6 Steps To Creating the Best Snow Cone & Shave Ice Business

Kudos to you. While everyone else is getting ready to soak up the summer sun and lay out by the pool, you’re thinking about how that same sun can heat up your financial future. Well, you’ve come to the right place. We’ve been in the shaved ice business since 1984 and we’re here to share our recipe for starting a successful shave ice business.

start a shaved ice business

1. Determine Interest Levels

Are people interested in shave ice? Would people want and patronize a snow cone stand here? Why should people buy from me? These along with many other questions have to be answered before you can turn that sign from “Closed” to “Open” with some confidence. While some of these questions are between you and your friends and family, we can help with answer that first question. Yes, people are interested in shave ice and snow cones, particularly when it’s hot out.

start a shaved ice business

Google Trends clocks people’s interest in “Shaved Ice” over 75 during the close of May, June, July and the beginning of August (2016). Not to mention, this trend line has also seen little variance since 2010.

Now where exactly is all this interest coming from? To give you some idea, we thought we’d share the top 30 states where Tropical Sno gets searched for and visited from the most in the US.

1. Texas
2. Illinois
3. Utah
4. Missouri
5. California
6. Arkansas
7. Iowa
8. Georgia
9. Nebraska
10. Arizona

11. Florida
12. Kansas
13. North Carolina
14. Alabama
15. Indiana
16. Tennessee
17. Ohio
18. Washington
19. New York
20. Idaho

21. New Jersey
22. Virginia
23. Kentucky
24. South Carolina
25. Nevada
26. Oklahoma
27. Colorado
28. New Mexico
29. Oregon
30. Mississippi

start a shaved ice business

2. Understand the Numbers

If you’re like most people. You’re probably not going to perform a cost benefit analysis before opening a shave ice stand. However, you most likely would like to have some idea how your finances might look at the end of the summer. For that reason, we’d like to tell you about Katie (Full disclosure, Katie is a hypothetical construct).

**Note: Numbers below are estimates and are not guaranteed for every market.**

Like you, Katie is about to take the plunge into selling shaved ice. Let’s say Katie opens up shop on April 1st.

April

Since April still has its chilly days, Katie’s shave ice shack didn’t see the best numbers, but she’s doing all right! Here’s what Katie’s April looked like:

Average Daily Sales Daily Wages Daily Overhead Daily Cost of Goods Sold Average Daily Profit Monthly Profit
$500 $140 $36 $60 $264 $7,920

 

May

Lucky for Katie, things have started to heat up. Though there were a couple days of rain in May, Katie still feels pretty good about how her month went.

Average Daily Sales Daily Wages Daily Overhead Daily Cost of Goods Sold Average Daily Profit Monthly Profit
$900 $215 $52 $108 $525 $15,750

 

June

Summer has started and school is out but unfortunately for Katie, a lot of her regular customers are on vacation for the month. Regardless, Katie has still had a pretty great month!

Average Daily Sales Daily Wages Daily Overhead Daily Cost of Goods Sold Average Daily Profit Monthly Profit
$1,200 $295 $64 $144 $717 $21,510

 

July

Summer is in full-swing and temperatures are reaching an all-time high. Katie had her best month ever!  

Average Daily Sales Daily Wages Daily Overhead Daily Cost of Goods Sold Average Daily Profit Monthly Profit
$2,000 $435 $96 $240 $1,229 $38,099

 

August

Though Katie didn’t see quite the customer volume she did in July, things still went really well in August.

Average Daily Sales Daily Wages Daily Overhead Daily Cost of Goods Sold Average Daily Profit Monthly Profit
$1,800 $395 $88 $216 $1,101 $33,030

 

September

The days have gotten a lot cooler where Katie lives, but she is still excited about her summer success. Instead of closing shop Katie fights through the nippy days in September. Katie scrolls through Instagram and sees everyone drinking pumpkin lattes! Oh no! Needless to say, it was not Katie’s best month.

Average Daily Sales Daily Wages Daily Overhead Daily Cost of Goods Sold Average Daily Profit Monthly Profit
$300 $65 $28 $36 $171 $5,130

 

Year in Review

It looks like Katie had a very successful six months. Katie personally profited $121,439.

Sales Revenue Total Wages Total Overhead Total Cost of Goods Sold Total Profit
$205,700 $47,395 $11,156 $24,684 $121,439


While Katie might be a fictional character, her story is true for hundreds of snow cone stand owners across America. With a little hard work and strategic planning you’ll be telling a story much like Katie’s.

start a shaved ice business

3. Pick a Strategic Location

Perhaps you’ve heard the old proverb, “Location, location, location!” While this feels more like a lecture than business advice, the obvious emphasis is truly necessary. Few things play a more important role in the success of your shave ice shop than your location. Here are some things to consider when deciding where to set up shop.

