strip mall with franchise-style look and feel, with architectural plans and all of that jazz will likely run $150k - $250k. You can probably go really low budget for around $50k to $75k or lower if you can find good deals on used equipment.

3. You can probably expect your fixed operating costs for a 1,000 - 1,200 square feet (rent, utilities, insurance, maintenance) to run about 2x your rent - rough rule of thumb. So, if your rent is $15 per square foot per year, (or $1,250/month), expect the fixed costs to total around $2,500. That's before employee costs. Empolyee costs can vary dramatically based on your staffing approach. You can build a model in Excel fairly easily to esimate the costs of various approaches (i.e. you cover the store 80% of the time and have extra help come in during peak times).

One thing I enjoyed about the ice cream biz was that almost all customers walk away with a smile.

Good ice cream is key. But, overall cleanliness, courtesy and client experience is just as important. Also, having a good mix of flavors and "signature" items (like banana splits, sundaes, pre-menued shake and malt flavors) is good.

I hope this helps. Good luck.

Are you planning to manufacture your own ice cream?

What you need to do is to visit another community that has a store on the order that you imagine. Sit in your car outside the store for a week. Yeah, that's a lot of monotony, but you need to know what the head count is.

Then you need to go inside, and pay attention to the cash register for a few hours, and try to figure out how much the average person is spending.

As a general rule, restaurants (and this *is* a restaurant of sorts) try to spend 30% of their receipts on food, 30% of labor, 30% on overhead (electricity, paper goods, detergent, etc.) and get 10% for profit and depreciation. It's really tough to keep your costs down to those figures, which is one reason a lot of restaurants close or are sold within a year of opening. (The long hours of hard work are another reason.)

If you have any doubts about this, you should walk away from the project before you start. At some point fairly early on, you'll see a ton of work ahead, you'll see a need to invest a ton of money for this or that, and you'll rather pathetic profits. It's a lot cheaper to walk away *now* than *then*.

If you're really determined, I think there would be a market for neighborhood soda fountains. If you not only made ice cream in the back, but you also bottled a variety of fruit pops in the back as well, and you sold pints and quarts of ice cream, and cases of fruit pop, you could develop quite a big business. (Take a look at the Goya beverages in the supermarket - flavors like mango and coconut.)

It needs to be fun, and that could be the most difficult part. And there's no guarantee that it'll work even then. Remember Farrell's Ice Cream Parlor restaurants? They did a lot of things right, but they aren't around any more, so they must have done a lot of things wrong....

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Ice Cream Business Costs?

I am in the preliminary stages of designing a business plan for a neighborhood ice cream parlor. It's something I've always wanted to do.

Is there anyone out there that could provide some guidence on a variety of related subjects? 1. Average Gross profit per customer? 2. Average...

Go to http://www.score.org/template_gallery.html and download the Excel templates for estimating start up costs and operating costs.