How to Fund Your Ice Cream Shop
Start an Ice Cream Shop Business
How to Fund Your Ice Cream Shop
Starting an ice shop can be fun, exciting, and profitable. And yet, like all other retail businesses, ice cream shop owners must figure out how to pay for it.
Funding your ice cream shop doesn’t have to be scary or boring. Instead, consider your funding an opportunity to empower your dream business.
Your capital or cash will ultimately be the milk to your ice cream operation – your job then is to make sure you have a place to put that milk!
In today’s post, we’ll focus on how to fund your ice cream shop and help you develop a game plan.
With a game plan in tow, you’ll be ready to serve your customer the best-tasting ice cream this side of the Mississippi.
How to Fund Your Ice Cream Shop
Before we get into the nitty-gritty of funding your ice cream shop, we have to have a few things taken care of.
At the very least, you need to:
- Determine your concept
- Figure out your costs
- Write a business plan
- Develop a funding mix
- Strategize
- Execute our strategy
- Assess and Re-evaluate
So now that we’ve broken down our funding path into steps let’s discuss them individually.
Determine your ice cream shop concept
There are a thousand different ways to serve ice cream – finding the one that works for you will be your challenge.
Your ice cream shop concept impacts your actual need for cash funds. Whether you are open to having a mobile ice cream truck or a gelato café, your idea will determine your need for cash.
So, ensure that you get your concept down and understand how your idea will succeed.
Your concept will include your branding efforts, menu, ice cream shop experience, space requirements, and equipment needs.
Brainstorm ice cream shop business ideas and determine if your target market will respond positively to your chosen concept.
Further Reading: Steps to Open an Ice Cream Shop
Figure out your costs
So now that you’ve got an idea of what type of ice cream business you want, it’s time to figure out your costs.
For starters, you’ll want to list your possible expenses and provide a cost range for each item.
For example:
Ice-cream display case $700 – $1000
Ice-cream dipping cabinet $4500 – $7,000
Commercial fridge $500 – $,2000
Espresso machine $5000 – $10000
You’ll have a cost range by the end of your list of ice cream shop startup costs. This cost range is crucial to determine the degree of costs you’ll encounter. List all items you will need: from big freezers to smallwares like ice cream spoons – this will give you the best look on the required funds.
For example, if you list the most minimal costs from the above example, the chances are that somewhere along the way, you’ll spend above the minimum. Having a range, therefore, allows you some slack in your cost estimates, ensuring that you have 100% of the needed funds.
Write an ice cream business plan
To successfully open an ice cream shop, you’ll need to have a game plan. Your game plan will steer you in the right direction as you move your business forward.
Often a game plan is codified in a business plan.
You’ll want to write a business plan to get a better handle on the specifics of your ice cream shop.
Business plans are essential for your investors or those institutions you’ll plan on borrowing from. As any prudent lender will tell you that before they out any money for any business, they will want to see a detailed plan.
A business plan isn’t just busy work.
Business plans not only to help you articulate your thoughts and ideas into one document, but they also help to communicate these ideas to your stakeholders.
Our Ice Cream Shop Startups Kit has a sample business plan guide that you can fully edit. Additionally, you will want to read our blog, How to Write an Ice Cream Shop Business Plan.
Develop a funding mix
When it comes to funding, figuring out where you will get your money is key to this whole effort. First coined by Coffee Shop Startups, your funding mix is a list of various funding pools. You will want to determine which pools you utilize and how much to source from each. Together, these capital sources of funding make up your funding mix.
Some funding mix pools include personal savings, investors, and crowdfunding.
Strategize for your funding
Now that you know how much money your ice cream shop will cost and what your funding mix is, you’ll be able to strategize.
How you approach each funding pool within your funding mix will be essential to develop.
For example, will you need to create a presentation to show a small group of investors? Perhaps, you will need to draft a letter, email, or make an elevator pitch for those you seek money from.
Execute your strategy
After developing your funding mix and creating a strategy, you will want to follow through on the plan to get funds. This means setting appointments and making follow-up calls or emails.
Following up and answering any additional questions that investors may have will be critical.
It’s important to answer things questions in a timely fashion – as well as be open, honest, and transparent with your investors, partners, and lenders.
Assess and Re-evaluate
As you work through your funding options, you will need to continuously assess and re-evaluate the financial commitments that you’ll be receiving. You will then need to make adjustments to your funding mix.
For example, let’s say that you have established that 20% of your funding mix would be composed of savings, and 20% would be borrowing from friends and family.
Now, let’s say that your family and friends could only come up with 15% of what you were hoping for – which pool would you get the rest of the money from?
In light of changing commitments, you may have to rework your funding mix option to ensure you have enough money to see your ice cream shop vision through.
Ice Cream Shop Operational Expenses
It is essential to realize that your startup costs make up a significant portion of your initial expenses. However, you may have some early operational expenses that you need to have money for – this may include employee training, marketing, inventory, or labor hours.
Therefore, ensure that you include at least 3 to four months of operational costs in your funding mix.
Further Reading: Low-Cost Ice Cream Shop Ideas
Additional questions:
Will you need to alter your concept?
As your funding picture comes into focus and you re-evaluate your financial support, you may decide to alter your original concept. While you may need to downsize your original ice cream shop concept, you may also choose to expand your idea if you get investors to put down even more money.
Should you use credit cards to fund your ice cream shop?
Credit is one funding pool that exists primarily out of convenience. While it theoretically can be a funding source, it isn’t the best method to cover your ice cream shop business startup costs.
High-interest payments, charges, and fees make using credit cards less appealing. Therefore, I would consider avoiding using credit cards as a significant source of funding.
