My boyfriend and I made a big move at the beginning of this year from Los Angeles to Cleveland for a job promotion I received at work. He'd gotten into making ice cream while we were in California-we had even tossed around the idea of starting our own business, but the task was daunting and the costs seemed prohibitive.
Due to the move, we are currently living rent-free with his mom while he looks for employment. Given my salary bump and the lower cost of living, it seemed like a good time to take a risk, so we started Mason's Creamery, our ice cream business. We decided to target food festivals and farmer's markets because:
The initial costs are lower than it would be to rent a storefront or go the food truck route.
It's about to be summer! People love food festivals and farmer's markets in the summer, right?
That's pretty much it.
In March, we applied, and somehow finagled our way into an upcoming festival in Cleveland that will happen in May. We were also recently accepted to the downtown Cleveland Farmer's Market, and will continue to apply to others around the area. This way, we hope to get our name out and eventually segue into something less booth-like. For anyone curious about the costs of starting a very small business, or the costs of a festival (because you love festivals in the summer), here's the rundown:
- $120, one-time: Business incorporation for the state of Ohio, with which we can now procure our EIN (free of charge!).
- $299/year: Liability insurance-we used Food Insurance Liability Program (FLIP). FLIP covers food vendors at festivals and farmer's market at a much lower cost than actual food insurers. The $299 we paid is the lowest rate, which is based on sales numbers. Our sales are $0.
- $25, one-time: Transient vendor's license for the state of Ohio, which will need to be renewed yearly but paid only once.
- $15/every three years: Online food safety course called ServSafe, a national food safety certification.
- $160, one-time: Food vendor license and placard for the city of Cleveland.
Festival (Two Days):
- $640: Festival food both with temporary food permit, which is comprised of $40 for the temporary food permit, $10 for the booth set-up and $590 for.. well, we're not sure, but we paid it. General festivities? This was a lot steeper than we had expected, but the festival had 40,000 people in attendance last year, and we know there were a limited number of ice cream vendors, so it seemed like a good way to debut in Cleveland.
- $50: We need to rent electricity for our freezer.
- $75: We bought a quarter-page ad in the pamphlet the festival will be handing out, because after the first $690, the $75 seemed like a bargain.
- $215: The aforementioned freezer was purchased used from Craigslist. There's a few rust stains on it, but otherwise it is in good condition. If the ice cream business fails, we will start hoarding food in the freezer for the eventual zombie apocalypse.
- $20/hour: We will be renting a commercial kitchen in preparation for the festival. We're not sure how long we'll need, but that's the going rate.
So far, we've spent $1,599, and that's not counting the actual ingredients for the ice cream we've been testing, kitchen rental time, and all the incidental goods we will need to purchase, such as napkins, cones, cups, spoons, business cards, trash bags, etc. Thankfully, someone in my boyfriend's family has a trailer, which we'll use to lug around the freezer, and which can easily cost up to $800 for a new one.
We plan on charging $3.50 for one scoop and $5.00 for two small-ish scoops of ice cream at the festival, and hope to break even from that. After the festival on May 18-19, we'd love to come back and provide an update of how much we spent and how much we've made.
Helen Qin lives and works in a non-ice-cream-related industry in Cleveland, Ohio. Follow her on Twitter @masonscreamery. In the meantime, Mason's Creamery can be found in a suburban kitchen in Cleveland, Ohio and at masonscreamery.com.
Well, I have to say you did do a good job. However, if you are using these figures as representation of what it would cost for others, you are out of line. Here in Mass you have to take a Servesafe course - the cost is $100 to $150 PER PERSON. You missed Allergin awareness certificates - those cost only $10 off the internet, but another cost. I really think you insurance costs are very low - the lowest premiums here are around $500. You don't realize how quickly you will go through $500 to $1000 at the local Restaurant Depot for supplies. You forgot tables, buckets, gloves, containers to put supplies in, registration for the trailer - borrowing is not going to last for too long. I don't know anyplace you can guy an enclosed trailer to move your stuff for $800. What about hand washing facilities? Utensil washing facilities? If you buy a portable sink it can cost you $3000. You did this on a shoestring, and I started my own food biz on one too. We thought we got away with $15K with buying our donut making machine and equipment. Funny, the next year we found out all the ways we could make it more efficient and then it cost us another $15K. You are perpetuating the MYTH that you can start a mobile food biz for a few grand, 5K tops. The realistic budget to start a food biz is more in the 30-50K range. You can start small, but you will realize that you will never make money if you stay that way. FYI - I think the fees for that festival are high too. You have $1000 to make up before you walk in the door. That is 400-500 cones before you start paying for your supplies. Given the 1-3 formula, which I think is low for a mobil biz - you will need to sell 600 cones to break even! You will need to sell 1000 or more before you make money. I have NOT included paying for your equipment costs. Good luck.
Awsome!!! Welcome the world of concessions!! Sounds like my wife and I when we started in 2012. We bought a used concession trailer on cregslist and had the gut the entire thing. Every year we learn alittle more and up grade our equipment as we find better and faster ways to do stuff. Permits prices vary from county to county here in Indiana. This year we were invited to do three more festivals because they were looking at food vendors on FNO and saw us. Check us out on FNO Kandu Jo's.
David And Nancy
Awsome Helen, Welcome to our World, 5th year Food Truckin around. My wife and I started with a tent and a smoker selling BBQ,Brisket and more at motercycle races and farmers markets now we have 3 crews and are working festivals like Neptune Festival in Va Beach, Last years attendance was over 400,000 in 3 days . We are starting this year in a few weeks at Martinsville Va for our first NASCAR race. And we are having more fun now than 5 years ago. We travel alot and meet some of the best folks in this Biz. Check our FNO out and our Facebook . Jadeans Smokin Six O Good Luck ! Maby we'll run in to Ya'll. Cheers, Janet and Dean