Anyone who has ever been in business for very long knows that the most important numbers are not gross profit, but profit margin. You’re better off with $5,000 in sales and $4,000 in net profit than you are if you make $100,000 in sales, but only $3,000 in net profit. This difference is profit margin, and the snow cone business has a great profit margin because of the low overhead per product.
What’s the Profit Margin Math?
The snow cone business has huge profit margins, and because of that many people who buy shaved ice stands find they can make their initial investment back in less than a month…and sometimes much sooner! For any given snow cone you have very low overhead. A paper cup might cost 5 cents each when you buy in bulk, napkins are just under a penny each, while plastic spoons might be one and a half cents each.
Even with the syrup costs added in, the numbers still look very good. Prices vary based on whether you make your syrup from concentrate or buy it pre-mixed, but even then prices might range from 15-30 cents a snow cone at most. Add all of that up, and even if you only charged a dollar for shaved ice and had no up sells, you’d still make 65-70% profit. Very few businesses can say that.
Imagine doing $200 of business in a few hours and knowing three fourths of that was going into your pocket, and that’s not including up sells, if you can charge more than a $1 for a snow cone, or if you find a good deal in bulk buying and save even more in costs.
There are always ways to trim the numbers, as well. You can figure out good up sell products, find a good sale and buy in bulk to take down overhead even more, or maybe your location allows you to have higher prices. There are always ways to figure out how to make your business much more profitable overall.
So How Much Can I Pocket?
So what is the profit potential of a snow cone business? It depends on the sales numbers you’re looking at in your area, the foot traffic, and what prices you can charge. But the huge potential of the business comes from the high profit margin. How much can you charge per snow cone?
Even if you can only charge $2 a snow cone, sell 100 in an hour at a little league game or 500 at a flea market, or even 1,000 during the day at a beach event and you’re looking at some really good days, especially when you’re pocketing well over 60% of the money as net profit. There aren’t many businesses where you can count on pocketing a hundred or several hundred dollars in cash for a few hours of work just a week after starting.
If you’re in an area where incomes and average prices allow you to charge even more, …