Do you want to start a shaved ice business? If YES, here is a complete guide to starting a shaved ice business with NO money and no experience plus a sample shaved ice business plan template.
One of the very first steps to take when it comes to starting a new business is to carry out findings to know if the residents of the location you are about to launch the business will be willing to purchase the goods or services you are about to start selling. This is very important if you don’t want your business to die a natural death.
For example, if you intend starting an ice cream related business, you are expected to launch the business in a location with the right climatic condition; a place where there is some measure of fair weather in terms of heat. If you make the mistake of launching an ice cream business in a city known to snow all through the calendar year, you are likely not going to make headway with such business.
If your shave ice business is in the right location, if your shop is located in an area with good human and vehicular traffic, and if you have different flavors of shave ice and other ice desserts, then you may not have to struggle to get people to visit your shop and make purchase.
As a matter of fact, shave ice business can be located in any part of town as long as there are children and even adults who love shave ice plying and playing around the location.
Generally, shave ice kiosks and shops are located in schools, parks, shopping malls, hotel lobbies, railway stations, bus stations, campuses, sport centers and in any public facilities as long as you are given the permission to locate your shave ice kiosk or shop there.
On the other hand, if you operate a mobile shave ice shop, then there won’t be any restriction to the places you can sell your shave ice just like the conventional food truck business. So, if you are considering opening a shaved ice business, all you need are capital to purchase or lease/rent a suitable facility (if you are not settling for mobile shave ice shop), the required equipment, utensils and furniture.
You would also need some additional capital to purchase the initial supply of assorted flavors and toppings, pay your employees at least for the first 3 months, and also to pay your utility bills. These expenses are called working capital.
Steps to Starting a Shaved Ice Business
1. Understand the Industry
Shave ice or Hawaiian shave ice as it is popularly called is an ice-based dessert made by shaving a block of ice. Even though the product looks like a snow cone, but snow cones are made with crushed ice as against shaved ice. Despite the fact that it is made with shaved ice, it is called “shave ice”, not “shaved ice”.
Shave ice or ground-up ice desserts are commonly served throughout the United States of America and Canada in a conical paper or plastic cup with multiple flavors and with a scoop of vanilla ice cream and/or azuki bean paste at the bottom of the cup.
They are often flavored with local ingredients such as guava, pineapple, coconut cream, passion fruit, li hing mui, lychee, kiwi fruit and mango.
Players in the Ice Cream Production/ice cream truck industry of which shave ice or ground – up ice deserts line of business is a part of predominantly produce different flavors of shaved ice deserts, snow cone, ice cream, frozen yogurt and sherbet et al, and sell these products to downstream markets such as retailers and food service related businesses.
Between 2010 and 2015, the Ice Cream Production industry’s performance has declined as repressed disposable income in the years following the recession caused consumers to purchase a smaller volume of industry goods at retail stores, ice cream trucks and food service related businesses.
In addition, the growing health concerns around us have caused many people to cut down their consumption of foods such as shave ice, snow cones and ice cream, which is naturally high in fat and sugar. Largely, the industry revenue is projected to decline by 0.3 percent per year on average to $8.0 billion in the next 5 years.
It is on record that many players in the Ice Cream Production/ice cream truck industry were able to successfully beat the economic downturn and grow stronger over the last five years, as healthy and nutritious shave ice, snow cones and ice cream became one of America’s favorite frozen desserts.
No doubt, the increasing popularity of the dessert has enabled the speedy franchise growth of well-known brands in the industry which has made this industry one of the foodservice sector’s biggest success stories of the past decade. The ice cream production/ice cream truck industry has remained resilient even as other food segments waned during the recession period.
The Ice Cream Production/ice cream truck industry is indeed a thriving and profitable industry in most countries of the world.
It is a major sector of the economy of the united states of America and they generate a whooping sum of billion annually from more than 373 registered and licensed ice cream production cum ice cream truck companies (shave ice production inclusive) scattered all around the United States of America.
The industry is responsible for the employment of well over 18,474 people. Experts project that the industry will grow at a 0.3 percent annual rate between 2011 and 2016.
One of the great benefits of starting a shave ice shop business is of course low startup costs, and entrepreneurs interested in starting the business can choose to either rent or buy new equipment and also either operate a mobile shave ice truck or operate from a fixed facility (kiosk or shop).
The shave ice business will continue to blossom because people will always want to take shave ice when they are out in the open especially during summer. Despite the fact that the industry seems over – saturated, there is still room big enough to accommodate aspiring entrepreneurs who intend opening their own shave ice shops in the United States of America.
If you are contemplating starting your own shave ice business in the United States, you should ensure that you carry out thorough market survey and feasibility studies.
