We earn commissions if you shop through the links below. Read more
Written by: Carolyn Young
Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
Edited by: David Lepeska
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Updated on May 22, 2023
Investment range
$7,500 – $28,000
Revenue potential
$60,000 – $200,000 p.a.
Time to build
0–3 months
Profit potential
$50,000 – $110,000 p.a.
Industry trend
Stable
Commitment
Flexible
On a hot summer day, shaved ice can be the very definition of refreshing! So why not live out those summertime dreams and start up your own shaved ice business?
The market for shaved ice, or snow cones, is expected to grow steadily in the coming years, offering real opportunity for the smart entrepreneur. The business tends to be seasonable, but you’ll be able to spend your time outdoors, in parks and at special gatherings, enjoying life with locals as you make good money.
You can start out as a solopreneur with a single cart, then scale up to a shaved ice shop or dozens of carts across the city. Of course, starting any business is a challenge that requires hard work and determination. Thankfully, you’ve come to the right place, as this step-by-step guide lays out all you need to know to develop and launch your promising shaved ice business.
Let’s start at the beginning.
Looking to register your business? A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple.
Form your business immediately using ZenBusiness LLC formation service or hire one of the Best LLC Services.
It’s crucial to consider the factors that go into starting a business and decide if it’s right for you. Unfortunately, loving shaved ice is not enough to be successful in the business! Read through the below before taking the leap.
Starting a business is going to have both pros and cons. It’s important to review them before jumping into a new business venture.
The shaved ice and snow cone market grew steadily from 2014 to 2019, according to industry analyst Market Research Explore. Following a pandemic-driven downturn in outdoor events, frozen desserts like shaved ice started coming back strong in 2021.
Trends shaping the shaved ice industry include:
Challenges in the shaved ice industry include:
Startup costs for a shaved ice business are fairly low, assuming you launch your business with a single mobile cart. The minimum start-up total is about $7,500, while the high-end cost, which includes a storefront and mobile vending trailer, is about $28,000.
You’ll need a handful of items to successfully launch your shaved ice business. Here’s a list to get you started:
| Start-up Costs | Ballpark Range | Average |
|---|---|---|
| Licenses, permits, and insurance | $550 - $1,100 | $825 |
| Shaved ice equipment and supplies | $3,300 - $8,950 | $6,125 |
| IT device, equipment, and software | $500 - $2,500 | $1,500 |
| Shop furniture, decor, and lighting | $0 - $1,750 | $875 |
| Branding, marketing, and advertising | $1,000 - $5,000 | $3,000 |
| Website | $100 - $1,000 | $550 |
| Paper and stationery | $50 - $100 | $75 |
| Hiring | $0 - $100 | $50 |
| Cart | $2,000 - $0 | $1,000 |
| Vending trailer | $0 - $7,500 | $3,750 |
| Total | $7,500 - $28,000 | $17,750 |
Because demand fluctuates with the seasons, monthly revenue for a single cart shaved ice business can run from $200 to more than $10,000. From October to March, you may want to consider shifting to a cold-weather alternative, like hot tea, though some owners shut down for the winter and re-open again as the weather warms up.
In your first couple of years, you might generate enough sales to average $5,000 in monthly revenue, which would give you just over $60,000 for the year. This would give you a pre-tax profit of $50,000, assuming an 80% margin.
With your own shop, revenues will be significantly higher, but the increased overhead will bring your margin down to 55%. You might be able to generate $200,000 in annual revenue, which would give you a tidy profit of $110,000.
Within five years you could scale the business to three storefronts and five carts, generating close to $1 million in revenue and nearly half that in profit.
After looking at the financials, you can see that there is good revenue potential in the shaved ice business. But there are some barriers to entry to consider before getting started, such as:
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
All businesses need to find clients to start making money. That means you need to determine where the demand is for your product. Overall, the frozen dessert industry is very popular, because people love dessert!
However, the demand for shaved ice will primarily be driven by rising demand for low-calories and low-sugar desserts in the US. Consumers are eager to try new options that do not have a negative impact on their health.
Shaved ice is also an excellent alternative for vegans or others who avoid dairy but still want a delicious frozen treat. This is a growing market and is a good segment to market your business towards. Shaved ice also has hundreds of flavors, so your business will have something for every taste of the customer.
The main ingredients for shaved ice are ice shavings and flavored syrups. Each vendor gains popularity based on their top flavors and customer service. You can purchase flavors in powders, concentrates, and ready-to-use syrups from a supplier such as Snowie.
Shaved ice is usually served in a paper cup or cone with a spoon or straw, though customers can also just eat it directly like an ice cream cone.
