Thinking about starting a gelato shop in your town? You’ll choose a gelato style to develop here. You have the vision of creating a one-of-a-kind gelato shop, but where do you begin? Like all businesses, it all starts with due diligence to make sure you’re starting the right gelato shop in the right area of town that will allow you to be profitable. Even the best retail concepts don’t work if you’re not in the right location.

A great place to start is to find the right location for your gelato business. When it comes to gelato, you want to be in a location with plenty of foot traffic. That means you’ll want to start identifying areas and building a list of places that people congregate regularly within your city. Popular options to start any frozen desert business includes shopping malls, nearby or on college campuses, strip malls, local attractions, or tourist areas with lots of little small shops that people like to walk and browse. You need to deeply understand your market and the options that are available.

During the podcast, Waldt shares a key tip you can take to ensure a prospective location has sufficient traffic.

This is an invaluable tip that you can apply to your business in the research phase. Don’t take a leasing representatives word on the amount of foot traffic you should expect at any location. These estimates will always be optimistic at best.

Remember… Your savings and business future is going to be tied to the location you select. You owe it to do everything in your control to make this work. We also recommend documenting traffic in different days of the week and time of the day. It’s normal for a location to be busier on weekends than weekdays, but it’s something you’ll want to be aware of and build into your business plan estimates.

How much will it cost to start a gelato shop? What are the expenses?

Batch Freezer – This is the most expensive piece of equipment you’ll purchase for a gelato business. A batch freezer allows you to produce large quantities of frozen deserts like ice cream, frozen custard, and gelato too. This is the piece of equipment that actually makes the gelato and that you will dispense into a pan, bucket, or other container.

New batch freezers cost between $22,000 – $35,000 depending on the model. If you want to reduce your initial investment purchasing a high-quality preowned batch freezer from Slices Concession will cost about $8,000 – $15,000 on average.

Blast Freezer – This piece of equipment will cost around $15,000 brand new. After you dispense product from the batch freezer as described above, you’ll immediately place the product into a blast freezer. A blast freezer allows you to cool your frozen deserts as quickly as possible and prevent’s crystallization of product. The quicker you’re able to get your gelato or ice cream into a blast freezer the less of this crystallization will appear on the product. Crystallization is not good because it will result in a gritty feeling final product that’s not ideal to serve.

Blast freezers are sometimes referred to as “shock freezers” because of how quickly they bring down the temperature of product. Depending on the model you choose, blast freezes can get as cold as -49 degrees Fahrenheit.

Dipping Cabinet – Finally, you’ll place your gelato into a dipping cabinet when it’s ready to serve and display to customers. This is the clear style glass dipping cabinet that allows customers to view the gelato. We eat with our eyes first! Take care when you install these because after they’re installed, they can be very difficult to move.

Wages – One major business decision you will need to make is whether or not to hire a full-time store manager early on. Hiring a manager will require between $4,000 – $6,000 typically. That’s a lot of gelato sales to be able to recoup this line item.

If you plan to own and operate the store initially this will significantly reduce the amount of revenue you need to bring in during the early days. When you’re just starting out this can be a good option to help you learn the business. Keep in mind that there’s an opportunity cost to self managing, however. You’ll have less time to market your business and develop relationships if you’re working in the shop for 60 hours a week.

Leasing a Space – According to a survey from RestaurantOwner.com, you should expect to pay $3,000 on the low end and $8,750 on the high end. Of course, you’ll need to contact property managers in your specific area to get rates for areas that you’re considering.

Capital Reserves – There’s a perception new businesses become profitable immediately upon opening their doors. Sadly, this is not how things typically work. You’ll want to plan for a few months of breaking even or even losing money when starting this type of business. Ideally, you’ll have 6 months of cash reserves before opening up shop. This will provide a buffer for those lean early months before local customers have discovered your business.

There will of course be other variable costs that will depend on your goals that need to be factored into a business plan. Some common variable expenses include cooking equipment, soda machines, a cash register, lighting and dining room furniture.

After you open the doors to your artisan gelato shop, you’ll need to get the word out about your new business within the community. You will accomplish this by developing a marketing strategy. Admittedly the marketing aspect of operating a gelato shop can be a difficult aspect of operating a successful business to grasp. There are so many marketing / advertising options out there that it can become overwhelming.

In our interview, Waldt shares some specific strategies that have worked well for other ice cream business and frozen desert shops. Many of these require a small amount of advertising investment so these are ideal for owners on a budget. Here are some of the strategies outlined during the conversation:

Coupons – One battle tested way to attract new customers is to offer them a coupon or discount. Within a one mile radius of your store front, deliver as many coupons to people doorsteps as possible. Visiting residential areas and apartment buildings are recommended when using this approach.  You can save a lot of money by delivering these coupons yourself instead of using the post office.

Partnerships – Find creative ways to partner with other business. One unique way would be to include to partner with a local coffee shops to create a coffee flavored gelato. This type of event would help you build a relationship with another small business owner and allow you to tap into their existing customer base. This kind of creative activity costs almost nothing aside from your time and a small amount of free product.

Fundraising / Charitable Groups – Schools, churches and non-profits are always looking for new ways to raise money for their cause. By splitting a portion of the revenue you make at some of these organizations events is another way to get your foot in the door, generate sales, and raise awareness for your business.

Leverage Employee Skills – Odds are you’ll be hiring lower wage and younger employees for your shop. Take advantage of this when you can. If you happen to hire a college student they may have a better understanding on how to manage social media profiles on Instagram or Facebook. During slow periods, delegate social media posting and participation to your employees that have interest in that area. Your employees may thank you for the opportunity!

Starting with the following steps:

Steps 1. Visit existing gelato shops to research types of advertising used, and determine which types of locations draw the most traffic.

Steps 2. Talk with the owners of current gelato shops to get advice about your own business, and learn about any special equipment used.

Steps 3. Contact gelato restaurant chains, such as Screme, Paciugo or Grom, to receive more information about the specific equipment and other needs for a gelato business.

Steps 4. Attend trade shows, such as the North American Pizza and Ice Cream Show or Great Lakes Ice Cream and Fast Food Association Show, to meet potential suppliers and learn more about required equipment and techniques.

Steps 5. Take a trip to Italy to sample true Italian gelato, learn about Italian decorating for your restaurant and take a class at the Italian Institute for Advanced Culinary and Pastry Arts on Artisan Italian Gelato Technique and Production or a course at Carpigiani Gelato University.

Steps 6. Develop a business plan that includes all equipment and supplies needed and estimates of monthly and yearly sales based on the research you have conducted. Also, plan out how you will market your store and what prices you will charge.

Steps 7. Choose and buy or lease a location for the store in an area that receives a lot of foot traffic.

Steps 8. Obtain all business licenses and permits required by your state and local governments. You will need to have your shop inspected before receiving approval from the state health inspector. You also will need to register your business with your state. This is usually done on the state's secretary of state website and involves a search to make sure the name you have chosen is not already in use in the state. You also will need to obtain an Employer Identification Number from the Internal Revenue Service (see Resources) as well as the proper insurance, which would include liability, workers' compensation and unemployment insurance.

Steps 9. Advertise your gelato shop in local magazines or newspapers, on local radio programs and by placing flyers in nearby businesses.

Steps 10. Provide coupons for free gelato at community events to introduce customers to your store.

Steps 11. Hold a grand opening event with free samples of gelato, and provide those who attend with a discount on their next visit.

Steps 12. Give customers a frequent visitor card where customers receive a hole punch or sticker for each purchase, and after a set amount of purchases, receive a free gelato.

Have a successfull business of gelato !