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 step guide to starting your italian ice 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 italian ice business?
Starting a small water ice vending business is inexpensive. Some types of Italian ice carts are available for less than a thousand dollars, and even top-of-the line carts are less than $4,000. The cost of buying wholesale water ice is also a lot less than the price for ice cream.
The real cost of vending is obtaining the right permits and staying legal. In most cities, vendors need to belong to a commissary to obtain a vending license, and the rent for the use of the commissary is from several hundreds of dollars to thousands each month. Italian ice vendors who only operate at festivals usually can avoid the commissary charge, but will need to pay vendor fees directly to the festival organizers. All in, a mobile water ice vending business can cost less than $7,000.
Opening a storefront to sell Italian ice is much more expensive. The cost of additional freezers, dipping cabinets, and other equipment is much more than a simple cart. In addition, owners of a storefront need to pay rent and utilities, even when the store is closed during the winter. Locating a storefront water ice business in a location which is warm throughout the entire year offers a better chance for success.
What are the ongoing expenses for an italian ice business?
The ongoing expenses include rent or commissary charges, restocking, and fees for festivals and labor.
Who is the target market?
Children love Italian ice, but many adults buy scoops for themselves, too. This is especially true at festivals or other active outdoor activities when ice cream may be a little too heavy. Italian ice has a perception among many customers as being a healthier alternative to other sweet snacks.
How does an italian ice business make money?
An Italian ice business earns money through selling scoops of Italian ice.
How much can you charge customers?
Prices for a scoop of water ice is usually the same as the average price for a scoop of ice cream. Many vendors sell a single scoop in a cup for two to three dollars.
How much profit can an italian ice business make?
A small scoop of water ice in a cup with a spoon costs around 35 cents to make and will sell well for two dollars. That is almost 600% profit! Italian ice has a long shelf-life if frozen, and it is rare to lose money through spoilage.
How can you make your business more profitable?
Combining an Italian ice business with other food businesses which are popular throughout the year helps to reduce the risk of poor weather forcing a business to close. Food businesses like soft pretzels, roasted nuts, smoothies, and cookies are great options for adding to a water ice menu.
What will you name your business?
Choosing the right name is very important. 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 italian ice business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
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.
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.
Federal Business Licensing Requirements
There are federal regulations regarding what can and cannot be added to, sold as, and processed with food. Attached is a resource from the Food and Drug Administration detailing the process of starting a food business: How to Start a Food Business
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate an Italian ice business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
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.
For 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.
Certificate of Occupancy
An Italian ice business is generally run out of a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to an Italian ice business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your Italian ice business will be in compliance and able to obtain a CO.
When selling food, you will need licensing from a local health department; all establishments serving food are required to pass a health inspection. Tips for faring well on a health inspections
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
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 italian ice business
The best promotion method for a water ice business is to just show up where the customs already are located and offer free samples. Customers usually purchase an Italian ice without planning, so investing in advertisements is not the best use of resources. On the other hand, Italian ice shops with a permanent location need to heavily advertise throughout the season to drive business in the door.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
A well-known brand combined with a good location is usually enough to attract customers, especially if it is a mobile vending cart. To keep customers coming back to brick and mortar storefront, owners need to create a child-focused and exceptionally fun experience. Loyalty programs and other specials, like limited-time flavors, will keep customers coming through the door.
Italian ice shops should remember to send out a flyer to past customers to remind them when they are planning to reopen for the season.
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 Italian Ice Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
An Italian ice business is perfect for anyone who is looking for a mostly seasonal or part-time food business. The owner of an Italian ice business should enjoy working outside during hot weather. In addition, any water ice business owners who are planning to travel to fairs or festivals in other locations for work should feel comfortable pulling a trailer on the highway.
What happens during a typical day at an italian ice business?
After restocking an Italian Ice cart or dipping cabinet, the remainder of an operator's daily activities involves selling and scooping water ice. At the end of the day, the equipment needs to be cleaned and any leftover Italian ice needs proper storage.
What are some skills and experiences that will help you build a successful italian ice business?
Besides basic business skills, Italian ice business owners should have some food experience. Most areas of the country require an operator of an Italian ice business to have a business license, a food handler's license, and for mobile businesses, a vending license. Past experience dealing with the various permitting agencies can speed up the process. Owners of an Italian ice business should love to interact with a wide variety of people and have great customer service skills.
What is the growth potential for an italian ice business?
The easiest way to increase the growth potential for an Italian ice business is to extend the number of days the business is open. To successfully extend the season, mobile Italian ice businesses which operate in Northern states can head South to take part in festivals during the colder weather at home. Purchasing additional mobile vending units will also increase gross sales, but will lead to more expenses as well.
TRUiC's YouTube Channel
For fun informative videos about starting a busines visit the TRUiC YouTube Channel or subscribe below to view later.
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 italian ice business?
A great idea to jump start a water ice business while reducing expenses is to partner with an existing business. Many businesses attract large numbers of young people throughout the year like indoor playground and arcades. These businesses may allow a water ice cart to set up permanently inside for a cheap rent or a small percentage of sales.
Business owners who want to sell name-brand Italian ice and step into a fully tested system should consider a franchise opportunity. Many water ice franchises are available online with prices to meet almost any budget.
How and when to build a team
Small vending businesses usually do not need additional employees, but for storefronts, it is important to have a good team from the start. Employees who work in this type of business are generally students or others looking for short-term jobs and do not earn much more than minimum wage.