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Hey everyone,
I touched on my business in my into page (INTRO - Gelato Entrepreneur), but I thought it might be interesting to give you a much more detailed overview of what I’m doing, primarily for my own benefit (both for self-accountability and advice-seeking), but also to hopefully help anyone considering a food business and talk about some of the pros and cons of this type of business.
Overview
My business makes and sells ice cream, we manufacture our own ice cream in house using our own recipes and methodology. Gelato is the same as ice cream in principle (even the word “gelato” is just ice cream in Italian), but it generally has a softer and smoother texture and in general, is associated with creaminess and higher quality. For my business I imported the best equipment from Italy and, having both grown up and learned to make ice cream in Italy, I can say the product is about as authentic as it can be.
I set up the business between Dec 2017 and May 2018 while working a job in a school and I began trading on 20th May 2018. My business operates seasonally until roughly the end of Sept. We reopened this year in April 2019 and am currently in my second season.
We don’t have an ice cream shop. Instead, we sell it from a food truck, the main vehicle is a converted tuk-tuk.
This was an active choice for a few primary reasons:
I’ve also recently started supplying some cafes and an upmarket garden centre, these add an extra income source and smooth out revenue.
In all those cases, the business approached me to supply them. In one case I have a partnership where we split the cost of the counter and I supply the ice cream free of charge but get 50% of the revenue. In all the other cases I just sell the ice cream at a wholesale price.
I also do private events, only if they are prepaid (as a wise man suggested). It prevents so much bullshit and everyone is a lot happier, it means I turn down a lot of stuff.
Lastly, last week I opened up my own second location in a prime spot in a shopping centre. It has huge potential, but I’m still figuring out how to get myself known there and increase sales. It’s pretty late in the season, but it’s mostly setting up for next year.
The good
We’ll start with a nice one. The business makes me happy! I really love what I do. It’s partly the product that I’m selling that makes me feel good as it’s the right mix of creativity, sciency-ness and just putting good food out on the market.
That’s probably a small part though, what I love even more is that it’s my ticket into the game of business. I think I could have had a toilet plunger biz and I would have been happy. Thinking about growing, competition, marketing, efficiency, systems, etc. is riveting. I honestly believe if the thought of continuously getting better at those things doesn’t excite you then you aren’t cut out for this entrepreneurship stuff.
Secondly, my branding and product are on point. I cannot stress enough how good the logo, name, and image of the company is. People assume that I’m part of a chain or that it’s a long-established business. I also have enormous customer retention in my primary location and 5-start reviews on every platform you can think of. Another ice cream business tried to open up close by an actual shop and they are likely to go out of business in their first year. So the product and delivery get a big tick.
The bad
The current model does not lend itself to growth, if I wanted to open up multiple locations, I would have enormous trouble organising staffing around the weather. Because most of my locations are semi-outdoors, if the weather is rubbish, it’s not worth opening. If I had say, 25 locations, then I couldn’t tell 25 people every day “oh weather is bad tomorrow, let’s see about the next day”.
This was the fundamental issue that I have been having: “How do I grow this?”
The business also doesn’t lend itself to wholesale. The machinery I have is only suited for small batch production so there are limits to scaling. Buying different machinery, would both be really expensive but more importantly would reduce the product quality, defeating the whole purpose of the biz.
I’ve started to look at franchising but if someone were to copy the entire business model it would be a pretty horrid offer. The start-up costs are too high, the revenue is too unpredictable and any franchisee would run into the same problems I’m currently running into if they wanted to grow.
The future
Not all is bad though, through reading TMF it got me thinking about changing the business model and a way to grow rapidly without the business growing into an uncontrollable monster and collapse in on itself.
The current idea is to “franchise” the carts, while keeping the production under my control.
Essentially, a franchisee would pay a franchise fee to have one of my company’s “carts”, from which they would be able to sell gelato. I imagine most franchisee candidates would be existing business owners that have a café, bar or food outlet or just someone that has access to a good location to sell ice cream.
The franchisee would be able to offer artisan gelato, without having to make any investments into a whole operation (space, equipment, training, managing) they would have a catalogue of flavours to choose from and I would provide all the training, equipment and gelato to them. They would only have to look after the staffing and ordering the gelato, everything else would be taken care of.
They would also benefit from selling a premium product with high-margins, offering something new that would draw in new customers and give them a USP over other business in the area.
For my part, I would benefit from having huge multiple selling points, without having to manage the staffing or intricacies of each different location and could focus on the core of my business.
I’m currently using my second location as a “prototype” for what I would be offering a franchisee, as such I’m trying to make the numbers as good as possible to make it a viable proposition. It’s early days, but I definitely see the potential.
I have a LONG way to go and absolutely loads to learn. The second place is bringing with it some great challenges that are forcing me to become a lot better at so many different aspects of business, but I guess that’s the fun of it all.
I’ll use this thread to keep track of the journey and my experiences. If you have any questions, about my business of your own food biz, I would love to help.
If you are still reading, hope it wasn’t too boring, future posts will be a lot more concise
PS. I'm more than happy to post some pics up of the van and the cart to make it clearer for people, just not sure if it counts as advertising or how the forum is about putting out personal info.
