Business ideas
8 min read

How to Start a Profitable Shaved Ice Business [11 Steps]

Learn how to start a profitable shaved ice business with our 11+ step guide. Discover the key ingredients for success and start earning today! #shavedice #smallbusiness #entrepreneur

By Nick Cotter
Updated Feb 02, 2024

image of a shaved ice business
This page may feature products from our affiliate partners, which could influence the products we discuss due to potential compensation. Despite this, our evaluations are impartial, based solely on our independent analysis. The content here is intended for informational purposes and should not be seen as legal advice. For professional guidance, consulting with a legal expert is recommended.
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1. Perform market analysis.

Starting a shaved ice business requires a solid understanding of the market to ensure success. A thorough market analysis will provide insight into consumer preferences, competition, and potential locations. This critical step lays the foundation for making informed decisions as you plan your venture.

  • Identify your target customers by age, income level, and taste preferences to tailor your offerings accordingly.
  • Analyze competitors in the area, noting their product range, pricing, and customer reviews to identify gaps and opportunities.
  • Research the demand for shaved ice in different locations and seasons to optimize your business strategy.
  • Consider current trends in the food and beverage industry, such as the popularity of organic or natural ingredients, to align your products with consumer interests.
  • Examine suppliers for shave ice machines, flavors, and other necessary materials to assess the cost and maintain a high-quality product.
  • Study local regulations and permits required to operate a food business to ensure compliance and avoid legal issues.
image of a shaved ice business

Are shaved ice businesses profitable?

Yes, shaved ice businesses can be profitable. Depending on the business model and local market, profits can vary significantly. In general, well-run businesses that have a strong pricing strategy, marketing efforts, and a steady customer base have the potential to be profitable.

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2. Draft a shaved ice business plan.

Creating a comprehensive business plan is a critical step towards launching a successful shaved ice business. It will help you outline your business goals, strategies, and the resources needed to achieve them. Here's a guide to drafting your shaved ice business plan:

  • Define your business concept: Include details about your shaved ice products, unique selling points, and the theme of your business.
  • Analyze the market: Research your target audience, competitors, and the demand for shaved ice in your chosen location.
  • Develop a marketing strategy: Detail how you plan to attract and retain customers, advertising methods, and branding.
  • Outline operations: Describe the day-to-day activities, the equipment needed for your shaved ice business, suppliers, and staffing requirements.
  • Financial projections: Provide realistic revenue projections, start-up costs, operating expenses, and a break-even analysis.
  • Risk assessment: Identify potential challenges and risks, and explain how you will mitigate them.
  • Set goals and milestones: Establish short-term and long-term goals, and outline the key milestones for your business growth.

How does a shaved ice business make money?

A shaved ice business makes money by providing a unique product that customers cannot make at home. They typically purchase high-quality ingredients and supplies to make their product unique and attractive to customers. A shaved ice business's target audience could include anyone who enjoys the dessert; such as young adults, families, those with a sweet tooth, or tourists visiting the area. Additionally, they can focus on specific markets such as high school students, beachgoers, or people attending outdoor events.

3. Develop a shaved ice brand.

Creating a strong brand for your shaved ice business is crucial as it will set the tone for your customer's experience and differentiate you from competitors. Your brand should reflect the unique qualities of your product, your company's values, and appeal to your target market. Here are some key points to guide you in developing your shaved ice brand:

  • Define Your Brand Identity: Choose a name, logo, and color scheme that resonate with your target audience and convey the cool, refreshing nature of shaved ice.
  • Develop Your Brand Voice: Establish a consistent tone for all communications, whether playful, friendly, or sophisticated, to reinforce your brand personality.
  • Focus on Your Unique Selling Proposition (USP): Highlight what makes your shaved ice special—be it unique flavors, organic ingredients, or a secret family recipe.
  • Consider Your Packaging: Design cups, napkins, and spoons that are not only functional but also visually reinforce your brand identity.
  • Build an Online Presence: Create a professional website and active social media profiles to engage customers and share your brand's story.
  • Engage with the Community: Sponsor local events or partner with other businesses to increase brand visibility and build a loyal customer base.

