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NOV.19, 2020

Ice Cream Business Plan Sample

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ice cream shop business plan

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Table of Content

    Ice Cream Shop business plan for starting your own ice cream shop

     The primary purpose of this ice cream shop business plan is to highlight the parameters by which principals will continue to build, develop, and operate an ice cream shop, which owns a prominent location.

    Kevin D, the managing director of the ice cream shop, and the owner of the Ice Shop Company, Inc., are confident and eager to find a larger store within Texas (United States).

    Kevin D, The American Ice Shopping Company, Inc., and owners Marry, and Evan Dwyer hope the store will be a success among other national stores already committed to doing business in Texas.

    How to open an ice cream store

    To open an ice cream store, it is very important to have a parking space. Buying ice cream is usually the customer’s impulse decision. Therefore, an ice cream shop should be easily accessible and have adequate parking. Find a location near businesses such as markets, baby clothing/toy stores or family restaurants.

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    Executive Summary

     Kevin D (owner), of the Ice Cream Shop, this single retail store will sell the ice creams and related products, all of which will be made by the owner under its own name.

    Proceeds will be primarily from the sale of ice cream and related products consumed within the Davis Plaza. Owners will also sell ice cream cakes, traditional cakes, birthday cakes and cola products. Sales in the first year are expected to reach $74,890.00 and will grow at an average annual rate per year for the first five years of operation.

    How to start a business?

    Ice Cream Business Plan - Startup Cost

    Landlord business plan
    Helps commercial tenants get landlord approval.

     In this Ice cream startup business plan, we expect the initial required costs of $75,000 to $100,000 based on the cost of starting the ice cream shop and other liability. We are not expecting for the loan as of now. Therefore, we will be bearing the startup cost initially.

    Start-up Expenses
    Legal $675
    Stationery etc. $250
    Brochures $0
    Consultants $550
    Insurance $282
    Rent $2,105
    Research and Development $1,200
    Expensed Equipment $0
    Other $0
    Total Start-up Expenses $5,062
    Start-up Assets    
    Cash Required $24,818
    Start-up Inventory $320
    Other Current Assets $0
    Long-term Assets $69,800
    Total Assets $94,938
    Total Requirements $100,000.00

     

    How to implement business management?

    The principals, themselves, will manage this ice cream business plan. A qualified person will be the hand-in-hand manager for the day-to-day operations of the shop, with the help of the department. The manager will have the following responsibilities and perform the following duties:

    Customers of ice cream shop

    Without any customers, it doesn’t matter how big your ice cream is. Customers are the most important thing for any business to succeed. How to promote your new ice cream business?

    Well, there is the old-fashioned way and the modern technological way. You have to do both!

    What target of this business?

    The main goal of the ice cream startup business plan is to offer products related to ice cream advertising to large and small stores at regular national and international discounts on regular wholesale-purchase orders at competitive rates. We want to stand out from the other shop owners and offer a wide range of products that surpass our competitors, thus making our ice cream business plan a more attractive option.

    Any questions? Get in Touch!

     Company Summary

    The company will be owned by Kevin D and one or two additional partners. Currently, no investment has been received from the other owners. However, it will hold a majority stake in the company under Kevin’s control. A buy/sell agreement with other investors will be established when a limited liability company (LLC) is formed to allow an exit strategy for one or all investors.

    Business Plan for Investors

    • Plan your business

    When starting an ice cream shop, the business/startup, the shop owner will involve a consultant to help implement a business plan early on. Ice cream shop or store Expenditure Budget / Funds for a Startup – Comes from legacy and business credit.

    • Define your brand

    The ice cream shop’s measuring stick will be its unique approach to how to start a ice cream shop for personal customization based on customer satisfaction and customer needs. No customer is the same; they will not be treated generously. We are not only another shops, we

    • How to advertise and market a business

    In the business plan for ice cream store, will be very involved in the promotion and marketing of the social media market. Digital marketing is at the heart of any successful ice cream business plan today. Instagram, Twitter, Facebook, and LinkedIn will be the main target areas. A full-time digital marketing expert will be hired to run this page of the business to maintain its presence online.

    • Establish web presence

    A new website is currently under construction to engage the most effective web presence. It engages customers and gets new ones. Customers can order online as well as go to the store. Thus, it attracts a large customer base. Staying up to date with Google Analytics is key to maintaining a high search level.

