How to Write an Ice Cream Shop Business Plan

Whether you’re looking to raise funding from private investors or to get a loan from a bank (like a SBA loan) for your ice cream shop, you will need to prepare a solid business plan.

In this article we go through, step-by-step, all the different sections you need in the business plan of your ice cream shop. Use this template to create a complete, clear and solid business plan that get you funded.

For more information about ice cream shops, make sure to read our guide below:
How to Open an Ice Cream Shop in 10 Steps

1. Executive Summary

The executive summary distills the details of your business plan into major points potential funders can easily grasp within a few minutes. It usually contains a brief description of your product, financial growth plans, vision and mission statement, target market, marketing strategy, funding ask, and your team.

Though the executive summary is the first and the most important section, it should normally be the last section you write because it will have the summary of different sections included in your business plan below.

Why do you need a business plan for an ice cream shop?

The purpose of a business plan is to secure funding through one of the following channels:

• Obtain bank financing or secure a loan from other lenders (such as a SBA loan)
• Obtain private investments from investment funds, angel investors, etc.
• Obtain a public or a private grant

How to write your ice cream shop’s executive summary?

Your executive summary shouldn’t be more than two pages and should grab and sustain the attention of whoever reads it. In most cases, how you present the information here determines how feasible your business appears to potential funders and if they will bother about the remaining pages. Remember, first impressions matter! Here are the major parts your executive summary should contain:

• Business Overview: here, you explain your business vision and goals, your products and pricing strategy. Also mention where your store is located, how big it is, whether it’s a sit-in or takeaway-only ice cream shop, etc.
• Market & competitive overview: here you must go in depth about the ice cream industry in your area (the city you intend to open your shop for example), the level of competition from other ice cream shops, and the demography of your target market (age, income level, gender, ethnicity, education, religion)
• Sales & marketing strategy: how will you reach your target market? What marketing channels will you use? What is your marketing budget?
• Management & people: what are the roles and responsibilities of every team member? What are their experiences? Who manages the team?
• Financial plan: how much profit and revenue do you expect in the next 5 years? When will you reach the break-even point and start making profits? You can include here a chart with your key financials (revenue, gross profit, net profit)
• Funding ask: what loan/investment/grant are you seeking? How much do you need? How long will this last?

2. Business Overview

Here, you shed more light on your ice cream shop concept while answering questions potential funders will likely ask. For instance:

• Why did you decide to open an ice cream shop today?
• Where is your shop located? Why did you choose that location?
• What is your business model: sit-in, takeaway ice cream shop or food truck?
• How many employees will you hire to run your shop?
• Will you specialize in a specific ice cream specialty? Will you offer other products (e.g. coffee, drinks, etc.)?
• What legal structure will you adopt for your business?

History of the project

Any business overview must start with explaining the history of the project. There are 2 components here:

• Passion & experience of the business owner
• Rationale behind starting a ice cream shop today

Passion & experience

You may or may not have prior experience. If you have experience, speak about it and how it will help you to run your business. For instance, you may have worked as a manager in one of the leading ice cream franchises in the country and you want to start your own.

Rationale

Is there a certain problem (or perhaps, a set of problems) that your ice cream shop will try to solve? For example, the area where you want to operate may not have a full-service ice cream shop despite being located in a busy summer vacation area next to the shore.

But that’s not all! The market must be suitable for a business to exist and thrive. For instance, if you are trying to open a gelato foodtruck next to an already very successful and longstanding gelato ice cream shop, the business may not succeed. 

b) Business model

This section of the Business Overview should explain the model you want to adopt for your ice cream shop. For example:

• Will it be an independent or a franchise ice cream shop?
• Is this a seasonal or year-round business?
• Will it be a food truck or a brick-and-mortar location?
• Will you buy and remodel an existing ice cream shop, or will you have one built from the scratch?

c) Products

What ice cream products will you sell (Italian gelato vs. different flavors)? What additional products will you offer your customers to beat the competition (Milkshakes, sundaes, yogurt, etc.)? Will you have unique services ( custom-themed ice cream for events, outdoor catering, etc.)?

d) Target market

You need to define your target market to be able to sell to them. In other words: who is your ideal customer?

A few questions you must ask yourself is:

• How old are they?
• Are they families?
• Are they tourists or residents?

e) Pricing strategy

Your pricing strategy influences your key financials, so you must get it right. You don’t want to set prices so low that you almost run at a loss or so high that you alienate your target market.

