How to Start an Ice Cream Truck

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There was nothing more exciting than hearing the sound of the ice cream truck driving through your neighborhood as a kid. While ice cream trucks bring joy and much-loved traditions to kids each summer, they also bring potential business opportunities. Starting an ice cream truck business can be a rewarding business, especially if you enjoy interacting with children and families. Plus, if you have an idea to make your truck stand out from the competition, you could enjoy a strong business powered by plenty of repeat customers.

Business Overview

Ice cream trucks offer convenient, tasty products to customers. Unlike brick and mortar ice cream parlors, trucks can travel to a variety of locations and offer more of a grab-and-go service. While quickly serving customers is a priority, trucks can also offer custom-made products, like sundaes and milkshakes. Some trucks offer pre-packaged ice cream bars and treats, while others essentially act as full-service ice cream parlors on wheels.

Because they are mobile, ice cream trucks may market to customers in many different locations. Beaches and festivals are popular options, but some trucks also do private events like employee appreciation days and parties. Many trucks park and remain in one place, but others may take a more mobile approach, traveling regular routes through neighborhoods.

Industry Summary

According to IBIS World, the street vendors industry, which includes ice cream trucks, experienced a 3.4% growth from 2015 to 2020. Though the COVID-19 pandemic led to a decline in 2020, the industry experienced robust growth during the rest of the five-year period. This growth was due to increased demand for unique foods.

IBIS World predicts that the ice cream business industry in the United States will rebound from the decline caused by the pandemic and experience growth from 2020 to 2025. Multiple factors, including renewed interest in food trucks, increased consumer spending, and the recovery of the economy, will all contribute to this growth.

Industry Trends

The ice cream industry is evolving, and an ice cream truck that can embrace some of the newest trends can stay competitive and appealing to consumers. According to Barry Callebaut, classic flavors like vanilla and chocolate are hugely popular, but there’s increased demand for low-calorie ice creams that consumers can enjoy with less guilt. Similarly, non-dairy ice creams allow consumers who are on specialty diets to enjoy this treat. Some consumers are now seeking out ice creams that have added health benefits, including ingredients like probiotics, protein, fiber, and even CBD.

While healthier options are on-trend, rich indulgences are also gaining in popularity. An ice cream truck may want to offer indulgent mix-ins for both ice creams and milkshakes to take advantage of this trend. Savory or salty add-ins, like potato chips and salted pretzels, are popular at the moment. Customization options are also increasingly valued. Trucks can embrace this trend by offering personalized dipped and topped bars, and sundaes and shakes that are made to order.

Target Market

An ice cream truck’s target market will partially depend on its business model. On a more general basis, a truck will market to consumers looking for convenience – that market can consist of kids and adults in a specific location, like a beach or festival. If an ice cream truck adopts a specialty, that can further define its target market. A truck that offers rich mix-ins and more premium options will have a different target market than a truck that offers pre-made ice cream bars and treats to beachgoers.

Skills, experience, and education useful in running an ice cream truck

Running an ice cream truck doesn’t require a business degree, but certain skills and experiences will be helpful in running this type of business.

Foodservice and handling experience. Experience working in the foodservice industry is valuable in this field. An ice cream truck owner will need to understand food handling and storage safety procedures, and previous experience in the field can make this easier.

Mechanical and technical skills. Some mechanical and technical knowledge can be useful when servicing and troubleshooting the truck and the machinery, including the freezers, on board.

Customer service skills. With strong customer service skills, a truck owner can build a rapport with customers, encouraging repeat business.

Marketing knowledge. Some marketing knowledge can allow a truck owner to take on some or all of their marketing tasks, potentially saving money over the costs of hiring a professional.

Management experience. If a truck owner decides to expand into a multi-truck operation, experience in hiring and training staff will be valuable.

Educational Resources

Amazon has books on starting an ice cream truck.

Business Plan For Ice Cream Truck
Food Truck Business 2021: Transform your Passion into a Job! (Free on Amazon Kindle Unlimited)

Financial Overview

The cost to start an ice cream truck business will vary depending on factors like the size of the truck purchased and whether the business owner buys a used or new truck. Startup costs can be significant, especially when buying a brand-new vehicle, but a commercial vehicle loan can reduce initial out-of-pocket costs.

Common startup costs for an ice cream truck business include:

  • Ice cream truck

  • Equipment like freezers, blenders, fudge warmer, etc.

  • Inventory like ice creams, ice cream cones, bowls, etc.

  • Signage

  • Working capital to cover the first few months of salary, insurance, gasoline, etc.

Steps to Starting an Ice Cream Truck

Step 1: Write Your Business Plan

Once you’ve come up with an idea for your business, you’ll need to write out an ice cream truck business plan. This business plan will outline key elements of your business, your target market, your profit margins, and how your business will be a financial success. A bank will require you to have a business plan to secure funding. Additionally, multiple sources have found that having a business plan increases the chances of success.

