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EXECUTION Let’s grow an ice cream business!

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Brrr

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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:
  • 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
This comes with some downsides of course, for one thing, I am very limited for space and therefore have a limited product range. Additionally, I am somewhat dependent on licenses to trade. There is no reason that I would be asked to leave, but there is always a small risk. Lastly, I am much more weather dependent than a shop, which acts as a double-edged sword in that I get more business when it’s sunny and much worse when it’s raining (which happens quite a bit in the UK).

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 :smile2:

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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broswoodwork

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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”.
Not my business, but the dude two doors down from me runs a novelty company that sends vendors out to parades with inflatable spongebobs, plastic fortnite guns, and all that other junk you see for sale at events.

He sends one or two rental trucks filled with merchandise out to events within 3 states. As near as I figure from talking to his guys (he's almost never there because he's smarter and more organized than me), they get paid strictly on commission from what gets sold. Sometimes they kill it and make $50/hr, sometimes they barely hit minimum wage (bad weather, truck breaks down en route, etc).

The good days outweigh the bad, so his staff just grumbles a bit when they blank, and they're singing and dancing through the hallway as they load and unload trucks giant trucks when circumstances cooperate.
 

the_cipher

New Contributor
Jul 19, 2019
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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:
  • 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
This comes with some downsides of course, for one thing, I am very limited for space and therefore have a limited product range. Additionally, I am somewhat dependent on licenses to trade. There is no reason that I would be asked to leave, but there is always a small risk. Lastly, I am much more weather dependent than a shop, which acts as a double-edged sword in that I get more business when it’s sunny and much worse when it’s raining (which happens quite a bit in the UK).

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 :smile2:

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.

If you're down to do a lot of talking how about you make a Youtube Channel as well dedicated for ice cream since you seem very knowledgeable about making ice cream as a side hustle? Of course you'll still focus more on your business but you could educated people who are interested in learning it plus this could help you gain more exposure as well all over the world and make others know about your product (scaling). I think this is a good way to build your brand as well!
 

ChrisV

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There use to be a guy on here who loved Ice Cream...
 

Walter Hay

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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.
Franchising is not for the fainthearted, but in my opinion it is the best way to scale a business provided the business meets the criteria that I set out in the original post in my Rapid Scaling by Franchising thread. See link below.

The good news for you is that franchising in the UK is not regulated by legislation. You still have to abide by laws relating to business in general, but franchising in that country is basically free of rules.

The nearest thing to regulation is a code of conduct operated by the British Franchise Association (BFA). Abiding by that code of conduct is optional, but you would be crazy not to. If you don't, selling franchises will be more difficult.

You should learn something about franchising even though the UK allows you a lot of freedom. Have a look at this thread: Rapid Scaling a business by franchising and then see: : PUBLISHING - Forum Members and Their Books!? Where in the contents list of my franchising book you will get some idea of what is involved. But, keep in mind that the UK is one of the easiest places in the world to set up a franchise system.

Walter
 
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Brrr

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Franchising is not for the fainthearted, but in my opinion it is the best way to scale a business provided the business meets the criteria that I set out in the original post in my Rapid Scaling by Franchising thread. See link below.

The good news for you is that franchising in the UK is not regulated by legislation. You still have to abide by laws relating to business in general, but franchising in that country is basically free of rules.

The nearest thing to regulation is a code of conduct operated by the British Franchise Association (BFA). Abiding by that code of conduct is optional, but you would be crazy not to. If you don't, selling franchises will be more difficult.

You should learn something about franchising even though the UK allows you a lot of freedom. Have a look at this thread: Rapid Scaling a business by franchising and then see: : PUBLISHING - Forum Members and Their Books!? Where in the contents list of my franchising book you will get some idea of what is involved. But, keep in mind that the UK is one of the easiest places in the world to set up a franchise system.

Walter


Hey @Walter Hay , I was hoping you'd pay this thread a visit! I most definitely have checked out your thread and I can assure you I'll be buying your book as soon as my season is over. At the moment, I'm still a bit in the trenches with the business and wrapping things up for the season, this will hopefully be done in the next few weeks.

After that, I can focus on the future of the business and try and set things in motion for the next stage. I still know virtually nothing about franchising so that's my main focus for the winter. I think my business is extremely suitable for franchising (or at least some form of leasing), I just need to be a bit clear in my mind on how the franchise will actually look like.

I really didn't know that about the UK and franchising, but that's great news. That's pretty surprising since normally the UK love their red tape and ultra-regulating things. I'll check out the BFA and I've signed up for one of their Exhibitions in October, I think there is so much for me to learn and that's really exciting.

