How to Start an Ice Cream Truck Business | TRUiC

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Video How to start an ice cream truck

Start an ice cream truck business by following these 10 steps:

  1. Plan your Ice Cream Truck Business
  2. Form your Ice Cream Truck Business into a Legal Entity
  3. Register your Ice Cream Truck Business for Taxes
  4. Open a Business Bank Account & Credit Card
  5. Set up Accounting for your Ice Cream Truck Business
  6. Get the Necessary Permits & Licenses for your Ice Cream Truck Business
  7. Get Ice Cream Truck Business Insurance
  8. Define your Ice Cream Truck Business Brand
  9. Create your Ice Cream Truck Business Website
  10. Set up your Business Phone System

There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your ice cream truck business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

  • What are the startup and ongoing costs?
  • Who is your target market?
  • How much can you charge customers?
  • What will you name your business?

Luckily we have done a lot of this research for you.

What are the costs involved in opening an ice cream truck business?

Your biggest expense will be the ice cream truck itself. This typically has a minimum cost of $10,000, but fancier models can run to twice that cost. The truck must be insured, which can cost between $800 to $1500 every year. One of the attractive things about the business is that you can acquire your starting stock of ice cream for as little as $500 and simply order more as needed.

What are the ongoing expenses for an ice cream truck business?

The ongoing expenses for an ice cream truck business are very straightforward. The primary expense is gas—to be completely safe, allot a budget of three dollars per gallon of gas and determine how far you will drive each month in order to get a reliable estimate of monthly fuel costs. You must also restock your ice cream, which should cost no more than the initial $500 (though you will order more as necessary, so periods of booming business may necessitate restocking more often).

Who is the target market?

As mentioned previously, your preferred clients will be children. In fact, most of your route research will focus on finding where and when large numbers of children will be.

How does an ice cream truck business make money?

The ice cream truck business model is simple: you sell clients ice cream and receive payment. Due to the nature of the business, most of the payments you receive will be in cash. However, devices such as Square allow you to take debit and credit card payments if you so desire.

How much can you charge customers?

While the exact amount will vary by region and exact product, you can typically charge customers between one and four dollars for the different products you sell. Higher priced items are those involving licensed characters, those considered premium or gourmet products, and those that are offer a greater quantity of ice cream. Some ice cream trucks will sell quarts of particular ice cream, for example, in addition to the typical selection of popsicles, ice cream sandwiches, and so on. You may consider adjusting prices based on season, such as making ice cream cheaper in the Fall, Winter, and Spring, and more expensive in the summer.

How much profit can an ice cream truck business make?

In one survey of average yearly profits, vendors were bringing in about $5000 a month and working about twenty days a month. Your own profit will have several variables, however. This includes how many days you work and, as mentioned above, how many rivals you have in your area. And, obviously, the longer you work, the more profit you make: your willingness to work long days during the summer or long into holiday weekends (when more children are free to buy ice cream) will dictate how much money you make.

How can you make your business more profitable?

Ways of making your business more profitable includes adding new routes and/or changing to more profitable routes, adding hours you work, adjusting the times that you visit certain neighborhoods, diversifying the products that you sell, and even just driving slower through your chosen neighborhoods.

If you do happen to live in a highly populated area, consider expanding by leasing or purchasing another truck and hiring additional help. Over the long term, growing your business like this could double or triple your profits.

What will you name your business?

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Ice Cream Truck Business Name Generator

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name, we recommend researching your business name by checking:

  • Your state’s business records
  • Federal and state trademark records
  • Social media platforms
  • Web domain availability.

It’s very important to secure your domain name before someone else does.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your ice cream truck business is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It’s really easy and free!

Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.

Small Business Taxes

Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).

You can learn more about small business taxes in these guides:

  • LLC Taxes
  • Sole Proprietorship vs LLC
  • LLC vs Corporation
  • LLC vs S Corp
  • How to Start an S Corp
  • S Corp vs C Corp

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Additionally, learning how to build business credit can help you get credit cards and other financing in your business’s name (instead of yours), better interest rates, higher lines of credit, and more.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

  • Separates your personal assets from your company’s assets, which is necessary for personal asset protection.
  • Makes accounting and tax filing easier.

Open net 30 accounts

Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.

NetMany net 30 credit vendors report to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.

Get a business credit card

Getting a business credit card helps you:

  • Separate personal and business expenses by putting your business’ expenses all in one place.
  • Build your company’s credit history, which can be useful to raise money later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate an ice cream truck business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

As an ice cream truck operator, you will need licensing from a local health department by passing a health inspection. In addition, you can expect that your ice cream truck will be randomly inspected by the local health department on a regular basis. Inspections will check for compliance with local health laws, typically related to prevention of food contamination.

Tips for faring well on a health inspections can be found here.

Additional local licensing or regulatory requirements may apply. For more information about local licenses and permits:

  • Check with your town, city or county clerk’s office
  • Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.

Additional Considerations

  • Depending on your location and truck build and size, your local department of motor vehicles may require you to obtain a special type of vehicle registration.
  • It is advisable to have a comprehensive insurance plan, covering your vehicle, equipment, and any employees, as well as to be aware of parking and zoning requirements when operating your business.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers’ Compensation Coverage.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market an ice cream truck business

One unexpected way of marketing and promoting your ice cream truck is social media. This allows you to engage with the community, advertise routes and prices, and possibly offer unique discounts and promotions. The most traditional marketing, however, comes from the truck itself. This includes pleasant songs the truck plays that are familiar to children. Also, be sure that the ice cream truck has bright colors and eye-catching designs in order to be noticed by as many people as possible.

How to keep customers coming back

Promoting your business on social media, playing catchy music, and decorating your truck with bright colors are all great ways to attract new customers. In order to retain the customers, it is important to have set routes that you drive on set days so that you can establish regular customers. You may also consider punch cards or other promotions where repeat customers can eventually receive free ice cream as a reward.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business.

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

  • All legitimate businesses have websites – full stop. The size or industry of your business does not matter when it comes to getting your business online.
  • Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
  • Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.

Other popular website builders are: WordPress, WIX, Weebly, Squarespace, and Shopify.

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2022 to find the best phone service for your small business.

Start a Ice Cream Truck Business in your State

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