Factors To Consider For An Ice Cream Business Plan

“And then there is ice cream….” is the sentence that makes everything seem alright. Especially in the times of the pandemic where everyday throws up a new challenge and celebrations have been cut short taking into consideration social distancing and safety norms. For stressful days we are grateful for small pleasures such as a bowl (or maybe even a tub) of ice cream, that makes things seem alright, in that moment at least. And what if you are the source of bringing that smile and moment of happiness to everyone’s face and satiating their sweet tooth by starting your own ice cream business. 

The popularity and potential of the ice cream business is global. Starting an ice cream business is easy and rewarding, especially in a tropical country like India where the warm weather and sunny days outnumber the relatively colder days. The ice cream business market in the country grew at a CAGR of 14.1% during 2014-2019. And over 200 million liters of ice cream was produced in India during fiscal year 2020, which was an increase from the previous year and a significant increase from production volume of about 136 million liters in the fiscal year 2015.

These promising figures prove that an ice cream business plan is a profitable opportunity worth exploring. And the future too seems promising where the global ice cream market is projected to grow at a CAGR of 4.9% during the forecast period (2020 – 2025). And the ice cream market in India is also expected to exhibit strong growth during 2020-2025.

These facts and statistics point towards the popularity and demand of the ice cream business plan and are definitely the incentive you need to start your own ice cream business too. However, before taking the leap, there are certain factors that you need to consider to make a successful start. 

Factors To Consider For An Ice Cream Business Plan

• Idea Validation

A successful business always starts with a validation of the business idea along with its feasibility, followed by a business plan that outlines the path to follow in order to kickstart the business. Validating and planning of business includes assessing the viability of the business along with creating a project report that describes the business, it’s goal and objectives in detail. This helps create a structured business and helps save time and resources as any weaknesses or discrepancies are identified in the business planning stage itself and can be worked out beforehand. Additionally, the written ice cream business plan will help identify any likely challenges that might arise in the future. 

Business idea validation and creation of business plan might seem too much for you as an entrepreneur starting out, especially to identify  what is lacking but you can always opt for Business Planning and idea validation service to help with this task. 

This service will help check the viability and practicality of the business idea and then create the ice cream business plan too which will include-

• A summary of the business 
• Describing the business in detail including the goals, the methodology, the location and area of the business, etc.
• A market and competition study and analysis
• The operational and management details of the business
• The financial requirements and details of procurement of capital for the business
• A marketing plan for the business

These factors included in the business plan help to chart out a path for you to follow in order to kickstart the business.

• Location

The ice cream business plan must give the location of the business serious thought. The business can either be operated from a shop or from a food truck or even via an exclusive delivery system. The decision regarding the location of the ice cream business must be made considering the feasibility, budget, and target audience among other reasons. 

This means that it should be feasible for you to start an ice cream shop, whether on rent or by purchasing the shop space, as the budget permits. Additionally the shop must be located in such a place where there is a good footfall and the place is easily accessible. This could be in a shopping mall or a market place. Nowadays several entrepreneurs are considering starting an exclusive ice cream shop providing gourmet ice cream, thus choosing the location too to be exclusive, much like a restaurant or cafe.  The minimum space required for an ice cream shop business plan is 500 sq ft as it will require a preparation plus display area and an area where customers can collect their orders. If you plan on opening a gourmet ice cream parlour, providing a whole experience, then there needs to be seating capacity and a larger space is required for that.

Alternatively you can even start an ice cream truck which is big enough to store and serve the ice creams. The ice cream truck is cheaper to maintain and can be driven to different locations, thus reaching out to a wider audience, however the lack of a fixed location can be a hindrance for customers.

The third option is to provide a delivery service only where customers order their ice cream of choice and you set up a system to deliver it to various locations. In this model however packaging needs to be done carefully (preferably done using liquid nitrogen) to prevent the ice cream from melting.

The choice of location for the ice cream business plan must be decided upon after careful thought and taking all factors into consideration.

• Uniqueness

An ice cream business plan is not novel and several competitors are already present. In order to make the business a success you need to add some unique element to the business.

It could be in terms of unique ice cream flavours such as charcoal, bubblegum, chilli, guava, or something different from what is already on offer or it could be unique in its presentation or even in the way the ice is prepared and served. Nowadays there is a growing trend of ice cream in mason jars with assortment of toppings or bubble ice creams or liquid nitrogen ice cream and many more. It depends on you as an entrepreneur to decide on the uniqueness of the ice creams offered or the way it is served or a unique store.

