People love ice cream, which is why the sound of an ice cream truck approaching always gets people excited at the prospect of sampling these beloved treats. But did you know that there is passive income to be made off the ice cream selling business? Some ice cream trucks make $200 to $300 per day selling these frozen delicacies (source).
Can you make passive income selling ice cream? You can make passive income selling ice cream, may that be via a fixed brick and mortar ice cream store, or via a mobile ice cream truck. In some markets, ice cream trucks make $5,000 a month. However, in order to be passive, the work must be well delegated and outsourced.
It does not take much effort to start an ice cream selling business, however, it can be costly to start. Many people simply get trucks and drivers to take them around selling the product to customers. Based on the kind of ice cream they are selling, and where the business is located, many people are able to make at least a few thousand dollars every month selling ice cream.
1. Finding The Right Niche Market
Many factors come into play when you want to start an ice cream business. You have to consider them carefully to have a successful business. For instance, you need to take a look at the sort of competition you are up against. You also have to consider what your margins will be like and how seasons might affect your business.
Clearly, if you sell ice cream in an area with tropical climate, your ice cream business will be less seasonal than when doing the same business in places with harsh winters. Also consider if you have access to neighborhoods with young families and small children, as this is the primary ice cream market. Richer areas with higher incomes will also be more enticing and provide better ROI.
Another important factor is community, you will probably sell more if there are many outdoor events in your area such as summer sporting events (soccer, baseball etc), outdoor concerts, local gatherings and events. These types of events can provide a stronger market. You might also consider operating your business in highly dense areas so that your truck does not have to travel long distances, which will increase its repair costs and even increase fuel costs. However, if you are in an underpopulated, rural area, you may not want to embark on this business.
2. Considering the Benefits and Requirements
You also have to consider the kind of margins you can get off your products. Reasonably speaking, you can make profits of well over 50% if you are able to purchase raw materials in bulk. However, you might have to offer less flavor choices to enjoy these enticing margins on the product. Starting an ice cream business has the following benefits:
Fairly low start-up costs: Compared to most businesses the startup costs are fairly low. You can always buy a used ice cream truck and used freezers to stock products.
- Low operational costs: Operational costs are low since the product does not spoil fast and you only need one employee to keep the business running.
- Highly popular product: Ice cream is very popular among all sections of the population, which means this business has a lot of potential.
- Excellent margins: Ice cream has very good margins, and you can easily get a 100% return or more on some ice cream products.
An ice cream business might be very exciting to own, but it also requires considerable financial investment on your part. For instance, you have to buy a truck, the actual ice cream in bulk for the best price, and probably put a refrigeration process in place to stock your frozen supplies. Then you have to account for the necessary licenses and permits, as well as insurance for your business and your truck, and the person you will pay to drive your truck around selling the ice cream to make the process as passive as possible. All things considered, you should have about $10,000 to $30,000 ready so that you can get your business up and running. You can lower those costs by buying used freezers and a used truck. However, do make sure it is reliable.
3. Meeting The Necessary Legal Requirements
Every business has its rules. Since selling ice cream is in the food industry, you will have to clear with authorities in this industry before you can freely sell ice cream in your chosen locations. This will include passing inspections, getting permits and licenses, and paying for any mandatory insurance or being a member of certain statutory bodies. You should also hire someone to drive your truck around, and have in place people who will supply you with the raw materials you need to run your business. Make sure to consult a lawyer and expert accountant in your area to setup your business before the season starts.
4. Choosing The Right Products
Before getting started, consider the kinds of people you are selling your ice cream to. Even though everyone likes ice cream, the flavors that children prefer are not the very same flavors adults would like. Therefore, if your target market has more adults than children, you would have flavors that are more appealing to this segment of the market and so forth.
Offer vegan and lactose-free products to appeal to more people. Not only are these highly popular and trending food products, they are sometimes actual allergic obligations for some people to be able to join in on the iced fun. Make sure to appeal to a broader audience with products that are friendly for more people. However, try to limit the number of choices you offer as more choice means more stock to manage and can make serving customers more complex. Keep things simple and clear when offering choices to clients.
Make more money and save time by selling products that are already prepared. If your employees have to scoop ice cream on a hot day in the truck, this will be longer and more complex than just serving ready ice cream or soft-serve. Longer service will keep customers waiting and may make some leave. The ice-cream may also melt and make cleanup more difficult. Keep these things in mind when deciding what to sell.
