One of the biggest mysteries of entrepreneurship is Why do businesses fail. Some people start a successful business one by one while others fail to succeed. No one starts a business expecting to fail. In fact, starting an Ice cream business can be a lot of fun and delightful. But, some entrepreneurs are unaware of failing their business until it is often too late.

Why do Ice cream Shops Fail?  how to profit on ice cream shop

The worst part about failing business is that, the entrepreneur does not know it will happen until it’s too late. It means that if the entrepreneur really knew what he was doing wrong, he would be able to save the business. So, before you falling into that situation, it is so vital to know the reasons why do Ice cream shops fail.

An Ice-cream shop most of the time fails because of the entrepreneur. But, instead of that, there could be many reasons behind a failure. So, let’s see the reason.

#1. Lack of planning

Especially, this is true for new ice-cream business owners. What you think is a good business idea on paper will not be so successful in reality. This does not mean that you must ignore your desires. Instead, it means you have to do a little research and business planning.

Businesses fail due to a lack of short-term and long-term plans. Your plan should include where your business will be in the next few months to the next few years. Include measurable goals and objectives. The correct plan includes a list of things to do with the dates and due dates. Failure to plan can damage your business.

Among other important things:

  • Who constitutes your customer base?
  • How do they buy your product or service in-store, online, or both?
  • What is your marketing plan?
  • How do you find customers for your business?
  • What are your cash flow projections?
  • Your start-up capital?
  • How far will your cash reserves take you? Remember the factor of both business and cost of living Most businesses are not profitable in their first year.

Remember to track both living and business expenses as most businesses are not profitable in their first year. Answering such questions yourself, while your business idea is still at the planning stage will help you to increase the likelihood of your ice-cream business being successful.

#2. Failure to Understand Customer behavior

In our connected age, ‘customer is always right’ is more true than ever. When it comes to Ice-cream it is so true. Your business is mainly dependent on your customers. So, sometimes, they may expect a small food cart to accept credit cards, even if the shop is a tiny mom and pop operation.

Businesses that fail lose contact with their customers. Stay touch for your customers’ trend values. Find out if they still love your ice-cream as well as service or not. Just start to find,

  • Do they want new features?
  • Are they love your ice cream?
  • Do they love your services?

85% of customers say they trust online online reviews as personal recommendations. So, if you have an online presence, it is important to keep your online reputation.

#3. Poor location

Poor location is a disadvantage and cannot be overcome. Ice cream businesses mainly depend on foot traffic, location is a strategic necessity. A weak location costs more to get your customers. How could you determine that your location is good or bad?

Not crowded in the spring and summer

It is important to open your ice cream shop in an area with high foot traffic, especially during the spring and summer. Because it will the season which always busiest. So, if your location is not crowded in the spring and summer, it is a big issue. So, Consider opening your store near restaurants, parks, gyms, beaches, schools, or other places. A place where most kids pass is something you should consider because they always love ice cream.

Uneasy to get to by car or on foot

One of the main things to consider when opening an ice cream shop is that it must easily accessible by foot and by car. Actually, a potential customer in your ice cream shop is actively looking for ice cream, and keeping your shop hidden from them will certainly not help you. So, it is so important to have a large sign in front of you that can be seen from a distance. If not, it is one of the main facts to fail the ice cream shop.

Not enough parking

Finding a good place for your ice cream shop is not easily accessible. It should have adequate parking space as most people drive from place to place. If there is no enough parking, it is more possible to get low traffic and it will make you fail.

So, ice cream shops fail because choosing the bad location. Choosing location is a great thing for success of an ice cream shop. If you fail to choose the right location, certainly it will lead to fail.

#4. Lack of profit

Income is not equal to profit. As an entrepreneur, you should always focus on profitability. Allow profits to grow. Only 40% of small businesses are profitable and even 30% fall. But, don’t lose hope. Just because you have a business idea that is interesting, does not mean that it is a good idea. Creating a business plan, conducting marketing research, and seeking advice from others can be life-saving. Also, is there a customer base for your ice cream? Is there a proven income model? How long does it take to bring a business to market and at what cost? Just ask yourself.

#5. Poor financial management

Use professional accounting software. Keep records of all financial statements and always make decisions based on the information you receive from factual data. Know where you are always. If numbers are not your thing, at least hire a financial professional to explain and train the basics.

Warning signs of poor financial management in business

  • Inability to pay your debts
    If the debt is going up and managing money, now is the time to improve your cash flow and find ways to recover. As a resolution, you can sell old or excess stock, talking to the bank about putting in a temporary loan, preparing weekly cash flow forecasts.
  • Poor profitability
    If your profits fall – your business may be in a slow spiral. So, Start constantly monitoring profits such as gross and net margins, sales, review the productivity of your staff.
  • No access to finance
    If you do not have access to finance when you need it, this could be the end of your business. So, having a financial facility when the financial situation is tough is a good uncertain plan.
  • Continually replacing staff
    If you have a high staff turnover, or if you can do your ice cream shop yourself, training new staff can be a waste of valuable time and money.
  • Inadequate financial records
    Financial records are the backbone of any business. So, it’s critical to keep your records up-to-date and monitor them regularly. Make sure all your invoices and payments are entered weekly into your financial system.

#6. Lack of focus

Without attention, your business will lose its competitive edge. It is impossible to have a comprehensive strategy for the start-up budget. The reason beginners are successful is the inability to make the necessary changes due to inattention, the ability to turn quickly.

