The Entrepreneur’s Checklist for Buying an Ice Cream Shop

Article updated on November 18, 2019.

During both chilly weather and hot summer days, ice cream is a delicious treat enjoyed year-round. Whether your dreams pull you towards ice cream franchise opportunities or private specialty-owned shops, there are lots of steps involved in landing a worthwhile deal. If you’re interested in buying an ice cream shop, make sure to follow Sunbelt Business Brokers’ complete checklist below.

1. How much revenue does the ice cream shop produce?

buying an ice cream shop with sunbelt

Ice cream shop owners operate their stores with a relatively low capital intensity. Industry experts are expecting owners will spend just $0.11 on capital for every $1.00 invested for labor purposes. This favorable expectation plays a key role in the success of ice cream shops which were accountable for about $5 billion in revenue this past year.

Paired with a 1.8 percent annual growth rate, the ice cream shop business is both profitable and extremely scalable to accommodate increased sales during the warmer months. One sure way to make your ice cream parlor lucrative is to secure a prime location. Assess the ice cream store for its convenience and how well it currently fits in the community. Most prosperous businesses are located in high-traffic, popular areas.

2. How will you differentiate your ice cream store from the crowd?

Due to an increased focus on health and additional dietary options, it’s essential your ice cream business is conscious of the current market’s demands. As a baseline, determine how your ice cream shop compares to industry giants such as Ben and Jerry’s or Dairy Queen. With more ice cream brands supplying grocery and convenience stores with their products, it’s crucial you make your ice cream shop appeal to the masses. Some ways to help differentiate your store include:

  • Offering dietary-specific options like vegan, dairy-free, gluten free, and more;
  • Investing in an ice cream truck;
  • Creating unique flavors;
  • Using locally-provided ingredients;
  • Offering both homemade ice cream and soft serve ice cream;
  • Creating specialty ice cream cakes, sundaes, milkshakes, smoothies, and other treats; and
  • Focusing on marketing and social media strategy.

Though ice cream is typically a high-calorie treat, you should make efforts to align yourself with today’s current health-focused market. Tapping into this trend with healthful alternatives can help you appeal to a broader pool of consumers.

3. Why is the current owner selling the shop?

Your early conversations with the current ice cream store owner should include some fundamental questions. One of the first you should ask is, “Why are you selling your ice cream shop?” The owner will likely reference reasons including retirement, burnout, illness, poor performance, financial issues, or new opportunities.

However, take note if the owner cites performance or financial struggles. While a change in ownership can sometimes be the key to turning a business around, it often is a queue that the business is not a wise investment.

4. Does the sale include real estate?

Once you’ve examined the above aspects of the ice cream shop, you should next inquire about the building. Find out whether the build is leased or owned so you can prepare for other potential costs. If the building is owned, determine if it will come with the overall purchase. If the building is leased, it’s best to fine-tune the lease agreement to understand the measurements needed to transfer ownership.

5. Will you need to purchase your own ice cream equipment?

Like many other businesses, the cost of necessary equipment can quickly add up. To help you determine what the ice cream shop will cost, ask the current owner if the sale includes any equipment. To gauge potential costs, a commercial ice cream machine typically costs $10,000 or more depending on the size. Keep in mind the size of your shop to help estimate any costs you didn’t initially expect.

 6. What are the ice cream shop’s current expenses?

Once you’ve determined the real estate and equipment details, you should ask the current owner about his or her present expenses. Learning more about the current operational costs can help you estimate the costs involved with bills, materials, employee compensation, general building and equipment maintenance, and more.

7. What is the value of the ice cream store?

During your final questions to the business owner, you should also ask how he or she determined their asking price. Learning the reasoning behind the asking price can earn you more bargaining power during final negotiations.

Hearing the owner’s asking price is a great place to start, but keep in mind that the best determination of value will come from a professional. During your valuation process, consider enlisting the help of a business broker from Sunbelt to help you pinpoint a realistic value.

If you’re ready to take the plunge into business ownership, begin searching for ice cream shops for sale. Sunbelt Business Brokers can assist through every stage of buying an ice cream shop. To get started, locate your closest Sunbelt office here.

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