1 An ice cream parlor: business plan

9 YEARS AGO
5 MINUTES
TO READ

The summer and heat season is approaching and what

better way to take advantage of it than by considering
the possibility of investing in a business that is noble
and potentially profitable at all times: an ice cream
shop or ice cream shop .

Today I present to you a complete business plan for setting up an ice cream parlor .
(Please note that the entire reading will take about 10 minutes.)

Business Description
Fundamentally, the business role consists of the sale of ice creams of different flavors
as well as refreshing drinks under the concept of a retail store (or kiosk).

To do this, distribution will be strategically based on the acquisition of an ice cream

franchise with a company with extensive experience in the market such as... (here the
name of the franchise is considered) who will provide and regulate the standards of
preparation, presentation and product quality.

Target market
Our product will be mainly aimed at those people who walk around our store, which will
be located at the following address (location address), our product being especially
attractive to children who are the main consumers of ice cream.

It is also expected to reach all those people who, for work or simple recreation, require a
refreshing drink on the road.

If your business will be located in a shopping center or with sufficient parking area, then
people who travel by vehicle can be considered a potential market.

Competence
According to the visual investigation carried out, there are less than 1Km in the nearby
surroundings. only __ store(s) with similar characteristics to ours distributing ice cream
brand X. And over a greater distance range, an average of 3 km. Around there are some
__ similar ice cream parlors whose level of service, according to what has been verified,
corresponds to: (good, bad, average).

It was found that the other stores that will compete with our business have a low level of
demand on Mondays and Tuesdays, a level of regular clientele on Wednesdays,
Thursdays and Fridays and a high level of sales on weekends, being Saturdays and
Sundays are the days preferred by customers for the consumption of our product.

Business Location
Our business will be located at the following address __________________________.
The recommended measurements for a kiosk are: 4 to 6 m2
The recommended measurements for a store are 20 to 30 m2, considering the
possibility of offering tables and chairs to customers for local consumption of the product.
The estimated rent for a kiosk depends on the location, but a recommended range of:
US$100 to $200 if it is a neighborhood or residential area
US$200 to $300 if it is an accredited shopping center and depending on the visibility and
traffic of people passing through the point
For a store, consider equivalent values depending on the size in square meters of the
premises to be rented.

Schedules
Considering that the days of greatest demand at the ice cream parlor are weekends, the
following customer service hours are established:
Monday to Friday, in the afternoons from 2:00 p.m. to 7:00 p.m.
Saturdays and Sundays all day from 10:00 a.m. to 7:00 p.m.
The possibility of special hours requirements in shopping centers should be considered
if they are located there.
Business Management and Operation
The business will be attended personally by its owner during the week and by a hired
collaborator for the weekends. The owner will be responsible for making decisions and
will supervise the proper operation of the business during the weekends, and must
consider visiting the business on Saturdays and/or Sundays to ensure that it is running
properly as one of his or her duties.

Additionally, the owner will function as administrator and must take care of important
aspects such as: product purchases (inventory), control and payments of services,
administration of all accounting aspects that include tax payments and billing, premises
payments and salary(s).

Possible risks
Among the risks to which the business and its operation could be exposed are:

 Little clientele: if the location is not appropriately chosen or if the access conditions to the
premises are not adequate
 Insecurity: also depending on the location of the business and opening hours.
 Few sales: if product inventories are not properly managed and the customer will not find what
they are looking for.
 Few sales: if the personalized attention provided by the owner and the clerks were not of
excellent quality
 Financial risks: if the business finances are not managed correctly. For this it is essential to
have a budget and respect it.

Financial Plan (in us$)

Origin of initial investment funds:

Initial capital available in cash: $1500

Initial capital from credit: $2500
Capital for initial investment: $3000

Use of funds (Initial Investment)

Franchise cost: $2000*
Local rent deposit: $150
Initial investment in product: $200
Furniture: $200
Working capital: $4000
* Estimated average of the different ice cream franchises available in Latin America
that regularly includes: right to use the franchise, training, promotional support,
decoration and painting of the premises and an initial (variable) amount of product.
Working capital refers to an amount of money that supports the business until it is self-
financing and begins to generate profits. Banks usually use this data as a reference to
the potential of the business and usually do not grant loans when the credit projection
corresponds to very long terms.

