Opening my first shop as a 20 year old. looking for advice
Two years ago, I started my own ice cream business, and it has kept me pretty busy while growing quite a lot. I currently run it alongside a part-time job, but my long-term goal is to make the business my full-time income so I can eventually leave my job.
I’ve been thinking about expanding into a dessert trailer and combining it with my existing ice cream business. Winter is obviously a much slower period for ice cream, so I thought adding desserts and other products could help make the business more viable year-round.
A couple of months ago, I bought a food trailer for around $30,000. My original plan was to convert it into more of a dessert trailer, but I decided against it because it felt like a waste to remove all of the existing commercial hot-food equipment. I also think trying to run a trailer that does both a full hot-food menu and desserts would be too complicated.
Now I’ve got a slightly more complicated opportunity in front of me.
A shop has recently come up for lease in town. We don't have many shops become available, and I actually missed out on another one previously, although that one was roughly double the rent. This new shop is $600 per week, compared with around $500 per week for the site where I was considering operating the dessert trailer.
The shop is obviously going to have significantly more costs associated with it, but it would also give me a permanent location, which was always the long-term goal anyway. Instead of operating purely as a dessert shop, I was thinking of running it as a café in the morning and then transitioning into more of a dessert shop/bar in the afternoon and evening.
I think this could make more sense than relying on desserts alone. I already own most of the commercial equipment I would need and have some experience in the food industry, so I wouldn't be starting completely from scratch.
The biggest issue is the risk.
I would need to take out roughly a $40,000 loan to get the shop up and running, and I’d be entering a market that I haven't really tested yet. The difficult part is that I don't have an easy way to properly test the concept beforehand.
There are already several cafés in town, so there is definitely competition on the café side. However, there is only one café particularly close to this location, and there are currently no dedicated dessert businesses in the town. Most of the cafés also close around 3pm, which potentially leaves a gap for a business that operates more heavily in the afternoon and evening.
The dessert side is what interests me most, but I don't want to convince myself that the lack of competition automatically means there is demand. There may be a reason nobody has done it before.
So I'm trying to work out whether this is a genuinely good opportunity or whether I'm getting carried away because the shop has become available.
Another thing to note that in the trailer i am not allowed to sell soft serve or scooped ice cream with my current ice cream as i had to find a new supplier who only allows me to sell other ice cream options in a shop.
The two options I'm currently looking at are roughly:
Option 1 – Dessert Trailer
- Around $500/week for the site
- Lower overheads
- I already own the trailer
- Less financial risk
- More flexibility
- But limited trading hours/space and still quite seasonal
- Cannot sell soft serve or scooped ice cream
- Would have to buy another trailer (10-20 thousand) but can sell the first trailer down the track (when i find a buyer)
Option 2 – Café + Dessert Shop
- $600/week rent
- Much higher overall operating costs
- Around $40,000 in additional borrowing
- Permanent location
- Ability to operate mornings through to evenings
- Could combine coffee, breakfast/lunch items and desserts
- Potentially much easier to grow into a full-time business
- Can also sell soft serve and scooped ice cream
I'm genuinely torn and feel stuck because the shop feels like it could be the opportunity I've been working towards, but it also feels like a big jump from running a relatively small mobile business into taking on a lease, staff, utilities, stock, insurance, loan repayments and all the other costs that come with a permanent venue.
Most if not all the staff could be family till i get on my feet and they dont mind being payed a little less at the start. I would still be doing ice cream events in my current ice cream trailer which the first 8 months of owning it i earned 30k profit. i could expect anywhere to $30-50k profit as im getting more and more events which covers the pressure of the rent aswell.
I'd really appreciate some honest opinions, especially from people who have experience opening cafés, dessert shops or other small hospitality businesses.
I'm more than happy to answer any questions about the business, the location, finances, equipment or what I'm planning to sell if it helps people give a more informed opinion.