As the dairy industry has a strong foothold in India and the climate is hot, the ice cream parlour is a perfect retail food venture. The culture of dining outside, having surplus money with the young generation is the major reason for the increasing demand for ice cream shops.
Ice-cream is typically regarded as a seasonal product, with demand peaking during the summer months. However, in recent years, the consumption of ice-cream and other frozen novelties in winters has been on the rise. A mix of factors is responsible for lessening the seasonal impact and contributing to the overall growth of the country’s ice-cream industry.
Is Ice Cream Business Profitable in India?
India’s current ice-cream market is worth Rs 3,000 Cr, including the unorganized sector. Increasing urbanization, rising incomes, consumer awareness, improved cold supply chain, growing deep freezer penetration, and growth of modern format retail facilities are giving a fillip to the country’s frozen desserts business, which is highly capital intensive.
The reasons for steady growth are changing consumer perception, capturing regional variations, diverse consumer segments, favorable retail location, product range and innovation, festivities, and marketing and promotions.
10 Steps to Start an Ice Cream Parlour Business
Find below the basic steps to start an ice cream shop in India:
1. Understand the Local Market
The ice cream industry in India has seen a lot of change in recent years. Gone are the days, when ice cream was sold only on small carts at the roadside. The ice cream business nowadays is more organized and different formats of selling ice cream have evolved.
You will see a lot of ice cream parlors and food trucks in cities and towns across the country. It is advised to conduct detailed market research and gather as much information as possible before starting the business.
2. Create a Business Plan
In initiating an ice cream store, a proper business plan or project plan is required. Ice cream comes in many different qualities like low-fat ice creams, frozen yogurts, cake ice creams, imported Ice cream, milkshakes, prepackaged Ice Cream, etc. Decide the store space, products, and marketing plan. You can start the ice cream store business in two ways.
3. Choose the Format
One is through buying a franchise of an established brand or by having your own store. If you are starting the business with no experience, then buying a franchise would be a most prudent decision. Calculate your monthly fixed overhead cost and make financial planning with ROI calculations.
4. Ice Cream Store Business Registration & License
In starting an ice cream store in India, you will need to get the following license and registration:
- Company Registration: If you are a starter with a low budget, initiate the business with the registration of the One Person Company. If you have partners, you can register your firm as LLP or Pvt. Ltd. Company.
- Trade License: Obtaining a Trade License from the local Municipal Authority is a must.
- Shop & Establishment Act License: This license is a must when you are operating a retail store.
- GST Registration: GST registration is a must at present to start and run an ice cream parlour business.
- FSSAI License: Having a license from the Food Safety and Standards Authority of India(FSSAI) is mandatory for running an ice cream parlour in India
5. Area & Cost to Start an Ice Cream Parlour Business in India
The minimum area required to start a small ice cream parlour is around 2500-300 sq. ft. However, for a larger format with more sitting space, you will need more floor space. You can also opt for a food truck format if you are not interested in a retail store.
It is estimated that an investment of around Rs 5 lacs will be needed for a small ice cream store. For larger formats, the investment can go to Rs. 15 lacs or more.
6. Fix the Profit Margin for Your Ice Cream Business
If you are selling your own manufactured uniquely flavored ice creams, you can set your profit margin based on a value-based pricing strategy. However, while selling ice creams of a reputed third-party brand, you can expect a profit margin in the range of 20%-30% depending upon the item.
7. Equipment Needed to Open an Ice Cream Parlour/Shop
You will require a wide array of equipment to run an ice cream shop for smooth functioning. Some of the basic types of equipment are mentioned below:
- Ice Cream Machines( If you plan to make ice creams of your own)
- Ice Cream Dipping Cabinets
- Storage Cabinets
- Packaging Materials
- Cups & Utensils
In addition to this, you must buy a noiseless generator. This because you need your freezer to be active all the time to avoid ice creams getting melted. You must have a 24/7 electricity supply. Also, you will have to buy efficient POS( point of sale) software for financial billing.
8. Select a Good Location & Setup For Ice Cream Store
Ice cream is an “impulse” product. People who buy ice cream usually do it on impulse when they see it and are tempted. Selecting the right location is the most important factor in getting success in the ice cream store business. If you are counting on car traffic, then a drive-through window is almost mandatory.
Enclosed malls are a better proposition for year-round traffic and people prefer them to stroll through and buy ice cream.
9. Set Up the Interior & Exterior
Design your ice cream parlour in such a way so that customers get attracted and enjoy spending time in your shop. It is better to hire a professional interior designer to set up the store.
Create attractive banners with sufficient lighting to make the shop a happening place.
1o. Create a Web Presence
Presently, it is almost a must to have a website for any business. A company website not only helps you to get more customers but also enhances the brand image of your ice cream shop. Check our detailed guide on how to create a website without any technical knowledge.
In addition, create social media profiles in the name of your company and keep on posting information on different activities and new products of your ice cream parlour.
Editorial Staff at NextWhatBusiness is a team of Business Consultants having years of experience in small and medium scale businesses.