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Let’s grow an ice cream business!

A detailed account of a Fastlane process...

Walter Hay

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Although you obviously know what you are doing I like the idea of growing your own knowledge of the process and gaining a lot more hands on experience.

This will equip you with the ability to choose what is really best for your business development.

Having your eggs in more than one basket is clearly working for you, and it could even be the best way to go. It might be a shame to cease any one avenue when they are working so well for you.

I can see you with a nationwide chain in the future.

If you do decide to go down the franchising route, read again Chapter 5 Franchise Law and Franchise contracts, particularly the reference to being sure to use the services of a real developer, not one of the countless brokers who claim to be developers.

Walter
P.S. The US developer that I mention could probably handle the process for you in the UK and save you a lot of money.
 
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PapaGang

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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.
Amazing job!

I know a retailer that closed his wholesale sauce accounts because he realized that people were buying the product somewhere else and not visiting his main store, where he sold a lot more stuff. He realized that if he made his store the ONLY place to get the product, he could sell them other things besides his famous sauce. Result: more $ spent per customer visit.

Also, the food truck is a great way to venture out to new locations to spread the word. It's a great marketing tool for you and an easy way to scout new areas for expansion by looking at sales figures.
 

Tony100

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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.
Congrats on your progress. I just enjoyed reading your story.

What size space are you after for production? I'm not sure which part of the UK you are in but there is likely to be flexible space nearby. industrials.co.uk flexspace.co.uk (I've never used these 2 sites so can't recommend them) You're growing, need to find somewhere quickly and probably can't forecast the next few years accurately so flexible space might be suitable.

I run a wholesale (non food) business - our first premises was a 400 sq ft on a flexible business park. We later took on 2 further units on this business park bringing our total up to about 900 sq ft. They were all on one month rolling leases so when we ran out of space again, we only had to give one month notice on all 3 units.

We moved again in Nov-2020 to a different business park taking on one unit at 2000 sq ft on a flexible 3 month rolling contract. Unfortunately, recently the landlord has said they will increase the rent by 30% later this year so we're looking to move again. I suppose the downside of flexible space is that the flexibility goes both ways. If we refuse the increase, they can just give us 3 months notice. However, the first business park we were at was fantastic and never increased the rent, they were a local organisation.

Now I'm trying to decide whether to use flexible space again or sign a 3 year lease on a warehouse and benefit from the lower rent. Anyway, I hope the above info can be of use.

Lastly, maybe you've heard of it but realla.co.uk is a good site for finding commercial property.
 

Brrr

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Congrats on your progress. I just enjoyed reading your story.

What size space are you after for production? I'm not sure which part of the UK you are in but there is likely to be flexible space nearby. industrials.co.uk flexspace.co.uk (I've never used these 2 sites so can't recommend them) You're growing, need to find somewhere quickly and probably can't forecast the next few years accurately so flexible space might be suitable.

I run a wholesale (non food) business - our first premises was a 400 sq ft on a flexible business park. We later took on 2 further units on this business park bringing our total up to about 900 sq ft. They were all on one month rolling leases so when we ran out of space again, we only had to give one month notice on all 3 units.

We moved again in Nov-2020 to a different business park taking on one unit at 2000 sq ft on a flexible 3 month rolling contract. Unfortunately, recently the landlord has said they will increase the rent by 30% later this year so we're looking to move again. I suppose the downside of flexible space is that the flexibility goes both ways. If we refuse the increase, they can just give us 3 months notice. However, the first business park we were at was fantastic and never increased the rent, they were a local organisation.

Now I'm trying to decide whether to use flexible space again or sign a 3 year lease on a warehouse and benefit from the lower rent. Anyway, I hope the above info can be of use.

Lastly, maybe you've heard of it but realla.co.uk is a good site for finding commercial property.
Probably 1000sqft for now and the next 12 months, ideally 2000sqft to really future-proof it.

