How much money can I expect to make a day (ball-park) with a storefront?

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rtang21980

Wed Apr 11, 2018 8:42 am

In southern California and want to open a shave ice store (shave ice, ice cream, milk shake, and dole whip). Typically, how much money can I make in a given day (busy, average, and slow)? I just need estimates (no exact number). Just want to know if it's worth perusing this business.
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IceClouds
Posts: 95
Joined: Tue Mar 28, 2017 4:05 am

Wed Apr 11, 2018 10:38 am

Hey rtang,

This is a loaded question and I have seen some threads talk about this before. Not sure if i can be much help as i operate seasonally out of a food trailer so my overhead is minimal compared to having a storefront. Do you have competition in your area? Have they been around for a long time? I think its hard to break into a market if someone is already doing shave ice and is successful at it. I can make anywhere from under a hundred to over 1500 in a day, So many factors can occur to having a successful day to a crappy day. I would scope out existing places in or around your area and see what they are doing. Do they have good reviews? Can you bring something to the table they are currently not doing?
rtang21980

Wed Apr 11, 2018 12:12 pm

There is no competition in my area. Although there are shave ice stores in neighboring cities. Would you say I can make around $100K - $150K a year at least with a store front?
mrjosco

Wed Apr 11, 2018 4:22 pm

No one could say that. There are too many factors. How good is your product? How good is your marketing? How good are your employees? What prices do you charge? What other items will you be selling? How good is the location? How much foot traffic? How many cars pass by each day? What is the speed limit on the street? How big/visible of a sign can you have? What is the average income of your market? Does your market have a lot of discretionary money? Do they spend that money on desserts/snacks/eating out? What kind of promotions will you be running? How often? What is your competition (hint: it isn't just other shaved ice stores... but stores that sell items people might buy INSTEAD of shave ice, like ice cream/frozen yogurt/smoothies/cupcakes/etc)

The questions you are asking are impossible to answer. I would suggest you spend some time at a local SBA office and see what training and courses they have available. Talk to as many similar business owners who are willing. Get demographic information and talk to people in the market. Get location information and # of cars that pass and speed limit and visibility information. Write a business plan and have someone with experience critique it.
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IceClouds
Posts: 95
Joined: Tue Mar 28, 2017 4:05 am

Thu Apr 12, 2018 7:47 am

mrjosco stated it best, There is no way to answer your question accurately without you putting in some serious research. My advice start small, such as a tent or food trailer and build up from there. That is exactly what I am doing. Building my business and the brand then looking to see if i could pull off a storefront.
Loopdan
Posts: 53
Joined: Sat Oct 01, 2016 8:51 am

Thu Apr 12, 2018 10:07 am

Short answer: It's unlikely you will take home $100k-$150k a year, at least for a while.

Longer answer:

For every storefront that makes a fortune selling flavored H20 and sugar, there are others that barely scrape by, or end in bankruptcy. Building out a storefront is a significant investment. You need to do local research and develop a business plan.

Unless you are an established brand you will not be an overnight success. The number one reason why food service businesses fail is lack of capital, so taking a salary when you are just getting started is not a good idea. Unless you have significant savings, you will likely need to keep your day job and somehow also manage this business on the side until it is well-established.

I would not count on $100k-$150k a year anytime soon. You should instead anticipate not taking any money out of the business for at least the first year. If your personal finances can't survive that, then you might reconsider or delay until you've developed a plan that allows you to not depend on $100k+ in income from this venture.

Let's work out some basic numbers: If your profit margin is 20% (which is very unlikely with a storefront) you would need to generate $42k in gross sales a month to earn $100k pre-tax. If you are open seven days a week this is $1,400 a day in gross sales.

A more realistic 10% profit margin would equal $2,800 in needed daily sales to generate $100k pre-tax. that means averaging $2,800 a day year-round. If your average serving is $4, that is 700 servings.

I agree with IceClouds about starting small and building your brand.
ShaveIce
Posts: 517
Joined: Fri Feb 20, 2009 11:53 am
Location: Honolulu,HI
Contact:

Fri Apr 13, 2018 12:21 pm

You guys are absolutely, positively, correct!

One thing to keep in mind before you open a shave ice store, you are not in it to get rich.

I have came across countless customers with unrealistic expectations simply because they think shave ice is a high yield and high margin product, trust me it is not. Even in Hawaii where we are sunny year round, there are only a handful (less than 10) shave ice stores that sell over 500 cups a day. Only the top guys sell over 500 cups, and you have to be known to sell over 1000 cups consistently.

The So Cal market is really fickle and trendy based, especially if you are in LA county or OC. A niche product will be required and most likely you will have to supplement your income with catering and do private functions. You also will have to be hands on meaning no excessive employees and do everything yourself. With all those factors, you will possibly be able to hit 80k ebitd.

Main thing is to be realistic in your expectations, don't be disheartened if you break even or lose the first two years, and be hands on with everything. With patience, time, and a good product, you can achieve that 100k+ mark.
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shavedicetrucks

Mon Apr 16, 2018 10:27 am

Remember that location is absolutely key. It can make you or break you. No matter how awesome your product, staff and branding may be, if you're not in the right spot, it can fail quickly.
Just because it's a killer building for a killer price doesn't mean it's the best spot for a shaved ice biz.
Paying a higher rent for a better location is usually going to be a better move. You also have to think about utilities (electric, water, phone, internet), signage, repairs, advertising/marketing, etc.
Hope you're wildly successful!
Oguzksk

Thu Feb 14, 2019 2:16 am

@Loopdan

How did you come up with making 42K amount? Are you serious? Even restaurants are not making that much gross sales with the shaved ice? If you make 42K gross sales which you say $2800 a day you can make close to 500K gross a season. Thats not we are talking about.

I have just rent a storefornt. My rent is $2000 and my electric bill is probably will be $600 max. I have electro freeze soft machine as well.

Your food expense is 10 percent. 1 gallon syrup brings you $100. ( you make 32 12 oz cups with one gallon and sell $3) 10 gallon syrup is 1K. To make 10 gallon ( which brings you 1K) syrup you need to pay $22 for 50 pounds of sugar and $30 for cups (12 oz) and spoons ($6).

So with my rough calculation $60 brings you $1K syrup. If you make 10K gross sales you will be paying $600 for the product.

If I work my self my monthly expense will be $2000 rent $600 electric bills and $600 goods $3200. Of course this is a rough calculation but close to it.

If I hire someone and dont work. I should add $3000 a month extra for employee.

It is not a rocket science. I dont know if I am going to be successful or not but I have rent the closed frozen yogurt shop. He said he was making 120K gross in a season. This is terrible for frozen yogurt since they pay over 1K only for electric since so many ice cream machines. I have only spent $500 for the place because everything is ready. As you guys know frozen yogurt was a bubble and majority AAA locations even closed.

According to my calculation if you make $15000 gross sales in a season you can easily hit 100K profit.

I am in the ice cream business since 2014. Mister Softee. Now I am going to also carry over 25 different type of milkshakes and sundeas and soft cones. Also planning to bring pizza as well but first I want to see.

There was a guy in my neighborhood in memphis and he had a trailer. Two years ago he rent a storefront and guess what. He closed the trailer and he has the storefront right now.

Also city's the most popular shaved ice store (who makes over 2 million dollar a year)open another store 2 miles away from him. He is still in business.

Dont expect to become a millionaire but most people prefer to come to storefront instead of going to a trailer or a truck.
Whitten

Wed Feb 27, 2019 1:35 am

I think that's a very reasonable expense break down, Oguzksk. Combine all that with good hand-to-hand combat marketing, and you're in business.
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