     Company owner

    The owner of the ice cream shop is a young man Kevin D who has a career in university. Kevin D comes from a family that has been in the ice cream and custard/food industry for two generations and dreamed of one day owning his own ice cream shop business. His knowledge of the field of food industry is immense, and his effort will be greatly appreciated.

     Why the ice cream shop is being started

    Coming from a long line of family business owners, he always knew that he wanted to create his own identity in life, to be his own boss, to create his own new company from scratch. With this in mind, the university was her starting point. They need to gain more knowledge than she already has to ensure the success of her ice cream business plan.

     How the ice cream shop will be started

    A lucky legacy enables the birth of an ice cream shop with a small business loan and the business plan for ice cream store. Besides, help from a business partner, consultant, and family business owner, the business will be operated.

    Products

    In the sample business plan for ice cream shop, the owner is highlighting that the customers can choose the taste of frozen custard (vanilla, chocolate and one or two additional daily flavors) and then mix it with the Italian ice flavors of their choice (more than 30 flavors are offered daily to the customers). In addition, the customers can enjoy their desserts in a warm, soothing atmosphere like the upstairs of the ice cream shop.

    The Products

    1. It tastes rich because it is made with an egg base.
    2. Low in fat and sugar than most premium ice creams
    3. Smooth and creamy texture.
    4. Taste of antique home (made fresh every day.)
    5. High density (it fills more than soft service due to low wind gusts.)
    6. Italian ice

    Fruit-flavored ice cream with a smooth texture (very small ice crystals)

    1. A sweet and fat-free frozen product
    2. Made without milk or egg products
    3. Made with real fruit concentrate
    4. The consistency of a slash

    Marketing Analysis of Ice Cream Shop Business

    Market Trends

    In recent 4 to 5 years, the ice cream and frozen confectionery industry have seen significant growth. Much of this growth has come in the premium and super-premium ice cream segment. Kevin’s Ice cream shop will serve products that come in the premium ice cream segment. Premium and super-premium products are commonly found in scoop stores such as Goldstone Creamery, Ben & Jerry and Prince Bucklers.

    • 13% over 65 Years
    • 45 to 25% between 45 to 64 Year
    • 25% from 25 to 45 Years
    • 12% from 18 to 25 Years

    Marketing Segmentation

    Customer groups for Kevin’s Ice Cream shop will be:

    Ice Cream Business Plan - Market Segmentation

    Any questions? Get in Touch
    Potential Customers Growth CAGR
    18-24 Year Olds 3% 38,040 39,181 40,356 41,567 42,814 3%
    First Families 4% 55,852 58,086 60,410 62,826 65,339 4%
    Other 1% 3,160 3,192 3,224 3,256 3,288 1%
    Total 4% 97,052 100,459 103,989 107,649 111,441 4%

     

    1. 18-24 year olds

    For the ice cream business plan project our market research identifies approximately 38,000 customers in the Texas area within this age range. The target customer is going to be the central part of “Ice cream shop”: half college students and half locals. They tend to spend more on expensive products than they buy.

    1. First families

    These are the children who grew up in the Texas and nearby population. Most of their children are not yet teenagers. By targeting this group, we can not only build a large-scale instant business but also build long-term clients in children.

    1. Others

    Increasing our downtown location and customer base will attract customers outside of our target groups, including those attending Saturday market, coming to town to shop, or attending plays or music events. We estimate that this third market segment of about 3,160 people (1% of the total local population) is conservative.

    Business Target

    16-24 year olds age group customers go out for ice cream more than any other age group. Among the 16-24 age group, the “Texas” location is important because they occupy a large area around the store location. They are accessible through music, mostly R&B, and they prefer valuable products that are compatible with our product offering.

    Ice Cream Business Plan - 3 Years Profit Forecast

    What is the target Market?

    The “first families” were chosen because of their growing population, number, and desire to go out frequently for ice creams. Their lifestyle is particular because they are the most accessible group to market. They all have young children, so strategies towards children or child-related markets can be very useful in testing and developing sales.

     

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    In the ice cream businesses, we plan to reach the first families with their children. Kevin’s Ice Cream shop will sponsor a small league ball team and provide free ice creams on days when players win a game. This will draw them and their families to the store.

    How to keep customers coming back?

     We also invite local elementary schools to visit our facilities. We will teach children how to make ice creams with various flavors. We allow each child to create their work; we hope they enjoy their time in our scoop shop so much that they wish to bring their parents back.

    What will be the average receipt of the business?

    The average customer receipt will range from $ 10 to $ 100, depending on the size of the business ordering the ice creams. Items purchased in bulk expect an average of $ 1000 receipt.