I touched on my business in my into page (INTRO - Gelato Entrepreneur), but I thought it might be interesting to give you a much more detailed overview of what I’m doing, primarily for my own benefit (both for self-accountability and advice-seeking), but also to hopefully help anyone considering a food business and talk about some of the pros and cons of this type of business.
Overview
My business makes and sells ice cream, we manufacture our own ice cream in house using our own recipes and methodology. Gelato is the same as ice cream in principle (even the word “gelato” is just ice cream in Italian), but it generally has a softer and smoother texture and in general, is associated with creaminess and higher quality. For my business I imported the best equipment from Italy and, having both grown up and learned to make ice cream in Italy, I can say the product is about as authentic as it can be.
I set up the business between Dec 2017 and May 2018 while working a job in a school and I began trading on 20th May 2018. My business operates seasonally until roughly the end of Sept. We reopened this year in April 2019 and am currently in my second season.
We don’t have an ice cream shop. Instead, we sell it from a food truck, the main vehicle is a converted tuk-tuk.
This was an active choice for a few primary reasons:
- Big ongoing cost savings from not having to pay rent, business rates and other premises costs
- Ability to move if the area proved to not be successful, less commitment to a single location
- Marketing and differentiation, by standing out and having more visual exposure
- Possibility to do events
I’ve also recently started supplying some cafes and an upmarket garden centre, these add an extra income source and smooth out revenue.
In all those cases, the business approached me to supply them. In one case I have a partnership where we split the cost of the counter and I supply the ice cream free of charge but get 50% of the revenue. In all the other cases I just sell the ice cream at a wholesale price.
I also do private events, only if they are prepaid (as a wise man suggested). It prevents so much bullshit and everyone is a lot happier, it means I turn down a lot of stuff.
Lastly, last week I opened up my own second location in a prime spot in a shopping centre. It has huge potential, but I’m still figuring out how to get myself known there and increase sales. It’s pretty late in the season, but it’s mostly setting up for next year.
The good
We’ll start with a nice one. The business makes me happy! I really love what I do. It’s partly the product that I’m selling that makes me feel good as it’s the right mix of creativity, sciency-ness and just putting good food out on the market.
That’s probably a small part though, what I love even more is that it’s my ticket into the game of business. I think I could have had a toilet plunger biz and I would have been happy. Thinking about growing, competition, marketing, efficiency, systems, etc. is riveting. I honestly believe if the thought of continuously getting better at those things doesn’t excite you then you aren’t cut out for this entrepreneurship stuff.
Secondly, my branding and product are on point. I cannot stress enough how good the logo, name, and image of the company is. People assume that I’m part of a chain or that it’s a long-established business. I also have enormous customer retention in my primary location and 5-start reviews on every platform you can think of. Another ice cream business tried to open up close by an actual shop and they are likely to go out of business in their first year. So the product and delivery get a big tick.
The bad
The current model does not lend itself to growth, if I wanted to open up multiple locations, I would have enormous trouble organising staffing around the weather. Because most of my locations are semi-outdoors, if the weather is rubbish, it’s not worth opening. If I had say, 25 locations, then I couldn’t tell 25 people every day “oh weather is bad tomorrow, let’s see about the next day”.
This was the fundamental issue that I have been having: “How do I grow this?”
The business also doesn’t lend itself to wholesale. The machinery I have is only suited for small batch production so there are limits to scaling. Buying different machinery, would both be really expensive but more importantly would reduce the product quality, defeating the whole purpose of the biz.
I’ve started to look at franchising but if someone were to copy the entire business model it would be a pretty horrid offer. The start-up costs are too high, the revenue is too unpredictable and any franchisee would run into the same problems I’m currently running into if they wanted to grow.
The future
Not all is bad though, through reading TMF it got me thinking about changing the business model and a way to grow rapidly without the business growing into an uncontrollable monster and collapse in on itself.
The current idea is to “franchise” the carts, while keeping the production under my control.
Essentially, a franchisee would pay a franchise fee to have one of my company’s “carts”, from which they would be able to sell gelato. I imagine most franchisee candidates would be existing business owners that have a café, bar or food outlet or just someone that has access to a good location to sell ice cream.
The franchisee would be able to offer artisan gelato, without having to make any investments into a whole operation (space, equipment, training, managing) they would have a catalogue of flavours to choose from and I would provide all the training, equipment and gelato to them. They would only have to look after the staffing and ordering the gelato, everything else would be taken care of.
They would also benefit from selling a premium product with high-margins, offering something new that would draw in new customers and give them a USP over other business in the area.
For my part, I would benefit from having huge multiple selling points, without having to manage the staffing or intricacies of each different location and could focus on the core of my business.
I’m currently using my second location as a “prototype” for what I would be offering a franchisee, as such I’m trying to make the numbers as good as possible to make it a viable proposition. It’s early days, but I definitely see the potential.
I have a LONG way to go and absolutely loads to learn. The second place is bringing with it some great challenges that are forcing me to become a lot better at so many different aspects of business, but I guess that’s the fun of it all.
I’ll use this thread to keep track of the journey and my experiences. If you have any questions, about my business of your own food biz, I would love to help.
If you are still reading, hope it wasn’t too boring, future posts will be a lot more concise
PS. I'm more than happy to post some pics up of the van and the cart to make it clearer for people, just not sure if it counts as advertising or how the forum is about putting out personal info.
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