Snow Ball / Shaved Ice
Business Plan From Southern Snow ®

MARKETING
Product Cost

Snow Ball Syrup Formulation & Cost:

6 lbs. sugar + 2 qt. 6 oz. water + 4 oz. flavor = 1 gal. (6 lbs. x 50¢) + 0 + 85¢ = $3.85 a gallon. The current sugar price is 50¢ a lb. One gal. of flavoring concentrate will flavor approximately 32 gal. of snow ball syrup ($27.00 ÷ 32 gal. = approximately 85¢ cost to flavor a gallon of syrup). Syrup cost of $3.85 a gal. ÷ 128 oz. = 3¢ cost per ounce.

Cost of a 12 ounce snow ball:

Syrup 4 ounces @ 3¢ an ounce
12¢
Styrofoam cup with spoon and straw per thousand
Ice @ $8.00 per hundred pounds

Total Cost
20¢

This 20¢ is the cost of a deluxe 12 ounce snow ball. Cost of ice can be cut 2¢ on this 12 ounce snow ball by using a SNOW-BLOCK ® ice maker that will produce ice for approximately 2¢ per pound. Thus, the cost of the 12 ounce snow ball is 18¢.


PRICING, SALES, AND PROFITS
SNOW BALLS SNOW BALLS AVERAGE PRICE TOURIST AREA OR SPECIAL EVENTS
8 oz. cup $1.50
12 oz. cup $2.00 $3.00
16 oz. cup $2.50 $4.00
20 oz. cup $3.00
24 oz. cup $3.50
32 oz. cup Prices vary from a bargain price to a sales gimmick.
46 oz. cup

The prices of these snow balls are usually "sales tax included."


COST OF GOODS SOLD (COGS)

For all snow ball sizes are based on the 20¢ cost of the 12 ounce snow ball with ice purchased at 8¢ a pound. The price of $2.00 will be used for the sales figure, thus yielding a 10% COGS.
(20¢ COGS ÷ $2.00 sale price = 10% COGS).

The COGS of 10% is reduced to 9% (18¢ snow ball cost ÷ sale price $2.00 = 9%) by using a SNO-BLOCK ® ice block maker. The SNO-BLOCK ® brochure illustrates daily ice savings.


RETAIL SNOW BALL BUSINESS DAILY
OPERATION FIGURES AND MONTHLY PROFIT


SALES
COST OF
GOODS SOLD
10%

GROSS
PROFIT

EXPENSES
OVERHEAD

EXPENSES
LABOR

DAILY NET
PROFIT

MONTHLY NET
PROFIT
$100 $10 $90 $15 $60 $15 $450
200 20 180 25 90 65 1,950
300 30 270 35 120 115 3,450
400 40 360 45 150 165 4,950
500 50 450 55 180 215 6,450
600 60 540 65 210 265 7,950
700 70 630 75 240 315 9,450
800 80 720 85 270 365 10,950
900 90 810 95 300 415 12,450
1,000 100 900 105 330 465 13,950

LOCATION
POSSIBLE LOCATIONS FOR SNOW BALL SALES OUTLETS:

  • Parking lots of shopping malls, department stores or supermarkets are hot and create impulse sales for snow balls that may have been lost inside the air-conditioned facility. Parents who have denied their children expensive purchases inside the shopping mall may treat the same children to a snow ball upon leaving. The children are exposed to the possibility of a snow ball before and after the shopping mall experience. The parents will also be your customers after they sample their children's snow balls. Lease or rent payments for space in these parking lots are sometimes negotiated so that the payments are reduced during the winter season while the snow ball sales outlet is closed.
  • Locations across the street from shopping malls, department stores or supermarkets will benefit from the advantages of these high traffic areas. Pedestrian access and parking are important considerations for such a location.
  • Inside shopping malls, department stores or supermarkets are high traffic areas suitable for snow ball sales.
  • Highway locations with ample parking and some neighborhood access are desirable.
  • Fast food outlets can also sell snow balls as an additional item.
  • Parks and tourist areas produce customer interest in the novelty of a snow ball.
  • Mobile units can also sell snow balls. It is best to have the mobile units conduct regular hours at specific locations rather than roam the streets. Direct current 12 volt motors are available to power the Southern Snow Machine with a 12 volt deep cycle marine battery.
  • Neighborhood snow ball sales outlets create sales quickly that peak at an early date during the season.
  • Special events sometimes provide high volume sales. The most successful events for snow ball sales are food festivals and any hot day events such as race tracks and rodeos. The earlier above mentioned locations seem to be more desirable than the later. Ample parking and access is always important. There is no guaranteed successful location. Each site needs to be considered for its advantages as well as its disadvantages. There are some special event snow ball sales outlets that sell as many snow balls in one week as some prime locations sell all summer. Location is one of your most important decisions when starting a new business.


PROMOTION

Signs are your first step. The more signs you have, and the bigger and more colorful they are, the better. Colorful triangle pennants strung above the snow ball outlet will draw customers.

A day of free snow balls will certainly draw crowds. Your cost on 100 eight ounce snow balls will be under $15.00. Kids are your first customers. As the parents sample the kids' snow balls your customers will be composed of half kids and half adults.

Circulars distributed through neighborhoods, office buildings and parking lots will create customers. If you are creating a new service for a community, you may have a story eligible for free publicity through local newspaper articles.