We strongly recommend you include a pricing list here. While it may not be possible to provide a proper pricing table for all products that you will offer, it is still a great idea to provide a table that gives an overview of your pricing structure.

For example, you can provide an average price based on categories like shown below:

However, don’t go into extreme details here as you might lose investors’ interest. They just need the big picture to assess your business profitability: they will tie your pricing strategy with your financial projections later on. Keep details for the appendix instead.

f) Legal structure

Finally, your business overview section should specify what type of business structure you want. Is this a corporation or a partnership (LLC)? Who are the investors? How much equity percentage do they own? Is there a Board of Directors? If so, whom? Do they have experience in the industry?

3. Market Overview

A complete understanding of the market where you want to operate is important for the success of your business. That’s also something you must showcase in your business plan.

You must cover here 3 important areas:

• Industry size & growth: how big is the ice cream industry in your area? What is its growth rate (or decline rate) and what are the factors contributing to its growth or decline?
• Competition overview: how many competitors are there? How do they compare vs. your business? How can you differentiate yourself from them?
• Customer analysis: who is your target audience? What type of ice creams do they prefer? What is their average spend per order? How frequently do they visit an ice cream shop?

a) Industry size & growth

How big is the ice cream industry in the US?

The overall US ice cream market was valued at $13.3 billion in 2020, and is projected to be $15.8 billion by 2027. This includes ice cream shops, yet the biggest part is retail ice cream (the ice cream you buy in a store).

Within the overall US ice cream market, ice cream shops represents $5.1 billion in 2022 (so approximately 1/3 of the overall ice cream industry).

Moreover, there were approximately 11,000 ice cream shops in the US in 2022: that’s an average annual turnover of $430,000 per shop..!

How big is the ice cream shop industry in your area?

After getting a clear picture of the ice cream shop industry in the US as a whole, narrow down to your location. It’s very likely that you won’t find the number anywhere (at least not for free). In that case, you can use our guide to estimate the TAM, SAM, and SOM for your business.

Here is an example of how to do it:

We already know the average annual turnover per ice cream shop is $430,000. Therefore, if the location where you will operate has a total of 15 ice cream shops, the ice cream shop industry in the area is worth about $6.5 million.

Yet, be careful with averages too: for example, Minnesota is ranked one of the least US states where ice cream consumption is low. You can’t compare the sales you’ll make in a city in Minnesota to a city in California, the US state that consumes the largest amount of ice cream. 

How fast is the ice cream shop industry growing in your area?

We know the US ice cream shop industry has increased by 0.6% from 2017 to 2022. But what about the area where you want to open your shop?

US national averages are a great addition to your business plan, yet they don’t necessarily help to assess the ice cream shop industry where you want to open your store.

As you likely won’t find this information online, you can instead rely on the number of ice cream shops in the location as a proxy for market growth.

For example, if your city had only 14 ice cream shops in 2019 and 15 in 2022, you can assume that the average annual growth rate of the industry is about 2%.

b) Competition Overview

You’ll learn a lot of business practices if you study your competition: How do they acquire and retain customers? Where are they located? What type of ice cream do they sell? Etc.

For a better understanding, you can use a SWOT analysis to compare your risks and rewards with the competition. Here’s an example :

Strengths	Weaknesses	Opportunities	Threats
3 years of experience managing an ice cream shop	No brand reputation	Pioneer advantage in the location	Established franchises planning to enter the location with more product offerings
Connections with suppliers	Low capital.	Shop situated close to commercial centers and public places

c) Customer Overview

Here, you need to show whoever looks through your business plan that you understand your target audience’s needs and preferences.

For example, here are a few questions you must ask yourself:

• Who is your target audience (age, demographics, etc.)?
• How do they prefer to consume ice cream (on-the-go vs. sit-in)? What do they complement ice cream with (drinks, cakes, cookies, etc.)?
• What ice cream flavors they want the most?

4. Sales & Marketing Strategy

This is the section of your business plan where you outline your customer acquisition strategy. Try to answer here the following questions:

• What is your Unique Selling Proposition (USP)?
• What are the different marketing strategies you will use?
• How do you intend to track the success of your marketing strategy?
• What is your CAC or customer acquisition cost?
• What is your marketing budget?
• What introductory promos and offers do you intend to provide for attracting new customers?