States in the southern region in the United States such as Texas and Florida et al can be ideal for a shave ice truck business simply because of the climatic condition/weather there. If you get some key factors wrong before starting your shave ice business, then you are likely going to struggle to stay afloat.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who buy shave ice and related desserts from shave ice shops cut across all genders and age group. Male and female, adults and children all consume shave ice hence the demographic composition of the shave ice shop business is all encompassing.
The truth is that when it comes to selling shave ice and other ice desserts, there is indeed a wide range of available customers. In essence, your target market can’t be restricted to just a group of people, but all those who reside around the locations where you have your shave ice shop and who have the purchasing power.
So, if you are thinking of opening your own shave ice shop business, then you should make target demographics all encompassing.
3. Decide Which Niche to Concentrate On
It is important to state that there is no known niche area when it comes to shave ice shop business. Every player in this line of business are basically involved in preparing and serving / selling shave ice, snow cones, ice creams, yoghurt and perhaps other ice – desserts.
Naturally, it is common to find a standard shave ice shop engage in preparing and selling all of the under listed;
- Different flavors of shave ice deserts such as guava, pineapple, coconut cream, passion fruit, li hing mui, lychee, kiwi fruit and mango cherry, grape, blue raspberry, strawberry, lemon-lime, banana, and watermelon et al
- Snacks
- Training, Advisory and Consultancy Services
- Selling Franchise
The Level of Competition in the Industry
The competition that exists in the shave ice shop line of business goes beyond competitions amongst shave ice shops in your location; you are expected to compete with snow cone shops, ice cream shops, mobile food trucks, and any other outlets that also sell shave ice and other ice desserts. Thus, it will be right to say the competition in the shave ice shop business is tough.
The truth is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your products or business properly, you will always make headway in the industry. Just ensure you are good at preparing the different flavors of snow cones and ice desserts you have on your menu, you can deliver excellent customer care services and you know how to attract and reach out to your target market.
But over and above, there are several shave ice shops, snow cone shops, ice cream shops, mobile food trucks, and any other outlets that also sell shave ice and ice desserts scattered all around the United States. So, if you choose to start your own shave ice shop business in the United States, you will definitely meet stiff competition amongst them.
4. Know Your Major Competitors in the Industry
In every industry, there are always brands that perform better or are better regarded by the customers and general public than the others.
Some of these brands are those that have been in the industry for a long time, while others are best known for how they conduct their businesses and the results they have achieved over the years. These are some of the leading shave ice shops in the United States of America and in the globe;
- Tc Shaved Ice
- Iceberg Dive Inn
- Sno-La Snowball Lounge
- Sno Biz Treats
- Chuck’s Sno Cones
- Snoh Ice Shavery
- New Orleans SnoBall Café
- Oasis Shaved Ice
- Pelican’s SnoBalls
- Polar Chill Shaved Ice
- Sweet Firefly
- Kona Ice of San Angelo
- Snofellas Shaved Ice
Economic Analysis
If you are looking towards successfully launching a business and maximizing profits, then you need to ensure that you get your economic and cost analysis right and try as much as possible to adopt best practices in the industry you choose to build a business in.
Shave ice shop business is not a Green business; as a matter of fact, you will come across several shave ice shops and other outlets that also sell shave ice and ice desserts when you drive through town.
So, if you are mapping out your economic and cost analysis, you should carry out thorough market survey and costing of what is required to rent a space where you are expected to open your shave ice shop business and the amount required to purchase shave ice making machines (blenders), refrigerators, ice block/shave making machines, coolers, assorted flavors and other supplies and also the cost to successfully run the business.
Over and above, if you are considering starting a shave ice business, then your concern should not be limited to the cost of renting a shop facility and purchasing shave ice making machines and equipment but also on branding and on how to build a robust clientele base. The truth is that if you are able to build a robust clientele base, you are sure going to maximize profits in the business.
5. Decide Whether to Buy a Franchise or Start from Scratch
When it comes to starting a business of this nature, it will pay you to buy the franchise of a successful and well – established shave ice shop as against starting from the scratch. Even though it is relatively expensive buying the franchise of an established shave ice shop brand, but it will definitely pay you in the long run.
But if you truly want to build your own brand after you must have proved your worth in the Ice Cream Production industry, then you might just want to start your own shave ice shop business from the scratch.
The truth is that it will pay you in the long run to start your shave ice shop business from the scratch. Starting from the scratch will afford you the opportunity to conduct thorough market survey and feasibility studies before choosing a location to launch the business.
Please note that most of the big and successful shave ice shops around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.
6. Know the Possible Threats and Challenges You Will Face
If you decide to start your own shave ice shop business today, one of the major challenges you are likely going to face is the presence of well – established shave ice shops and other outlets that also sell shave ice and other ice desserts. The only way to avoid this challenge is to create your own market.