How to come up with a name for your shaved ice business?

Coming up with a name for your shaved ice business can be a fun and creative process. Start by brainstorming different words and phrases that relate to your business, such as “Ice”, “Treats”, and “Shaved”. Once you have some ideas, think about puns or clever word combinations you can use to create a unique and memorable name. Consider the flavors you offer or potential ingredients that could be used in your business's signature creations. Lastly, make sure to research the names you come up with, to ensure they are not already in use by another business. With a bit of creativity and effort you can create an eye-catching and unique name for your shaved ice business.

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4. Formalize your business registration.

Once you've done your research and laid the groundwork for your shaved ice business, the next crucial step is to formalize your business registration. This will legitimize your enterprise, allow you to operate within the law, and enable you to start building your brand. Here's how to navigate the registration process:

  • Choose a business structure that suits your needs, such as a sole proprietorship, partnership, LLC, or corporation, and understand the implications of each for taxes and liability.
  • Register your business name with the appropriate state authority, ensuring it is unique and not already in use.
  • Obtain an Employer Identification Number (EIN) from the IRS for tax purposes, especially if you plan to hire employees.
  • Apply for any necessary local and state business licenses and permits, which for a shaved ice business may include a food handler's permit and health department certifications.
  • Check into zoning laws to make sure your business location is compliant, and acquire a Certificate of Occupancy if necessary.
  • Register for state and local taxes to ensure you can collect sales tax if required in your jurisdiction.

Resources to help get you started:

Explore key resources designed for shaved ice entrepreneurs, including publications, industry reports, newsletters, and other materials that provide market insights, operational best practices, and strategic growth advice:

  • National Ice Carvers Association (NICA): While focused on ice carving, NICA offers resources that can benefit shaved ice businesses in understanding the broader ice industry, including safety standards and supplier networks.
  • International Association of Amusement Parks and Attractions (IAAPA): Provides insights into the amusement park and attractions industry, relevant for shaved ice businesses looking to operate in or partner with such venues.
  • Snack Food & Wholesale Bakery Magazine: Offers trends and operational advice relevant to food entrepreneurs, including those in the shaved ice sector, about the snack and bakery market.
  • Food & Beverage Magazine: Covers the latest trends, news, and advice for the restaurant and foodservice industry, valuable for shaved ice businesses seeking to grow and adapt in a competitive market.
  • Entrepreneur Magazine: While not specific to shaved ice, offers generalized business growth strategies, marketing advice, and entrepreneurial inspiration that can be applied to any small business, including those in the shaved ice sector.

5. Acquire necessary licenses and permits for shaved ice.

Starting a shaved ice business requires compliance with various regulatory requirements to legally operate and serve your delicious treats. It's important to research and secure the necessary licenses and permits specific to your location and the nature of your business. Below is a guide to help you through this crucial step:

  • Business License: Apply for a general business license through your city or county clerk's office to legally operate your business.
  • Food Service License: Contact your local health department to obtain a food service license, which involves passing a health inspection to ensure food safety.
  • Sales Tax Permit: Register for a sales tax permit with your state's taxation or revenue department to collect and remit sales tax.
  • Resale Permit: If applicable, get a resale permit to buy products wholesale without paying sales tax.
  • Mobile Vending License: If you plan to operate a mobile shaved ice cart or truck, secure a mobile vending license from the appropriate regulatory body.
  • Zoning and Land Use Permits: Check with local zoning authorities to ensure your business location complies with zoning laws and obtain any necessary land use permits.

What licenses and permits are needed to run a shaved ice business?

Depending on the location, a shaved ice business may require a variety of licenses and permits in order to operate legally. These can include a business license, food handler’s permit, health permit, and/or vendor’s permit. Additionally, the business may need to obtain a Certificate of Occupancy if they are renting or leasing property. It is important to check with the local government for specific regulations and requirements that must be met in order to obtain the necessary licenses and permits for the operation of a shaved ice business.