What marketing channels do ice cream shops use?

Even though ice cream sells itself, you still need to invest in marketing channels to increase sales. The standard marketing channels include:

• Billboards & signage
• Social media 
• Referral programs
• Partnerships with stores and restaurants
• Getting an ice cream truck to go to food festivals and public events
• Traditional media (radio and television) for franchises and chains

5. Management & People

You must address 2 things here:

• The management team and their experience/track record
• The organizational structure: different team members and who reports to whom?

Management

Small businesses often fail because of managerial weaknesses. Thus, having a strong management team is vital. Highlight the experience and education of senior managers that you intend to hire to oversee your ice cream parlor.

Describe their duties, responsibilities, and roles. Also, highlight their previous experience and explain how they succeeded in their previous roles.

Organization Structure

Even if you haven’t already hired a pastry chef, bakery managers, shift leaders, serving staff, cooks, bakers, cashiers, and other relevant staff members, you must provide a chart of the organizational structure defining hierarchy and reporting lines.

Of course, the number of employees and their roles will vary greatly depending on the number of shops you operate, whether your ice cream parlor is independent of part of a franchise, and the concept (sit-in vs. takeaway vs. food truck).

6. Financial Plan

The financial plan is perhaps, with the executive summary, the most important section of any business plan for an ice cream shop.

Indeed, a solid financial plan tells lenders that your business is viable and can repay the loan you need from them. If you’re looking to raise equity from private investors, a solid financial plan will prove them your ice cream shop is an attractive investment.

There should be 2 sections to your financial plan section:

• The startup costs of your project (if you plan to start a new store, add a new location to your ice cream shop chain, etc.)
• The 5-year financial projections of your ice cream shop(s)

a) Startup Costs

Before we expand on 5-year financial projections in the following section, it’s always best practice to start with listing the startup costs of your project. For an ice cream shop, startup costs are all the expenses you incur before you start making sales. These expenses typically are:

• The acquisition of the real estate (if you buy)
• The lease deposit (if you rent)
• The renovation and equipment costs
• License & permits, business insurance, etc.

Of course, the startup costs depend on a number of factors, like the number of stores you plan to open, their size, the quality of the design and equipment, etc.

b) Financial Projections

In addition to startup costs, you will also need to build a solid 5-year financial model in the business plan of your ice cream shop.

Note that your financial projections should be built using a spreadsheet (e.g. Excel or Google Sheets) and presented in the form of tables and charts in your business plan.

As usual, keep it concise here and save details (for example detailed financial statements, financial metrics, key assumptions used for the projections) for the appendix instead.

Your financial projections should answer at least the following questions:

• How much revenue do you expect to generate over the next 5 years?
• When do you expect to break even?
• How much cash will you burn until you get there?
• What’s the impact of a change in pricing (say 10%) on your margins?
• What is your average customer acquisition cost?

You should include here your 3 financial statements (income statement, balance sheet and cash flow statement). This means you must forecast:

• The number of customers / orders over time ;
• Your expected revenue ;
• Operating costs to run the business ;
• Capex (cost to renovate / build your ice cream parlor, furniture and equipment, etc.)

When projecting your financials, make sure to sensitize sales volume (customers), pricing as well as the expenses (inventory, salaries, etc.). Indeed, a small change in these assumptions may have a significant impact on your revenues, and most importantly, your profits.

7. Use of Funds

This is the last section of the business plan of your ice cream shop. Now that we have explained what your business model is, what type of products you sell, how you get customers, etc., this section must now answer the following questions:

• How much funding do you need?
• What financial instrument(s) do you need: is this equity or debt, or even a free-money public grant?
• How long will this funding last?
• Where else does the money come from? If you apply for a SBA loan for example, where does the other part of the investment come from (your own capital, private investors?)

If you raise debt:

• What percentage of the total funding the loan represents?
• What is the corresponding Debt Service Coverage Ratio?

If you raise equity

• What percentage ownership are you selling as part of this funding round?
• What is the corresponding valuation of your business?

Use of Funds

Any business plan for an ice cream shop should include a clear use of funds section. This is where you explain how the money will be spent.

Will you spend most of the loan / investment in paying your employees’ salaries and the COGS (inventory)? Or will it cover mostly the cost for acquiring the real estate and renovations?

For the use of funds, we also recommend using a pie chart like the one we have in our financial model template where we outline the main expenses categories as shown below.