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 | RentWe have discussed the importance of the actual location of your business. High traffic areas that have convenient access are very helpful. However, a suitable location will often cost you quite a bit in rent.
Rent prices may range from $50 to $500 a month. The price you pay will all depend on the arrangement that you make with your landowner. Usually, the better the location, the higher the rent will be. As always, shop around to get your best price.
At our busiest stand we paid $200 a month from May to October. Our landlord did not ask for rent during the winter months when we were closed. In reality, we would have paid $300 a month all year round if needed. We had great business and were located in the middle of town. Nearby there nine baseball fields, a community college, neighborhoods, shopping centers and restaurants. The daily traffic count on the highway in front of the business was about 28,000 vehicles in a 24 hour period. At this particular location we had no problem averaging between 300 to 500 dollars in sales a day.
Whatever you work out with your landlord, be certain to have a contract or agreement in writing. If possible, agree to a fixed number years for your lease. Too many times, a snow cone or shaved ice businesses has been forced out of business and lost thousands of dollars in revenue after one season at their location. Try to get at least a one year lease with the option to renew for one to two years. This option will give you the opportunity to get a feel for the location before committing to a long term lease.
| | | LaborUnless you plan on operating your business completely by yourself, labor will most likely be your largest expense. Because of this, it will be imperative that you keep a handle on your labor costs.
During warm weather, we tried to keep at least two employees at each of our stands at all times. However, if it was rainy or cloudy outside, we were quick to send one of the employees home. By doing this we were able to keep our labor costs down and save hundreds of dollars.
At businesses where the owner is not the manager of day-to-day activities, labor costs should be around 30 – 33%. This includes manager pay. If the business is owner-managed and the owner works a 40 hour work week at the business, the cost of labor should average around 25 to 28%.
| | | Insurance As with any business, insurance is an important factor. It would be terrible for something unexpected to occur and cost you your business or a large sum of money. Insurance is a great way to prepare for the unexpected. You can never be too careful.
There are four basic types of insurance that you may need. As always, check with your local insurance agency and/or a local attorney to determine what may fit your business and location the best.
- Product Liability – generally protects you if any of your products harm any customers
- General Liability – generally protects you if a visitor to your place of business is harmed or injured in any way
- Worker Compensation – generally protects your employees if they are injured while at work, usually required by the state that your business is located in, may or may not cover the owner of the business. Our worker compensation proved to be invaluable one summer after an employee was injured on the job.
- Property Insurance – generally protects you in case of fire, theft or other type of damage to your business or equipment
Again, it is important to speak with a local insurance agent and/or attorney to determine what types of insurance best fits your business. As with any business expense, check on rates with a variety of insurance companies to determine the best match for your budget.
| | | Vehicle Expense Did you know that you may be able take a portion of your mileage on your personal car as a tax deduction on your yearly tax return? The IRS will allow a deduction of 36.5 cents a mile (in year 2002) for every mile that you classify as business mileage. Visit the IRS website for more information.
Business mileage may include a trip to your local grocery or wholesale dealer to pick up supplies. It may include travel to and from your place of business. We suggest keeping a logbook in your vehicle and write down any mileage that used for business. You will need this information as proof to the IRS.
As with any legal or accounting advice in this manual, it is imperative that you first speak with an attorney or certified public accountant to make sure that this applies in your situation.
| | | Shaved Ice MarketingNow that you have your business open, how do you make sure customers stop by and see what you have to offer? Besides having a good location and an eye-catching shaved ice or snow cone building, trailer or stand, what else can you do? Be creative and think of unique ways to advertise cheaply. You should know your area and customers better than anyone else.
The idea is that you want as many prospective customers to visit your establishment as possible. The more people that sample your shaved ice or snow cones the better it will be.
Listed below are ways that we have advertised over the years and what seem to work best for us.
Free Day
We have tried almost everything, including radio spots, newspaper ads and even large roadside signs. But we have found that the most effective form of advertising that we have used is an idea that we had on opening day back in 1994.
We were new to area and there wasn’t another shaved ice stand around for 30 miles. The local people knew what snow cones were but they were not familiar with shaved ice. So on opening day, we placed colorful helium balloons all around our location. We placed a large letter roadside sign beside the highway in front of our building that read “Grand Opening, Shaved Ice, 32 Flavors, FREE SAMPLES”.