6. Open a business bank account and secure funding as needed.

Starting a shaved ice business requires careful financial management, which is where a dedicated business bank account and proper funding come into play. These steps not only help in managing your daily transactions but also establish your business's credibility with suppliers and investors. Here's how to approach these crucial steps:

  • Research local banks and credit unions that offer business banking services. Consider fees, services, and convenience when choosing where to open your account.
  • Prepare the necessary documents, such as your business license, EIN, and ownership agreements, to open your business bank account.
  • Explore different funding options, including small business loans, government grants, crowdfunding, or angel investors, to find the best fit for your shaved ice business.
  • Create a solid business plan to present to potential lenders or investors, showcasing your market analysis, financial projections, and growth strategy.
  • Consider also alternative funding methods like bootstrapping, where you start small with your own savings and reinvest profits back into the business.

7. Set pricing for shaved ice services.

Setting the right pricing for your shaved ice services is crucial in balancing affordability for customers and profitability for your business. Consider the following factors to determine competitive yet sustainable prices for your shaved ice offerings:

  • Cost Analysis: Calculate the total cost of goods sold (COGS), including ice, flavorings, cups, and spoons. Don't forget to factor in overhead costs such as equipment, rent, utilities, and labor.
  • Market Research: Research the pricing of competitors in your area to ensure your prices are in line with the market, but also reflect the quality and uniqueness of your product.
  • Value Perception: Price your shaved ice considering the perceived value to the customer. Premium ingredients or unique flavors can justify higher prices.
  • Size Variations: Offer different sizes at different price points to cater to various customer needs and maximize sales opportunities.
  • Seasonal Adjustments: Be prepared to adjust prices for seasonal demand fluctuation, with possible discounts during off-peak seasons to attract more business.
  • Promotions: Consider introductory prices, loyalty discounts, or bundle deals to entice new customers and reward regulars.
  • Profit Margins: Set prices that allow for a reasonable profit margin after all expenses are covered, ensuring the sustainability of your business.

What does it cost to start a shaved ice business?

Initiating a shaved ice business can involve substantial financial commitment, the scale of which is significantly influenced by factors such as geographical location, market dynamics, and operational expenses, among others. Nonetheless, our extensive research and hands-on experience have revealed an estimated starting cost of approximately $2500 for launching such an business. Please note, not all of these costs may be necessary to start up your shaved ice business.

8. Acquire shaved ice equipment and supplies.

Starting a shaved ice business requires the right equipment and supplies to deliver delicious, frosty treats to your customers. Here's a guide to help you acquire everything you need to serve up the perfect shaved ice.

  • Shaved Ice Machine: Research and invest in a high-quality shaved ice machine that is durable, efficient, and capable of producing fine, fluffy ice. Consider your expected volume of sales to choose the appropriate size and power.
  • Ice: Ensure a consistent supply of clean, pure water to freeze into large blocks or cubes, depending on your machine's requirements.
  • Syrups and Flavor Concentrates: Stock a variety of popular flavors, and consider offering unique or seasonal options. You can purchase pre-made syrups or make your own with flavor concentrates and simple syrup.
  • Cups and Spoons: Purchase cups in various sizes and colorful spoons. Consider eco-friendly options to appeal to environmentally conscious consumers.
  • Straws: Get straws, especially if you plan to offer shaved ice drinks or need them for layered shaved ice treats.
  • Napkins and Wet Wipes: Keep a good stock of napkins and wet wipes for customer convenience.
  • Storage Containers: You'll need airtight containers to store the ice and keep your syrups and toppings organized and fresh.

List of software, tools and supplies needed to start a shaved ice business:

  • Shaved Ice Machine - $200-$500
  • Shaved Ice Syrups - $25 per quart
  • Cups - $10-$20 a pack
  • Straws & Spoons - $5-$10 a pack
  • Carts or Covered Tents - Starting around $50
  • Flavorings & Toppings - $10-$20
  • Food Grade Gloves to avoid cross contamination - $10 per pack of 100
  • Napkins, Trash Bags and Plastic Utensils - $15-$30 a pack
  • Small Scoop for Flavored Syrups & Toppings - Starting at $4 each
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9. Obtain business insurance for shaved ice, if required.

