A good percentage of ice cream shops offer a minimum wage or slightly above it to their entry-level employees, and that is around $7.25 per hour.
Nevertheless, it is very necessary to note that some states and cities have a higher minimum wage, and ice cream shop owners will have to conform to those regulations. For instance, New York has a minimum wage of $15.00 per hour, and Seattle’s minimum wage is $16.69 per hour.
The exact amount you spend on labor will most often depend on factors such as the number of employees, their job titles, responsibilities, and experience.
For example, a manager in an ice cream shop will make more than a server, while a full-time employee will earn more than a part-time employee.
Owing to that, it is always recommended that the labor cost of the shop be factored into the ice cream shop’s pricing strategy to guarantee profitability and sustainability.
Running an ice cream shop comes with a wide range of operating expenses. One of the most notable expenses will have to be labor costs.
Your ice cream shop workers are without a doubt the face of your shop and are crucial assets, and you would want them to be compensated appropriately for their hard work and dedication.
Aside from the base salaries/wages cost, ice cream shop owners also need to take into account other factors associated with employees, including things like taxes, benefits, and overtime pay.
Factors That Determine the Average Labor Cost for Running an Ice Cream Shop
1. Location
This is one factor you wouldn’t want to skip especially since the exact amount you spend on labor will vary depending on your location.
Note that urban metropolitan cities and high-cost-of-living areas will mean higher labor costs especially when compared to businesses in rural areas.
2. Minimum Wage Laws
One thing you have to understand is that Federal, state, and local minimum wage laws differ exponentially and will play a massive role when it comes to how much you pay workers.
Just as it was noted above, some states and cities have a higher minimum wage, and ice cream shop owners will have to conform to those regulations. For instance, New York has a minimum wage of $15.00 per hour, and Seattle’s minimum wage is $16.69 per hour.
3. Employee Roles
In this line of business, there are numerous roles that will have to be filled to the cravings and needs of patrons. However, note that the exact amount as well as the types of employees you hire will definitely affect your labor costs.
In most ice cream shops, you will find roles like; scoopers, cashiers, cooks, supervisors, and managers, each with different pay scales.
4. Experience and Skill Levels
Note that workers’ wages in most other sectors will indeed vary depending on the worker’s experience and skill levels. It simply entails that entry-level workers will make less as against more experienced or specialized employees.
5. Hours of Operation
You have to understand that the amount of hours your ice cream shop stays open each day will also factor in when determining your shop’s labor costs. As such, longer hours or extended seasonal operations will mean more workers and that translates to more labor costs.
6. Employee Benefits
A good number of modern businesses tend to offer benefits to employees and thus work to draw in experienced and efficient workers.
As such, note that If your ice cream shop offers employee benefits such as health insurance, paid time off, or retirement contributions, these will most definitely hike your labor costs.
7. Employee Turnover
So much goes into managing employees. For one, you have to understand that high turnover rates will give rise to increased costs owing to the expenses that come with recruitment, training, and onboarding. As such businesses are advised to seek ways to reduce turnover because it helps to control labor costs.
8. Efficiency and Productivity
This is another critical factor that has a way of impacting the labor cost of businesses. In an ice cream shop business, having well-trained workers who take their jobs seriously works to limit the need for additional staff. Ideally, overstaffing will heighten labor costs, while understaffing would also lead to poor customer service and lost revenue.
9. Seasonal Variations
Ice cream shops are known to witness seasonal fluctuations in business, and will most often necessitate adjustments when it comes to staffing levels and labor costs.
10. Regulations and Overtime
This is another factor that will play a massive role in how much your ice cream shop spends on labor. In the United States, staying in line with labor laws will most often encompass regulations that have to do with overtime pay, breaks, and meal periods.
Conclusion
Your ice cream shop workers are without a doubt the face of your shop and are crucial assets, and you would want them to be compensated appropriately for their hard work and dedication.
The exact amount you spend on labor will often depend on factors such as the number of employees, their job titles, responsibilities, and experience.
Business owners should ensure they comply with state and federal labor laws, which include minimum wage requirements, overtime pay, and worker’s compensation insurance. Going against these laws will give rise to hefty fines and legal repercussions.