Ice Cream Business Plan, With a Projection

An ice cream business plan is a plan for freezers and air. The freezers are the big startup cost, a batch freezer to make it and more to harden and hold it, and they run all year. The air is overrun: a gallon of mix makes more than a gallon of ice cream, so what a pint costs depends on how much air goes in, within what the standard allows. The plan also has to weigh pints sold to grocers, which bring volume at a wholesale price, against pints and scoops sold at your own window. In the example below, a small-batch maker in Alabama buys a pasteurized base from a dairy, sells pints to grocers and at its weekend window, scoops, and tubs to restaurants, and ends its first year about $32,700 ahead on $113,300 of sales, with the making and the window staff paid. Below is a description example, each part of the plan, the rules, the first year month by month, the startup budget, and a free template.

The short version

• Describe the business in a paragraph: the ice cream, where it's made, who buys it, the goals.
• Cost a pint from the base mix: the overrun, the flavors, the pint and label, your minutes, the delivery.
• Pints at your own window leave $6.76; pints to grocers leave $2.63 but sell more.
• Restaurants buy tubs; a weekend window sells scoops.
• Freezers and a van are most of the startup.
• Count pints by flavor and batch, and send grocers the oldest first.
• TaroStack keeps every batch with its lot and every pint counted by flavor. More below.

Part 1: the business description

Ironwood Pint Co., a made-up small-batch ice cream maker in Birmingham, Alabama, I use in these examples, writes:

Ironwood Pint Co. makes small-batch ice cream from a pasteurized base bought from an Alabama dairy, in a licensed production space, sold in pints to about a dozen grocers, at its own weekend scoop window, and in 3-gallon tubs to restaurants.

Part 2: the rules

Ice cream is a standardized food. It's made by freezing a pasteurized mix while stirring it, has at least 10% milkfat, and weighs at least 4.5 pounds a gallon with at least 1.6 pounds of total solids (21 CFR 135.110). The weight rule is what limits the air: a rich mix weighing about 9 pounds a gallon can take in roughly as much air again before it falls under 4.5 pounds. Buying a pasteurized base from a dairy, as this plan does, means the mix arrives pasteurized; making your own mix from scratch means pasteurizing it yourself, under your state's rules. Ask your state's dairy or food safety program what license a frozen dessert maker needs before you buy the batch freezer.

Pints sold in grocery stores carry a Nutrition Facts label unless the business qualifies for the small business exemption: fewer than 100 full-time equivalent employees and fewer than 100,000 units of that product sold in the United States a year, filed with FDA unless the business is smaller still, and with no nutrition claims on the label (21 CFR 101.9(j)(18)). What grocery buyers ask of a new supplier is in selling to grocery stores requirements. This is general information, not legal advice.

Part 3: what a pint, a scoop and a tub cost

The base mix is $10 a gallon. At 40% overrun, a gallon of mix makes 1.4 gallons of ice cream, or about 11 pints.

The window staff are counted per scoop: two people on a weekend afternoon, paid whether the line is long or short, come to about $1.50 a scoop at this plan's volume. More air would make a cheaper pint, and a lighter one; the 40% here is a dense, small-batch pint. How a recipe's cost is worked out step by step is in steps in recipe costing.

Part 4: customers and prices

A grocer that sells the pint for about $10 buys it for $6, which leaves $2.63. At full speed the grocers bring a little less contribution than the direct pints, $2,630 to $2,704, from two and a half times the pints, and the window's scoops another $2,730. Grocers also bring demos, a share of the freezer and sometimes fees for the shelf; what slotting fees are and when they come up is in slotting fees.

Part 5: the first year, month by month

Fixed costs are $2,195 a month: the licensed production space ($1,200), the frozen dessert license and inspections averaged ($40), power for the freezers ($250), insurance ($120), fuel and upkeep for the van ($300), store demos and samples ($250), and software and card fees ($35). Sales start at 15% of full speed and reach it in month 11:

The year's sales are $113,275 and the profit $32,687, with the making paid at $18 an hour and the window staff in the variable costs. Cash falls to −$1,358 by month 3, and pints are made and held before they sell, so the plan keeps $6,000 of working cash. Ice cream sells more in summer; in Birmingham the season is long, but plan the batches and the window's hours for it. Counting what's in a freezer is in freezer inventory sheet.

Part 6: the startup budget

The freezers and the van are $35,500 of it. At $32,700 a year, the $38,400 spent before working cash takes a little over a year to earn back.

Get the template

Download the ice cream business plan workbook. Four sheets: your pints, scoops and tubs with price, variable cost and a month's volume at full speed; the first year, month by month, with sales, profit and cash; your fixed costs; and your startup budget with working cash. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

Where this stops working

Twelve flavors, a batch of each a week, pints hardening in one freezer and held in two more, a dozen grocers each with its own order, tubs for restaurants and a weekend window. A notebook can't say how many pints of brown butter pecan are in the freezers, which batch a grocer got, or what a pint costs now that the dairy raised the base.

How TaroStack does it

TaroStack keeps every batch with its lot and every pint counted by flavor.

Batches with their lots. Each flavor is a recipe of base mix, flavors, pints and labels; each batch takes them off stock and gives the pints a lot with its date, noting the base mix's lot on its own.

Pints by flavor and freezer. Pints are counted by flavor, lot and freezer, on a phone in the cold, and a grocer's order is picked from the earliest dates first, with the lots each grocer got recorded as it ships.

What a pint costs. Batches are costed at what the base and mix-ins cost, and the price creep report shows when the dairy raised the base, so the $6 to grocers is checked against this month's pint.

Recipes, batches, lots and sales orders are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.

Questions people also ask

Is an ice cream business profitable?

It can be. In the example, a small-batch maker selling pints to grocers and at its own window, scoops and restaurant tubs ends its first year about $32,700 ahead on $113,300 of sales, after paying for the making and the window staff.

How much does it cost to start an ice cream business?

In the example, $44,400: a used batch freezer, a hardening freezer and two storage freezers, a dipping cabinet, a used van with a freezer, a first order of pints and labels, label design, a website, and $6,000 of working cash.

How much does it cost to make a pint of ice cream?

In the example, $2.94 before delivery and fees: $0.89 of base mix at 40% overrun, $0.60 of flavors, $0.55 for the pint, lid and label, and $0.90 of making and packing.

What is overrun in ice cream?

The air frozen into it. At 40% overrun, a gallon of mix makes 1.4 gallons of ice cream. The federal standard's minimum of 4.5 pounds a gallon limits how much air ice cream can hold.