How to Start Your Own Ice Cream Business

Important elements to think about when starting your ice cream business:

1. Niche — Decide on the types of ice cream you will offer, such as traditional scoops, soft serve, gelato, frozen yogurt, or specialty flavors.
2. Health permits — Ensure you comply with local health department regulations and obtain the necessary health permits for food handling and production.
3. Choose a location — Select a high-traffic location with adequate space for a kitchen, serving area, seating, and storage. Ensure it is easily accessible for customers and has ample parking.
4. Ice cream equipment — Invest in high-quality equipment necessary for ice cream production, such as batch freezers, soft serve machines, dipping cabinets, and refrigerators.
5. Ingredients and supplies — Source high-quality ingredients from reputable suppliers. Offer a variety of flavors and toppings to meet customer preferences.
6. Register your business — A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple. Form your business immediately using ZenBusiness LLC formation service or hire one of the best LLC services on the market.
7. Legal business aspects — Register for taxes, open a business bank account, and get an EIN.
8. Industry associations — Join industry associations such as the National Ice Cream Retailers Association (NICRA) to network with other professionals, gain access to resources, and stay updated on industry trends.

You May Also Wonder:

Why start an ice cream business?

Starting an ice cream business is relatively simple, and it’s also a well-known frozen treat across the U.S. In fact, the average person in the U.S. eats more than 23 pounds of ice cream in a single year. So as long as you’re selling a quality product and have enough customers, you should have a profitable business.

Do ice cream shops make money?

If you have the right location and employ effective marketing, it’s possible to make money. An ice cream shop owner, Mr. Shipley, says that you will need to get heavily involved in your ice cream parlor, as running it remotely will increase the chances of failure.

What is the profit margin on ice cream?

The profit margin depends on your costs, such as ingredients, and the price that you sell your ice cream at. On average, though, a locally owned parlor could expect between 20% to 50% if the business is run effectively.

How profitable is an ice cream business?

The profitability of an ice cream business can vary depending on factors such as location, target market, competition, product quality, pricing, and operational efficiency. 

Can I make my own ice cream and sell it?

Yes, you can make your own ice cream and sell it. However, it’s important to comply with local regulations and obtain the necessary licenses and permits to ensure legal operation. Additionally, you should focus on developing unique flavors, using quality ingredients, and implementing proper food safety practices to create a desirable and safe product for your customers.

What is the most successful ice cream business?

Established brands like Ben & Jerry’s, Häagen-Dazs, and Baskin-Robbins have achieved significant success globally. However, success can also be found in smaller, locally focused ice cream businesses that provide unique flavors, exceptional customer experiences, or cater to specific dietary preferences or niche markets.

How can I differentiate my ice cream business from competitors in the market?

Experiment with creative and innovative flavor combinations that set your ice cream apart from others. Develop signature flavors or limited-edition offerings to generate excitement and curiosity among customers.

What is the most sold flavor of ice cream?

Traditional flavors like vanilla, chocolate, and strawberry tend to be popular worldwide. However, other popular flavors include mint chocolate chip, cookies and cream, cookie dough, and various fruit flavors. It’s important to offer a diverse range of flavors to cater to different tastes and preferences. 

Step 1: Decide if the Business Is Right for You

Before you start your ice cream business, you should look at the industry as a whole to help you identify the right opportunity. 

Pros and cons

Before moving forward with your ice cream business, let’s look at the pros and cons, so you know what to expect. 

Ice cream industry trends

Consumers still scream for ice cream, but they are also becoming more health-conscious about their choices. 

A look at Google Trends reveals a clear seasonality to ice cream interest. You can see this demonstrated over the last five years.((https://trends.google.com/trends/explore?date=today%205-y&geo=US&q=ice%20cream%20US)) 

Industry size and growth

• Industry size and past growth – Ice cream production in the US is estimated to be worth $9 billion, after growing 2% annually over the last five years.((https://www.ibisworld.com/industry-statistics/market-size/ice-cream-production-united-states/)) 
• Growth forecast – The global ice cream market is projected to grow around 5% annually through 2028((https://www.fortunebusinessinsights.com/ice-cream-market-104847)) while market analyst Mordor Intelligence expects the North American ice cream market to grow steadily through 2026.((https://www.mordorintelligence.com/industry-reports/north-america-ice-cream-market))
• Number of businesses – There are more than 700 ice cream production companies in the US.((https://www.ibisworld.com/industry-statistics/number-of-businesses/ice-cream-production-united-states/))
• Number of people employed – The industry employs almost 22,000 people.((https://www.ibisworld.com/industry-statistics/employment/ice-cream-production-united-states/))

Trends and challenges

The latest trends in the ice cream industry include:

• Health-conscious consumers prefer natural flavors, low-fat, and handcrafted ice creams made with organic local ingredients.
• Other hot ice cream trends include savory and dairy-free products, functional benefits such as protein- or CBD-loaded ice cream, and sophisticated flavor profiles like turmeric-infused honey with candied ginger.

