Do those little snow cone shacks, push carts, or trucks make any real money? It’s a legitimate question and can be easy to dismiss the revenue potential of a shaved ice if you’ve seen a little push cart at a fair or farmer’s market. But if you take a deeper look, you’ll discover that shaved ice is actually a profitable little niche market. In this post, we will break out some different scenarios and factors that go into determining the annual profits of a shaved ice business. We will also outline some of the variable expenses of operating different models of this business.
Note: For the purposes of this article we are using the word shaved ice or snow cone interchangibly. There are some small differences between the two depending on where you live, but to the layman these are usually interchangable.
Profit Potential Case Studies
First, let’s look at some examples of shaved ice businesses that have reported gross revenue numbers publically to get a sense of the overall potential of operating a shaved ice business.
Bahama Buck’s refer to themselves as the Original Shaved Ice Company. They are a franchise opportunity with locations in many parts of the United States including California, Nevada, Texas, and many others. While this franchise diversifies their product offerings to include coffee and smoothies, the core product offering is shaved ice.
According to the franchise disclosure document for Bahama Buck’s, a document required and reviewed by the Federal Trade Commission, average gross sales was $463,387 annually in 2015. The top 25% of franchisee’s generated reported over $650,000 in top line revenue. That’s a lot of shaved ice!
Another shaved ice business franchise is Kona Ice. In 2015, there were 594 Kona Ice franchises in America and the number has continued to grow since then. On average, Kona Ice units will generate an average of $94,868 per unit in 2015. Of course with Kona Ice, it is not uncommon for frachisee’s to own multiple vehicles, which increases the average annual income. Also, unlike stationary restaurant locations, most Kona Ice trucks do not operate as frequently and some are only open part of the year so this is not exactly an apples to apples comparision.
Of course there are success stories from other shaved ice business owners as well that are not part of a franchise. Check out this podcast interview with Snowy Joey based out of Australia. This business was started by a high schooler and has since gone on to generate over one million dollars in revenue. Not bad for a business that started out being operate on weekends only with a used shave ice machine.
As you can see from the examples above the sky really is the limit in terms of revenue potential in this industry. It all depends on how much you want to work, how hard you work, and how well you execute. The model is already proven and you can build a large and profitable business serving this product. You just need to have the execution and marketing down!
The Low End
Of course many shaved ice businesses don’t generate anywhere near 6 figures in top line revenue annually. And that’s okay! Many people start selling shaved ice as a way to make a little extra money on weekend or during the warmer summer months. In these situations, a business may only generate between $500 – $1,000 total. The nice aspect of this, however, is that you can still pay off the cost of buying shaved ice equipment, syrups, and other supplies within just a few months of operating a business at this level.
The other thing to keep in mind is that even if you start out by having a part-time shaved ice business that only operates on weekends or holidays, it doesn’t mean you need to operate as a small business forever. As mentioned in this interview, Snowy Joey operated for years as a small business before getting serious about their business and expanding into multiple shaved ice units. To date, they own a business in full that has generated over one million dollars in sales.
Different Types of Shaved Ice Businesses with Revenue + Expenses
One handy dandy tool available for free is the potential earnings calculator from Snowie.com. This tool lets you make estimates about how profitably your snow cone business might be. Another nice element of this tool is that it estimates your expenses for operating the business as well, including things like syrups, spoons, ice, cups, insurance and rental space that you will need to cover.
Stationary Location – A stationary or brick-and-mortor location will require the most overhead of any business model for selling snow cones. There’s monthly rent, electricity, labor and other costs associated with running a storefront. With that being said this model usually offers the best opportunity to generate the most top line revenue as well since you’re always in a fixed location and are open a consistent number of hours each month.
Shaved Ice Business Monthly Costs – Ballpark Costs
|Expense Type||Estimated Cost||Notes|
|Monthly Rent||$500 – $3000||Variable cost depending on location.|
|Shaved Ice Machine||$1,000 – $2,000||One Time Expense.|
|Permits and Licenses||$100 – $500||Varies a lot depending on where you operate.|
|Phone / Internet||$100 – $200|
|Register / POS||$50 – $1,000||Can also use an iPad and an app for credit transactions.|
|Insurance||$100 – $500|
|Cups||$80.00||Approx. 2,000 per Month at $0.04 per cup.|
|Spoon Straw||$40.00||Approx. 2,000 per Month at $0.02 per spoon straw|
|Ice||$260||Approx. 2,000 per Month at $0.13 per sale.|
|Napkins||$20||Approx. 2,000 per Month at $0.01 per sale.|
|Labor||$3,600||Assumes $10 per hour for one employee. 12 Hours per day for 30 days per month.|
|Electricity||$100 – $300|
|Note: These costs above assume you will sell about 67 units of shaved ice per day (about 2000 sales monthly or 30 day time period) over the course of an 11 hour work day.|
|These are conservative sales numbers for research purposes only. Everyone’s situation will be different and sales could be much higher or lower depending on your marketing and location.|
|Total Low End Monthly Costs||$6,450|
|Total High End Monthly Costs||$13,500|
|Shaved Ice One Time Expenses / Startup Costs|
|Item||Monthly Estimated Cost||Notes|
|Shaved Ice Machine||$1,000 – $6,000|