Anyway, thanks for popping in. I'll be sure to keep you updated on how I progress in this aspect.
 

broswoodwork

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Edit: self deleted. off topic. very sorry.
 

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Brrr

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Careful now... We'll get banished to the minnow enclosure of broken dreams.

It's weird going back and reading through all those old threads. Like some sort of esoteric hidden mysteries of the forum stuff. and then BOOM "Snape kills Dumbledore".

I'm out of the loop and it's my own damn thread haha any of you guys care to share some of this history?
 

broswoodwork

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Edit: self deleted. off topic. very sorry.
 
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ChrisV

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I'm out of the loop and it's my own damn thread haha any of you guys care to share some of this history?
It's stuff we probably shouldn't be talking about..

But that's awesome you converted a took-took. I think @Rabby would appreciate that.

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.
Yea, I'm curious what it looks like.
 

Xeon

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@Umbired This thread reminds me of what you're doing!

I'm probably playing a dangerous game, because I really like this forum, but once upon a time there was a highly respected forum contributor who turned out to be different than he presented.

I know the names, but I wonder if someone can tell me the story of what happened. Maybe PM me or something so I can read it before I sleep :D
 

Brrr

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Edit: I'll post some pics in a few months, I need to get a few things in order first.
 
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Rabby

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Oh neat, an ice cream tuk-tuk? I love it. Food tuk-tuk is my spirit-animal-car. My second favorite is the motorcycle with a barbecue as the side-car. I could go to Thailand (where I normally see stuff like this) JUST to watch the interesting vehicles.
 

robertaddington

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Sep 25, 2019
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Hey @Walter Hay , I was hoping you'd pay this thread a visit! I most definitely have checked out your thread and I can assure you I'll be buying your book as soon as my season is over. At the moment, I'm still a bit in the trenches with the business and wrapping things up for the season, this will hopefully be done in the next few weeks.

After that, I can focus on the future of the business and try and set things in motion for the next stage. I still know virtually nothing about franchising so that's my main focus for the winter. I think my business is extremely suitable for franchising (or at least some form of leasing), I just need to be a bit clear in my mind on how the franchise will actually look like.

I really didn't know that about the UK and franchising, but that's great news. That's pretty surprising since normally the UK love their red tape and ultra-regulating things. I'll check out the BFA and I've signed up for one of their Exhibitions in October, I think there is so much for me to learn and that's really exciting.

Anyway, thanks for popping in. I'll be sure to keep you updated on how I progress in this aspect.
Yes exhibitions have too many things to learn
 

Brrr

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I'm Back

Hi everyone, I thought I would take some time to briefly update people on my business. I think I abandoned the forum sometime in Feb/March last year, I think I found myself getting sucked into the gigantic covid thread that became way too shitpost-y. Shortly after, I had to do a lot of fire putting out and devote my full attention to riding the rollercoaster that has been the last 12 months.

Let's start with March 2020, due to restrictions I saw the entirety of my wholesale dry up in late Feb and, with the UK lockdown being announced at the end of March for 12 weeks, I was looking at all my main business be canceled right as the season was about to get started.

For some reason, despite facing the prospect of my business being turned upside down, I was overcome by this feeling of nervous excitement about how much of a challenge the next period was going to be. I looked at what I could do to survive the immediate future and luckily I had built up a small but loyal social media following so I quickly announced that I would start doing a delivery service, I initially would take orders anyway anyone would contact me. IG, email, calls, Facebook, messages, anything. I then slowly created a crude ordering system on my website that somewhat improved things.

Because everyone was at home for 12 weeks and a lot of local government and food blogs published lists of takeaways on their websites. I was the only company doing artisan gelato delivery so I ended up being inundated with deliveries and ended up having a fantastic April & May for orders. As good as any other summer. It also meant that I had added another element to the business: delivery.

At the end of June, I was able to reopen the food truck (as it was outdoor) and had an incredibly busy summer of trading. I felt like I'd taken a huge step back from 2019 and the whole year was more similar to my first summer, but at least the business was alive and I was working where many others were not.

Because of the success of deliveries and the summer season, for the first time ever I'd built up a bit of a cash reserve. Mostly due to the severe forced efficiency of the 2020 summer. In mid-August, a shop came up for rent in a location that I had always dreamt of being in and after viewing it I put in an offer to take it on. The original reasoning was this it would help smooth out the revenue throughout the "bad" months and boost the good ones.

