Ice cream is a beloved treat that people of all ages enjoy. It has been the favorite dessert of Californians for generations. Many people dream of creating their own ice cream business and wonder how much money they would make.
How much revenue you would make as an ice cream shop owner depends on various factors, including competition, location, and marketing strategies. When talking about the average numbers, ice cream businesses make about $100,000 to $600,000 annually.
If you are considering opening up an ice cream shop business, you need fine financial advice and guidance. Make sure you consult with a restaurant CPA in Oakland before making any decisions to have clarity over things.
Ice Cream Industry in 2024: Overview
In 2024, the global Ice Cream market reached a revenue of US$14.27 billion. It is expected that the compound annual growth rate (CAGR) will be 5.07% from 2024 to 2029. Currently, China is leading in terms of ice cream shop revenue, reaching US$21.86 billion in 2024. On average, each person is expected to consume 8.2 kilograms of ice cream in 2024.
The Ice Cream Stores industry in the US had a market size of $6.563 billion in 2024. These figures are only expected to grow in the future. Therefore, if you are considering opening up an ice cream business, there could not be a better time.
The trends in the ice cream industry have been rapidly evolving. People have come a long way from the classic flavors of chocolate, vanilla, strawberry, and butterscotch. Customers are asking for more, and thus, businesses are experimenting with more unconventional flavors.
Apart from that, there have been attempts to make ice cream healthier. Vegan, low-calorie, high-protein, and probiotic-rich options are hitting the market. Additionally, businesses have shifted towards more eco-friendly packaging and ethical ingredient sourcing.
Revenue streams in ice cream shops
Traditionally, ice cream shops only had one source of revenue: customers who visited their store. However, the world has come a long way.
The primary sales come from dine-in, take-out, and delivery. However, ice cream shops have also started making their own merchandise and selling them in their shops. These may include coffee mugs, water bottles, fridge magnets, etc. Apart from that, ice cream shops also diversify their menus by adding items like shakes, pies, cakes, and other things.
Factors Affecting Ice Cream Shop Earnings
Some key factors that determine your ice cream shop earnings include:
- Location: Choosing the right location is crucial. You want a place with high foot traffic, especially near a school, college, children’s parks or shopping malls.
- Unique Selling Proposition (USP): There are thousands of other ice cream shops in your state, but what makes yours different? Having a USP can be a specific flavor, commitment to sustainability, etc.
- Seasonal fluctuations: Seasonal fluctuations happen in most businesses. For ice cream shops, winters are a little bit slower than summers.
Break-even analysis
The break-even point is where your revenue equals your expenses, and you start making a profit. Knowing your break-even point is crucial for pricing your products and providing the best service to your customers.
To know your break-even point, make sure that you know what your fixed and variable costs are. Then, apply this formula:
Break-even point = Price per unit − Variable costs per unit / Fixed costs
For example, if your break-even point comes out to be 1,000 units of ice cream, it means that you need to sell 1,000 ice creams to start making a profit.
How a CPA can help?
Whether you are considering opening up an ice cream shop or have a newly opened one, you need financial guidance. A restaurant CPA will help you set budgets, analyze fixed and variable costs, ensure tax compliance, and much more. Hire one today!
