Players in the ice cream truck industry predominantly produce ice cream, frozen yogurt and sherbet et al, and sell these products to downstream markets such as retailers and food service – related businesses. No matter how attractive and profitable a business is, there are always pros and cons of owning such business. In this article, we will be looking at the pros and cons of owning an ice cream truck business and they are;
Pros of Owning an Ice Cream Truck Business
One of the advantages of operating an ice cream truck business is that expenses are relatively lower than operating a brick and mortar ice cream shop. Ice cream trucks are relatively less expensive to start. There aren’t any building regulations to adhere to or a serving area that you have to decorate and maintain.
In all, it doesn’t require a lot of capital to launch an ice cream truck business. Interestingly, you can start an ice cream truck business with a startup cost anywhere from $50,000 and up to start one. A reliable ice cream truck could cost at least $15,000.
However, it is possible to get a truck for far less. While these numbers are costly, it is still less expensive than starting a brick and mortar ice cream shop business. Once you get past all of the start-up expenses, all of the profits earned are yours to keep.
Many ice cream truck owners are <a ” target=”_blank” rel=”noreferrer noopener”>sole proprietors or operate as an LLC. This means that there is no board of directors or franchisers to consult who will take a percentage of the profits. However, it is not unusual for some ice cream truck owner to go into partnership or franchising.
Open for Creativity
The food truck industry that ice cream truck business is part of tends to be more forgiving when it comes to breaking any recipe rules. You don’t have to be a trained or certified to operate an ice cream truck. You just have to produce tasty ice cream!
Ice cream truck owners also tend to have a bit more room for creativity when it comes to branding their business and creating a unique recipe. Shifting consumer tastes have hampered the performance of the Ice Cream Production industry over the years.
In response to growing preference for healthier, premium food, industry operators have introduced new brands or reformulated their existing frozen dessert lines with higher-quality ingredients. Operators have also experimented with new flavor combinations and launched single-serving varieties that appeal to a wider range of health-conscious consumers and that is when liquid nitrogen ice cream was birthed.
Easy to Attract Sales
Another advantage of owning an ice cream truck business is that fact that it is easier to attract sales from passersby who ordinarily might just make up their mind to buy from you on the spot. Recently, there has been appreciable increase in the number of ice cream truck business owners in the United States of America.
This increase can be attributed to creativity, the change in lifestyle of the average Americans and of course post – recession and economic factors. In essence the food truck industry that ice cream truck business is part of is growing and the future is still bright for the industry.
Conventional ice cream shop owners are venturing into ice cream truck/cart business because it is easier for them to attract sales when they are mobile as against being positioned in one location. For example, an ice cream truck can visit more than two event venues in a day to sell their ice creams.
Lower Risks When Compared Brick-and Mortar Ice Cream Shop
Another advantage of owning an ice cream truck business is the fact that the risks involved is much lower than owning a brick and mortar ice cream shop.
Interestingly, anyone that wants to start a business especially those who are starting a small business for the first time, top on the list of their priority will be how to avoid unnecessary risks and ice cream truck business is one business that can boast of lower risks.
This is so because the business requires lower start-up cost and flexibility in marketing your products. For example, if you aren’t making sales from one location, you can easily switch to another location rather than get trapped biting your fingers in regret.
A good number of entrepreneurs start ice cream truck business and then go on to become successful ice cream shop franchise owners.
You Can Start Small and Save on Capital Costs
Another advantage of starting an ice cream truck business is that you can choose to start small and it could be starting with a small fairly used but reliable ice cream cart or truck. Unlike other related businesses, an ice cream truck business doesn’t necessarily need standard ice cream production facility and expensive ice cream production machines and equipment which usually requires expensive maintenance.
All you require is a good space for preparing your ice cream, deep freezers, and other basic ice cream making equipment. You just have to ensure that the place is squeaky clean to avoid contamination.
If you are producing your ice cream from home, then you can also save on capital costs, but, of course, you have to comply with the licensing requirements. With that, you will be able to save up some money and decide on what to do with the money.
Product Specialization and Creativity
The market for ice cream business is huge due to the different types of ice cream that are sold by players in this industry. However, you can choose to focus on a unique niche in this industry like liquid nitrogen. The concept of liquid nitrogen ice cream is becoming generally accepted because of the loads of advantages it brings to the industry.
The truth is that with ice cream truck business, you can challenge yourself by creating new recipes and inventing new products to improve sales and customer satisfaction. You can express your ideas by experimenting on different ingredients and incorporating different styles in branding your products. This is possible because once you try a recipe that people aren’t cool with, you can easily change it.
A Sustainable Market
Ice cream is consumed by almost everybody on our planet, and as as such, anyone who chooses to establish an ice cream business in any part of the world especially in tropical regions or countries in the equator is sure going to get good returns on his or her investment as long as they are doing the right thing when it comes to setting up a business and effectively running the business.
An ice cream truck business is one business that is hard to resist because ice cream is in high demand during summer. People of all ages take ice cream when they are hot. It has also long been considered recession proof, especially since people can generally afford it when they are broke.
Potential for Growth
Another advantage of starting an ice cream truck business is that you can also decide on how to expand your business. You can build your brand before expanding. Sometimes there is the opportunity to move into a larger area like opening a brick and mortar ice cream shop or operating a fleet of ice cream trucks in different cities or sell franchise.
