Nobody wants to miss out on enjoying ice cream on random occasions, gatherings, and even holidays, whether it’s winter, summer, or monsoon. Ice cream is more of a preferred consumable, with high demand all year round but especially in the summer. Since India’s dairy industry has developed a footing and the temperature is sweltering, the ice cream business can be an attractive retail food venture. The younger generation’s preference for eating outside is the key cause for the increased demand for ice cream shops.
Amidst intense competition and the launch of new brands nearly every month, the ice cream sector is doing exceptionally well. Because an ice cream store focuses on a particular type of food, the cost of the ingredients is comparatively inexpensive. Aside from that, ice cream shops are often small enterprises, thus compared to other restaurants, the cost of renting a space and covering utility costs may also be minimal. Let’s proceed with the factors to consider while thinking how to start an ice cream business.
Is it necessary to create a strategic plan for my ice cream parlour?
The ice cream industry is incredibly competitive. It is relatively simple to find ice cream-focused brands, fast food chains that provide the dessert, and individual vendors. Not every brand or up-and-coming ice cream business will likely dominate the market share.
You’re on the correct track if you’re considering opening an ice cream parlour business. According to a recent FICCI analysis, the market for frozen desserts and ice cream would reach a whopping 1 billion USD by 2022. The survey also demonstrates that the demand for ice cream in India is rising annually. Therefore, we can say with confidence that an ice cream store business strategy can be quite profitable if planned well.
In an ice cream shop, different customers have different needs. Some prefer the classic version without exotic flavours or new trends like nitrogen. While some customers might prefer a more exclusive experience. Regardless of current trends, creating a business plan for your ice cream parlour is crucial to help you identify the type of facility you want to create and the genre you are considering while keeping in mind your target demographic, location, and other crucial logistics.
This article will show you how to start an ice cream shop in India. If you want to know if an ice cream business plan is the best option for you, keep reading.
Step 1: Market Research
Launching a profitable ice cream business starts with careful market research. Ice creams are no longer considered a cheap delight offered from carts by local vendors. Ice creams are currently in the top tier of sweets. There is a huge market for upscale ice cream shops, unique flavours, and nutritious ice cream delights. You must grasp the potential of the neighbourhood market before creating an ice cream business plan. Conduct market research to learn about local consumers’ expectations, the options currently on offer, and what’s missing. Your business’s path will become clearer as a result of this.
Also, read – 25 Food Business Ideas in India [With Low Investment]
Step 2: Choose the Format of Business
There are different kinds of ice cream shops like small take-out-only kiosks at malls, on beaches, and in other heavily populated areas
takeout/sitting restaurants, or specialized or theme-based ice cream parlours. Choosing the ice cream business model is the first step. After you have assessed the format, the following step is to decide whether you wish to make ice cream and market it under your own name or choose a franchise model where you sell ice cream from a different company.
Step 3: Make a list of the products you want to sell.
You don’t have to build a thorough menu at this point, but it’s a good idea to have a general concept of the types of ice cream items for a shop that you want to sell. Ice cream is a broad term that covers a variety of flavours, including:
● Ice cream with real milk
● Slim-down ice cream
● Ice cream in prepackaged form
● Ice cream treats
● Frozen yogurt
● Cakes with ice cream
● Milkshakes with ice cream, etc.
After selecting your products, you can concentrate on other ice cream business ideas like store layout, marketing strategy, menu, etc.
Step 4: Determine Your Store’s Location
In marketing lingo, ice cream is classified as an impulse purchase. As a result, people frequently buy ice cream on the spur of the moment. It is advantageous to have a store with a high footfall. People are probably tempted to make a purchase when they see others buying your product and enjoying it. Here are some ideas to have in mind while you look for a place for your ice cream shop:
● Optimum visibility to lure passersby.
● Look for stores that have sizable see-through glass to maximize the appeal.
● Ice cream shops do well in malls because of the constant foot traffic.
● A minimum of 400 to 500 square feet is required. If you want to set up a fancy café, you should look for parlours with at least 2500 to 3000 square feet.
Once more, the amount of space needed will depend on how your ice cream shop is set up. You will require additional space for the kitchen, cleaning spaces, etc. if you are creating ice cream in-house in a commercial kitchen.
Step 5: Purchase Equipment and Hire Employees
The machinery and ice cream shop equipment make up the bulk of an ice cream shop’s investment. The franchiser will take care of all the equipment and machinery if you wish to open an ice cream shop under their ownership. The franchise fee includes the cost of the equipment.