Budget for fixed monthly operating expenses:

Services (water, electricity): $75

Local rent: $150
Investment in product $500
Promotion and marketing $75
Administrative expenses: $200
Bank credit payment: $100
Maintenance $50
Depreciations $50
Salaries $150
Total: $1350

Financing Plan (Credit)

To support the business, a bank loan of US$ 2,500 is considered, which will be paid
over 36 months with an estimated interest rate of 15% with amortizations of about $100
per month.

Estimated Sales (Daily Average)

The following are estimated sales with the accredited business with a minimum of 6
months of operation. At first, as the business becomes known, these numbers can vary
drastically.

About 40 ice creams or snow daily worth $0.15 total $6.00

About 20 flavored ice creams worth $0.50 total $10.00
About 20 medium ice creams worth $1.00 total $20.00
About 10 large ice creams worth $1.50 total $15.00
About 2 quarts of ice cream worth $3.00 total $6.00
About 2 half gallons of ice cream worth $5.00 total $10.00
About 1 gallon of flavored ice cream worth $8.00 total $8.00

Approximate daily sales total: $75.00

Weekly sales total $525.00
Total monthly ice cream sales $ 2100.00
Total monthly sales of soft drinks $ 200.00

Approximate net profit of the business:

Total monthly sales: $2300.00

Total operating costs: $1350.00
Profit: $950.00

Annex 1 - Competitive advantages of acquiring a Franchise

Of course, the numbers stated above may vary depending on a series of variables
related to operating costs, but especially with the selection of the franchise to choose
since the prices, variety and quality of the product vary from one brand to another.

However, among the main advantages of working with an ice cream parlor franchise we
can mention:

 Endorsement of a renowned brand

 Business knowledge (know-how)
 Experience
 Guaranteed product quality
 Personalized training
 Marketing and image support
 Growth opportunities

Annex 2 - Strategic aspects:

The consumption of ice cream is a usually familiar, very pleasant activity that for the
customer represents "enjoyment" and that is precisely where the success or failure of
whoever operates this business lies.

 Kind and careful attention is required

 Children should be treated with special care
 Cleaning of the premises
 Promptness of service
 Prices appropriate to the socio-economic level of the sector
 Variety
 Pleasant atmosphere
With options as diverse as soft ice cream, smoothies and artisanal ice cream,
this line of business represents an investment alternative for those who have a
taste for the food industry and a passion for service. Your audience will range
from children to older adults, whom you can conquer with innovation and
top quality products .

Model. Independent ice cream shop selling premium products (gelato),

smoothies, coffee, tea and various desserts. It has tables and chairs for on-site
consumption, as well as service for motorists. Open Monday to Sunday from
10:00 am to 9:00 p.m.
Target audiences. Men, women and children of all ages, with a taste for ice
cream and desserts, of socioeconomic level A, B and C+.
Infrastructure. Local of 130 square meters in neighborhoods with high
population density and guaranteed pedestrian flow. It is recommended to be
“anchored” to restaurants and gastronomic businesses. Must have parking or
valet parking.
Equipment. Italian display case with capacity for 24 vasquetas (ice cream
containers). Production area equipped with pasteurizer, butter, freezer, work
tables and various utensils. Also 22 tables with four chairs each. Four rooms.
Audio and video equipment. Health services for men and women. It has
closed circuit television.
Staff. Eight employees (two at the bar, a cashier, a production manager, a
cleaning person and three on the floor). The accountant and valet parking are
hired through outsourcing.
Initial investment: $1,568,000
Profit margin: 18 to 25 percent.

Flexible, dynamic and creative. Full of flavor, concept and tradition. This is
what ice cream parlors are like, a line of business that in recent years has
flourished thanks to a new wave of consumers eager to try new combinations,
flavors and types of ice cream. And if this product - whose creation is
attributed to the Chinese 4,000 years ago - is characterized by something, it is
because of its democratization, since there are ice creams for $12 or less per
serving, as well as others that, due to their ingredients, can exceed the prices.
$60 per ball.

