Food costs
Gelato involves very little cost: raw materials make up around 12% of the selling price (or if we include milk and cream, etc. among the raw materials, up to 20%). The same can’t be said for the soft drinks, sandwiches, and pastries usually sold in a café, where costs can even reach 50%. Don’t forget, though, that whereas the cost of ingredients in gelato provides bigger profit margins, it sells for a fairly low unit price, so good sales volume is vital.
Overhead costs
There are also lower overheads when it comes to opening a hand-made gelato parlour, as it requires less space and therefore commands a lower rental or purchase price, as well as requiring fewer staff. That said, sales figures may well be comparatively lower. The main overheads include rent for the premises, wages, electricity and water.
Geomarketing
One of your most important decisions is where to open your point of sale.
First of all, make sure that any gelato parlours in the immediate vicinity are not too similar to what you want to create; next, evaluate the area: pedestrian precincts or shopping streets mean plenty of customers passing your front door, although rents can be rather an issue. The same goes for shopping malls. If you are looking to open a gelato shop where your customers can sit down to eat, and not just take away, easy parking in the vicinity is a big plus. In some countries that is crucial.
A gelato shop in the city centre can charge higher prices, while a point of sale on the outskirts has to adjust its prices to the income of the neighborhood's residents, which may well be lower.
The business plan
Once you’re sure you have a proper grounding in the knowhow and skills you’ll be needing and you’re sure you want to go into the gelato business, then go ahead and draw up a business plan – a document where you plan each step you need to take to open your point of sale.
The business plan will make it clearer what investments are needed – make sure to include the rental or purchase of your premises and machinery, showcases, ingredients and equipment in general, the cost of labour for tasks carried out by third parties, as well as utility costs such as electricity. Drawing up a comprehensive business plan that includes the main expense categories is also helpful when it comes to asking your bank for a loan to fund your new start-up.