The 2k sqft seems like a particularly awkward size to find, at least in a 30-minute radius from me, checked the links you sent but unfortunately they don't really seem to cover my area much.

Thanks for sharing your experiences though, it's always good to hear how other people are doing things. I don't mind the idea of flexi space, but to be honest there is quite a substantial investment required on my part (eg. three phase plugs, walk in fridge & freezer, sinks & plumbing) that I would like to find somewhere that is a bit more settled.

And yeah, realla is great and always use it to look at retail units in areas although estate agents have told me that the pricing is sometimes completely off.
 
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Tony100

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Probably 1000sqft for now and the next 12 months, ideally 2000sqft to really future-proof it.

The 2k sqft seems like a particularly awkward size to find, at least in a 30-minute radius from me, checked the links you sent but unfortunately they don't really seem to cover my area much.

Thanks for sharing your experiences though, it's always good to hear how other people are doing things. I don't mind the idea of flexi space, but to be honest there is quite a substantial investment required on my part (eg. three phase plugs, walk in fridge & freezer, sinks & plumbing) that I would like to find somewhere that is a bit more settled.

And yeah, realla is great and always use it to look at retail units in areas although estate agents have told me that the pricing is sometimes completely off.
I'm struggling too with finding this size workshop. I think it is because of how well online businesses have been doing during the pandemic, it is increasing the demand for workshops. If I had the money I would be building 1000-2000 sq ft workshops to rent out.

Fair enough, I see why you want somewhere more long term. Though some of these flexible places you can choose a longer lease length up to 5 years so don't rule it out if you come across somewhere. You could search whittlejones.com too (again, never used them so can't recommend)

Someone introduced me to a guy who grew a family business into a £100 million a year distribution business. His advice for signing leases while growing was to find a warehouse on a business park with lots of neighbouring units. So if you have to sign a 3 year lease on a 1500 sq ft warehouse and outgrow it after a year, you can rent a neighbouring unit as well for the remaining 2 years.

Have you read Duncan Bannatyne's book by the way? He had some badass moments guarding his territory while running his ice cream business lol. It's a good read.
 

DMNinja

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Subscribed to the thread. Not for the process, since my own venture is totally different, but for the way of thinking! And I hope you can fill the whole world with ice cream!
 

Brrr

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Update on the business.

Production
I was waiting on the person to get back to me on renting out his space. 1 text, 2 texts, 2 texts & a call, 3 texts & 2 calls. Nothing. He came to my shop to say he would show me around the next day, sure enough, he didn't show up.

I was feeling really deflated about the whole situation but in the meantime, a brand new unit came up. Great location, great price (same as I am paying now), and about 5/6x bigger than the space I currently have. I called the estate agent and had a viewing the same day. Sometimes you just know that something is exactly right and it was ticking all the boxes so I basically made an offer there and then.

I sent the email that same evening outlining the terms and then later in the week spoke to the landlord about the place. She already knew my business, which always helps and we seem to be moving ahead with it already. Hoping to get the paperwork done in the next 4-5 weeks and move in a couple of weeks after that.

Big lesson: Keep your options open, even if you have a really good lead you have to cover yourself and give yourself options. It's really hard to look at a "worse" option rather than "hope" for the best, but pragmatism wins the day in the end.

Sales
Sales are still decent, weather has been shocking in the UK, but it's given me some breathing space to do other stuff. Hoping to reopen my food truck soon which should take everything up a gear as well. It's nice that this can run so well without me being there every second.

Waiting to hear back from my second shop as my solicitor found some things on the initial agreement that were not great (feels good to finally have found someone good at this) so I've had to push it back a second. Hopefully this still all goes through alright.

Next steps
The future challenges are going to be almost all to do with organising everything and bringing everything I've been building into some kind of order. Creating systems and having the right kind of hires in the next 6 months is going to be very important. It's very weird having things still be so fluid with their timeline, but frankly I don't have the experience to really put some hard numbers on when each thing should happen in the next 3 months (and a lot of it is out of my hands).

