I Bought An Ice Cream Shop — Now It Brings In $1.2 Million A Year

Summary

Sean Allard, a 27-year-old owner of Novel Ice Cream in Arizona, shares the realities of running a small business. After purchasing the company for $1.1 million in 2023 with the help of an SBA loan and family capital, Sean reinvested all earnings back into the business, living off savings. With two locations and a third in progress, he discusses challenges such as stress, debt, and growth. Despite low profit margins and constant effort, Sean remains optimistic about future expansion, aiming for $1.3 million in sales and a $40,000 net income in 2024.

Takeaways

• 💼 Owning a small business is challenging and stressful, especially with debt and reinvestment involved.
• 🍦 Sean Allard, a 27-year-old, owns Novel Ice Cream in Arizona with two locations in Phoenix and Mesa.
• 📈 In 2023, the business generated $1.2 million in sales, with projections of $1.3 million for 2024.
• 🏦 Sean used an SBA loan to buy the business for $1.1 million, putting down 10% using family capital.
• 📉 Sean took home $0 in net income in 2023, living off savings to reinvest in the business, but expects $40,000 in net income in 2024.
• 👨‍👩‍👧‍👦 His family played a crucial role in supporting the business by lending him $110,000, which he plans to repay with interest over five years.
• 🧁 Novel Ice Cream offers unique products like the Cookie Monster cone and the 'D melt' ice cream stuffed donut.
• 👥 The business employs 20 team members across two locations, with gross margins between 35-37% and profit margins of 2-4%.
• 🚚 Deliveries, including ice cream and donuts, are made daily to both shops from a central warehouse.
• 🏗️ A third location is in development, a trailer set to open in July, costing about $35,000 to $40,000 to build and equip.

Q & A

What is the primary challenge of owning a small business according to the script?

The primary challenge of owning a small business is dealing with the stress and uncertainty, especially when debt is involved and capital is constantly reinvested back into the business.

Who is the owner of Novel Ice Cream and where are the locations?

Sean Allard is the owner of Novel Ice Cream, which has two locations in Arizona: one in downtown Phoenix and the other in downtown Mesa.

What was Sean Allard's previous profession before buying Novel Ice Cream?

Before buying Novel Ice Cream, Sean Allard worked in dental consulting for about three and a half years.

How much did Sean Allard purchase Novel Ice Cream for and how did he finance it?

Sean Allard purchased Novel Ice Cream for about $1.1 million, using an SBA loan and putting 10% down with family capital.

What was Sean Allard's income in 2023, and what is his projected income for 2024?

In 2023, Sean Allard took home $0 in net income, relying on savings to reinvest back into the business. For 2024, he is projected to take home about $40,000 in net income.

How many employees does Novel Ice Cream have, and how are they distributed across the locations?

Novel Ice Cream has 20 team members, with about 10 employees working at each of the two shops.

What are Novel Ice Cream's gross and profit margins?

Novel Ice Cream's gross margin is between 35-37%, while the profit margin is between 2-4%, as much of the revenue is reinvested into growth.

What is the most popular item at Novel Ice Cream, and how much does it cost?

The most popular item at Novel Ice Cream is the D Melt, an ice cream stuffed donut, which costs $4.95.

What are the busiest and slowest months for Novel Ice Cream?

The busiest months for Novel Ice Cream are October through December and March through May. The slowest period is from July to August due to the extreme summer heat in Arizona.

What plans does Sean Allard have for expanding Novel Ice Cream?

Sean Allard is building a third location in downtown Peoria, Arizona, which will be a fixed trailer. The total cost for the trailer and equipment is expected to be around $35,000 to $40,000, with an opening planned for mid-July.