Memories of sunshine, tinkling music, frozen treats … in the hot summer months, starting up an ice cream van business can seem very attractive. With the prospect of being your own boss, making a respectable income and becoming a hit with the neighbourhoods on your route – what’s not to like?
Starting on this new venture may also not be as onerous as you might think, making this prospect potentially very sweet indeed. Before you jump in, here are essential questions to consider.
Creating a business plan for your ice cream van business
One of the first steps when starting any business is to write a business plan. You need to consider what kind of outlay you can afford, and how you'll secure financing. Are you planning to use existing savings, or take out a loan? If you take out a loan, how will you keep up repayments if things don't work out?
You'll also need to calculate your incomings and outgoings. Will you be working by yourself or do you plan to employ someone? Will you be operating full time or part time? What prices do you plan to set, and will your target market (probably children) be able to afford them?
Location, location, location
If you're planning to start an ice cream van business, you probably have a route or a pitch in mind. Your next step should be to consult with your local authority to find out what their policies are regarding trading. Some places may have a ban on ice-cream vans in specific areas. Local authorities may mandate exclusion zones in or near busy shopping precincts, or ban ice cream vendors from pay-and-display parking. It's also common for authorities to set up exclusion zones around schools or play areas where children gather. You need to be aware of local regulations that apply to your proposed area of operation.
Competition comes in many flavours
As part of your business plan, you'll need to research your competition. If there any other ice cream vendors on your proposed route – brick-and-mortar or other ice cream vans – you need to consider how that might affect your profits. With their lower prices, supermarkets and corner-shops can offer very stiff competition. It's also very likely that unless another ice cream vendor has recently quit or retired, someone else is already operating in the area – and may strongly contest your right to do so. The right pitch can be very lucrative, and other operators will be very protective of a good spot.
Here are some questions to consider regarding competition:
● Who will you be competing against?
● If you have significant competition, will the market support another trader?
● What can you offer your customers that the competition doesn't?
● Is the market likely to expand or contract?
In some cases, you may be able to take over a round from an existing trader. This offers a number of advantages, not least the removal of a competitor. They may be willing to sell you their van and equipment, and may also provide invaluable information about the practicalities of working on a particular route or pitch.
Picking your products
An important choice you'll face is determining the kinds of products you plan to offer. There are two main types of ice cream van, known as hard and soft. A hard van only provides refrigeration for frozen goods and scoop ice cream. A soft van has the same facilities, plus a machine for soft-serve ice cream.
In regions where the climate is variable, you may want to diversify into other products besides ice cream. Sweets, crisps and soft drinks are all possibilities, but some van operators also choose to sell hot items: teas and coffees are popular, as are hot dogs, hamburgers and other cooked foods. If you want to offer hot foods as well as ice cream, you'll need to ensure that your van is fitted with proper cooking equipment and hot-food storage.
Your choice of products is highly significant. Consider your intended market and how you plan to stand out relative to other traders. If, for instance, you plan to offer your very own brand of artisanal, organic ice cream, you’ll likely face higher costs – and sell at higher prices – than other ice cream vans selling industrial products they can source in bulk. As such, you’ll need to ensure your customer base can afford your pricier ice cream; or, alternatively, devise a business model enabling you to make up for lower prices with greater volume. These decisions will depend on the findings of the industry analysis and market research you conducted while writing your business plan, so make sure they are sound.
Your vehicle and equipment
Your physical vehicle and the equipment you're planning to use are crucial elements of your business plan, of course. You need to think about the kind of van and refrigeration systems you'll invest in. As mentioned above, selling soft ice cream or adding hot snacks to your repertoire will require additional equipment.
As concerns the vehicle, you have several options: new or preowned, bespoke or conversion, modifying your existing vehicle … all of these can make a big difference on your starting up costs. Additionally, your choices will determine your options in terms of how to finance your small company’s business van: outright purchase, contract hire, lease purchase, the list goes on. In all cases, good fuel efficiency should be a top criterion, as fuel will be a major ongoing outlay.
Vehicles with bespoke conversions
If you do not already own a business van, you can kill two birds with one stone by acquiring a vehicle and having it tailored to your own specifications. The Renault Master is a hugely versatile vehicle, with many conversions available both “off the shelf” and tailor-made, through our network of Accredited Converters. These include installing temperature-controlled environments in addition to other requirements you may have for your business.
Modifying your existing Renault vehicle
Having your existing Renault vehicle modified as an ice cream van could be one of the less onerous options depending on your situation, with temperature-controlled installations. We encourage you to check with our Accredited Converters whether your vehicle is eligible and how this modification will impact your warranty.
Acquiring a new or used ice cream van
Though this may seem like the ideal option overall, it essentially applies in two distinct cases. The first is if you plan to make very short runs or sell from a single location: used ice cream vans 10 to 20 years old can go for sale in the £4,000 to £7,000 price range, but are more prone to breakdown and less fuel efficient. Models just five years old can start at £12,000 and quickly fetch for more, though they rarely have the option for lease or hire purchase. The second is if your venture holds a truly significant starting up budget, as prices for brand-new ice cream vans based on late-model vehicles typically begin at £60,000 or more.
Independent trading or franchise?
There are many advantages to running your ice cream van as a franchise. Large ice cream companies offer ice cream van franchises that you can obtain for a certain minimum investment. Franchises are attractive as they may provide things like equipment, insurance and pre-approved routes or pitches. The downside of a franchise is that you will probably be limited in terms of which items you're allowed to sell. You may also be constrained to a particular route or pitch, since the company will likely have other operators in the region and won't want any overlap between franchisees.
Don't forget the paperwork
Now that you've drafted your business plan and selected a vehicle, you'll need to ensure that you have filed all the correct paperwork. Just to begin with, you will need a standard food hygiene certificate. Obtain any business licenses that you may need to operate in your intended area. As part of your business plan, you will already have carefully investigated any national and local regulations that might affect your operation; before you start trading, you'll need to re-check everything and ensure you're in full compliance. Don't forget that you'll need additional catering van insurance for an ice cream van.
Setting up an ice cream van business may not be the simplest thing in the world -- but with the right preparation and a little luck, it can be a lucrative and satisfying occupation.