Additionally, the more time passes the lower the financial pressure of undertaking both projects at the same time will be but I feel like I should always be a bit ahead of where I actually am.

I find that you get to the point where it's almost 50:50 on actual problems vs psychological management of oneself. Luckily I feel like I am getting better at both.

If anybody has any good book (or other) recommendations on building up teams and systems, I'm all ears.
 
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Brrr

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Making some really substantial progress at the moment with the business, things seem to be really coming together now although I've just come through a hellish week as someone turned the summer switch "on" in the UK. In the last 10 days, we've done over £20k in sales, as a reference all of last year's season it was a measly £60k. We're on track to hit £350k in revenue for the year, a 30% profit would be very achievable on this (higher if you count money that is going towards debt servicing), but a substantial part of it is going to be reinvested in the second location, more on that later.

Because of this burst in demand and profitable year so far, the finances of the business are in a really strong place and I've identified the growth strategy for the business aka turning it fastlane.

I've had a bit of an epiphany in the last week realising that I am actually running 2 businesses, the first being a gelato manufacturing business and the second being a gelato retail business. I was feeling really overwhelmed, but splitting the two mentally has really helped inform me on how to grow both parts, without them becoming a big jumbled mess. The key challenge in the next 6 months is going to be effective systemisation and optimisation of the two mini-businesses and getting the two to communicate without me being the glue, but letting systems becoming the glue.

Production
The explosion of demand gave me a bit of whiplash, 16-19 hour days these last 10 days, and now just bringing it a bit together. I've finally hired a full-time production manager, really good guy with lots of experience. He's should be able to take 90% of production out of my hands with the next hire going to be a KP/assistant production person at the end of June to take off the remaining 10%. This should all work really well as we move into a larger production kitchen at the end of this month. Just finalising the paperwork and they are doing some final work to the building before we are ready to get it ready for churning. This move is really exciting for me, more so than the shops, as it gives a centre to really nail the product and future products even more over the winter.

It also lets us build the IP and internal systems that run our business, which could then be rolled out to future geographical areas.

Current business
The shop is doing great, had staff drama this week that I had to sort out, never fun but a valuable learning experience for all parties, me mostly. Re-opened the food truck, which I've had to work these couple of weeks, also great. Wholesales orders are getting really big and constant, just about coping with that.

I've had to temporarily stop deliveries and am now saying no to all new events, it's hard to cut parts of the business out and dissapoint people, but the reality is that these bits are now due to contribute <5% revenue and a much higher % of headache. I think this is a normal business process though and the delivery kept the business alive in 2020.

The next thing to do is nail the hiring and ensure I have enough staff for the season, it's been such a challenge to get the numbers right, but to be fair to myself, this is all uncharted territory and it's easier to hire than fire. Definitely the hardest part at the moment, staff (closely followed by systems), but most of the issues are on my side rather than the individuals themselves.

Second shop
Finally managed to agree on the terms of the new unit, this time the landlord was a big pension fund, very different from my previous experience, and having a competent solicitor has been invaluable. They should be staring on the paperwork this week, with a view to complete by July. 6 weeks for the shop fit-out and we should be ready to rock'n'roll from mid-August.

Yes, I've basically missed the summer season, but the business needs to work 12mo/year regardless and frankly, with my inexperience, the current setup has been enough of a handful, so I am ok with the timing. It also means that I can completely set it up through organic growth, rather than borrow money, it's been real nice see the debt shrink as a % of the turnover. Makes the business feel much more stable.

I will detail everything about the new shop and happy to break down numbers later. It's twice the size of the current one and I'm very conservatively estimating 30% more sales from the location.