Related:
How to write a business plan
Free sample business plans

Step 2: Form a Business Entity

When starting a business, you’ll need to choose a business entity, which is how the business is legally organized. The four most common business entities include a sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each entity type has various pros and cons regarding liability, costs, and administrative requirements.

Related: Comparison of Business Entities

Step 3: Name the Business

Finding the perfect name for a business can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.

Related: Tips and ideas for naming an ice cream truck

Step 4: Select Your Location

An ice cream truck isn’t tied down to any one location, which can be a benefit. You’ll still need to determine the towns that you want to operate within and apply for permits within each town. Certain locations, like food festivals and fairs, may require you to attain additional permits.

Related: Choosing a business location

Step 5: Apply for Business Licenses and Permits

Operating an ice cream truck will require multiple licenses and permits. In addition to the standard business licenses and permits required by your town, you’ll need to apply for a food service permit and pass health inspections from the local health department. You may also need additional vendor permits that are specific to the location where you will be selling.

Also, check with your local Department of Motor Vehicles to see what licensing is required for your truck to operate as requirements will differ from one state to another.

Related: Common business licenses, permits, and registrations by state

Step 6: Find Financing

Start-up costs for an ice cream truck business can be high, so finding financing will be an important task in getting your business up and running. To get a business loan, a borrower will need to have good credit and personally invest their own money toward 15-25% of the start-up costs. A strong, detailed business plan can also help when securing financing.

Related: Finding the money to start a business

Step 7: Open a Business Bank Account

Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the business’s income and expenses.

Step 8: Get Your Marketing Plan in Place

A strong marketing plan can contribute to an ice cream truck’s success. Common marketing techniques include using Facebook, Instagram, and Pinterest social media accounts to announce locations and new ice cream flavors, radio advertising, online advertising, and more. Ice cream trucks that offer a premiere experience can encourage customers to tag the truck in social media posts.

Related: Low-cost ideas to market a new business

Step 9: Get Business Insurance

An ice cream truck needs several types of insurance for full coverage:

  • General liability insurance helps to protect the business if a customer is ever injured while buying from the truck or the food truck serves.

  • Commercial property insurance protects the business against damages that could occur if the truck or its equipment were ever damaged in an event like a fire.

  • Worker’s compensation insurance offers coverage that protects the business if an employee is ever injured while working.

  • Commercial auto insurance protects the business if the ice cream truck is ever involved in an accident.

Insurance policy cost will vary depending on factors like the value of the truck and the number of employees on staff. To get the best idea of what to budget for insurance, request quotes from multiple insurance providers. When comparing those quotes, consider not only how the premiums compare but also the differences between coverage exclusions, coverage limits, and deductibles.

Related: Types of insurance your business may need

Step 10: Hire Employees

It may be possible to run a smaller ice cream truck business without hiring staff, but operational hours will be limited. As the business grows, hiring employees can help with that expansion. According to ZipRecruiter, ice cream truck drivers earn an average of $34,579 per year, though salaries can range from $16,000 to $65,500.

A business that hires employees will also need to include other expenses, like paid time off and worker’s comp, in its budget.

Related: Hiring your first employee

Step 11: Set up an Accounting System

Setting up an accounting system for your ice cream truck is critical to the long-term success of your business.

Staying on top of taxes not only keeps the business out of trouble with the government, but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

Related: Setting up accounting for your business

How Much Can You Potentially Make Owning an Ice Cream Truck?

According to a 2019 survey performed by Food Truck Empire, mobile ice cream vendors bring in an average of $200 to $300 in gross sales per day during the summer. Survey respondents noted monthly gross incomes of approximately $5,000. Once accounting for expenses, monthly incomes averaged $2,500.

Keep in mind that many factors will affect an ice cream truck’s profits. Holidays and weekends are high income-generating times, and this business is largely seasonal. A truck owner who works almost daily during the summer months can take advantage of the increased business and drive up income. Booking special events, like birthday parties, can also help to boost profits. Being this is a mobile business, if you can create a consistent ice cream truck route or set up at big events, profits will increase as well.

The type of ice cream you sell will also affect profits. Prepackaged ice cream (also referred to as novelties) is the easiest type of ice cream to sell as there is minimal food handling and inventory management. Scooped or soft-serve ice cream can be sold at a higher price (and profit), though there is more work and potential waste. You can even set yourself apart from the competition by making your own ice cream.

Things to consider before starting an ice cream truck

With food trucks growing in popularity, competition within the ice cream truck industry is increasing, too. When designing your business model, look for a way that you can make your truck stand out. Consider offering specialty products or a special experience, like hand-dipped and custom-topped ice cream bars, to appeal to customers. Stocking products that other trucks don’t have, like dairy-free ice creams, can encourage repeat business when your truck follows a reliable route or can frequently be found in particular locations.

Because ice cream trucks are a seasonal business in many areas, it’s essential to consider other ways to make money in the off-season or find ways to make summers profitable enough to carry the business through the rest of the year.