For event and leisure

START UP A MOBILE ICE CREAM BUSINESS

STEP1. PLANNING

Business plan and cash flow planning continued
For demonstration purposes lets assume that your  £1,152 sales are made up of £700 worth of ice creams @ 90% gross profit and £452 of other related products with an average gross profit margin of around 40%. Your calculations will need to be done slightly different and as you can see from the figures below the overall net profit has been reduced considerably.

£700 ice creams x 90% = £630
£452 other products x 40% = £180
Total gross profit = £810 x 26 summer weeks = £21060 - expenses £7,800 = £13,260 net profit.

A way to work around this problem could be to increase the price of the ice creams to help compensate for the lower profit margins on the other products you sell, but ideally those other products should be sold in addition to your main ice creams sales and not make up too large a part of your overall sales figures.  

But why do we need to prepare a business cash flow plan? Two reasons mainly, one is to teach yourself business basics, if you don't understand or grasp the difference between turnover, gross profit and net profit and how to get to those figures then maybe running a mobile ice cream or any business is not really for you. Secondly if you are trying to raise capital to purchase an ice cream van or ice cream equipment perhaps from a bank you need to demonstrate to the bank that you understand your business, how it works and project expected profits to repay any borrowing.
 

KEY POINTS

CHECK LIST

The initial idea
Have you ever considered starting your own mobile ice cream business?
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What's involved
It looks so easy, but what's it really like running your own mobile ice cream business?
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Where to trade
Plan where your customers will be and where you can legally trade.
Find out more

Be imaginative
Adapt and offer new ice cream products without big changes to your mobile ice cream business.
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Business plan
Financial planning is essential for your new mobile ice cream business.
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