To my massive surprise, the offer was accepted at the start of September and we started getting the paperwork ball rolling then, after delays and headaches we managed to get it sorted at the end of October.

I will save you all the drama and details of the building work, contractors dropping out last minute on the project, and solicitors being useless, but in the end, I managed to find an absolutely fantastic team that did the work and I opened up my first shop on 17th December.

I expected to barely break even and to not start seeing any real sales until the spring, but after a few days, I started getting absolutely ravaged with queues of people. Didn't matter if it was -1C or raining, people were lining up to get ice cream in a pandemic.

I've had a terrific few months for sales, despite a new lockdown, and have managed to hire some great staff who basically now run the shop independently of me and I've been able to focus purely on the business development (and making ice cream, but I'll fire myself from that in time too). This has been a dramatic shift from the last 3 years of business, sales are now both more reliable and predictable and I am realising how wrong my initial assumptions were and how if you have a good product and good positioning, you can buck trends that you shouldn't.

I absolutely had no intention to go down the shop route, but it's working and the missing puzzle for my business (SCALE) has finally been addressed. I'm sure a lot of refinement is going to be needed, but I have something where the numbers are actually starting to make sense (or should I say CENTS).

What next? I'm looking to dramatically increase my production capability by moving my production to an industrial unit and I am also looking at my second shop in a nearby more populous town. The timescale on the first is 3 months and 4 months on the second.

The business has completely shifted gear and it is surreal how much can change in a year, I am nowhere near making it but I feel like I have a clearer direction on where to take things and am very excited to share with you what the next chapter looks like.

If there is one takeaway from the last 12 months: Just keep going! Keep moving, keep improving, keep working it, you can't see it yet but you will get a breakthrough! Growth & change are intertwined so embrace it.
 

The-J

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Super cool to see a small local business not only survive, but find new life and thrive during a pandemic. Looking forward to future growth!
 

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Brrr

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Super cool to see a small local business not only survive, but find new life and thrive during a pandemic. Looking forward to future growth!
Thank you, the last 12 months have included some of the hardest working weeks I've ever had to subject myself to (as I'm sure it has been for many many people here). The stress involved must still be lower than being fired or having your job be put on suspended animation (furlough in the UK) so I try to only highlight the positives, but it's been an absolute hellish grind.
 
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Brrr

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Small update:

I've formally put in an offer for a second shop, roughly double the size of my existing shop. Still hasn't been formally accepted, but the parties seem very keen and I think everyone involved is quite happy with the terms and the prospect of me being there. Still, time for things to go wrong.

I've also hired a full-time gelato maker to hopefully take over all of the production and looking at a part-time position to also help completely free me from production and also add some more elements to our product range. They are both around 50 years old, so it's very interesting seeing older vs younger hires. Probably worth a whole thread of its own.

I'd also identified a third shop in another location, it's a great spot but already had an offer on it. However, the estate agent told me he thinks the deal is going to fall through. We shall see. It would be a big stretch on top of another stretch anyway, but I just can't help myself with trying to grow things and take on new stuff.

I feel that I might as well try and fill up my pipeline and that creating all this extra demand can only be good for the business, but I do feel like I have taken a big bite and forgotten my dentures at home. Which brings me to my biggest issue: managing supply.

I haven't been able to find a really suitable location to move production to yet and I am sort of running out of time. I potentially have the staff to manage the expansion but I soon won't have the space to do it. This is always the case, there is always a bottleneck and this year it's been nothing but going from bottleneck to bottleneck.

I am holding out to hear about a location that has the potential to be really good, but the person has gone cold. I also have a somewhat inadequate backup plan, which involves just asking my current landlord to use more space. This is the most can kick-y of the approaches but one that might have to do for this summer.

Overall things are good, at least things are making money and ticking along, just needs a few big pushes before we really reach some altitude.
 

sparechange

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This is literally one of the easiest business's in the world, besides the startup costs.. a bit jealous.

Last food truck I worked at raked in like 5 figures a day, selling *only* french fries.

Nice & polite family, cheap as hell though confirming the Indian stereotypes, got a $20 bonus at the end of my slavery while illegally working overtime (12 hour days) and NOT getting paid overtime... ahh fun times!

Best of luck to you, location really is key here! The more drunk and stupid college/uni kids you can cater to, the better.
 

Walter Hay

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I have begun to follow your thread again, and think it shows great spirit and perseverance.

The one thing that I see as lacking is a carefully constructed plan. In particular you need to decide which type or types of sales venues you should concentrate on.