    Product Pricing

    Our prices are very low so that even middle class people can buy such products and get it easily. Therefore, our goal is to include all kinds of customers who want to have an unique taste and a variety of ice creams.

    Marketing Strategy

    Our online presence will increase our marketing online in the form of a professional website compatible with mobile phones. We direct traffic through our site by using/delivering an add-on to our customers. It will be essential to create regular food-centric content with keywords that are guaranteed to get high marks in search engines. We post the best offers on social media sites like our Facebook page to engage our followers and buy and click on our website. Using Facebook and Instagram ads for businesses to promote our products will be part of our implementation in Offset.

    Competitive analysis

    Kevin’s Ice Cream Shop has two competitive analysis points:

    1. Rich and creamy, high class, low fat, frozen desserts.
    2. Our friendly, neighborly attitude to our customers.

    Both of these selling points help to achieve the overall goals of a consistent customer base with continuous sales. Our focus on paying personal attention to our customers, and engaging in local events and clubs will set us apart from our competitors.

    Sales Strategy

    Our sales strategy is primarily focused on delivering the highest quality products and services to our target customers. Once a customer enters our shop, it is our job to make sure their experience with us is enjoyable. Product offers and prices are clearly posted behind the counter, and scoopers are educated about the products and processes involved in each, so they can answer all customer questions.

    Sales Monthly

    The Ice cream shop business may not be able to take a profit margin in the very first month, but our plan is to do so in order to mitigate that plan quickly. However, in terms of sales, we expect a rapid increase in the first four weeks of the store.

    Ice Cream Business Plan

    Sales Yearly

    For the First and second years in a row, we expect a total increase of 36-40% in sales due to a modest annual sales volume and the dramatic difference between the monthly average of the opening months and their peers in the second year. In the third year, we expect a conservative 16% increase in sales revenue.

    Ice Cream Business Plan - Seles Yearly

    Sales Forecast

    In the ice cream business proposal, our sales forecast is mainly determined by the foot traffic in the area, the season of the year and the current weather. The sales for the first year will be based on this plan are approximately $70,000.00 to $80,000.00 and $80,00.00 to $90,000.00 for the second year and $90,000.00 to $100,000.00 for the third year.

    Ice Cream Business Plan

    Sales Forecast      
    Frozen Custard $105,600.00 $126,720.00 $152,064.00
    Italian Ice $65,000.00 $78,000.00 $93,600.00
    Total Sales $170,600.00 $204,720.00 $245,664.00
    Direct Cost of Sales Year 1 Year 2 Year 3
    Frozen Custard $58,000.00 $66,700.00 $76,705.00
    Italian Ice $16,890.00 $19,423.50 $22,337.03
    Subtotal Direct Cost of Sales $74,890.00 $86,123.50 $99,042.03

    Personnel plan

    We expect seasonal hiring of part-time employees. Since we do not offer any benefits to our employees, full-time employees will not be hired in the first year.

    We expect two or three part-time employees to start working in May, except for two or three employers. Our two or three employees will share the hours per week because we expect the paid employee to work an average of 5 hours a day, seven days a week.

    Company Staff

    What staff needed to open a company?

    For opening an ice cream shop or company the basic staff will be sufficient, which are as below-

    1.  Part-time employees
    2. Owner – Kevin D
    3. Other Owner(s)

    Average Salary of Employees

    How much costs average salary for all employees?

    To start an Ice cream shop business, the following table describes the average annual salary of each employee and the total salary for the next 3 years –

     Personnel Plan      
    Year 1 Year 2 Year 3
    Part-time employees $30,000 $34,500 $39,675
    Owner – Kevin D $41,000 $47,150 $54,223
    Other Owner(s) $10,000 $11,500 $13,225
    Total Salaries $81,000 $93,150 $107,123
    Any questions? Get in Touch!

    Financial Plan

    The growth is expected to increase from the second year of the owners of Kevin D’s ice cream shop. In addition, there will be a need of some extra fund to maintain the required inventory levels and to purchase additional inventory if sales are higher than expected. No other immediate financial needs are expected.

    Important Assumptions

    An important assumption is the initial sales forecasts. We made this estimate based on an hourly average found at a local ice cream shop. We are significantly reducing the number due to the weather, our unknown brand name, and foot traffic. These ratings are very conservative, and we expect real sales to surpass them immediately.