Despite this, in Mexico per capita consumption of ice cream remains low.
According to the organizers of the 2014 International Ice Cream Fair, an
event that was held in Mexico City during the first quarter of the year, per
capita consumption does not exceed two liters per year, a figure that is far
from 14 liters. that are reported in the United States, for example. This
represents a window of opportunity for those who want to join the value
chain as retailers, as long as they offer different concepts, quality and
services.

Specialists estimate that the Mexican ice cream market is valued at US$850
million. He considers that its growth is linked to several factors, such as the
purchasing power of the population, the consumer's acculturation in terms of
ice cream and the launch of ice cream parlors that operate under a concept
that increases their income with the sale of cakes, coffee, tea and even some
dairy products such as milk and yogurt.

Are you interested in the twist ? Forward! But first analyze the fine points.
To begin with, take into account that ice cream is, without a doubt, a versatile
food that is loved by children and adults. It is usually consumed throughout
the year, although there is a peak between February and August, which is
precisely the warmest season. However, December is also a good month.

Experts in the industry divide the product between hard and soft. This is
based on its consistency, ingredients and preparation processes. Hard ice
cream, for example, is usually served in scoops on traditional wheat flour
cones or baskets. Or, it is used as a base for the preparation of various
desserts .

Depending on its ingredients and preparation, it is subdivided into artisanal

and industrial ice cream. The first includes manual processes based on
original recipes from traditional ice cream makers, with natural ingredients
such as dairy products (milk and cream), sugars (sucrose, fructose),
flavorings (chocolate, fruit juices and pulps), eggs and other additives.

In addition, it is usually prepared every day. And although it is made with the
latest technology machinery, such as butter makers and pasteurizers, it retains
its natural spirit thanks to its ingredients that guarantee a minimum fat
content. Its main protagonist? Gelato , characteristic of Italy.

On the other hand, industrialized ice cream is the result of a mixture of

processed ingredients (sugar, flavorings and colorings) to which you only
have to add milk and/or water to obtain large quantities of product, which can
last several months in the freezer. Those of this type are usually moderately
priced, are widely accepted and are known as American-type ice cream.

What about soft serve ice cream? It is a very popular aspect, with the yogurt-
based product being one of the most “blockbuster” versions due to the
possibilities it offers to create diverse combinations from toppings and
syrups.

These aspects, with their respective variants, have a potential market that is
worth exploring. Thus, while many children and young people have a
preference for standard-priced soft ice cream or an American-style ice cream,
adults look for something more elaborate like gelato. Be careful: the latter can
be more expensive and is a product that also increases the average ticket.
The recommendation is to analyze these aspects to develop your business
model. Remember that each of them requires different machinery and
furniture, as well as the development of an ad hoc concept for the type of
product that is going to be sold.

2 Startup
One of the first points that you will have to resolve before starting the
operations of your ice cream parlor refers to your commercial premises .
Make sure it is located in an area that guarantees a high pedestrian flow,
whether in a shopping plaza, near a park and/or in a mixed-use area (housing
and commercial).

According to industry experts, road axes and large avenues are not
recommended. The reason? This is because the bulk of consumption comes
precisely from impulse purchases made by ordinary people.

City or beach? Rodolfo Martínez, founding partner and general director of

Gelatieri , an Italian ice cream manufacturing company and one of the most
famous ice cream parlors in the Roma neighborhood of Mexico City, explains
that cities are a better option since they guarantee a constant flow of potential
buyers. .

“Unlike what everyone may think, beaches are not a good option. I have seen
many ice cream parlors fail in these places, because they depend totally on
tourism and in this business you cannot afford to close a single month a
year,” adds the businessman.

The dimensions of the premises depend on your business model . Gelatieri,

for example, started with a 130-square-meter store, which it adapted to an
architecture with industrial touches that contrasted with the comfort of its
tables and armchairs, and the view of an Italian display case with containers
of artisanal ice cream made in the same place. . Obviously, there are other
concepts.