You will need to buy the following items in this ice cream shop equipment list if you’re starting your own brand:
● Industrial ice cream makers
● the deep freezer
● cabinets for storage
● cabinets for dipping ice cream
● packaging supplies
● plates and cutlery for serving
● chairs and tables
● a silent generator and UPS for constant power backup
● POS billing software
The following stage is to assemble your team. You will need to hire ice cream chefs, kitchen staff, serving crew, cleaners, etc. depending on the store style. Take a specialist ice cream-making course to gain knowledge of the process’s technicalities if you wish to manage the firm yourself.
Step 6: Plan Your Costing and Profit Margin
A reasonable ice cream parlour setup cost of the equipment needed for an ice cream shop includes a Cold Stone refrigerator (Rs 2-2.5 lakhs), a 500-litre chest refrigerator (Rs 40,000), storage cabinets and cutlery (Rs 30,000), raw ingredients and packaging (Rs 1-1.5 lakhs), and miscellaneous (Rs 50,000). Power backup is important for an ice cream shop because melting ice cream is the main source of waste in these businesses. Ice cream can be kept for two hours in a good refrigerator, but if there is a power outage that lasts for several hours, you are in trouble. So keep in mind to choose a top-notch quiet generator. This is available for less than Rs 1 lakh.
Since ice cream falls within the food category, all the permissions needed are relatively similar to those of a QSR: shop establishment licenses, FSSAI licenses, local municipal authority licenses, and fire licenses. A total of Rs 50,000 ice cream shop start-up costs are expected. To obtain the necessary permissions, it is usually advisable to seek out professional help. Since the process takes a lot of time, you can focus on other business-related tasks. Since ice cream is typically eaten as a dessert, the peak hour for ice cream sales is from 9 PM until midnight. To operate your ice cream shop until the wee hours of the morning, obtain the necessary licenses. The license Required are-
● Sales tax Registration
● FSSAI License
● GST Registration
● Firm Registration
● Business Pan Card
● Trade Mark & Trade License
Also, read – What licenses are needed to start a restaurant in India
How much of a profit margin should I maintain in my ice cream shop?
Ice cream should have a profit margin of between 30% and 40%, but this depends on your market as well. Consider that you have developed your own brand and are producing and marketing ice cream under this name. In that case, you must estimate making costs and other related expenses before calculating the profit margin. Your ice cream’s selling price also depends on a number of other things. Your ice cream shop’s profitability will be greatly impacted by its location.
The location is very important in increasing your revenues. The profit margin for franchise owners, that is, if you have accepted a franchise to sell another brand’s ice cream, can be a little low because a specific proportion of the total sale amount is to be given to the main ice cream factory. The profit margin in the ice cream manufacturing industry will vary since each company will have a different cost of production, but on average it ranges from 15% to 35%.
Step 7: Incorporate Selling Tactics
If you are thinking how to improve ice cream business, check out these smart selling tactics to increase your ice cream business revenues-
● Promote Your Store– Posting pictures of your delicious ice cream delights on Instagram and other social media apps is the most effective way to sell your ice cream parlour. The ideal strategy to attract ice cream lovers to you is to share your best pictures and urge your customers to leave reviews.
● Offer discounts and deals– Customers will swarm to your ice cream parlor in droves if you provide deals and discounts. You can provide discounts for children to encourage parents to spend more money on ice cream. A wonderful strategy to get rid of extra ice cream is to offer two-for-one deals or “happy hour” discounts on particular ice cream varieties.
● Increase your sales volume– Another excellent technique to boost ice cream store income is to sell ice cream by gallon or pint. People enjoy purchasing ice cream to store and eat later. You can sell it “off the cone” to boost ice cream sales.
● Distribute samples– Never underestimate the power of a free-tasting sample. Free samples draw a flurry of customers when offered. Once they’ve tasted the delectable pleasure of this creamy delight, many customers find it difficult to resist buying ice cream.
The Last Step: Opening Your Parlor to the Public
There you go. You have now mastered the fundamentals of starting an ice cream business. Just keep in mind that these are the basic rules. Along the journey, you’re likely to face further challenges. But keep going; concentrate on what you love. Always keep in mind your aspirations and the primary driver behind your decision to open an ice cream shop. Follow your heart, use your imagination, and open a unique ice cream shop that stands apart from the competition.