1. You can start a Snow Cone Stand with no debt
Often times the main barrier to entry for a potential entrepreneur is having the cash or being afraid to take out loans and get into debt. New entrepreneurs are scared they won’t be able to pay it back. There is always a possibility of failure and no entrepreneur wants to fail and go into bankruptcy. Even simple businesses such as a coffee shop, small restaurant, or boutique will require the average individual to take out loans and debt.
It is realistic to start a stand for as little as $5,000, though this number can exceed $20,000 for a brand new stand and commercial equipment. All of this will depend on how thrifty one wants to be. Almost anyone can save up $5,000 in a relatively short period. For potential entrepreneurs this is a great way to attempt your 1st business without spending every dime to your name or taking out excessive loans.
2. Snow Cone Stands have scalable Business Models
Less than $10,000 to start your first business is as low a barrier to entry as you may find. It is completely reasonable to start a snow cone stand for an amount even a high school student could save over a year or two. Like many fast food owners, snow cone stand owners can continue to fund new locations with profits from the current ones. In fact, it’s often easier to do so with a snow cone stand than any other business I have seen.
It’s possible in a typical summer to show net profit between five and twenty-five thousand. This is especially possible if you plan to operate the stand yourself and avoid high labor costs. If you are thrifty and smart about the stands you purchase then you could open one or more new snow cone stands every year. With a some time and experience it is possible to open several new locations in a season.
3. Snow Cone Stands have a simple Business Model
The business is both financially scalable and operationally scalable. Snow cone trailers are easy to run and with small amounts of supervision, you can hire high school kids to 90% of the work. A couple of dependable employees an entrepreneur can run multiple locations with the same effort as one. The owner must be sure to handle making and delivering ice, mixing and delivering syrup as well as handling the money. The owner should collect deposits and make payroll. These jobs are as easy to do for one location as several. When an owner already has to make ice and mix syrup it doesn’t take much additional time to do this for several stands.
4. It’s a business you can run in your spare time.
Even though you may not want your very own snow cone empire, the point above can apply in a different way. This business model allows you to operate it in addition to your regular job. If you work a normal 40 hr/week job as many do, then this may be a great part-time project. Once your stand is up and running it shouldn’t too difficult to hire kids to work during the day and then you can handle the other work at night. My most recent snow cone stand had high school kids work during the day and weekends, and I split the profits with a friend for him to make ice and syrup, pay the rent and payroll, and make deposits. I was running this business putting in less than 5 hours per week.
5. Snow Cone Stands have an great cash margins
Snow cones typically costs $2-5. The cost of goods sold for one include ice, syrup, cup, spoon, straw and napkin. This number would not include things such as labor, rent, utilities or any other fixed cost.
If you purchase these items in bulk these costs should not exceed 20-30 cents per snow cone. Gross profit can easily exceed $1.75 to over $4 per snow cone. Now your job is to maximize sales in order to cover your operating costs. Rent, utilities and labor won’t really change whether you have 1 customer or 100 customers in an hour.
A solid rule of thumb provided by the 1-800-shaved-ice is to multiply each ounce of a cup by 2 cents. So a 12-ounce cup would have COGS of roughly 24 cents.
These are just a few of the reasons you should consider a snow cone stand for your 1st small business. I highly encourage you to check out other reasons and the various information we provide.