How to Choose the Best Location for an Ice Cream Shop Business
Choose the Best Location for Your Ice Cream Shop
Choose the Best Location for an Ice Cream Shop
One of the most critical factors in your success is choosing your ice cream shop business location. Choosing the right location depends on your concept, your target market, and, ultimately, your budget.
Finding the right ice cream shop location can either make or break your business. It can deliver generous foot traffic sales, or it can be devasting to your ice cream shop.
Ultimately, your ice cream shop location should be easy to access, park your car, and generally appeal to your customers. Interestingly, people still get it wrong with so much at stake for picking the right location for your business. Nevertheless, choosing the best location for your ice cream shop is a vital step to open a successful ice cream business.
This post will discuss the factors you want to look for when choosing your ice cream shop location.
Ice Cream Shop Startups
How to Choose the Best Location for Your Ice Cream Shop
Choosing the right location for your ice cream shop can be challenging. You may also decide to get help in selecting a location. For example, you may work with a local commercial real estate broker.
Google maps could prove very useful to stake out the competition and high traffic streets. Or you might decide to drive around and see what spots are available on your own.
The following is a list of factors to help you determine the best location for your ice cream shop:
- Traffic (foot and vehicular)
- Demographics of the area (students, high-income residents, tourists)
- Accessibility (easy to park, drive up, or walk-up)
- Competition
- Cost per square footage
- Zoning & permits
- Lease terms
Indeed, there may be other important factors that are specific to your location or town. They are all critical. However, you may want to consider the traffic and accessibility at each potential site. Equally important are the terms of the lease, zoning requirements, and demographics.
Let’s dive into some of these factors a bit more below.
How to Choose the Best Location for Your Ice Cream Shop
Understand Your Target Audience
The first step in choosing the right location is understanding your target audience. Are you catering to families, young adults, or tourists? Identifying your primary customer base will guide you in selecting a neighborhood that aligns with their preferences and behaviors. For instance, a family-oriented ice cream shop might thrive near schools and parks, while a gourmet gelato parlor could succeed in an upscale shopping district.
Traffic (foot and vehicular)
High foot traffic is essential for an ice cream shop, as it relies heavily on impulse purchases. Spend time in potential locations at different times and days to observe the flow of people. Look for areas with natural foot traffic, such as near movie theaters, beaches, shopping centers, or tourist attractions. Remember, more foot traffic usually means higher rent, so balance the potential sales boost against the cost.
A certain percentage of those passing by would need to be your customers. Therefore, your prospective location needs to have a customer base and a certain amount of foot traffic to provide you with enough customers to be profitable. You will also have to do your part in attracting more customers with various promotions, marketing, and loyalty programs.
You want your ice cream shop to be located close to main roads with much vehicular traffic. You also want to be able to provide easy access for cars and car parking.
Demographics of the area (students, high-income residents, tourists)
Studying the local demographics will be essential to choose your ice cream shop location.
- Who will your ideal customer be?
- Will your customers be primarily tourists?
- Will they be local families?
Figure out who your primary market will be and then settle on the best suitable location to reach them. For example, there’s no point in setting up an ice cream shop by an office building if your target market is families with kids.
Accessible (easy to park, drive up, or walk up)
Your shop needs to be both visible and accessible to attract customers. A location easily seen from the road or by pedestrians can increase your shop’s exposure.
Accessibility is equally essential; look for spots with convenient parking, public transport options, or pedestrian-friendly pathways. Locations that are hard to access or hidden away can hinder potential sales, regardless of how delicious your ice cream is.
Competition
Understanding the competitive landscape is crucial. Having competitors nearby isn’t always bad, as it can indicate a demand for ice cream in the area. However, you should assess how your offering differs and can stand out.
If the market feels oversaturated, consider a location with less direct competition or one where you can offer something unique. For example, how many other ice cream shops are around? Additionally, how many substitute businesses are in the general vicinity?
Substitute business locations are those places where customers can get ice cream sundaes or soft-serve items and avoid your business altogether. There may also be other coffee shops or drive-thru coffee stands that serve ice cream or comparable desserts. This initial research can quickly be done using Google Maps to find neighboring companies competing for local customers. Ultimately, you will have to drive and walk around your prospective neighborhoods to get a feel for what your customers have access to.
The Cost of Your Location
Cost is a significant factor in choosing an ice cream shop business location. High-traffic areas typically command higher rents, so ensuring the projected sales can cover these costs is important. Additionally, consider the condition of the space and the potential need for renovations. A turnkey space in a slightly less ideal location may be more financially viable than a prime spot that requires extensive fit-outs.
For example, if your site costs $5000 per month, how many ice cream cones or scoops would you have to sell to break even? Make thorough calculations before signing up for your lease.