Overall
Every summer has its own challenges, every time different, but each time I get a little wiser, a little bigger, I meet new people and learn new lessons. It's knackering, and I'm preaching to the choir here, but it's very very rewarding. The business has attracted a good amount of investor interest too suddenly, with weekly "you have my number" type conversations. I'm holding back, still a lot to figure out using my own sweat & cash, but there is a lot of promise and it's nice to be able to document it in a place like this.
 

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Start on the new Production Unit
Work has started on the new production unit, with all the electrics done this week and plumbing work starting tomorrow. It's been a really interesting experience kitting out and planning a unit that is 100% practical and 0% aesthetic. It's always had to be a compromise, but this place is somewhere that has got to just churn out (literally) as much ice cream as possible and really raise the ceiling for capacity. Trying to future proof the place has been fun and actually laying out future 3-phase sockets and new prep areas really does help with that "this is real" excited feeling you kind of lose after you've been just been dealing with crap as a company owner for months on end.

What you may find interesting, I received two quotes for the flooring. The first, an independent contractor,
came in and just basically looked at the place and said "Yeah I can do it, I'll get you a quote later", spent 5 mins max looking at the location, and asked zero questions on my needs. The second quote, from an established flooring company, came out, tried to understand everything I needed, what my business would be doing, what would be where. We went through the perimeter of the building and he offered solutions for every problem I brought up, also explained the process in lots of detail.

Quotes came through, first one was HALF as much as the second one. The second one was higher spec, including a latex skimming to level it and make it stick better, but the price difference still seemed enormous. I pushed back with the second guys and they offered to lower certain parts of the spec to put it more line with the other one, but it a)Still came out much higher b)They recommended against lowering the spec for what I wanted (explaining the pitfalls) and explained that that was the price for the kind of work they did, but said they could budge 5% on the quote.

In the end, I went with no. 2, full spec. Twice as much money, but it felt like an easy decision.
In the end, the question I asked myself:
  • Who's going to do a job that actually fills the purpose?
  • What's the cost of not having the job be fit for purpose?
  • Which is least likely to give me a future headache if something goes wrong?
  • What is the cost of this possible headache now and in the future?
So anyway, peach vinyl safety flooring will be done the week after. Looking forward to it, but what a great lesson in how to sell your service vs just do a job. Showing your prospective clients that you will take care of their problems properly and not giving them the feeling of "If they don't care before they start the job, how are they going to care when they are doing it".

Everything else
Everything else is moving along ok, usual running things (staff out, staff in), sales are a bit meh due to classic british summer, but we're chugging along and we should be moving with the new shop soon enough.
 

Walter Hay

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I'm very pleased to see how well you are going. I am sure that the flooring decision was sound. Repairs and touch ups would possibly interfere with your operation, so you need to be sure that the new flooring won't cause headaches.

It reminds me of the attitude of customers in my Business #1 (Industrial Chemicals). An overseas competitor went around offering a product at half the price I had been charging. Only one took up their offer, but man! Didn't they regret it!

Every other customer in that industry refused to buy the cheap product. Many of them contacted me to tell me about the predator. Some obtained samples to pass on to me for testing. After a few weeks I heard from customers that the one that had changed suppliers was in big trouble.

I got an early flight and called on them to see for myself. It was difficult to refrain from gloating. The result they had achieved was loss of production and damage to equipment that would have cost them at least 5 times more than what they were paying me annually for my product.

After guiding them on how to fix the mess I returned home with a very big order.

The cheapest offer is not always a bargain.

Walter
 
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Tiago

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I had a conversation a couple of days ago with someone who runs the sales department of the #1 Camel Milk ice cream, they're based in the UAE. He has tons of connections in the ice cream business and was a pretty down-to-earth person.

If you want, I could connect you both. There is sure wisdom and knowledge that you both could exchange.

Also, you've asked for a book to build up a team and systems. It's not a "How-To" book per se, but more about the internal philosophies that will allow you to create teams and systems.

It's called "Straight Line Leadership", by Dusan Djukich. Phenomenal book, I think it could help you.
 

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