  • Find Location Piggybacking Opportunities
    A large part of your audience will discover you mostly because they simply saw your physical location. Landing a location near a community center, a college or a park is a great way to piggyback on a location.
  • Research Potential Competition
    Keep in mind, as a new minnow there may be sharks around. Before setting your heart on a location, do a Google search for surrounding shaved ice shops as well as other dessert vendors (your competition may not necessarily just be other shaved ice shops).
  • Proximity to Surrounding Businesses
    Like piggybacking, your shaved ice shop can benefit from surrounding businesses like a movie theater or a shopping mall. It may also have the reverse effect if you set up shop near an adult store or a bar. Be conscious of all businesses within a quarter-mile radius.
  • City Ordinance Laws
    Talk to a local official to see if there are ordinances or zoning restrictions around your desired location. You can also find out if any city construction, projects or events might interfere with the success of your business.
  • Parking and Accessibility
    It’s likely people are going to have to park on the street or in another business’s parking lot in order to patronize your shave ice stand. This could potentially cause friction with surrounding business owners. Keep this in mind as you decide upon your location.                   

start a shaved ice business

4.Take Care of Legalities Early

It’s no secret that shaved ice moves quicker when it’s warmer outside. However, if you’re a first-timer you’re going to want to get the legalities taken care of before the temperature rises. We recommend you start chomping at the red tape as early as January or February. Because your opening day hinges on permits from local government and inspectors, it’s best to give yourself some time to take care of your checklist.

Here’s what that checklist looks like:

  • Obtain a Business License and a Sellers Permit
  • Obtain a Federal EIN (Employer Identification Number)
  • Obtain a DBA (Doing Business As) if you’re not a franchisee
  • Pass health and safety inspections

start a shaved ice business

5. Get Familiar With Shave Ice Business Start-Up Costs

You’re probably getting into the shaved ice business because you’d like to make money, not spend it. So let’s talk about getting into the snow business at a minimal cost. What does that look like? While there are going to be a lot of variables associated with your start-up costs, Here’s a list of expenses associated with hypothetical shaved ice start-up.

 

Item Cost
General Business license $200*
DBA (Doing Business As) License $25*
Federal EIN (Employee Identification Number) Application Often free, otherwise $75*
Food Vending and Handling Permit $70*
Location Rent $750/mo*
Cleaning Supplies $150*
Electricity from Citygrid (Must have to pass food inspection) $30/mo* 
Professional Grade Ice Shaver $1995
Shave ice vending tent $999
Tablet Device and POS (Point of sale) software $498
Sink w/ Water Supply and Drain Tank (Must have to pass food inspection) $2796.64
Budget Benches For Customer Seating (x3) $449.64
Block Shave Ice Molds/ Pails $35
Flavor Pour Bottles 12 count (x2) $36
12 Gallons of Shave Ice Flavoring (x2) $312
Other Various Accessories $100*
Shipping & Tax for all the above $600*
Total $9,121.28

Our total comes to $9,121.28. Any item with an asterisk may vary depending on vendor and location. Links to vendors are not necessarily an endorsement. We referenced these vendors because they exhibit value pricing.  

Some Things To Keep In Mind

  • These costs did not include labor wages, and costs of goods sold. While we included some overhead items, you may discover more initial costs associated with overhead.  
  • These costs did not include lighting. If you planning on being open after the sun goes down, make sure to budget for some internal and external lighting. We recommend budgeting at least $200-$600 for internal and external lights.
  • If you want to take your stand on the road, a tent may not be the best option. A vending trailer with wheels is something you’re going to want to budget $3,000- $10,000 for.
  • These costs did not include signage or any branding materials. Making your stand unique is integral to its success. We recommend budgeting at least $500-$2000 for marketing and branding materials.  

When all is said and done, and in the interest of saving you headaches and creating a functional and prosperous shave ice business, we recommend having at least $10,000 to start your shave ice or snow cone business.   start a shaved ice business

6.Consider Your Start-Up Options

 

GOOD OL’ FASHION DIY

What To Expect: DIY is rewarding. You will be building everything from your stand to your brand. This is a great route for the shaved ice lover who craves control over every detail of her business. The DIY route will be a large financial and even larger time investment. Not to mention this route will take a considerable amount of skill. Because your stand/ shack, equipment and product will all have to pass inspection, DIY may not always be the most practical option. While DIY is doable, keep in mind it is not for the faint of heart.    

FRANCHISEE

What To Expect: Becoming a Franchisee has some very obvious advantages over DIY. As a franchisee, you’ve purchased permission to use a company’s brand name, equipment, stand and supplies. All the legwork is done for you! However, franchise agreements often dictate how you operate the business allowing you very limited room for creativity and autonomy. In most cases, franchising means paying royalty fees and signing time-bound contracts. Here’s a list of shave ice companies with franchise opportunities:

Ululani’s
Tikiz
Snowie
The Frigid Frog
Sno Shack
Tikiz
Hokulia
Kona ice

BUYING A BUSINESS

What To Expect: Buying a business is a nice middle ground between DIY and franchising. You get all the benefits of being the owner without any of the hassle of setting up your own stand.

At Tropical Sno, we know no one likes paying royalties or being roped into long contracts. So we got rid of them. Simple as that. This is why we sell business ownership opportunities and not franchises. Tropical Sno business opportunities allow you to wear what you want, work when you want and run your business your way. We’re your source for flavor, ice shaving machines, marketing materials, cups, printed apparel and just about everything else you need to keep your business running smoothly.  Here’s a look into how to start your shaved ice business today.

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