Do you want to start an ice cream business from home? Well, we have a complete guide here on how you can start a successful homemade ice cream business with less investment.
A homemade ice cream business is very different than a professional ice cream chain. Being the most popular dessert all around the globe, ice cream has a market on almost every corner. The business comes with plenty of opportunities and prospects. If done in a proper manner, you can grow your homemade ice cream and scale up in the future.
10 Steps to Start a Home-Based Ice Cream Business
Step 1. Understanding The Basics of Ice Cream Business
Before you start, you first need to understand how the ice cream business works. The best way could be a job at an ice cream shop. This will help you to understand the ice cream business in-depth. In case you can’t, it’s better to clear up a few things first.
Have a clear understanding of the following things in the ice cream industry:
- Raw Materials
- Supply Chain Management
Even if you choose to operate from home, having a clear understanding of these things is really important for an ice cream business owner.
Step 2. Competitor Analysis
You need to understand the local taste and trends as well as the potential competition you might face while running your ice cream company. What are the flavors available in your area, pricing, brands, and more? You need to be different, or at least better than what others are doing. It is necessary to conduct market research and find out the gaps available in the local market. It will help you in better planning of the business.
It’s important to have a USP that will differentiate your ice creams from others.
Step 3. Write an Ice Cream Selling Business Plan
You need to plan to implement things perfectly. If you truly want it to happen, do plan it carefully. As a homemade ice cream business, it’s really important to decide the flavors first. You need to plan out which flavors you will be producing, how to store them, sourcing raw materials, and packaging.
Even if you are not sure about how much to produce, you can take a rough estimate with a target number in your mind.
Step 4. Setting Up a Budget
While you don’t need a huge investment here, you still need to set up a budget. This will help you estimate your future production and the raw materials you need to buy. There will be some additional costs involved as well like packaging and a bit of branding.
If you are planning for ice cream manufacturing on a larger scale, you may also have to buy a few types of equipment.
You should also print a few boxes and stickers to give your ice cream business a jump-start in terms of branding. So, think of a name for your brand here.
Step 5. Legality & Permits
Ice cream being food, you will need to acquire a few licenses to sell it commercially. You will have to follow certain guidelines related to the production of ice cream at home. Your permits will also depend upon your scale of business, production, and distribution.
If you are from the United States, you can register your business as an LLC. This type of business formation will not only help in the smooth filing of annual taxes but also in protecting your personal financial assets.
Step 6. Deciding the Type of Ice Cream to Offer
If you wish to offer ice creams in a single domain, you can continue with different flavors under a single category. But, like an ice cream maker, you have a bunch of options to choose from. You can even choose to sell ice cream in different categories across multiple segments.
From frozen yogurt to custard to chocolate bars to sundaes, there are several variations in the ice cream business.
If you are a beginner, stick to a single category and grow gradually. Once you know you are comfortable producing a type of ice cream, you should then move on to the next one.
Step 7. Pricing Ice Cream Products
For home-based businesses, experts advise first to market your ice creams with a specific quantity and quality. Either, it’s organic or free from preservatives, or made with natural colors only and more. You should let your ice cream have a USP against the big ice cream companies and their mechanically produced products.
This will help you price your products independently.
Either you can choose a price close to your competition, or below it. You can even price it at par with other ice creams, and then market it as natural and homemade.
Step 8. Establish a Distribution Network
As a homemade ice cream business, the most difficult part is the distribution. You have to plan a distribution channel very tactfully. As you are low on resources, you should first contact local shops and offer them a sample of ice cream. Follow a two-channel distribution.
First the local shops in your area, and a single point distribution by storing all the ice cream at home.
Step 9. Promoting Your Ice Cream Business
For a homemade ice cream business, the promotions should first target the audience in your area. Start with a small kiosk on any of the busy streets in your area with free samples and your phone number for orders. Then distribute flyers around all the houses with notes in their letterboxes.
You may even set up a Facebook page to put up updates and offers. People can directly contact and order ice cream from your community page.
Step 10. Scaling Up & Expansion
Starting a homemade business doesn’t necessarily limit you to it there only. You should have a bigger picture in mind, where you will have to utilize the resources properly to grow your business. Once you start making, you need to capitalize on the points and sources where you see a steady flow of revenue.
You may also choose to buy a store or get a truck. As you start earning profits, you should use it to expand your business and reach.
FAQs on Ice Cream Business
What is the Difference between Homemade Ice Cream vs Branded Ice Cream?
First of all, you need to make sure that you are following all the standard health casualties to produce and sell ice cream commercially. At home, you will produce ice cream your way with no distribution network.
On the other hand, branded companies use machines to produce and pack their ice cream with a defined network.
Do You Need a License to Sell Ice Cream From Home?
While you may choose to sell ice cream from home, if you are legally registering your business, you will have to follow all the required procedures. Being a food item, you will need a food license to sell your ice cream legally and commercially.
How Much Capital Do You Need to Start Ice Cream Business?
The capital needed will largely depend on multiple factors like space rent, purchase of used or new equipment, and salaries of staff. However, on average you will need an investment of $25,000 to $60,000 to start a small-scale ice cream business.
Coming to the chances of turning a homemade ice cream business profitable, you have plenty of opportunities and scope.
Everyone loves ice cream. So use the opportunity to start a successful ice cream business at home out of the sweet integrant!
About the Author: 99businessideas.com led by Rupak Chakrabarty is committed to helping beginners, entrepreneurs, and small business owners in starting, managing, and growing their businesses.