Other challenges and threats that you are likely going to face are economic downturn and unfavorable government policies. There is nothing you can do as regard these threats and challenges other than to stay positive that things will work well for you.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
Generally, you have the option of either choosing a general partnership, Limited Liability Company which is commonly called an LLC, or even a sole proprietorship for a business such as shave ice shop business.
Ordinarily, sole proprietorship should have been the ideal business structure for a small – scale shave ice shop business especially if you are just starting out with a moderate startup capital in a small neighborhood and with just one outlet.
But people prefer limited liability Company for some reasons. As a matter of fact, if your intention is to grow the business and have chains of shave ice shops across the United States of America and other countries of the world via franchising, then choosing sole proprietor is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships.
Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholders meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your shave ice shop business; limitation of personal liability, ease of transferability, admission of new owners, investors’ expectation and of course taxes.
If you take your time to critically study the various legal entities to use for your shave ice shop business with the ability to sell franchise and open chains of shave ice shops all across the United States of America, you will agree that limited liability company; an LLC is most suitable.
You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.
8. Choose a Catchy Business Name
When it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Usually it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
If you are considering starting your own shave ice shop business, here are some catchy names that you can choose from;
- Ryan Whyte® Shave Ice, LLC
- Bask ‘n’ Bounce®, Shave Ice Shop, LLC
- Tippy Tapa® Ice Dessert Mobile Truck, Inc.
- Drape Ventures® Shave Ice Shop, Inc.
- Islanders® Shave Ice Shop, Inc.
- Calm Nerves™ Ice Dessert Shop, Inc.
- Blue Veil© Shave Ice Shop, Inc.
- Clear Star™, Shave Ice Shop LLC
- Snow White© Shave Ice Shop, Inc.
- Cassandra Butler© Ice Desert Shop, Inc.
9. Discuss with an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your shave ice shop business.
Here are some of the basic insurance covers that you should consider purchasing if you want to start your own shave ice shop business in the United States of America;
- General insurance
- Health/Medical insurance
- Liability insurance
- Workers Compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own shave ice shop business, usually you may not have any need to file for intellectual property protection/trademark. This is so because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
But if you just want to protect your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection.
11. Get the Necessary Professional Certification
When it comes to operating a shave ice shop business, you do not need to have any formal training or special certification before you can be allowed to open and operate a shave ice shop business in the United States of America and in all countries of the world.
All you need is informal training that will expose you to the in and out of preparing varieties of flavors of shave ice and other ice desserts and also effectively running the business. On the other hand, if you come across any form of certification that can aid you to conduct your shave ice shop business effectively, then by all means try and pursue such certification.
12. Get the Necessary Legal Documents You Need to Operate
These are some of the basic legal documents that you are expected to have in place if you want to legally run your own shave ice shop business in the United States of America;
- Certificate of Incorporation
- Business License
- Tax Payer’s ID/Tax Identification Number
- Food and drink handlers certificate
- Health inspection Certificate
- Proof of district-issued food and drinks manager identification card
- Copy of license for the service support facility and/or a recent inspection report
- Business Plan
- Non – disclosure Agreement
- Employee Handbook
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Online Terms of Use (if you also operate online)
- Online Privacy Policy Document (basically for online payment portal)
- Company Bylaws
- Memorandum of Understanding (MoU)
- Building License
- Franchise or Trademark License (optional)
13. Raise the Needed Startup Capital
Starting a shave ice shop business can be cost effective if you choose to start on a small scale by running a small shave ice shop business in a street corner.
Securing a standard and well – positioned store/kiosk facility and purchasing shave ice making machines (blenders and mixers), refrigerators, ice block/shave ice making machines, coolers, assorted shave ice flavors and other supplies are part of what will consume a large chunk of your startup capital.
If you choose to start the business on a large scale, you would need to go source for fund to finance the business because it is expensive to start a standard large scale shave ice shop business. Here are some of the options you can explore when sourcing for startup capital for your shave ice cone shop business;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell of shares to interested investors
- Applying for Loan from your Bank
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends
14. Choose a Suitable Location for your Business
When it comes to choosing a location for your shave ice shop business, the rule of thumb is that you should be guided by the demand for snow cone and other ice desserts and easy access to wholesale purchasing of fresh shave ice flavors. Of course, if you are able to secure a central location for your shave ice shop business, it will give people easy access to your shop.
It cannot be overemphasized that the location you chose to open your shave ice shop business is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people with the required purchasing power and lifestyle.
If you make the mistake of renting or leasing a facility for your shave ice shop business in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more in promoting the business and perhaps giving direction to potential customers.