Helado Obscuro is proof of this. Located on Córdoba Street in the Roma

Norte neighborhood of the Federal District, it has a peculiar concept by
offering a menu of 59 flavors, among which stand out products prepared with
tequila, vodka, mezcal, whiskey and cognac, which when mixed with
ingredients Various products such as chocolate, fruits and marshmallows
result in a different ice cream.
The creator of the concept is Romy Gutman, creative director of the place and
designer of all the recipes, who says that her idea was born when almost by
accident mixing mezcal with lemon snow, finding a formula that has served
as a differentiator: popsicles, ice creams and sorbets with alcohol. Although
these ice creams have been widely accepted by consumers, Gutman and his
partners produce AA (non-alcoholic) ice creams to meet the needs of those
who prefer a more classic product.

In addition to these concepts there are other more traditional ones. For
example, there is Roxy , which has been known for 46 years for selling
artisanal ice cream prepared with natural ingredients and the recipes of its
founders, Carlos Gallardo and María Luisa Rubio. Its decoration is far from
any presumption and in each of its six branches in Mexico City it offers a
relaxed atmosphere reminiscent of the soda fountains of the 1950s.

Another option is Helados Santa Clara , a company that operates under the
concession system and a standardized image, whose central elements are its
Italian showcase and minimalist furniture. In addition to ice cream, this brand
sells popsicles, milk, yogurt, cream, cheese and coffee. Regardless of the
concept you develop, it is important that you take care of other aspects such
as parking and the security of the place.

3 Custom equipment
The equipment of your business will depend on the type of products that your
menu includes. Making soft ice cream is not the same as making gelato, says
Francisco Bañuelos, head of Marketing for Mexico, Central and South
America at PreGel América, a company specialized in the sale and
distribution of supplies for the ice cream industry. “There are different types
of machines. For example, if you are going to sell a gelato, you will need a
pasteurizer and an Italian butter maker; But if you plan to sell soft ice cream,
you will definitely require another type of machine,” he emphasizes.

This machinery works on electricity and the latest generation machines are
very silent. They generally have six or eight cooling levels and various
functions to give consistency to mixes.

You will also need a freezer and a display case. Those of Italian origin are the
most attractive and recommended. Its capacity ranges between 12 and 36
vasquetas (ice cream containers), although a good measurement is 24.

If you opt for a soft-serve ice cream parlor, you will require a special
machine that mixes and cools the ingredients, while also acting as a
dispenser. These devices run on electricity and have eight levels of cooling.
Or, you can consider the alternative of selling the ice cream from a third
party. In this case you will only have to invest in a freezer to preserve the
product and a refrigerated display case.

The cost depends on the capacity, brand and origin of the equipment, says
Pedro Aparicio, general director of Emerymark , a manufacturer of machines
for the production of cold desserts, ice cream and popsicles. For example, a
pasteurizer of this brand costs between $140,000 and $260,000, depending on
its capacity. The first produces 10 liters of ice cream every ten minutes, a
good option to start with.

The ice cream base manufacturer also highlights the importance of obtaining
quality equipment that has a guarantee and service. “There are very good
Mexican teams, which offer quality and efficiency; while there is Asian
machinery that, although it may be cheaper, is not always the best option due
to lack of components or spare parts,” he warns. Therefore, the advice is to
approach a recognized supplier in the market that offers quality, service and
guarantee. Ask, investigate, test and remember that your investment is at
stake.

4 Basic inputs
The supply of raw materials for an ice cream parlor is aligned with the
demand for the product and, of course, the business model. While an artisanal
ice cream parlor requires the purchase of natural products every week, an
establishment that works based on industrialized mixes or bases for
American-type ice cream can even be supplied every 30 days. This is because
the preparations can last several months. Of course, as long as they are
protected from light, dust and ambient humidity.

Regarding cones, napkins, cups, baskets, spoons and straws, it is enough for
your supplier to supply you every week or every fifteen days, depending on
your needs. In any case, it is important to build a portfolio of suppliers and
not marry one until you are sure that they have the quality of the supplies that
your ice cream parlor needs. As an additional recommendation, it is worth
paying special attention to inventory management, in order to ensure that the
containers are always full and no flavor is missing from the display case.
Your clients will appreciate it.

