Start an ice cream truck business by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your ice cream truck business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening an ice cream truck business?
Your biggest expense will be the ice cream truck itself. This typically has a minimum cost of $10,000, but fancier models can run to twice that cost. The truck must be insured, which can cost between $800 to $1500 every year. One of the attractive things about the business is that you can acquire your starting stock of ice cream for as little as $500 and simply order more as needed.
What are the ongoing expenses for an ice cream truck business?
The ongoing expenses for an ice cream truck business are very straightforward. The primary expense is gas—to be completely safe, allot a budget of three dollars per gallon of gas and determine how far you will drive each month in order to get a reliable estimate of monthly fuel costs. You must also restock your ice cream, which should cost no more than the initial $500 (though you will order more as necessary, so periods of booming business may necessitate restocking more often).
Who is the target market?
As mentioned previously, your preferred clients will be children. In fact, most of your route research will focus on finding where and when large numbers of children will be.
How does an ice cream truck business make money?
The ice cream truck business model is simple: you sell clients ice cream and receive payment. Due to the nature of the business, most of the payments you receive will be in cash. However, devices such as Square allow you to take debit and credit card payments if you so desire.
How much can you charge customers?
While the exact amount will vary by region and exact product, you can typically charge customers between one and four dollars for the different products you sell. Higher priced items are those involving licensed characters, those considered premium or gourmet products, and those that are offer a greater quantity of ice cream. Some ice cream trucks will sell quarts of particular ice cream, for example, in addition to the typical selection of popsicles, ice cream sandwiches, and so on. You may consider adjusting prices based on season, such as making ice cream cheaper in the Fall, Winter, and Spring, and more expensive in the summer.
How much profit can an ice cream truck business make?
In one survey of average yearly profits, vendors were bringing in about $5000 a month and working about twenty days a month. Your own profit will have several variables, however. This includes how many days you work and, as mentioned above, how many rivals you have in your area. And, obviously, the longer you work, the more profit you make: your willingness to work long days during the summer or long into holiday weekends (when more children are free to buy ice cream) will dictate how much money you make.
How can you make your business more profitable?
Ways of making your business more profitable includes adding new routes and/or changing to more profitable routes, adding hours you work, adjusting the times that you visit certain neighborhoods, diversifying the products that you sell, and even just driving slower through your chosen neighborhoods.
If you do happen to live in a highly populated area, consider expanding by leasing or purchasing another truck and hiring additional help. Over the long term, growing your business like this could double or triple your profits.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your ice cream truck business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Find the right bank for you, read our review of the Top 5 Banks for Your Small Business
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate an ice cream truck business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
As an ice cream truck operator, you will need licensing from a local health department by passing a health inspection. In addition, you can expect that your ice cream truck will be randomly inspected by the local health department on a regular basis. Inspections will check for compliance with local health laws, typically related to prevention of food contamination.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Additional local licensing or regulatory requirements may apply. For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
- Depending on your location and truck build and size, your local department of motor vehicles may require you to obtain a special type of vehicle registration.
- It is advisable to have a comprehensive insurance plan, covering your vehicle, equipment, and any employees, as well as to be aware of parking and zoning requirements when operating your business.
STEP 7: Get Business Insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market an ice cream truck business
One unexpected way of marketing and promoting your ice cream truck is social media. This allows you to engage with the community, advertise routes and prices, and possibly offer unique discounts and promotions. The most traditional marketing, however, comes from the truck itself. This includes pleasant songs the truck plays that are familiar to children. Also, be sure that the ice cream truck has bright colors and eye-catching designs in order to be noticed by as many people as possible.
How to keep customers coming back
Promoting your business on social media, playing catchy music, and decorating your truck with bright colors are all great ways to attract new customers. In order to retain the customers, it is important to have set routes that you drive on set days so that you can establish regular customers. You may also consider punch cards or other promotions where repeat customers can eventually receive free ice cream as a reward.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start An Ice Cream Truck Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
An ice cream truck business is good for those who can handle periods of solitude, as you will likely be the only one working this business. You must also be good with children, who are your primary demographic. Finally (if obviously), you should be someone who loves ice cream, as this will help you sell your wares to customers.
What happens during a typical day at an ice cream truck business?
The primary daily activities of an ice cream truck business are exactly what you'd imagine: most of your day will be spent driving different routes and selling ice cream. Other activities include ordering and storing ice cream as well as researching the best routes and delivery times to maximize your business.
What are some skills and experiences that will help you build a successful ice cream truck business?
The essential skills of an ice cream truck business, driving and vending, are actually very basic. However, certain skills can help you build your business more quickly. This includes previous experience as an ice cream vendor and a background in something like business or management. If you have an existing relationship with local organizations and businesses where children congregate (such as schools, churches, youth clubs, and so on), it will help you more quickly discover optimum delivery routes.
What is the growth potential for an ice cream truck business?
While the exact growth potential for ice cream truck businesses has not been quantitatively researched, businesses such as artisanal ice cream and food trucks have experienced slow but steady growth in the last decade. The exact potential for your own business will depend greatly on your local area—for instance, whether there are any/many rival ice cream trucks or standing ice cream vendors in town.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting an ice cream truck business?
One good tip is to research the best routes ahead of time and then work them every day. As with any other business, regularity helps. That makes it easier for regular customers to find you at a certain time of day and buy your ice cream. Being friendly and talkative to customers also helps to establish a relationship with them—this is important when you are selling to close-knit neighborhoods that value relationships. Finally, don't forget to have as much ice cream variety as you can get—we are in a golden age of food and customers can sometimes be very picky.
How and when to build a team
Unless you intend to build a fleet of ice cream trucks, this is a business that is traditionally operated by a single person. This is typically considered one of the advantages of this job, as it keeps your overhead low and removes the need to manage and coordinate other employees. If you do have enough money to acquire an additional truck and supplies, and you feel there are profitable routes that you aren’t currently covering on your current schedule, this would be an ideal time to expand your business and hire an additional driver.