If you’re passionate about gelato and are looking to open a business, or even if you’re looking for a business to escape your current job, you’ll find it’s an excellent industry with high returns if done right.
Many people are looking for more than standard ice cream, and that’s where gelato comes in, with exciting flavors and being a healthier option. In addition, gelato doesn’t just need to be a seasonal treat; it can be a standard dessert after a nice meal to share with your family or friends.
There is still risk in opening any business. Having a clear understanding of what is required, doing research, and ensuring a complete understanding is crucial to your success. So keep reading for the initial details of starting a gelato business.
Before getting started, make sure you research the market. For example, how saturated is your area with gelato stores, and what locations could be available to you?
Gelato often does the best when paired with tourist locations around hotels, cruise terminals, or shopping districts. Smaller towns or more suburban areas may not do well with gelato stores, but that would be up to your market research to decide.
An important consideration will also be, how can you be profitable year-round, is gelato enough, or will you need to offer more to local customers that may not want gelato all the time. Coffee and other Italian products may be an option for you that also needs investigation.
Once your market research has been completed, you need to create a business plan. You’ll need to understand the startup costs, ongoing costs, requirements from the city to open your business, what your plan is to market, and every detail to make this a profitable business.
● What are the upfront and ongoing costs?
● Who is your market going to be? Tourists, locals, office workers?
● How will you make enough money to cover your costs?
● How much should you charge?
● What products will you sell?
● Sales and marketing strategy
These are some initial points to ensure you have the basics. However, a complete business plan would be ideal to know your business will succeed.
Initial costs for a gelato business can be pretty substantial, assuming you’re not going to be buying buckets of gelato from Costco to resell. While a resale-type business could work, if it became public, that was your business model, there may be less interest in purchasing from you.
● Register your business with your city – $750.
● Legal and accounting costs for licenses, permits, and accounting services – $1,300.
● Marketing and advertising the opening of your new business – $7,000
● Insurance – $2,400.
● Rent for your business – $25,000+
● Store furnishings – $10,000.
● Operating costs for the first three months, salaries and bills – $50,000+
● Initial inventory (gelato ingredients and packaging) for three months – $45,000
● Buying gelato making equipment (freezers, mixers) – $15,000+
● Additional equipment such as shelving, cash registers – $10,000
● Website costs – $600
● Refrigerated display case
● Pasteurizing machine
● Batch freezer
● Blast freezer
● Large mixers
Gelato making is a specialized skill, so you will need to hire somebody to make it for you or train yourself. An introductory course can last a week, though this is likely not enough to get you creating high-quality gelato.
You’ll make to investigate local courses for costs and length. You may even be able to hire and train directly with someone for a year if you don’t want to wait for your training to complete before opening the business.
● Ongoing inventory costs
● Employee salaries
● Rent and bills
Depending on the location and style of advertising you will do, the costs associated with starting a gelato business can be between $100,000 - $200,000. However, rent, salaries, and inventory add to ongoing costs.
You can sell various products in your store; it’s not just single-serve gelato cups or cones. You can make additional investments into a “soft-serve” gelato machine, gelato cakes, gelato bars. You can even look to sell coffee, Italian sodas, chocolates, and other similar products.
Diversifying your product range will allow you to keep selling all year round and offer different things to people that may not want traditional gelato.
You will need to review your operating costs and what similar stores sell gelato for in your area. However, a single scoop of gelato should be around $2.50 - $3.50 per scoop.
Start marketing your gelato business with a bang at the start. Have an opening party of sorts where you invite everybody to come and sample your gelato. You may need to offer free scoops to try before buying and because people like free things.
You’ll want to promote reviews, make it evident that you want customers to review you on websites like yelp and google. You’re going to need to rely on word of mouth heavily. Many people will use google or yelp to search for food options in their local area.
Make sure you’ve set up all of your social media profiles. Twitter and Instagram will be big ones, but create profiles everywhere and make sure you’re consistently posting so that locals can stumble upon you.
Create promotions and competitions to post photos of themselves or your product on their social media accounts. Instagram will be a powerful marketing tool for you, purely because it’s all about pictures and people love looking at great-looking food.
A gelato business can be highly profitable. However, it can be a costly mistake if opened in the wrong location or in the wrong way. Planning will be essential to ensure your business does well.
Two essential things are a quality product and a well-laid out store. Customers don’t want to walk into a bare store selling expensive gelato, so ensure you’ve put as much thought into your store as you have into your product.