These days, if you want to have a reliable source of income, opening your own business might be a great idea. It might sound like a major endeavor, but there are viable business models anyone can start without squandering their money. One such example is the humble snow cone stand. Selling snow cones is fun, it gets you outdoors, and it’s more or less seasonal — which means there’s not much chance of burnout. Building a summer snow cone business is also a great option for those who don’t work much during the summer.
Table of Contents
- Before You Begin
- Choose Your Location
- Buy Your Equipment & Supplies
- Choose Your Name & Create a Logo
- Create a Business Plan
- Get Started With Your Snow Cone Business Today
Before You Begin
A snow cone business is one of the simplest, easiest, and fastest proven business models you can create. But that doesn’t mean that careful planning and preparation are not critical to your success. Your first task is to fully understand what you’re getting into. Look up information on the local snow cone market in your area, and consider talking to established snow cone sellers near you. Some may be reluctant to share the information you want, but most will be friendly and will be more than happy to answer your questions.
Do Your Research
You have a responsibility to yourself and your prospective customers to have a complete plan before you start your new sno cone business. It is up to you to leave no stone unturned as you learn what it will take to achieve your goal. Here, we will lay out a complete plan on how to get started. But your particular circumstances are unique, and not every business of the same kind is exactly alike. You must nail down your needs and devise a plan to meet them if you want to be successful, and you can only do that with proper research.
Obtain Permits and Understand Local Laws
Not all cities or states will allow just anyone to start a snow cone stand, so it’s important to research your local laws and regulations regarding businesses like snow cone stands first. According to Ventured.com, the states that are most friendly to snow cone vendors and the like are Texas, Oklahoma, Florida, Louisiana, and California – in that order.
If your state is not snow cone stand-friendly, you might consider going out of state during the peak snow cone season to ply your new trade in more welcoming environs. Wherever you do choose to run your stand, you will need to obtain a business license, acquire permits, and have a full understanding of the laws regulating this kind of business in that location first. Failure to do this may lead to the ruin of your new business, and can even mean jail time and steep fines for you.
If you are interested in this idea, you’ve probably seen other snow cone vendors in your area. This can be a good sign and it can be a bad one. You will have to measure demand and endeavor to set up your business in an area where demand is highest. The greater the demand, the higher your prices can be. If you can’t sell your cones for at least twice the cost to make them, you won’t be in business very long.
Look at the prices other snow cone vendors are charging. Check out vendors in different locations such as the local beaches, the mall, the downtown area, around parks, and so on. You will have the most luck in locations where people are shopping and relaxing during their leisure time. But other vendors may have these areas fully served already.
You must understand the local interest and demand in your area fully to be successful – otherwise, you’re leaving everything up to blind luck.
Evaluate Startup Costs & Profitability
An indispensable part of your research phase is to understand your startup costs and when and how you’ll become profitable. For this, you will need to nail down precisely how must it will cost to obtain your equipment and inventory, secure your business license, permits, calculate operational coats such as fuel, food, and the like.
Having done that, you will need to create a realistic profits model for your snow cone business. This estimate should be conservative, while our costs should err on the opposite side. What we’re looking for, naturally, is that your sales/profits will outweigh the costs of setup and operation.
Let’s say your startup costs look like this:
- Cart & Equipment for one season: $3,560
- Inventory: $1,000
- Business License & Permits: $560
- Operational Costs (gas, premium location access) $300
Your inventory cost is based on an estimated cost to make one snow cone at .80 cents, figured out to 1,000 snow cones. If you can make and sell 1,000 snow cones at $3 apiece, you can expect to earn $3,000 that season.
So what we can see here is that you are not going to make your money back in the first season. That is not unusual, and it is not the end of the story. If you can continue to operate next year, you can cut your expenses down to inventory and operational costs. This we have at $1,300. If you earn at least $3,000 next year, you will be making a profit.
After one year of experience, you might even have learned a few things and gotten better at selling snow cones. So, as long as you can endure the trials of your startup season, you have a chance at attaining your dream of self-employment.
Choose Your Location
Where you decide to sell your snow cones will impact your costs and profitability, so it should be considered carefully. Up until this point, we have been working under the assumption that you will open a mobile snow cone stand. Arguably, that is the less expensive way to go. If you opt for a fixed location, i.e. a brick and mortar store, you will need to buy or lease a building, pay utilities and insurance, etc. While the costs will be higher for such a location, potential profits in highly-trafficked areas may make it worthwhile.