5. Promoting Your Business & Making it Passive
Advertising your business can be a great way to get more customers and make more money. Today, you can do this on social media. Instagram is a great place for ice cream businesses to promote their products. Your Instagram handle should have a very visible on your truck with a hashtag for your business if you want. These will entice people to share their treats and fun moments created by your business on their social media accounts and will help your business get known in your area. But always remember, the best way to promote your business is to offer your clients high quality products and services.
Flyers can also work. You can put them up around town so people can learn about your business and routes. On top of that, you should be at special events with lots of people so that you can get significant boosts in your income from time to time. Having a calendar of social events in your area should be a given if you want to make the best of this business.
Making this business passive can be fairly easy if well done. As long as you find someone you can trust to run the business, you can be good to go. You can offer to pay them a commission based on the sales they make, which will give them a greater motivation to sell more and find the best opportunities for the business.
How Passive is Selling Ice Cream?
Selling ice cream can be a very passive way to make some extra money on the side. For one, you don’t have to drive the truck yourself. Once you have an excellent process in place and hire a good driver, preferably with experience in selling ice cream, you can start making money easily without having to invest much of your personal time or effort.
You obviously cannot decide to get into the ice cream selling business and start making money tomorrow. Ideally, you should start by doing some research about your area to find out how big your local market is. Also have a look at your competition and how they are doing. Think about how you can do better. A good time to do this is off-season like in the winter. This may take a couple weeks, but once you know this can be profitable you can consult local professionals to setup your business and get started.
To some extent, starting an ice cream business is not the cheapest thing you can do. You might have to spend over $30,000 in the process, especially when you decide to start the business as part of a franchise. However, if you can manage to get a truck that was previously used to sell ice cream, then you can easily cut your costs and get started without putting too large a dent on your finances.
This is low-scalable as this would require franchising. Since you can earn from this business passively, you can scale it up by getting more trucks to work for you or by franchising to other vendors.
Starting an ice cream business can be difficult for a first time business owner. However, you do have to make the actual product yourself. All you have to do is choose the best products for your target market from suppliers offering good margins. Choosing the right truck may be a challenge but there is a lot of good information online about purchasing food trucks that can be relevant to this business.
There are risks associated with running an ice cream business. If you do your homework before getting into this line of work, your chances of meeting with any nasty surprises can be reduced. However, the costs are high and like with any other business it can completely fail.
Risks may be related to food issues (allergies, poisoning etc) so you do need good insurance coverage. There are also risks of running out of product so it’s important to have a good balance of available stock. And of course, the product could melt resulting in lost inventory and sales. Consult qualified professionals in your jurisdiction for more information related to risks.
Yes, seasonality is one of the things you have to worry about as you run an ice cream business. However, this does depend on where you are located. In some places, you can sell the ice cream all year round. But in other places, due to cold winters, you might have to tone down the business or even shut it down during the winter months.
Return on Investment
The ROI on this business can be incredibly good. In some markets, ice cream trucks easily make between $200 and $300 a day. That means some of them can have returns of over $5,000 a month. Even when you have to pay an employee to earn from this business passively, you can still end up with pretty good returns and break even within a few months.
What kind of equipment does an ice cream selling business require? In addition to the truck, gas and other truck-related items, you will need a refrigeration system, a cash register, cash machine, a POS (Point-of-Sale) system, music box, amplification system, inventory, napkins, and specialized equipment like spoons and scoops if necessary.
Is there a cheaper way to sell ice cream than from a truck? Ice cream kiosks can be a cheaper alternative to selling via a mobile ice cream truck. This can reduce costs associated with gas, repairs, upgrades and other ice cream truck-related issues. However, the kiosk should be located in a high traffic area that will yield returns.
Can you make money with an ice cream truck? In some markets, ice cream trucks make on average between $200 and $300 a day. That means some ice cream trucks provide returns of over $5,000 a month. Therefore, ice cream trucks can generate interesting returns even after factoring in expenses when serving the right market.
Why do ice cream shops fail? Ice cream trucks often fail for the same reasons general businesses fail including HR management, lack of funds, pricing, lack of marketing, poor choice of target market or location for example. More specifically, ice cream shops are also highly affected by seasonality.
Is an ice cream van profitable? With the right target market, location, marketing strategy, inventory and general business management, an ice cream van can generate on average between $200 to $300 per day. Therefore, an ice cream van can be profitable when well managed, even after factoring in expenses.
What is the best ice cream franchise? There are many ice cream franchises to chose from including Baskin-Robbins, Dairy Queen, Dippin’ Dots, Haagen-Dazs, and Ben & Jerry’s for example. Choosing the best one depends on your budget, preferred company culture, legal requirements, and location among other factors.