If you are seriously thinking of franchising you need to decide on and register a brand name. Having done that you should start the task of writing an Operations Manual.

It must outline and explain every detail of how the shop is to operate: Cleanliness, storage of stock, procedure for discarding old stock, opening hours, prices, clothing to be worn, even if it is only to specify a branded apron.

If in your shoes I would not even think of wholesale. Margins would be a lot lower and unless your customers would be willing to pay COD, cash flow would be harmed. You will have to supply franchisees at wholesale, but if they don't pay, they lose their franchise, so credit is not a risk as it is in ordinary wholesale. This introduces the question of royalties. Don't inflate wholesale to produce more income. Be fair, and you can charge them a royalty based on sales.

The food trucks could be franchised, and you could lease the trucks to the franchisees, but 1. You would need to be sure that the trucks comply to the letter with food and hygeine regulations. 2. You need legal advice to prepare the leases.

The shops could also be franchised, and the people who are running those shops for you would be your most likely prospects. Again, you need legal advice. Don't forget that you will only be franchising the retail businesses.

If you franchise you will find it far superior to paying employees and shop rental etc. The franchisees pay employees and any good franchise lawyer will ensure that they also pay for the lease. Shop fitout costs need to be worked out.

Walter
 
Last edited:

OMJ

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Small update:

I've formally put in an offer for a second shop, roughly double the size of my existing shop. Still hasn't been formally accepted, but the parties seem very keen and I think everyone involved is quite happy with the terms and the prospect of me being there. Still, time for things to go wrong.

I've also hired a full-time gelato maker to hopefully take over all of the production and looking at a part-time position to also help completely free me from production and also add some more elements to our product range. They are both around 50 years old, so it's very interesting seeing older vs younger hires. Probably worth a whole thread of its own.

I'd also identified a third shop in another location, it's a great spot but already had an offer on it. However, the estate agent told me he thinks the deal is going to fall through. We shall see. It would be a big stretch on top of another stretch anyway, but I just can't help myself with trying to grow things and take on new stuff.

I feel that I might as well try and fill up my pipeline and that creating all this extra demand can only be good for the business, but I do feel like I have taken a big bite and forgotten my dentures at home. Which brings me to my biggest issue: managing supply.

I haven't been able to find a really suitable location to move production to yet and I am sort of running out of time. I potentially have the staff to manage the expansion but I soon won't have the space to do it. This is always the case, there is always a bottleneck and this year it's been nothing but going from bottleneck to bottleneck.

I am holding out to hear about a location that has the potential to be really good, but the person has gone cold. I also have a somewhat inadequate backup plan, which involves just asking my current landlord to use more space. This is the most can kick-y of the approaches but one that might have to do for this summer.

Overall things are good, at least things are making money and ticking along, just needs a few big pushes before we really reach some altitude.
Re: you making an offer on a shop.

Is this standard practice in the UK?

I ask because a saw a for let sign in a shop so called the agent to get details of rental etc.

They said I should submit a proposal.
 

Brrr

Bronze Contributor
Read Millionaire Fastlane
Speedway Pass
Jul 28, 2019
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This is literally one of the easiest business's in the world, besides the startup costs.. a bit jealous.

Last food truck I worked at raked in like 5 figures a day, selling *only* french fries.

Nice & polite family, cheap as hell though confirming the Indian stereotypes, got a $20 bonus at the end of my slavery while illegally working overtime (12 hour days) and NOT getting paid overtime... ahh fun times!

Best of luck to you, location really is key here! The more drunk and stupid college/uni kids you can cater to, the better.
Well, I also handle the production which is off-site and the food truck bit is sort of being abandoned long term.

You can rely a lot more on drunk people than on the sun shining here in the UK.
 

Brrr

Bronze Contributor
Read Millionaire Fastlane
Speedway Pass
Jul 28, 2019
79
223
147
I have begun to follow your thread again, and think it shows great spirit and perseverance.

The one thing that I see as lacking is a carefully constructed plan. In particular you need to decide which type or types of sales venues you should concentrate on.

If you are seriously thinking of franchising you need to decide on and register a brand name. Having done that you should start the task of writing an Operations Manual.

It must outline and explain every detail of how the shop is to operate: Cleanliness, storage of stock, procedure for discarding old stock, opening hours, prices, clothing to be worn, even if it is only to specify a branded apron.