Setting up in a permanent location opens you up to all of the risks that make starting a new restaurant such a dicey proposition. A mobile snow cone cart or food truck, on the other hand, frees you from the risks faced by fixed locations. In fact, you can travel to any location you wish. You also have to cope with the possibility that you may be asked to leave your chosen location, so it presents risks of its own.
At the end of the day, your location choice will impact how much your startup costs will be and how much profit you can expect to make. Since a mobile snow cone business has much lower startup and operating costs, it is a much more affordable way to start. But if you have access to a brick and mortar location with high demand, a small business loan may be a wise investment in your future.
Buy Your Equipment & Supplies
Next, you’re going to need to buy all the necessary equipment, supplies, and inventory. We’ve already gone over including these factors into the estimated cost of your business plan, now’s the time to shop for and select specific items needed for your business.
First, find a stand large enough for your needs. How large it needs to be is dictated by where you intend to do business and whether or not you’re going to work in a fixed location.
Another major piece of equipment you will need is the best snow cone machine you can afford. Don’t cheap out here–if this unit fails, you don’t have a snow cone stand anymore until it’s fixed or replaced. You’ll also need to procure ice, syrups, paperware, cash register/s, refrigerators, molds, seating and tables (for vendors who work from a permanent location), etc.
Choose your items wisely, looking not only for the best prices but for quality, reliability, and durability. Buying cheap usually just means you’ll have to repair or replace it later on, so buy nice if you don’t want to buy twice.
Choose Your Name & Create a Logo
As we have already established, it is unlikely that you are going to be the only snow cone vendor in your area. You are entering a market that is full of established competition, so you’ll need a way to set yourself apart. Having an instantly-recognizable name and/or logo is a great way to accomplish this.
The name and logo of your new small business will communicate your brand identity instantly, creating a first impression that lasts. Make it unique, charming, and clear that you’re providing a snow cone buying experience unlike any of your competitors.
Take the time to think of a good name and develop a good logo, and be ready to hire a professional to make it look its best. An investment in these assets now could go a long way toward helping you get even further with your customers in the future.
Create a Business Plan
We’ve already made a sample version of your cost/expense comparison. Now we need to flesh out your business plan to increase your chances of running a successful business of your own.
Ask yourself the following questions:
- What am I selling? Do you intend to sell shaved ice, snow cones, or both? Is that all? Will your menu include other items like beverages and food items? Novelties?
- How will I sell? Will you use a mobile cart, a permanent stand, or a food truck?
- Where will I sell? Does the location you choose have heavy foot traffic? Will it bring you customers in the mood to buy your product, i.e. people vacationing, on a weekend outing, and so on?
- Will I include special events? Special events are a key way to promote your business, especially during the early days. The events you create are an important part of your branding and should align thematically with your company name and logo.
- Startup Costs, Operating Costs & Profits: By now, you should have a better idea of what your operating costs will be. Can you still expect to make a profit? If not, why, and how can you remedy the problem?
Menu and Pricing
In our example, we decided that a snow cone costs .80 cents to make and can be sold for $3. Does this hold true in your location? What are other vendors selling similar items for? You need to set prices competitive for your location and market to have the best chance of success. Consider diversifying your menu with add-ons, other menu items, and make sure you offer the most popular flavors.
Finally, you will need to come up with a meaningful and sustainable marketing plan. Advertising on social media is great, but it won’t mean much if people don’t go to your physical location. An effective social media campaign that shows your ads on the pages of nearby attractions can net you loads of local business if done properly.
Consider using a local affiliate program to ensure cross-site traffic with locally relevant results. Also, consider giving away gifts and novelties with your company name and logo like shirts, pens, hats, etc. to help secure customer loyalty and encourage repeat business.
Get Started With Your Snow Cone Business Today
Opening a snow cone business could be a fun way to make money for yourself, especially if you’re willing to work hard to serve others. While risks are involved in opening any kind of company, snow cone stand businesses present fewer than most, making them a great choice for would-be entrepreneurs of all kinds, particularly those with limited investment capital. With a little bit of research, some faith in yourself, and perhaps some luck, you too can achieve your dream of self-employment one snow cone at a time.