“I scream, you scream, we all scream for ice cream!”
It doesn't matter whether you're 9 or 90; everyone loves a delicious, creamy, cold ice cream. In a hot country like India, notorious for our love of sweet desserts, ice creams are an all-time, all-season treat.
If you’re thinking of starting an ice cream business, then you’re on the right track. A recent report  by FICCI estimates that the market for frozen desserts and ice cream is expected to touch a whopping 1 billion USD by 2022. The study also reveals that the Indian appetite for ice creams is increasing year on year. So, we can confidently state that an ice cream shop business plan can be highly profitable if planned strategically.
In this guide, we walk you through how to open an ice cream parlour in India. We've also got an FAQ section to answer the common queries regarding the ice cream business. So, what are you waiting for? Continue reading to decide if an ice cream business plan is the right choice for you.
Step-by-Step Guide to Start an Ice Cream Business in India
Step 1: Market Research
Just like any other business, starting a successful ice cream parlour begins with thorough and comprehensive market research. The ice cream industry in India has undergone significant changes in the last decade.
Gone are the days when ice creams were considered a pocket-friendly treat sold from carts by local vendors. Today, ice creams occupy the upper echelon of desserts. Swanky ice cream cafés, exotic flavours, healthy ice cream treats have a massive demand among consumers.
Before you develop an ice cream business plan, you need to understand the local market’s potential. Conduct market research to understand customers' expectations in your area, the choices currently available to them and what's missing. This will give you an idea of the direction your business should take.
Step 2: Decide the Format of Business
Ice cream parlours are of several types:
- Small take-away only kiosks in malls, beaches and other areas with high footfall
- Take-away cum sit-down parlour
- Specialised/themed ice cream cafes
The first step is to decide the style of your ice cream parlour. Once you have fixed the format, the next step is to determine if you want to:
- Manufacture and sell ice creams under your own brand
- Or go for a franchise model – where you sell ice creams from a third-party brand
Both these models have their pros and cons. For example, it's easier to start a franchise-model business since the franchiser guides you through every step of establishing your business. However, under this model, there's no room for your creativity as you have to abide by the franchiser's rules.
On the other hand, running your own brand gives you the freedom to experiment and try out your ideas, but the challenges of getting started are high. Also, until you create an identity for your brand, it becomes difficult to connect with customers.
So, evaluate both models' pros and cons and decide the suitable format for your ice cream parlour business.
Step 3: Plan the Products you want to sell
You don’t have to create a detailed menu at this step, but it’s a good idea to have an overall picture of the different types of products you want to sell. This will help you decide the other crucial factors like machinery, space required, hiring the chefs, staff, etc.
Ice cream is an umbrella product, and it includes several styles like:
- Real-milk ice cream
- Low-fat ice cream
- Pre-packaged ice cream
- Frozen desserts
- Frozen yoghurts
- Ice cream cakes
- Ice cream milkshakes, etc.
Once you decide on the products, you can focus on other items like store space, marketing plan, menu, etc.
Step 4: Zero in on the Location for your Store
Ice creams are considered as an impulse product in marketing speak. This means people often buy ice creams on the spur of the moment. Having a store with high footfall is an advantage. When people see others enjoying your product, they are likely to feel tempted to make a purchase.
Here are a few tips to keep in mind while scouting the location for your ice cream parlour:
- Maximum visibility to tempt passers-by.
- Look for shops with a large see-through window to up the temptation.
- Malls are an excellent location for ice cream parlours as they have year-round foot traffic.
- The minimum space required is 400 to 500 sq. ft. If you're planning to have an elaborate café setup, you need to look for parlours with at least 2500 to 3000 sq. ft.
- Again, the space required depends on the format of your ice cream business. If you are making the ice creams in-house in a commercial kitchen, you will need extra space for the kitchen, cleaning areas, etc.
Also read: Ice Cream Manufacturers in India
Step 5: Purchase Machinery and Hire Staff
The biggest investment for an ice cream business is the machinery and equipment. If you're planning to start an ice cream parlour under a franchise, the franchiser will take care of all the machinery and equipment. The cost of machinery is included in the franchise cost.