While deciding on the uniqueness of the ice cream business, you must conduct a market research to analyse what the customer’s preferences are, what type of ice cream business is working, what is the price range that customers prefer to spend, whether a food truck is a better option or a shop and study other market trends.

• Customer Service

Another factor that needs to be considered for the ice cream shop business plan is the service provided to the customers. The right customer service always creates a good impression and brings back the customers, especially in a people oriented business such as an ice cream shop business. As an entrepreneur you need to appoint the appropriate number of employees needed to operate the business and ensure they possess the experience and training required to carry out their duties efficiently. An ice cream business usually requires a manager/cashier to accept the money, a server to prepare and serve the ice cream, a cleaner and probably a waiter and also an accountant depending on the size of the shop and size of the business respectively. The appointment of the staff must be done keeping in mind the budget available (considering the salaries that must be made to each, roughly estimating to be Rs 30 to 40 thousand ) and the requirement.

Upon appointing, the employees must be provided training regarding how to speak to customers, how to explain the flavours and ice cream offerings to them, how to serve them, how to deal with queries, etc. as the customer service of the business will also help it stand out from the competitors.

• Permits

Another important factor necessary for an ice cream business plan is the permits and licences required for running the business. These include- 

• • Shop Act Registration- this licence/registration is necessary for any commercial establishment that is located within the municipal corporation limits of the city and it regulates the working conditions for the employees. Since this registration is mandatory, you can get Shop Act done by opting for professional services such as those offered by deAsra Foundation. 

• • FSSAI Registration-this registration is required for any business which deals with food and it’s packaging, including the ice cream business and must be procured to operate the business adhering to the stipulated safety and standardization norms.
  • GST Registration-every business needs to comply with the taxation structure of the country and the GST registration is needed for the same.

These are the registration mandatory for the ice cream shop business plan along with a business entity registration, fire licence and local municipal authority licence (to be permitted to operate the business at night too) and require an investment of approximately Rs 50,000.

• Equipment

The equipment and machinery form an integral part of the ice cream business plan and must be listed (along with their approximate cost) while creating the plan. The basic equipment includes-

• • A cold stone refrigerator
  • A chest refrigerator of approximately 500ltr capacity
  • A generator for power backup
  • Packaging material such as boxes and bags
  • Badic utensils such as scoops, spoons, bowls, etc.

The approximate cost of the equipment (including miscellaneous equipment) might go upto Rs. 4.5 to 5 lakhs. 

• Expenditure

The most crucial factor to consider while starting an ice cream shop business is the capital expenditure needed for the business. This includes the cost for purchasing or leasing a shop space (500 to 2000 sq ft), furnishing the shop with seating arrangements (app Rs 50,000 – 1lakh), the cost of equipment required (app Rs 4.5-5 lakhs), the permits and licences (app Rs 50,000), the salaries, the electricity and other bills, and miscellaneous expenses. Overall the capital required is estimated to be between Rs. 10 to 15 lakhs to start the business.

This capital can be procured via a loan, either from a bank or from NBFCs, for which submitting a loan proposal is necessary. Alternatively the amount can be borrowed or obtained from one’s savings but a loan is a recommended option.

• Advertising

Along with all the above crucial factors, the advertising plan is also an important component of the ice cream shop business plan. The advertising and marketing plan must be decided before starting the business and professional help can be sought for the same. 

Initially you can give out free samples and offer exciting promotional schemes and discounts to lure the customers. This can be followed by group discounts or combination offers etc so that customers might feel that they are getting a good deal and will prefer your shop.

The advertising can be done through print ads, banners and brochures. Digital marketing, either via Google AdWords or through social media platforms can also help the business. Even if I e cream cannot be sold over a Facebook page but alluring pictures and information on deals and even events at the shop can be conveyed through these platforms thus creating a following for the products. Instagram and Facebook accounts will definitely help advertise the business.

These are almost all the essential factors that need to be considered for the ice cream business plan to ensure that all the essentials are checked off the list and the business is prepared to make a jumpstart. Inspite of this if you have any queries regarding how to start the business or for any of the factors, you can contact deAsra Foundation for their assistance and guidance.