Start an Ice Cream Shop LLC Business

How to Choose Your Ice Cream Business Structure

Starting an ice cream business is an exciting venture.

Selling ice cream and related products can be a profitable entrepreneurial endeavor with tons of potential competition. That is why getting your ice cream shop business off to the right start will be necessary.

We recommend setting up your ice cream business structure early so that you can move forward with other aspects of your business.

When starting your business, choosing a business structure will be an essential first choice. It may have the ability to protect the investment you put into your business.

Fortunately, business owners have several options and can choose which one is best for them.

This post will briefly review several business structure options and how to start an Ice Cream Shop LLC.

Further Reading: Why Do Ice Cream Shops Fail?

Ice Cream Business Structure Options

Sole Proprietorship

A sole proprietorship is when an individual sets up the business independently. There is no real distinction between the individual and the business. However, due to the necessity to insulate themselves from legal jeopardy, many ice cream business owners don’t choose this possibility because of a lack of legal protections.

Partnership

A partnership is where two or more people form a business together. For example, you may have a partnership with a limited liability company. This option has its pros and cons that you want to evaluate beforehand. The pros are the shared responsibility, more funding sources, and a second pair of brain. The cons are possible disagreements and need to share profits.

Limited Liability Company

A limited liability company or LLC is a business structure that separates the owner from the company. It’s among the most common business structures retail businesses. It is a popular ice cream business structure option. As a business owner, your ice cream business will cost you in up front investment. Your LLC may help mitigate personal liability on actions taken in the course of your business.

Corporation

Starting a corporation is a more complex option when opening your ice cream shop. It’s more expensive and can be very cumbersome. On the other hand, setting up a corporation does offer robust liability protection against owner-liability. However, there may be drawbacks, such as being taxed twice on revenue.

Business Structure Summary:

There are plenty of options to establish your ice cream shop as a business within your state. However, you will want to carefully review all your business structure options to understand which is best for you – your partners, and your specific tax situation.

Since many ice cream business owners choose to set up an LLC, I will focus on this option today.

Why Do Many Ice Cream Shop Owners Choose an LLC

Benefits of an LLC

As with other business structures, setting up an ice cream LLC structure with your state allows you to form your business in a manner that protects you and your personal assets while giving you significant control and flexibility.

Having an LLC creates a separate entity apart from you as an individual – which puts you a step further from personal liability.

An LLC allows you greater flexibility when it comes to management and taxes. But first, let’s consider the management element of an LLC. Having a single or multi-member LLC allows you or other members to dictate the business’s operations and disperse the revenue without much interference.

Among the top benefits of setting up an ice cream shop LLC is that it allows you to have the revenue “pass-through” – as personal income.

Of course, you will want to be extra diligent in separating your business money from your personal money.

Benefits of ice cream shop business LLC:

Limits on your personal liability
Tax benefits
Easy to establish
Flexibility in ownership and management
“Pass-through” taxation

How to Setup Your Ice Cream Shop LLC

Once you’ve decided to set up an LLC within your state (or in the state you plan on doing business in), the process is fairly simple.

You can apply to establish your ice cream shop LLC by searching online for your state’s Secretary of State’s Office. For example, if you are deciding to open an ice cream shop in Texas, you would go to the Texas Secretary of State’s Office and apply on their website.

Step 1: Determine what state you would like to register your business.

What state will you form your ice cream business in?

Deciding where to establish your business may seem obvious if you live in California, Washington, Texas, or Hawaii. However, if you live in Arlington, Virginia, but want to set up your ice cream shop in Washington, D.C., or Bethesda, Maryland, you’ll need to consider what state works best for you.

Step 2: Choose your ice cream shop name

Choosing the name for your ice cream shop may seem like the easiest part, but you need to ensure that you are not violating anyone’s copyright or trademark. So spend time cultivating a name that works well with your market and your ice cream branding efforts and that has a nice “ring” to it.

Step 3: Compile the necessary information

You will need to have the information of your chosen members, their information, and your business address.

Step 4: Pay your fee

There is often an initial fee to establish your LLC or business structure. Some states charge more for the first registration and charge less for LLC renewals.

Some Other LLC Considerations

If you decide to open a business with a partner, you may consider creating an operating agreement between the two of you (or others). This article describes your operating agreement.

You will want to get an EIN number (Employee Identification Number) at the time of registration. If you are unable to get your EIN number, you can go to the IRS website and get it there.

The next steps may include opening your business bank account, developing your branding, getting your website and an ice cream POS system, and developing your ice cream shop menu.

Getting Started with Your Ice Cream Business

Getting started with your ice cream shop business may seem confusing. However, we have worked to create a resource to make the whole process easier. Packed with all the information you need to open your ice cream business, our Complete Ice Cream Shop Business Startup Kit will help you get your ice cream shop off the ground. There are many things to consider, including determining the cost of starting an ice cream shop, finding the best location, creating an ice cream shop budget, and much more. We’re here to help!