If you’re setting your own brand, then you will have to purchase the following equipment:
- Commercial ice cream machines (2 to 3 depending on the volume of ice creams you plan to sell)
- Deep freezers
- Storage cabinets
- Ice cream dipping cabinets
- Packaging materials
- Serving cutlery and plates
- Tables and chairs
- Noiseless generator/UPS for 24 x 7 power backup
- PoS Software for billing
The next step is to hire your team. Depending on the store format, you will have to hire ice cream chefs, sous chefs, serving staff, cleaners, etc. If you want to run the business hands-on, then it’s better to take a specialised course in ice cream making to know the technicalities of the process.
The Final Step: Opening Your Parlour for Business
That’s it. You have now covered the basic steps on how to start an ice cream business. Note that these are just the basic guidelines. You are likely to face other challenges along the way. But, don't lose heart – focus on your passion. Always remember your goals and dreams and the reason why you wanted to start an ice cream business in the first place.
Follow your passion, be creative and set up an innovative ice cream parlour that stands out from the crowd.
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Q. How to fix the profit margin for my ice cream parlour business?
Ans. If you have taken a franchise to sell another brand's ice creams, you can expect a profit margin of 20% to 30% depending on the brand. On the other hand, if you're manufacturing and selling your brand of ice creams, then you have to work out the profit margin after calculating the making costs and other allied expenses. Ideally, you can set a profit margin of 30% to 40% depending on your market.
Q. Do I need a business plan for my ice cream business?
Ans. Yes, having a detailed business plan is helpful in several ways.
- It gives you a blueprint of how to proceed. A detailed business plan ensures that you stay on track and move as per plan.
- Additionally, a well-documented business plan helps secure business loans. Banks and other lenders prefer borrowers who have a clear picture of how to operate their business. A business plan demonstrates to prospective lenders that you're serious about the company's success, thereby improving loan eligibility.
Q. What are the licenses and registrations required for an ice cream business in India?
Ans. Before you open your ice cream parlour business, you will have to complete the following registrations:
- Business Registration – Decide if you want to start the business as a solo venture, partnership, limited liability company or private limited, depending on your budget and operating style.
- Trade License – You need to obtain a trade license from your local municipal authority.
- GST Registration – GST registration is a must for an ice cream parlour business in India.
- Shop & Establishment Act License – If you plan to operate your ice cream business as a retail outlet, you need to get a shop and establishment act license.
- FSSAI License – Getting a license from the Food Safety and Standards Authority of India is a must for all ice cream parlours.
Q. What is the cost to start an ice cream parlour business in India?
Ans. It depends on the type of parlour. You can start a small kiosk under a franchise setup starting from Rs. 5 lakhs. On the other hand, elaborate café style parlours cost around Rs. 30 lakhs to Rs. 50 lakhs to start depending on the location.
Here is a breakdown of the various costs involved:
Q. How to market my ice cream business?
Ans. Having a robust online presence from Day 1 is a must. Before you open your ice cream parlour, work on your website and social media profiles. You can create anticipation among your target market by running “Coming Soon” ads on social media channels and Google. Make sure that you’re targeting the local market with the right keywords.
Additionally, distributing flyers in newspapers, running ads on your local FM channels are other ways to spread the word around.
Q. How do I make my ice cream business stand out from my competitors?
Ans. The ice cream business market is a niche market. So, you need to identify your USP (Unique Selling Point) and target the right customers. New ice cream concepts like exotic flavours, ice cream waffles, rolled ice creams, ice cream sandwiches, thick milkshakes, and ice cream cakes are high in demand right now. So, identify your target market, see what’s missing and deliver it to make your brand stand out.
Q. Can I deliver ice creams locally?
Ans. Yes, thanks to food delivery apps like Zomato, Swiggy and UberEats, it's easier than ever before to take your products right to the doorstep of your customers. You will have to invest in delivery packaging and dry ice packets if you plan to deliver ice creams to your customers.