    General Assumptions
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 10.00% 11.00% 12.00%
    Long-term Interest Rate 10.00% 10.00% 10.00%
    Tax Rate 26.42% 27.76% 28.12%
    Other 0 0 0

    Brake-even Analysis

    The gap-equivalence analysis shows that Kevin’s Ice cream shop has sufficient sales strength to be viable. Our breakpoint is $$6,719 per month. We estimate our average selling price to be $2.50, which is the approximate selling price for medium-sized ice cream at our retail outlet.

    Ice Cream Business Plan - Break-even Analysis

     Break-Even Analysis  
    Monthly Revenue Break-even $6,719
    Assumptions:
    Average Percent Variable Cost 26%
    Estimated Monthly Fixed Cost $4,972.00

    Projected Profit and Loss

    In the first year, we expect a Profit of $10,000 to $12,000. This is mostly due to losses incurred in the opening months and continued pay and other expenses. Next year, we expect to see a steady and steady profit level of $17,000, to $18,000 and we expect our profit to rise to $27,000 to $29,500 in the third year.

     Pro Forma Profit And Loss      
    Sales $1,70,600 $2,04,720 $2,45,664
    Direct Cost of Sales $74,890 $86,124 $99,042
    Other Costs of Goods $0 $0 $0
    Total Cost of Sales $74,890 $86,124 $99,042
    Gross Profit $95,710 $1,18,597 $1,46,622
    Gross Margin % $1 $1 $1
    Expenses      
    Payroll $81,000 $93,150 $1,07,123
    Sales and Marketing and Other Expenses $8,150 $4,800 $4,800
    Depreciation $4,668 $4,668 $4,668
    Rent $12,660 $12,913 $13,171
    Utilities $12,400 $12,400 $12,400
    Insurance $1,692 $1,692 $1,692
    Payroll Taxes $0 $0 $0
    Other $0 $0 $0
    Total Operating Expenses $81,000 $93,150 $1,07,123
    Profit Before Interest and Taxes $14,710 $25,447 $39,499
    EBITDA $14,710 $25,447 $39,499
    Interest Expense $3,536 $3,536 $3,536
    Taxes Incurred $0 $4,601 $7,552
    Net Profit $11,174 $17,309 $28,411
    Net Profit/Sales 6.55% 8.46% 11.57%

    Profit Monthly

    The initial months’ profit we make can sustain all our operations and give us enough dividends to invest in the future growth of the ice cream business.

    Ice Cream Business Plan - Profit Monthle

    Profit Yearly

    As already mentioned, we may be at a loss for the first-months operations, but we expect to touch the profit base within 3 or 4 months of operation so that our annual profits can recover all the losses.

    Ice Cream Business Plan - Profit Yearly

    Gross Margin Monthly

    In the first 5 to 6 months, the profit margins will be negative; however, we expect a thicker margin base as profits increase.

    Ice Cream Business Plan Gross Magazin Monthly

    Gross Margin Yearly

    Annual margins will be better in the upcoming years. Also, this will help us expand our business and reach a more extensive customer base.

    Ice Cream Business Plan - Gross margin Yearly

    Projected Cash Flow

    Kevin’s Ice cream shop expects to manage the cash flow in the first year with the help of cash and cash reserves from our first year loss of $17,000 to $18,000.

     Pro Forma Cash Flow      
    Cash Received      
    Cash from Operations
    Cash Sales $66,840 $97,760 $113,402
    Subtotal Cash from Operations $66,840 $97,760 $113,402
    Additional Cash Received
    Sales Tax, VAT, HST/GST Received $0 $0 $0
    New Current Borrowing $0 $0 $0
    New Other Liabilities (interest-free) $0 $0 $0
    New Long-term Liabilities $0 $0 $0
    Sales of Other Current Assets $0 $0 $0
    Sales of Long-term Assets $0 $0 $0
    New Investment Received $0 $0 $0
    Subtotal Cash Received $66,840 $97,760 $113,402
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations
    Cash Spending $20,094 $23,837 $30,784
    Bill Payments $52,681 $63,756 $68,288
    Subtotal Spent on Operations $72,775 $87,593 $99,072
    Additional Cash Spent
    Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
    Principal Repayment of Current Borrowing $5,000 $0 $0
    Other Liabilities Principal Repayment $0 $0 $0
    Long-term Liabilities Principal Repayment $7,000 $7,000 $7,000
    Purchase Other Current Assets $0 $0 $0
    Purchase Long-term Assets $0 $0 $0
    Dividends $0 $0 $0
    Subtotal Cash Spent $84,775 $94,593 $106,072
    Net Cash Flow ($17,935) $3,167 $7,329
    Cash Balance $6,883 $10,050 $17,379

    Projected Balance Sheet

    As stated earlier, owners insist on long-term growth in business value rather than short-term returns. Our projected balance sheet shows a decrease in net worth from $6,000 to $7,000 in the first year. However, starting from the second year, we expect our net worth to increase to $5,000 to $6,500 gradually, and by the end of the third year, the value of the company will increase to $21,000 to $22,000.

