About this type of business
In the 1950’s there were about 20,000 ice cream van operators in Britain – now there is less than a quarter of that number.
The problem isn’t just the reliance on seasonal and sunny trade, but also the swamping of the market by supermarket chains and the introduction of legislation limiting where people can trade.
Having said that, there is still a very good market for ice cream and a potential to make a lot of money.
The Main Advantages of an Ice Cream Business:
1) Excellent Profit Margins
On a hot sunny day few things can beat an ice cream. When the weather is fine and the pitch is right, ice cream vans can clean up. Ice cream offers probably the best profit margins in catering. A quick check on one wholesaler’s website shows 12 litres of Mr Whippy for £15 which will make 923 x 50/60g servings of soft ice at 1.6p each, which is around 1% of your average £1.50 sales price. Obviously you have to also pay for the cone, petrol, running of the van, tax and wages out of that, but compared to most catering businesses – most businesses in fact – this is a very tidy margin.
2) Minimal Waste
Waste is not a major issue, the most you are likely to throw away is a litre of soft ice at £1.25 a pop. Imagine what it costs a burger trader to throw away 70 burgers, plus buns etc. Your major cost in terms of waste is likely to be petrol and wages if the heavens open. Due to the long shelf life of most of an ice cream vendor’s stock, you are unlikely to lose much money on waste, avoiding one of the major headaches of any catering business.
3) Little Skill Required
Assuming that you are not making the ice cream yourself from scratch, there is very little skill required to run an ice cream van. Unlike some hot food units where certain dishes require some cheffing skills, ice cream vendors just need a good grasp of food hygiene, a driving licence and sometimes a CRB check to allow you to work with children.
4) Seasonal Popularity
When the sun does come out, everyone wants an ice cream. It is a traditional summertime treat, which is obviously very popular with children, although, most people will eat an ice cream in good weather, while they may not eat so much hot food.
5) Find Business
You can travel around looking for customers, you don’t have to wait for them to come to you. If one road is a bit quiet, you can always move onto the next, as long as you have permission to be there. You can even play chimes to attract customers.
The Main Disadvantages of an Ice Cream Business:
1) Bans and Licences
Over the last decade or so, ice cream vending has been targeted by health campaigners and Local Authorities, who have banned vans from many of the places that were most profitable e.g. near schools, parks and town centres.
Each Local Authority will have its own interpretation of the legislation and how to apply the rules, so it is essential that you talk them about where you can and can’t trade, whether you will require a licence and if, when and how you can use the chimes.
You are also likely to need to get a street trading licence from the local council and you may find that you are prohibited from working in certain areas or on certain pitches. Despite all this, there are still illegal ice cream operations, flaunting the licensing rules and many others, which has had a negative impact on those trying to do it properly.
2) Supermarket Competition
Like many other small businesses, the ice cream trade has been affected by the dominance of supermarkets who can offer multi-packs of choc-ices and lollies at considerably less cost than ice cream vendors.
3) Weather Dependent
To state the obvious, the weather in the UK has never been ideal for ice cream traders. In particularly wet years it can be a real struggle to make money. As the season is so short, one wet month can have a major impact on your cash flow and profitability.
4) Finding a Pitch
If you are going to ‘work the streets’ and have found yourself a pitch, be sure of one thing, someone has, or is most likely working that pitch already at the moment. Mobile trading can be very competitive and it may be difficult to break in where there are several vendors already operating – it has been known to create threatening behavior. If you decide to go the franchise route you may find that there is a support mechanism in place to help with pitch finding, but in general this is the hardest part of setting up in the ice cream business.
- Are you going to take over an existing business or start from scratch
- Are you going to buy into a franchise e.g. Walls
- Going to trade on the streets, at events or both
- What training, documents and licences are required in order to trade legally
- what type of ice cream do you want to sell? Hard or soft? Gelato? Organic?
- Going to trade from a van, trailer or cart/trike
It is important that you answer these questions, as the costs and profits will vary widely depending on the decisions you make. For instance, a new ice cream van can cost upwards of £60,000, a five year old one averages about £12,000, a new trailer might cost around £10,000 and a trike or cart might be as low as £3,000.
Creating a business plan will really help at this stage. It may sound very complicated, but it is in fact quite simple and should help you in the decision making process.
Other factors to consider
- Who are you competing against? Are there going to be any problems?
- Are you employing staff or working by yourself?
- Full time or part time?
- Is the market expanding or contracting?
- Is there room for another player?
- How much will you charge? Could a child afford it?
These are issues that you should address before parting with any of your hard earned cash.
The great majority of your customers will pay you in cash. Occasionally you may get a corporate client that will want to pay by cheque or even by credit or debit card, so you need to make your terms clear at the outset.
You will need to estimate how much income you will receive over the next 12 months, including VAT. To do this you will have to estimate how much ice cream and other products you are likely to sell, and at what price. You will also need to know at what price you can buy them and don’t forget the seasonal trends.
There are other things you can sell as well as ice creams – snacks, lollies, choc-ices, sweets and so on. You may decide to offer hot food such as hot-dogs and burgers to boost your income during the winter months. This will require additional training, cleaning and equipment. Don’t forget that there is a limit to the amount of equipment that you can fit into an ice cream van, so it’s important that you only stock popular items. The secret is don’t be afraid to try something different, but remember, TEST, TEST, TEST to see which items sell best.
Other products you could consider:
- Cold drinks and semi-frozen ‘slush’ drinks
- Sweets & confectionery
- Snacks e.g. crisps, sandwiches
If you are interested in getting started in the ice cream business then we strongly suggest that you buy our Profitable Mobile Catering guide. It’s information is invaluable.