#7. Personal use of business funds

Dealing with business finance can be an administrative upheaval. If you work for yourself, ice cream business income and your own income may be blurred. This is why it is so important to manage these activities carefully. Or not it will lead to failing your business.

Actually, controlling your money is liberating, but you have every legal obligation to do so. Failure to comply with legal requirements can have adverse consequences for you and your business.

#8. Understand your customers

If you are going to succeed in your ice cream business you have a clear definition of your customer. It is not an abstract idea. It is something that can be expressed numerically. Basically, Ice cream shops are are most likely to sell to the teenage market because they love ice cream. Consumers between the ages of 18 and 24 prefer to buy ice cream at a premium store, while female consumers 45 and over give high priority to branded ice cream.

#9. Lack of Preparation to fail

In the business field, anything would happen. But, it doesn’t matter whatever happens. You should keep your physical as well as mental health accordingly. The fact is, mental and psychological fitness is needed to help you be prepared for being an ice cream business owner. So, when failures happen, if you would be panic about it, it will be worst than failure.

#10. Not Learn from experiences

Once good or bad things happen in your business, you have to learn from them. Actually, experiences make a better person. Failure doesn’t have to be final. So, make sure to learn and grow to form your experiences. Then they would not really fail at all.

#11. Lack of data

Even if your target market is small, you still need to gather as much information as possible. If you do not have a realistic understanding of the dynamics of your business, it can severely limit your ability to make intelligent, data-based decisions.

In terms of the cost of the equation, if you want to buy a new inventory line or make updates to your store, you need to know how it will affect your bottom line. Not only do you need to keep an eye on these expenses, but you also need to keep an eye on all your expenses.

As an ice cream business owner, you need to know what percentage of income you can set aside for employee salaries, utility bills, or rent so that you can set proper targets for cost savings. Depending on the income, you should grow your business by month or year by year.

If you do not achieve your goals, you may want to examine areas of your business where you are spending more. It is helpful to know your net income so that your expenses do not exceed your income and your business becomes a failure rate statistic.

#12. Failure to advertise

Many companies leave the business because the owner has failed to promote and market. “If you build it, they will come” The mentality of an era where consumers can choose from a variety of options is not functional. You want to distribute your message.

Where do businesses go wrong in choosing their marketing stratergy?

  • Underestimating the power of the internet
    A business can go a long way if they leverage online marketing strategies correctly. 40% of small businesses in the US do not have their business websites. But, having an online presence is a must in this era.
  • No marketing expertise
    As an ice cream business owner, you should plan it carefully planned to integrate with existing objectives and marketing resources.
  • Lack of direction
    A marketing campaign will be less objective if it fails to target the desired customers. Many marketers do not go with customer preferences and choices and try hard to impress their employers. Without focusing on customer needs, such marketing strategies will have no bearing on purchasing decisions and behavior patterns. It only leads to lower sales. So marketers should always have a sense of direction.

Actually, an effective marketing strategy enables you to know your customers well and their preferences. Lack of a good marketing strategy certainly leads to the fail of ice cream shops.

#13. Underestimating the competition

It is worth noting that the ultimate reason companies leave the business is to underestimate the competition. Though you have a good business model, have enough funds to operate, and have the good management skills you need to succeed, you may still have to face one powerful challenge, it is competition.

#14. Afraid to fail

As a business owner, you need to prepare for anything that you have to face; even for failure. Do not be afraid to fail. Definitely, there is one thing, you will fail before you succeed. Expect failure, but do not be afraid of it. Think of it as a normal part of your business. it is necessary. It’s good for your business. Failure teaches you. In fact, it will help you make the right decision next time. It is important not to associate failure with withdrawal. Only those who act fail and only those who act succeed.

#15. Not knowing of core values in the business

Core values are the core beliefs that drive the business. They are guiding principles that should follow constantly. As your business grows, your core values remain the same including integrity, trust, excellence, respect, responsibility, and teamwork. Not knowing or failing to remember the core values, will definitely lead to the failure of an ice cream business.

Actually, whether you are an experienced small business owner or an entrepreneur, these statistics can be a little scary. But, don’t get afraid of these. If you see these signs in your business, take the steps to make your business successful. Or if you going to start a new business, just remember these and make sure to take steps for them.

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Uditha Sanjaya
Uditha Sanjaya, owner of "Founder Activity" has been passionate about business since he was 14 and started his own Online marketing group in his home garage. Now His unique talent is helping B2B and B2C companies with unique lead-generation campaigns.

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    1. Your way of telling everything in this paragraph is actually
      pleasant, everyone is capable of effortlessly understand
      it, Thanks a lot.

    2. related What are the challenges that one faces in running an ice cream manufacturing unit?
      One of the main challenges that one faces in running an ice cream manufacturing unit is demand planning and management. This involves determining the safety stock levels as well as accurate projection of demand so as to ensure successful supply chain operations. Demand planning provides a challenge in that inaccurate forecasts will adversely affect inventory replenishment and planning activities. This will have a negative impact on unit profitability.

      The perishable nature of inputs is another major challenge that poses significant constrictions on planning processes. Short product shelf life means that the company must manage forecast accuracy if it is to successfully run its supply chain operations. Poor inventory forecasting will lead to incurring costs as a result of materials going stale or the company failing to meet its sales orders. This introduces a big challenge in that the manufacturer must balance between stock outs and avoiding losses from materials that have gone stale.

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