     Pro Forma Balance Sheet      
    Assets      
    Current Assets
    Cash $6,883 $10,050 $17,379
    Inventory $1,922 $2,811 $3,135
    Other Current Assets $0 $0 $0
    Total Current Assets $8,805 $12,861 $20,514
    Long-term Assets
    Long-term Assets $69,800 $69,800 $69,800
    Accumulated Depreciation $4,668 $9,336 $14,004
    Total Long-term Assets $65,132 $60,464 $55,796
    Total Assets $73,937 $73,325 $76,310
    Liabilities and Capital Year 1 Year 2 Year 3
    Current Liabilities
    Accounts Payable $4,738 $5,285 $5,642
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    Subtotal Current Liabilities $4,738 $5,285 $5,642
    Long-term Liabilities $63,000 $56,000 $49,000
    Total Liabilities $67,738 $61,285 $54,642
    Paid-in Capital $25,000 $25,000 $25,000
    Retained Earnings ($5,062) ($18,801) ($12,961)
    Earnings ($13,739) $5,840 $9,629
    Total Capital $6,200 $12,039 $21,668
    Total Liabilities and Capital $73,937 $73,325 $76,310
    Net Worth $6,200 $12,039 $21,668

    Business Ratios

    Our total margin is significantly higher than the industry average. We believe this is because the vast majority of the industry is made up of large-scale manufacturers using economies.

     

     Ratio Analysis        
    Sales Growth 0.00% 46.26% 16.00% 1.21%
    Percent of Total Assets
    Inventory 2.60% 3.83% 4.11% 14.83%
    Other Current Assets 0.00% 0.00% 0.00% 19.26%
    Total Current Assets 11.91% 17.54% 26.88% 52.51%
    Long-term Assets 88.09% 82.46% 73.12% 47.49%
    Total Assets 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 6.41% 7.21% 7.39% 25.80%
    Long-term Liabilities 85.21% 76.37% 64.21% 25.21%
    Total Liabilities 91.62% 83.58% 71.61% 51.01%
    Net Worth 8.38% 16.42% 28.39% 48.99%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 74.00% 74.00% 75.00% 21.95%
    Selling, General & Administrative Expenses 77.60% 60.27% 58.61% 13.02%
    Advertising Expenses 0.00% 0.00% 0.00% 1.44%
    Profit Before Interest and Taxes -15.26% 12.31% 15.46% 2.11%
    Main Ratios
    Current 186.00% 243.00% 364.00% 174.00%
    Quick 145.00% 190.00% 308.00% 105.00%
    Total Debt to Total Assets 91.62% 83.58% 71.61% 53.74%
    Pre-tax Return on Net Worth -221.61% 69.29% 63.48% 8.09%
    Pre-tax Return on Assets -18.58% 11.38% 18.03% 17.49%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin -20.55% 5.97% 8.49% n.a
    Return on Equity -221.61% 48.51% 44.44% n.a
    Activity Ratios
    Inventory Turnover 1023.00% 1074.00% 954.00% n.a
    Accounts Payable Turnover 1212.00% 1217.00% 1217.00% n.a
    Payment Days 2700.00% 2800.00% 2900.00% n.a
    Total Asset Turnover 90.00% 133.00% 149.00% n.a
    Debt Ratios
    Debt to Net Worth 1093.00% 509.00% 252.00% n.a
    Current Liab. to Liab. 7.00% 9.00% 10.00% n.a
    Liquidity Ratios
    Net Working Capital 406800.00% 757600.00% 1487200.00% n.a
    Interest Coverage -289.00% 326.00% 464.00% n.a
    Additional Ratios
    Assets to Sales 111.00% 75.00% 67.00% n.a
    Current Debt/Total Assets 6.00% 7.00% 7.00% n.a
    Acid Test 145.00% 190.00% 308.00% n.a
    Sales/Net Worth 1078.00% 812.00% 523.00% n.a
    Dividend Payout 0.00% 0.00% 0.00% n.a

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