Five Risks Of Opening An Ice Cream Shop

Opening an ice cream shop is a good idea. I mean, what greater business could there be than one that makes people happy with just a cone or a pint?  But, like any business, launching an ice cream shop comes with risks. 

Five risks of opening an ice cream shop are:

1. The Seasonality of the Business
2. Locational Limitations 
3. Need For a Unique Selling Point
4. Poor Management 
5. Perishable Nature of Ice Cream

Any business owner should look out for these indicators that can cause low profits or income loss, or worse, business failure. 

The Seasonality of the Business

The first risk of starting an ice cream shop is that it will be seasonal. Even though ice cream is everyone’s favorite and the average American consumes around 20 pounds of ice cream or 4 gallons per year, ice cream sales are still prone to change as seasons shift.  

Typically, you can sell more ice cream during warmer seasons since demand is higher simply because ice cream is the best treat to beat the heat. Inversely, ice cream stores notice a decline in foot traffic and sales throughout the winter. 

That’s why before operating an ice cream store you should be aware of this particular risk and plan accordingly. To help you deal with this challenge, you can: 

• Make Use of Social Media – During the winter, people tend to stay at home and relax, resulting in less foot traffic for your store. So, you can utilize social media to market and provide delivery options. 
• Offer Promos and Discounts – To attract more customers, you can launch promotions and discounts. Starting a referral program and offering buy-one-get-one ice cream are both great examples of this. 
• Sell Seasonal Flavors – This is an excellent approach to save your ice cream store not just during the winter, but also throughout other seasons. That’s because people often look forward to limited-edition holiday delights from their favorite shops. 

Locational Limitations

Another risk that you should look out for is having a terrible location. If you choose the wrong location for your ice cream store, chances are your ice cream sales will also suffer.  And by terrible location, I mean one that has no allocated parking, limited foot traffic, and is generally inconvenient, particularly in terms of cost. These might have a long-term detrimental impact on your profitability.

Consider the following when choosing a site for your ice cream shop:

• Simple to Reach by Car or Foot – You need to make your shop easy to find and access for your consumers. Near parks and schools are considered areas with good exposure.
• A Comfortable Place to Sit and Enjoy a Scoop – Your ice cream shop must be situated in an area where your customers can relax while enjoying your ice cream products. Around parks and on the beach are great examples of this.
• Crowded in the Spring and Summer – More people can imply more potential customers. So, you should pick a location where people congregate more throughout the spring and summer, such as beaches.

Need For a Unique Selling Point

The ice cream industry is competitive and can get heated at times. You’ll have a hard time competing if you don’t have a Unique Selling Point (USP), which is essentially a marketing statement that distinguishes your product or brand from its rivals. For example, it could be something like the cheapest price, the greatest quality, being the first in its product category, or any feature that distinguishes the offering from the competitors.

That’s why starting an ice cream shop without thinking about your USP might be a big risk for your business. You must have it to compete with large and distinctive brands. Check out Dippin’ Dots’ Beaded Ice Cream and Dairy Queen’s Blizzard Treats; their products are excellent examples of USP, effectively separating them from the competition.

Poor Management 

Another risk of starting an ice cream store is poor management. This involves inadequate staff management, faulty financial management, and substandard advertising plans. It’s also one of the reasons why ice cream shops fail. 

Some entrepreneurs believe that running an ice cream parlor is simple, but in reality, it is difficult. Running an ice cream shop, for it to be successful, requires a knowledgeable and experienced owner or a very devoted manager with years of experience. Having bad employee management can result in low engagement, which leads to lowered production.

To deal with this risk, you need to ensure that you properly train yourself to manage your ice cream shop. You can also focus on adequately training your staff so that they get the job done. If you hire someone to run your store, make sure they are competent and have a great passion for ice cream.

Perishable Nature of Ice Cream

Despite having a longer shelf life than other products, ice cream can still go bad and expire. Unopened ice cream can be stored in the refrigerator for up to two months. You only have until this time after opening the tub to consume it. Otherwise, it won’t taste as wonderful as it did when you first bought it.

This can mean terrible news for ice cream stores, especially those that make more ice cream than they need but don’t sell it all. We’re talking about significant resource and financial losses.

Fortunately, you can prevent this. You need to make ice cream that matches your foot traffic and sales forecast. You can also follow proper ice cream storage methods to keep your product items in good condition.

Conclusion

All in all, these are the five risks of opening an ice cream shop:

1. The Seasonality of the Business – Ice cream is more popular in the summer than in the winter.
2. Locational Limitations – A terrible location might have a detrimental impact on your ice cream store’s sales.
3. Need For a Unique Selling Point – Not having a USP will not help you distinguish yourself from the competition.
4. Poor Management – Poor management can have a detrimental impact on your ice cream business as a whole.
5. Perishable Nature of Ice Cream – Ice cream can go bad, which can result in inventory and financial losses.

5 Tips For Selling Ice Cream From Home

Frequently Asked Questions

To learn more on how to start your own ice cream/gelato business check out my startup documents here

This blog post is provided for informational purposes only. The information contained is not intended to constitute legal advice or to substitute for obtaining legal advice from a qualified attorney.