Insuring your shaved ice business is a crucial step to protect your investment and ensure the longevity of your enterprise. Different types of insurance can safeguard against potential risks such as liability claims, equipment damage, or business interruption. Consider the following types of insurance often required or recommended for a shaved ice business:

  • General Liability Insurance: This protects against claims of bodily injury or property damage that can occur from your operations.
  • Product Liability Insurance: This is essential for any food-related business to cover claims related to the products you sell, such as if a customer becomes ill from your shaved ice.
  • Commercial Property Insurance: If you own or lease a space, this insurance covers damage to your shop, equipment, and inventory.
  • Business Owner’s Policy (BOP): Often a bundle of services that includes general liability and property insurance, which can be cost-effective for small businesses.
  • Workers' Compensation Insurance: If you have employees, this is typically required by law to cover injuries or illnesses that occur on the job.
  • Business Interruption Insurance: This helps replace lost income and pay for operating expenses if your business is temporarily unable to operate.

Always check with your local and state regulations to ensure you meet the insurance requirements for your specific location and situation.

10. Begin marketing your shaved ice services.

Launching your shaved ice business into the public eye requires a strategic approach to marketing. To effectively attract customers and create a buzz around your refreshing offerings, consider leveraging a mix of traditional and digital marketing techniques. Below are some actionable steps to kickstart your marketing efforts:

  • Develop a strong brand identity, including a memorable logo and vibrant color scheme that reflects the fun and refreshing nature of your shaved ice business.
  • Build a user-friendly website with your menu, location, and hours, ensuring it's mobile-optimized for customers on-the-go.
  • Use social media platforms like Instagram, Facebook, and Twitter to engage with your community, showcase your flavors, and announce special promotions.
  • Offer opening day discounts or free samples to attract initial customers and encourage word-of-mouth promotion.
  • Collaborate with local businesses and events to set up pop-up stands or sponsor community activities.
  • Invest in eye-catching signage, banners, and flags for your physical location to draw in passersby.
  • Implement a customer loyalty program to reward repeat customers and foster a dedicated customer base.
  • Engage with local influencers or food bloggers to review your shaved ice and spread the word online.
>> MORE:

What licenses and permits are needed to run a shaved ice business?

  • Shaved Ice Machine - $200-$500
  • Shaved Ice Syrups - $25 per quart
  • Cups - $10-$20 a pack
  • Straws & Spoons - $5-$10 a pack
  • Carts or Covered Tents - Starting around $50
  • Flavorings & Toppings - $10-$20
  • Food Grade Gloves to avoid cross contamination - $10 per pack of 100
  • Napkins, Trash Bags and Plastic Utensils - $15-$30 a pack
  • Small Scoop for Flavored Syrups & Toppings - Starting at $4 each
  • <

11. Expand your shaved ice business.

Once your shaved ice business has established a solid foundation and a loyal customer base, it's time to think about expansion. This could mean diversifying your menu, opening new locations, or exploring other avenues for revenue. Below are some strategies to consider when you're ready to take your business to the next level:

  • Open Additional Stands or Stores: Scout for high-traffic locations to set up new stands or brick-and-mortar stores to reach more customers.
  • Introduce New Flavors and Products: Regularly update your menu with innovative flavors and products to keep your offerings exciting and attract different customer segments.
  • Offer Catering Services: Expand your business by providing catering for events, parties, and corporate functions, which can significantly increase your revenue streams.
  • Franchise Your Business: If your business model is successful and replicable, consider franchising to allow others to open their own shaved ice businesses under your brand.
  • Leverage Online Sales: Develop an online ordering system for pickup or delivery, and consider selling pre-packaged versions of your popular flavors.
  • Partner with Local Businesses: Collaborate with local restaurants, stores, or event organizers to offer your shaved ice as a dessert or feature at their venues.
  • Invest in Marketing: Enhance your marketing efforts, using social media, local advertising, and loyalty programs to maintain customer interest and attract new patrons.