Some challenges faced by the industry are:

• Tough competition
• Keeping costs down

How much does it cost to start an ice cream business?

The investment needed for your ice cream business will depend on the type you choose, among other factors such as equipment. To open an ice cream shop, you will likely need between $40,000 and $100,000, with the average cost being $80,000. A large-scale manufacturing operation will likely need much more than this, while you could probably start a home-based online ice cream shop for as little as $15,000. 

Here’s a cost breakdown example for an artisanal ice cream shop, excluding the cost of the shop: 

Start-up Costs	Ballpark Range	Average
Setting up a business name and corporation	$150 - $200	$175
Business licenses and permits	$100 - $300	$200
Insurance	$100 - $300	$200
Business cards and brochures	$200 - $300	$250
Machines and equipment	$30,000 - $70,000	$50,000
Supplies	$3,000 - $5,000	$4,000
Website	$1,000 - $3,000	$2,000
Total	$34,550 - $79,100	$56,825

How much can you earn from an ice cream business?

Artisanal ice cream costs about $10/pint in the US, more expensive than the regular ice cream.

In your first year or two, you could make artisanal ice cream from home and sell 150 pints a week, bringing in nearly $80,000 in annual revenue. This would mean over $30,000 in profit, assuming a 40% margin. As your brand gains recognition, sales could climb to 500 pints a week. At this stage, you’d rent a commercial space and hire staff, reducing your profit margin to around 25%. With annual revenue of $260,000, you’d make a tidy profit of $65,000.

On the other hand, Cold Stone Creamery franchisees average $415,000 in annual sales. That said, 42% of stores were at or above this level and the rest, of course, were below. While this is for an ice cream franchise, an ice cream manufacturing business will generate much more in gross sales and have smaller profit margins. 

What barriers to entry are there?

Now before you start dreaming about your potential $400,000+ in annual sales, there are some barriers to consider: 

• Shelf space in a supermarket or convenience store
• Cold climates
• Food licensing laws
• Local competition

Step 2: Hone Your Idea

Now it’s time for the exciting part, clarifying your idea!

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Let’s dive into choosing your niche first. 

Why? Identify an opportunity

It’s important to become familiar with your competition. Knowing as much as you can about them will help you differentiate your company and create a more valuable product. 

Your competition will vary depending on the business model you choose. For example, an ice cream shop will only have local competition. In contrast, ice cream manufacturing will put you in a much bigger pool of competitors with names such as Ben & Jerry’s and Haagen-Dazs. 

Here are some questions to ask about your competition: 

• What products do they offer?
• Why do consumers buy their products? 
• Who is their target market? 
• What is their unique selling point?

What? Define your ice cream business focus

There are three main types of ice cream businesses: impulse ice cream, take-home ice cream, and artisanal ice cream.

• Impulse ice cream products are single serving sizes — think of ice cream pops and ice cream sandwiches — typically sold in gas stations and convenience stores. Depending on your manufacturing capacity, you could target large chains or stick with locally owned stores. 
• Take-home ice creams are the kind you buy in supermarkets, like Edy’s or Ben & Jerry’s. These are often sold in larger buckets and require significant manufacturing capacity. While a business can offer both impulse and take-home ice cream, in the beginning it’s best to choose a specialization. 
• Artisanal ice cream is generally made in small batches with high-quality ingredients and uncommon flavors, such as raspberry cheesecake or salted caramel fudge. If you want to make artisanal ice cream, you will either need your own ice cream shop or a top-notch website, in order to be able to sell directly to the public. 

Which type appeals to you the most? Do you want to create a nationwide brand that your customers recognize in the supermarket? Or are you more inclined to open a local ice cream parlor where you can experiment with flavors and create a unique experience for your customers? 

Use these answers to determine what your next steps will be. 

How much should you charge for your ice cream?

How much you charge will depend on the ingredients you use, operating costs, location, and your target customer. For example, artisanal ice cream maker Salt & Straw charges around $5 for a single scoop and $10 for a pint. On the other hand, franchises like Baskin-Robbins charge around $5 for a pint. 

To find the right prices, you’ll need to estimate your cost of goods sold and add on a healthy profit margin to make your time worth it. Then, compare these prices to your competition to see if they’re viable. 

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Next, you’ll need to define your target market based on who your best customers could be.

Here are some questions you should ask yourself: 

• How old are my ideal customers?
• How much money do they earn? 
• Who do I want to resonate with my brand?
• Which customers will benefit from my product?

Once you have your answers, you’ll be able to narrow down your ideal customer and tailor your brand toward them.

Where? Choose your business premises

If you want to get into ice cream manufacturing, location is not terribly important. As long as you have access to quality ingredients, reliable transport and ample space, you’ll be good to go. 