5 Tips from the experts

Although in the market of Mexico and Latin America in general there are
many ice cream parlors with American-type products, little by little, there is a
change towards more elaborate technologies and processes to make richer or
gourmet ice creams. Francisco Bañuelos, from PreGel América, explains that
consumers are beginning to become cultured in terms of ice cream and are no
longer satisfied with an industrialized product, but are looking for flavor and
quality .

Faced with this panorama, entrepreneurs need to find new formulas to attract
and retain their customers, which can be achieved with a quality product and
a concept that not only sells a product, but also provides an entire consumer
experience .

Therefore, it is essential to take care of the quality of the ice cream, train
employees and supervise the processes. “Ice cream is a delicate product. If
you do it wrong it can be greasy, cloying or crystallized. On the contrary, a
well-balanced ice cream can be warm to the palate and have a perfect flavor,”
adds Bañuelos.

To get to this point there is no other way than training . Generally,

machinery and input distribution companies offer courses to operate
equipment and prepare ice cream. There is also the option of taking a diploma
with the ice cream gurus in Italy, or if your budget is smaller, seek instruction
in pastry and/or gastronomy schools.

And the art of ice cream requires dedication and knowledge, which is why
anyone who has undertaken this field recommends training one or two
employees in the subject of production. “There are many fine points. For
example, ice cream has to be kept at minus 20 degrees Celsius, but when
served it must be between minus 15 and minus 16 degrees Celsius. This is so
that it is spreadable,” says Rodolfo Martínez, founding partner of Gelatieri.

Likewise, it is important to take care of the cold chain, since any oversight
(such as a voltage drop) can alter the consistency of the product or favor its
decomposition. To avoid this, it is recommended to consult with an electrical
technician who verifies that the equipment works with the appropriate
voltage and obtain an automatically activated light plant.

Another essential point is to have a freezer to store the ice cream overnight.
This is so that the display case “rests” during that period and is kept in
optimal conditions for longer. “To do it, just take out the vasquetas, cover
them and put them in the freezer. The display case works at minus 15 degrees
Celsius and the freezer at minus 20,” explains Rodolfo. Be careful: there are
Italian display cases that exceed $200,000, hence the importance of extending
their useful life by turning them off at night.

Don't forget to fumigate your business every two or three months (to avoid
crawling fauna) and establish control measures among your collaborators to
limit losses in the production area and on the counter. A good measure is to
install closed circuit television and inventory the warehouse at least every
fifteen days.

Finally, consider developing a marketing plan . Start by registering your

brand, personalizing napkins and glasses, and uniforming your staff (you can
embroider your company logo on their t-shirts, aprons, and caps).

Some more recommendations: create an institutional message to receive and

say goodbye to your clients, take maximum care of the decoration and
hygiene of the place and work intensively on the service. Remember that the
consumer is the reason for being. So build loyalty with periodic promotions.
To do this, you can establish a loyalty system or special discounts for
birthdays or anniversaries, for example.

6 How to sell more

Because an ice cream parlor has very marked peaks (and falls) throughout the
year, it is advisable to leverage its growth with alternative business lines such
as selling cakes, coffee, tea and dairy products. You can even expand your
business domains into catering for all types of social events, says Romy
Gutman, owner of Helado Obscuro.

The entrepreneur offers her ice creams at private parties, weddings, XV years,
expos and inaugurations, concerts, activations, brand presentations and
corporate events, among others. Another alternative is to invest in two or
three ice cream carts to take your product to places other than your location.

Helado Obscuro, for example, uses them to attend social events. Their
packages start at $4,600 (plus taxes) and include 15 liters of ice cream or 120
popsicles, two uniformed assistants, three hours of ice cream cart service, and
handling of disposables.

Another option is to produce ice cream for third parties, such as restaurants
and hotels. Gelatieri is proof of this. In addition to having points of sale for
retail sales, it has an Italian-type artisanal ice cream factory made with 100%
natural and preservative-free raw materials imported from Italy.
One of its recent innovations is an ice cream made with non-caloric sugars
and free of fat , for all those who have a medical impediment, such as
diabetes, or whose lifestyle is focused on eating a healthier diet, says
Rodolfo.

Just like these successful entrepreneurs have done, you too dare to innovate.
Study your market, know your product in depth and develop new proposals
that the consumer will fall in love with.