If in your shoes I would not even think of wholesale. Margins would be a lot lower and unless your customers would be willing to pay COD, cash flow would be harmed. You will have to supply franchisees at wholesale, but if they don't pay, they lose their franchise, so credit is not a risk as it is in ordinary wholesale. This introduces the question of royalties. Don't inflate wholesale to produce more income. Be fair, and you can charge them a royalty based on sales.

The food trucks could be franchised, and you could lease the trucks to the franchisees, but 1. You would need to be sure that the trucks comply to the letter with food and hygeine regulations. 2. You need legal advice to prepare the leases.

The shops could also be franchised, and the people who are running those shops for you would be your most likely prospects. Again, you need legal advice. Don't forget that you will only be franchising the retail businesses.

If you franchise you will find it far superior to paying employees and shop rental etc. The franchisees pay employees and any good franchise lawyer will ensure that they also pay for the lease. Shop fitout costs need to be worked out.

Walter
Thanks for your message Walter, it's always great to have you weigh in on this.

You are completely on the money with the constructed plan part, for the past 3 years I've been basically throwing everything at the wall and seeing what sticks: food truck, carts, events, wholesale, delivery & now the shop(s). By far the best thing so far has been the shops and this is the growth model for the business that I am focusing on.

Everything else, I've let people come to me. I'm somewhat reluctant to completely kill parts of my business if they are still profitable and don't take up a huge amount of time as I think that they may become a bigger part of the business in the future and it is easier than starting from zero. Having said that, they can all be a little bit of a drain to me personally, but a lot of the wholesale has lead to more and more opportunities and help spread my brand in the area with people keen to advertise the fact that they are stocking my ice cream. With that said, I think it is sound advice to cut this.

For the food truck, I think it has one more season left in it before it gets relegated to events. I have no plan to buy more or go down this route (even for franchising), but I feel for the customers that love it and look forward to it every summer so I want to find a way to put something in its spot instead (some form of Kiosk?)

Onto franchising, as a whole, this is what I thought the business would naturally lead to. I'd actually gotten an initial consultation for the viability of the business. I've trademarked both my business's name and logo and as for documentation, I have documentation for the shop to run independently of me but I still step in for the training of new staff and there is a lot of material that should go into a manual. Honestly, the manual isn't going to happen now until October at the earliest as I have my plate more than full with the season starting to go underway.

Secondly, I just want to spend some time running the various shops to get a really good idea of what is actually involved and get some "data" on what is needed, test some various products and see how I cope once things stabilise. I think one full season should suffice, but it is so hard to judge things when the circumstances of the last few months have been so unusual.

I do think franchising might ultimately be the superior route, but at this stage in my life, I feel like I have the energy and drive to just run a larger organisation and see what this leads to. I hadn't considered offering the franchise to the shop managers though, it's a very good suggestion. I have your book Walter and I also am a big Gerber follower so I want to always keep this option open.

Overall, I think I am still working things out for myself and the business. I think with some more time, money, and data the right path will become clear. I look forward to sharing this journey with the forum.
 

Brrr

Bronze Contributor
Read Millionaire Fastlane
Speedway Pass
Jul 28, 2019
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Re: you making an offer on a shop.

Is this standard practice in the UK?

I ask because a saw a for let sign in a shop so called the agent to get details of rental etc.

They said I should submit a proposal.
For proposal, I think they just might mean that they want to know what you want to do with the space, information about yourself and your business or proposed business. The landlords might not want certain types of businesses there. Eg. they don't want a cafe if there are 10 in the area, something noisy, something too "risky", something that attracts the "wrong" type of people.

They basically don't want timewasters or dreamers.

For me it has always gone like this:

Me: Hi, my name is X, I am the owner of company Y. I was wondering if you could send me info on this shop and maybe arrange a viewing?
Agent: Yes, here is the info (floor plan, asking price, asking terms) when would you like a viewing?

After the viewing, if I want to proceed. I put some kind of offer together, specifying:
  • Lease length (eg. 10 years with a 5-year break or 4+4 or even 3+2 these days is happening)
  • Rent amount (lower than asking, generally)
  • Rent-free period (I've heard as much as 6 months is being given these days, 3 months is generous, 1 month is common)
  • Deposit amount (how many months of rent, generally 3 months to as much as 1 year)

You might have some backward and forwards on parts of the terms and then they communicate it to the landlord. If you can come to terms that are satisfactory to both parties, then the offer is accepted. You would then draw up Heads Of Terms (HOTs) that summarise the agreement. The HOTs get passed to solicitors that draw up a contract from the HOTs. You sign and then you complete and you are given the keys and your lease begins.
 

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