On the other hand, if you want to open an ice cream shop, then location is crucial. You’ll want a location with lots of foot traffic or traffic with higher conversions, such as by the beach. 

If your area has cold winters, then you could find a location that matches that seasonality, like near a park. In summer and spring, you’ll likely have a lot of foot traffic, and when the traffic slows down in winter, you may be able to negotiate lower rents with the lessor.

You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm an Ice Cream Shop Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “ice cream” or “dessert”, boosts SEO
• Name should allow for expansion, for ex: “Sweet Scoops Ice Cream” over “Vegan Scoops” or “Sugar-Free Ice Cream Treats”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create an Ice Cream Shop Business Plan

Here are the key components of a business plan:

• Executive Summary: Present an overview of your ice cream business, highlighting its dedication to offering a variety of high-quality, unique ice cream flavors and desserts in a welcoming environment.
• Business Overview: Describe your business’s focus on producing and selling ice cream, including classic flavors, seasonal specialties, and innovative dessert options.
• Product and Services: Detail the range of products offered, such as hand-scooped ice cream, sundaes, milkshakes, and vegan or allergy-friendly options.
• Market Analysis: Assess the demand for ice cream products, considering factors like local demographics, seasonal trends, and consumer preferences in desserts.
• Competitive Analysis: Compare your ice cream offerings and store experience to other local dessert shops or ice cream parlors, focusing on your unique flavors or customer service.
• Sales and Marketing: Outline your strategy for attracting customers, using tactics like social media marketing, local events participation, or loyalty programs.
• Management Team: Highlight the experience and qualifications of your team, particularly in areas like food production, retail management, and customer service.
• Operations Plan: Describe the operational aspects of your ice cream business, including production, inventory management, and storefront operations.
• Financial Plan: Provide an overview of financial aspects, covering startup costs, pricing strategy, and expected revenue.
• Appendix: Include supplementary documents such as flavor menus, supplier agreements, or detailed market research to support your business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to ice cream. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your ice cream business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just needs to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have. 

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method, but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Venture capital: Offer potential investors an ownership stake in exchange for funds, keeping in mind that you would be sacrificing some control over your business.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings, the sale of property or other assets, and support from family and friends.

Bank and SBA loans are probably the best options, other than friends and family, for funding an ice cream business. You might also try crowdfunding if you have an innovative concept.

Step 8: Apply for Ice Cream Shop Licenses and Permits

Starting an ice cream business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your ice cream business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of any of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.  

You may want to use industry-specific software, such as Nextar POS, Kyte, or Gofrugal to manage flavor batches, track staff performance, generate sales reports, and simplify point-of-sale operations.

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

Your customers are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.

Marketing

Here are some powerful marketing strategies for your future business:

• Irresistible Samples: Offer free tastings to passersby or partner with local events to let people experience the deliciousness firsthand.
• Themed Promotions: Create special promotions tied to seasons, holidays, or local events to keep your offerings fresh and attract diverse customer bases.
• Loyalty Programs: Implement a loyalty program with rewards like discounts or free toppings to encourage repeat business and build a loyal customer base.
• Social Media Challenges: Engage customers through fun challenges on social media, encouraging them to share creative photos with your ice cream and use a branded hashtag.
• Collaborate with Influencers: Partner with local influencers or bloggers who align with your brand to reach a broader audience and leverage their followers.
• Themed Nights or Events: Host themed nights at your ice cream parlor, like movie nights or live music events, to create a unique and memorable experience for customers.
• Community Partnerships: Build relationships with local businesses for cross-promotions, such as offering discounts to customers who show receipts from nearby establishments.
• Seasonal Flavors: Introduce limited-time seasonal flavors to create a sense of urgency and anticipation among customers, driving them to visit regularly.
• Mobile Ice Cream Cart: Take your ice cream to the streets with a mobile cart, attending local fairs, farmers’ markets, and community events to expand your reach.
• Engaging Packaging: Invest in eye-catching and eco-friendly packaging that not only protects your product but also serves as a mobile billboard for your brand.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your ice cream business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your ice cream business could be:

• Premium subscription, so customers never miss their favorite flavors
• Offer unique flavors found nowhere else 
• Promote your products/shop with a mobile ice cream truck or cart
• Partner with local farms, dairies 

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running an ice cream parlor, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in ice cream for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in ice cream. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.

Step 12: Build Your Team

If you’re starting out small from home, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for an ice cream business would include:

• Scoopers/Workers
• Accountant
• General Manager
• Marketing Lead

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run an Ice Cream Shop – Start Making Money!

Now that you know how to start an ice cream business, you’re ready to take the first step in your entrepreneurial journey. Keep in mind that you’ll be able to attract customers and build your brand fast if you can offer enticing new flavors or adventurous combinations of existing flavors. Having a unique concept for your ice cream shop can also do the trick. 

Ice cream production is a $9 billion market in the US. You can still get in on the action and capture a share of this lucrative market. So, get ready to roll and start scooping!