Zoning & Permits
Double-checking the zoning and permit availability for each location is a must. Zoning and having the appropriate permits may seem like a small detail, but retail businesses have been forced to close because they were not in the proper zone. This is especially true if you have a mobile ice cream shop. It’s easy to think that you can place your ice cream cart anywhere you want. However, it would be necessary to have a permit to vend in a particular zone and meet all the requirements.
It’s prudent to take a few minutes to see if the specific location is zoned correctly.
Lease terms
The lease terms that the property owner offers need to favor your ability to make enough sales to stay afloat. While the location may be excellent, the foot traffic is terrific; you need to have favorable leasing terms for your business to succeed. For example, your lease contract might prevent you from putting up some fixtures or adding different structures to your ice cream shop. Or it might have very unfavorable contract termination clauses. That’s not what you want.
Choosing the Best Location for an Ice Cream Shop
(Continued)
We just covered essential factors for choosing an ice cream shop location. While these are the critical elements to consider, your specific location, region, or business may have other elements that are just as important.
Yet, let’s review the list below:
- Traffic (foot and vehicular)
- Demographics of the area (students, high-income residents, tourists)
- Accessible (Easy to park, drive up, or walk up)
- High traffic (vehicle and foot traffic)
- Competition
- Cost
- Zoning & Permits
- Lease terms
Finding the Right Balance
Finding the right balance between these factors is a bit of art, science, and intuition.
You will need to do your research on each prospective area that you are considering. Even if all these elements listed above provide you with a green light, there may be other areas of concern that you should consider too.
For example, you may consider the neighborhood’s general state during certain parts of the day.
What does the area look like at night or early morning?
- Are the streets well-lit, and is the place generally safe?
- To your knowledge, are there any future construction plans?
- Are there any plans to re-pave the road or have a construction where it would impede your business?
It may be best to walk the neighborhood and determine if you would be happy working there.
Think Long-Term
Finally, consider the long-term potential of your ice cream shop’s location. Is the area on the rise, with growing foot traffic and development? Or is it stagnant or even declining? Choosing a location with growth potential can ensure your ice cream shop thrives for years to come.
Strategies for Picking the Best Ice Cream Shop Location
Strategy 1. Know what kind of ice cream business you want.
Know what you want from your ice cream business. By developing your ice cream shop concept and writing it down in a business plan, you will have a good idea of what location would be most suitable for you. Your type of ice cream business will influence your startup budget, menu, and your target market. For example, you may want to offer smoothies or add an espresso machine to serve coffee too.
By putting your thoughts together in an ice cream business plan, you will be able to figure out various essential variables to your business. These variables include your target market, your marketing plan, and your budget.
Strategy 2. Start looking for your location early
Finding the perfect location for your ice cream business takes time, especially in some cities or regions. There are plenty of factors that determine if your site is good or not. Expect your search to take some time.
The geographic location needs to be right, as does the actual space. Additionally, you have to get it at the price that works for you and your overall ice cream shop budget.
Strategy 3. Understand Who Your Customers Are
The better you understand who your customers are, the better decision you will make when choosing your location. The needs of business workers will be very different from the needs of college kids.
By understanding your customers’ needs and wants, you will figure out what type of product they are looking for.
Strategy 4. Determine What’s Most Important
In the perfect world, we could have everything we want. But often, the case is that we won’t be able to get it all. Therefore, consider creating priorities. In your specific case, what factors matter most to your ice cream shop location? Maybe it’ll be the price of your lease or the commercial premises you already own. Everything will impact your decision-making.
Find the best location to open an ice cream shop
Additional Questions:
What should you expect from your lease?
Signing your lease is an essential step toward opening your business. But much like anything else, the terms attached to your lease are crucial. So make sure you understand them before you sign.
To be sure, most property owners or managers want your business to succeed. The last thing they want is for companies to rotate in and out of their property. So you can expect that your property owner will ask for an ice cream shop business plan that details your vision and efforts.
It’s important to realize that even the most ideal location can have bad leasing terms for the tenant – that tenant is you!
Your lease can have many factors, including your obligations to maintain the property, pay property taxes, determine your signage, etc. Just be sure you are cool with all the details.
Does the existing space require lots of work?
Some spaces may require you to spend a lot of money on getting them to fit your planned design and layout. Consider the build-out costs, the permitting that is required, and the delay in construction. You might want to take some time and look for another location that doesn’t require so much investment.
How much rent should I pay for my ice cream shop business?
If you live in Europe, you will want to pay the competitive local rate per square foot (or per square meter).
First, look at your estimated sales to determine how much rent you should pay. This should be done while writing your business plan. Next, determine your revenue and estimate that your rent should not exceed 15 percent of your revenue.