To kick off our business, we gave samples of shaved ice away the first day. In fact we gave away around 430, 6 ounce cups of shaved ice. There was a line of customers outside our stand all day long which help to create curiosity by the passing motorists. The next day we sold over $170.00 of shaved ice. The following day we sold over $300 and from then on we never looked back
For around $40, the total cost of all the shaved ice given away on opening day, we launched our business and soon became the talk of the town.
The week following our grand opening was crazy. Sales were great and customers were happy. Many of our customers that bought from us the first week were the same people that had stopped for a free cup of shaved ice on opening day. However, the majority of the customers were brand new. They were customers who were curious about the new business in town or they had learned about us from previous customers. The latter of the two, word-of-mouth advertising, has proven to be the most lucrative form of advertising for our business.
Coupons
Coupons are an effective and economical way to advertise your business. We always have several hundred “Free Small” coupons printed to give away throughout the summer. You can have these coupons printed by a local print shop or you can make your own on any personal computer and printer.
Often times we are approached to help sponsor a local charity event. Instead of donating cash we always offer the coupons instead. Coupons are a much cheaper way to make a donation and much more effective for your business than giving cash.
For example, every year we donate 300 coupons to the local “Relay for Life” cancer walk. Everyone who participates in the walk receives a coupon for one free small cup of shaved ice. Out of the 300 coupons given at the cancer walk, we have around 30 coupons redeemed. Most people lose the coupons but all 300 people get a coupon in their hand that has the name of our business on it. Hopefully, they remember us and stop next time they drive by our shaved ice stand.
Other places to give away free coupons are local swimming pools, baseball and softball fields, schools and local businesses. WE am sure that schools in your area would love to give away your coupons to students that made the honor roll, principal’s list or perfect attendance.
For the fastest and quickest results, be sure to place an expiration date on the coupon. This will encourage your prospective customer to visit you shaved ice business as soon as possible.
Frequency Cards
Made famous by a national sub sandwich chain, frequency cards or club cards are extremely popular with all of our customers. Kids as well as adults love to have their club card stamped for every cup of shaved ice they buy. The cards are usually about the size of a business card with around 30 squares on one side.
The idea is that for every 10 or so cups of shaved ice a customer buys, they get one free. Usually each size cup is assigned a stamp value. We had 4 cup sizes. For each small cup the customer bought, they received one stamp on their club card. For each medium, the customer received two stamps. For each large cup, the customer received three stamps and so on. Customers could redeem 10 stamps for a free small (8 ounce), 20 stamps for a free medium (12 ounce), 30 stamps for a free large (16 ounce) and 40 stamps for a free jumbo (20 ounce). Often customer would keep their club card or frequency card from year to year.
If you would like to have a club or frequency program of you own, check with your local print shop or office supply store. They may be able to design a club card for your program. Usually the cards will be the same size as a business card and cost around 10 to 15 cent each. In addition your printer may be able to customize a rubber stamp to work with your frequency program. The upfront costs of this program may be a little expensive however we have found it to be well worth it.
Newspaper and Radio Ads
Advertisements placed in newspapers and on radio stations can often be helpful however are usually quite expensive. We would suggest keeping this type of advertising medium to a minimum. You may want to use print or radio ads to announce your grand opening every summer or you may offer a coupon or two in the newspaper throughout the summer. It all depends on your area, your budget and how effective you feel that the ads are working. You may get great results!
| | | Other Expenses to Think AboutThese following costs will vary depending on your location but they are important to remember in figuring your budget.
Utilities (Electrical, Phone, Water, Gas)
Trash Pickup
Repairs and Maintenance
Property Taxes
Legal and Accounting
Office Supplies
Lawn Maintenance
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Phone:1-800-742-8334 1-800-Shaved-Ice
1-800-Shaved-Ice
321 Goldsboro Street
Newton Grove, NC 28366
Toll Free 1-800-742-8334
Direct 910-247-4152
Fax: (770) 234-6333
email CustomerCare@1-800-Shaved-Ice.com
This site is copyright ©1999-2007 by 1-800-Shaved-Ice.com, Mary Mack's, Inc. All rights reserved. All brand names are protected trademarks of their registered owners and no claim is made otherwise.
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