These are some of the key factors that you should consider before choosing a location for your shave ice shop business;
- The demography of the location
- The demand for shave ice and other ice desserts in the location
- The purchasing power of residents of the location
- Accessibility of the location
- The number of shave ice shops, snow cone shops, ice cream shops, mobile food trucks et al and any other outlets that also sell shave ice and other ice desserts in the location
- The local laws and regulations in the community
- Traffic, parking and security et al
15. Hire Employees for your Technical and Manpower Needs
On the average, there are no special technologies or equipment needed to run this type of business except for shave ice making machines (blenders and mixers), (microwave, toasters, dishwasher, refrigerator, blender, etc.), Storage hardware (bins, utensil rack, shelves, food case), Counter area equipment (counter top, sink, ice machine, etc.), Computers and receipt issuing machines, Sound System (For playing music), Point of Sale Machines (POS Machines), CCTV Cameras and Flat Screen TVs.
So also, you will definitely need computers / laptops, internet facility, telephone, fax machine and office furniture (chairs, tables and shelves) amongst others and all these can be gotten as fairly used.
As regard leasing or outright purchase of a bar facility, the choice is dependent on your financial standing, but the truth is that to be on the safe side, it is advisable to start off with a short – term rent/lease while test running the business in the location. If things work out as planned, then you go on a long – term lease or outright purchase of the property.
When it comes to hiring employees for a standard shave ice shop business with more than one outlet, you should make plans to hire a competent Chief Executive Officer (you can occupy this role), Admin and Human Resources Manager, Merchandize Manager, Shop Manager, Shave Ice Machine Operators, Sales and Marketing Officer/Sales Girls and Sales Boys, Accounting Clerk and Cleaners.
These are some of the key employees that you can work with. On the average, you will need a minimum of 5 to 10 key staff members to run a small – scale but standard shave ice shop business.
The Service Delivery Process of the Business
When it comes to the business services process of shave ice shop business, there are no hard and fast rules about it. Basically, it is the duty of the merchandize manager to help the organization purchase assorted shave ice flavors and packaging/serving materials.
They go out there to source for good purchasing deals and they also ensure that they only purchase at the right prices that will guarantee them good profits.
Once the shave ice shop business is in full operation, the shave ice and other ice desserts are prepared and they are listed on the menu. Shave ice and other ice desserts purchased from a shave ice shop are usually take away because they may not have the capacity to accommodate all their customers per – time.
It is important to state that a shave ice shop business may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated shave ice shop business process is not cast on stone.
16. Write a Marketing Plan Packed with ideas & Strategies
Generally, running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a shave ice shop business, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands that determine the market direction for the shave ice shop industry.
Businesses these days are aware of the power of the internet which is why they will do all they can to maximize the internet to market their services and products. In other words, a larger percentage of your marketing effort will be directed to internet users.
These are some of the marketing ideas and strategies that you can adopt for your shave ice shop business;
- Introduce your shave ice shop by sending introductory letters alongside your brochure to corporate organizations, car owners, taxi companies, transport companies, households, sports organizations, gyms, schools, socialites, celebrities and other key stake holders throughout the city where your shave ice shop is located.
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across, so that those on the social media or those who read blogs will know where to go when they need to purchase shave ice and other ice desserts within your location
- Create a basic website for your business so as to give your business an online presence
- Directly market your products
- Engage in road shows in targeted communities from time to time to promote your shave ice shop business
- Join local shave ice shop business associations for industry trends and tips
- Provide discount days for your customers
- Advertise your business in community based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of Word of mouth marketing (referrals)
17. Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you sell your shave ice and other ice desserts at rock bottom prices is to purchase your supplies directly from wholesalers in pretty large quantities. The truth is the higher the quantity of items that you purchase directly from wholesalers, the cheaper you tend to get them.
Another strategy that will help you retail your shave ice and other ice desserts et al at the right price is to ensure that you cut operational cost to the barest minimum, and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products.
18. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If your intention of starting a shave ice shop business is to grow the business beyond the city where you are going to be operating from to become a national and international brand by opening chains of shave ice shops and franchising, then you must be ready to spend money on promotion and advertisement of your brand.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand awareness and create corporate identity for your shave ice shop business;
- Place adverts on both print (newspapers and food and drink magazines) and electronic media platforms
- Sponsor relevant community based events
- Leverage on the internet and social media platforms like Instagram, Facebook, Twitter, YouTube, Google + et al to promote your shave ice shop business
- Install your billboards in strategic locations all around your city or state
- Engage in roadshows from time to time in targeted neighborhoods to create awareness of your shave ice shop business
- Distribute your fliers and handbills in target areas
- Contact corporate organizations, car owners, taxi companies, transport companies, households, sports organizations, gyms, schools, socialites, celebrities and other key stake holders throughout the city where your shave ice shop is located informing them about your shave ice shop business and the flavors of shave ice and ice desserts you sell
- List your shave ice shop business in local directories
- Advertise your shave ice shop business in your official website and employ strategies that will help you pull traffic to the site
- Position your Flexi Banners at strategic positions in the location where shave ice business is located
- Ensure that all your staff members wear your branded shirts and all your vehicles and trucks/vans are well branded with your company logo et al.