The fact that this line of business is a profitable one means that you can truly expand the business in any direction that you so desire with little or no stress when compared to expanding other related business. Although thorough monitoring of sales and considering the prices of ingredients are pertinent in determining if or when to expand.
Cons of Owning an Ice Cream Truck Business
Availability of Parking Space and Zoning Regulations
The fact that you operate an ice cream truck business does not mean that you can park your truck in just any available space that you find. As a matter of fact, top on the list of operating an ice cream truck business is the availability of parking space.
For example, if you intend selling your ice cream in an area with high foot traffic, you are most likely going to be competing for prime parking locations.
The whole idea of an ice cream truck concept is to take your ice cream to the people rather than them coming to you. Even though your ice cream shop is mobile, you can’t park anywhere you like. Cities have local zoning restrictions, which designate commercial and non-commercial zones.
Due to this, most ice cream truck owners plan their schedule months in advance so that they can get permits to park in certain locations. Also, some cities don’t allow food trucks or ice cream trucks to park in the same spot two days in a row, so it takes careful planning to stay compliant.
In the United States where zonal regulations are fully enforced, ice cream trucks have to adhere to proximity restrictions to other restaurants or ice cream shops. Some cities may even require you to obtain a lease to park in a spot.
All of these parking regulations vary depending on the state. If you know which cities you plan to park your ice cream truck, it is best to jump ahead and start applying for those parking permits in the early stage of business planning.
Regular Maintenance Cost
One obvious disadvantage when it comes to operating an ice cream truck especially if you decide to start with a fairly used truck is the unexpected maintenance cost that it will attract. The fact that you move your ice cream truck from one location to another means that there will be regular wear and tear on the truck hence it will require that you spend money on maintenance.
These are some expenses that a new ice cream truck business would not want to budget for but sometimes it becomes inevitable if you must continue to be in business.
Hurdles Involved in Securing Licenses and Certifications
One of the bottlenecks involved in starting an ice cream truck business in the United States is overcoming the challenges of obtaining the right type of licensing and certifications. This is the less glamorous part of being your own boss.
While the idea of selling ice cream is great, you are expected to first secure permission from the city to do it. Every city has its own regulations for food truck operators.
Whether you plan on operating your business in the same city or looking to cross county or state lines, it is your responsibility as a business owner to be abreast with all of the regulations and obtain the licenses and certifications required to operate an ice cream truck business.
This usually is not an overnight process. It is best to plan for this so that you are not promoting prematurely or committing to sell in locations that you have not been cleared for.
Multiple Levels of Regulations and Compliance
Once you plan to sell ice cream in the United States or in Canada you are expected to meet the regular health and safety inspections of the business. You will need to have the standard business license. You may also be required to collect sales taxes or meet other specific licensing needs in your community.
Also, specific certifications regarding your skills as an ice cream producer may even be required to start this business. Although not every business faces such scrutiny, be aware of this before you begin the process of starting your ice cream truck business.
Small Profit Margin
When you consider the labor and utility cost of moving about with your ice cream truck, there is a probability that your profit margins on some products could be under 5 percent. In this industry, prices are set at 4x of what the cost per product happens to be.
If it costs you $1.50 to make a bowl of ice cream, that means you will be charging $6 per bowl of ice cream and that just is not in the budget of many households today. Moreover, price fluctuations happen to any business that is seasonal.
These price fluctuations can have serious consequences for the bottom-line of an ice cream truck business, as profit margins become slim, and sometimes ice cream truck businesses are forced to pass some of those costs on to the consumer, to avoid going out of business.
However, a common way to avoid the risk of price fluctuation in your ice cream truck business is to negotiate contracts so that you buy all of your ingredients in bulk and at fixed wholesale prices.
Open for Competition
One thing about a business that has lower risks, lower startup cost, no technical skills and of course a business that is profitable is that entrepreneurs tend to want to try their hands on such business hence the high level of competition in the line of business.
That is exactly the case with ice cream truck businesses. The level of competition in the business is high hence you must be pretty creative to survive in this business.
So, if you are looking towards starting an ice cream truck business, you must take into consideration that it is indeed a competitive industry and you must be prepare to fight for your own market share within the city you are going to be operating in.
It Requires Small Work Space
Another disadvantage of owning an ice cream truck business is the fact that you will be restricted to work or operate on a small space.
Ice cream truck and food trucks are small, and once you add in ice cream production equipment, deep freezer, a POS system (if you are accepting credit cards), and other necessary ice cream making ingredients, the space feels even smaller. Each city has requirements on ice cream truck cum food truck sizes, and most are not large.
In the United States, there are different regulations as regards the size of a food cart or food truck. for example, in Madison – Wisconsin it is compulsory for all food trucks be no larger than 120 square feet (10X12). You will be in the small space for hours at a time, so you must be okay with working in cramped quarters.
Operate Based on Seasons Dictate
The fact that you operate outdoors means that you will be at the mercy of the seasons. It means if it is raining or snowing or very cold, you won’t be able to transverse the streets to sell your ice cream. Most often than not, the most ideal part of the year to sell your ice cream is during summer or warmer and fair weather. In essence, operating an ice cream truck business is subjected to the dictates of the season.