There are a few different ways you can sell your shaved ice. The following options vary in mobility and will affect the number of people you can serve. Here are your options:
Prices start at around a dollar per 8-ounce cup and go as high as $5 per cup in a pricey district during peak-demand summer months. Research local competitors to check out their offerings and prices, and customer response. Perhaps you could offer a slightly smaller cup at a better price? Or go big with a 12-ounce cup.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
It’s important to identify your target market for your shaved ice business. Here are a few examples of market segments that you can target and promote your product to:
In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out a storefront. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.
When choosing a commercial space, you may want to follow these rules of thumb:
You’d also want to go where the demand is. Just think – when do people have a craving for a frozen dessert? With that logic, the best locations to sell shaved ice are sporting events such as baseball and soccer fields, basketball courts; beaches, parks, and other outdoor recreation areas; fairs, festivals, carnivals and other local events; and birthdays, fundraisers, corporate events, weddings, church events.
Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.
Here are some ideas for brainstorming your business name:
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to shaved ice.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your shaved ice business will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
Choose Your State
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
The IRS website also offers a tax-payers checklist, and taxes can be filed online.
It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.
Securing financing is your next step and there are plenty of ways to raise capital:
Bank and SBA loans are probably the best options, other than friends and family, for funding a shaved ice business. You might also try crowdfunding if you have an innovative concept.
Starting a shaved ice business requires obtaining a number of licenses and permits from local, state, and federal governments.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.
If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.
Before you start making money you’ll need a place to keep it, and that requires opening a bank account.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your shaved ice business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You may want to use food truck software such as Shaved Ice Software, Square, and clover to take payments, manage staff and inventory, and enhance customer experience.
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
Some of your business will come from the casual passerby or online visitors, but you should still invest in digital marketing! Getting the word out is especially important for new businesses, as it’ll boost customer and brand awareness.
Once your website is up and running, link it to your social media accounts and vice versa. Social media is a great tool for promoting your business because you can create engaging posts that advertise your products:
Take advantage of your website, social media presence and real-life activities to increase awareness of your offerings and build your brand. Some suggestions include:
Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your shaved ice meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your shaved ice business could be:
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a shaved ice business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been selling shaved ice for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in shaved ice. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.
If you are starting small as a solopreneur with a cart, you may not need to hire any employees. As your business grows and you open a brick-and-mortar storefront and acquire additional vending trailers and carts, you will need employees to help you.
The key role in your business will be shaved ice vendors and drivers. As your business grows, you may need additional support. Here are some of the jobs you will need to fill if you scale up your business:
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Finally. You are at the last and most exciting step! Don’t let the seasonality of this business get in the way. You could come up with season-themed promotions or special products that would attract customers regardless of the season. A creative marketing campaign, both in digital and traditional formats, could do the trick.
Remember also that there’s an increasing demand for all-natural and sugar-free products, so you might take advantage of that and come up with innovative flavors that meet this need. This will promote your brand and encourage repeat customers.
Now, you’re ready to start shaving ice and making money!
Shaved ice machines range between $1,000 and $5,000, averaging at $3,000. The price varies depending upon its manufacturer and how fine it shaves the ice.
There are two ways to make shaved ice. Either you use the food processor to grind the ice cubes, or you do it through professional shaved ice machines. To be a successful shaved ice business you should invest in a high-quality shaved ice machine. It’s important to have a quality product so that clients will love it and come back for more!
Shaved ice is very light and fluffy, similar to the texture of snow, whereas snow cones have crushed ice that have relatively larger granules. Again, investing in a high-quality machine will ensure a high-quality product that customers are happy with.
A shaved ice business can be profitable, but the level of profitability depends on various factors such as location, market demand, competition, pricing strategy, and operational efficiency. It’s not likely to be a high growth business, however.
To achieve fluffy shaved ice, consider the following factors:
Experiment with unique and creative flavor options that appeal to your target market. Offer interesting combinations and seasonal specials to keep customers engaged. Introduce distinctive and premium toppings that complement your shaved ice offerings. Consider using fresh fruits, gourmet sauces, unique syrups, or even customized toppings.
Published on July 28, 2022
Hot dogs, pizza, snow cones and bubble tea are among Americans’ favorite street foods, which are quicker and more affordable than restaurantfo ...
Read Now
Published on June 30, 2022
People are always eating and drinking, so starting a food business is always a potentially wise career choice. But to succeed you’ll need astr ...
Read Now
Published on June 8, 2022
Food trucks have exploded in popularity in recent years and offer a unique, potentially lucrative alternative to brick-and-mortar restaurants. Foodt ...
Read Now
