Bauman’s Frozen Custard and Italian Ice is a scoop shop located on a busy street in downtown Eugene, Oregon. Bauman’s plans to establish a long-term presence in the Eugene/Springfield market, combining a $15,000 investment by Matthew Bauman with start-up financing to secure the location.

Bauman’s aims to introduce Frozen Custard and Italian Ice to Eugene, where the product is not currently available. The shop will offer a selection of rich, creamy Frozen Custard and bright, sweet Italian Ice in various sizes. Through selective marketing, we aim to create a loyal customer base who view Bauman’s as a high-class, yet affordable scoop shop with outstanding offerings.

We project first-year sales of approximately $66,000, increasing to over $90,000 by the end of the second year. Despite an initial loss in year one, we anticipate profitability by year two without compromising our cash reserves. Our conservative financial model prioritizes long-term opportunities in the local market over quick returns favored by trendy restaurants in larger cities.

Frozen Custard Shop Business Plan Example

1.1 Mission

Create high-quality all-natural frozen custard and Italian ice using the freshest ingredients.

Deliver exceptional service and products in a friendly and inviting atmosphere.

Respond to customer needs proactively.

1.2 Objectives

Bauman’s Frozen Custard and Italian Ice aims to achieve sales of more than $65,000 in the first year.

1.3 Keys to Success

Bauman’s success relies on:

  1. Offering top-quality products.
  2. Building and maintaining customer relationships for repeat sales.
  3. Investing in grassroots marketing.
  4. Creative product innovations to differentiate from competitors.

Company Summary

Bauman’s Frozen Custard and Italian Ice will source frozen custard mix and Italian ice base from Pennsylvania and Oregon respectively.

With a frozen custard freezer, we will produce premium, dense, and creamy frozen desserts, featuring vanilla and chocolate flavors daily along with a few rotating additional flavors.

The Italian ice base mix will be made into approximately 30 flavors using concentrate from a distributor in Salem, Oregon. It will be frozen using a batch freezer and stored in a display case in "liquid frozen" form.

The retail outlet for Bauman’s Frozen Custard and Italian Ice will be located in downtown Eugene, Oregon at the Aurora building on the corner of East 11th Avenue and Oak Street. We will lease 1,055 square feet at a rate of $1.00 per square foot per month. This location meets our criteria and includes a generous offer of $15 per square foot towards lease-hold improvement costs, reducing our start-up expenses.

The Aurora building provides prime visibility between the University of Oregon campus and the West Eugene neighborhoods. Close to other ice cream shops, our location benefits from an estimated traffic flow of over 18,000 vehicles per day.

Our target customers are young people aged 18-25 and families with pre-teen children who enjoy flavorful sweet treats. Currently in the planning stages, Bauman’s Frozen Custard and Italian Ice will be organized as a closely-held LLC with the founder and primary investor retaining the majority ownership.

The company seeks to raise around $70,000 in loans and an additional $10,000 from private investors, with $15,000 invested by Matthew Bauman for start-up purposes.

2.1 Start-up Summary

The initial phase of the business will require a short-term debt of $5,000 to cover initial inventory and other expenses for the first three months. Additionally, a long-term loan of $70,000 will cover equipment and fixtures costs. Legal expenses are estimated at $675 for LLC formation and liability issues.

Frozen Custard Shop Business Plan Example

Start-up Funding:

Start-up Expenses to Fund: $5,062

Start-up Assets to Fund: $94,938

Total Funding Required: $100,000


Non-cash Assets from Start-up: $70,120

Cash Requirements from Start-up: $24,818

Additional Cash Raised: $0

Cash Balance on Starting Date: $24,818

Total Assets: $94,938

Liabilities and Capital:


Current Borrowing: $5,000

Long-term Liabilities: $70,000

Accounts Payable (Outstanding Bills): $0

Other Current Liabilities (interest-free): $0

Total Liabilities: $75,000


Planned Investment:

Matthew Bauman: $15,000

Investor 2: $10,000

Other: $0

Additional Investment Requirement: $0

Total Planned Investment: $25,000

Loss at Start-up (Start-up Expenses): ($5,062)

Total Capital: $19,938

Total Capital and Liabilities: $94,938

Total Funding: $100,000



Start-up Expenses:

Legal: $675

Stationery etc.: $250

Brochures: $0

Consultants: $550

Insurance: $282

Rent: $2,105

Research and Development: $1,200

Expensed Equipment: $0

Other: $0

Total Start-up Expenses: $5,062

Start-up Assets:

Cash Required: $24,818

Start-up Inventory: $320

Other Current Assets: $0

Long-term Assets: $69,800

Total Assets: $94,938

Total Requirements: $100,000

2.2 Company Ownership:

The company will be owned by Matthew Bauman and one or two additional partners. Bauman will contribute $15,000 and the other investor(s) will contribute a combined additional $10,000. This will keep the majority of the equity in the company under Bauman’s control. A buy/sell agreement will be established with the other investors when the Limited Liability Corporation (LLC) is formed, to allow an exit strategy for one or all of the investors.


Bauman’s will sell premium fresh-made Frozen Custard and Italian Ice. Frozen Custard is a natural, wholesome, frozen dairy product. It differs from ice cream in both taste and texture. Currently, the popular product known as Frozen Custard in the Midwest and on the East Coast is not available in Oregon. There are a handful of small businesses in Oregon that sell a product they call “frozen custard,” but this is not true Frozen Custard. Our product will be unique to the Pacific Northwest.

Customers can choose their flavor of frozen custard (vanilla, chocolate, and one or two additional daily flavors) and then choose to have it mixed with their choice of Italian ice flavors (over 30 flavors offered daily). Then they can enjoy their desserts in a warm, relaxing atmosphere similar to an upscale coffee house.

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Frozen Custard has:

– Rich Flavor because it is made with an Egg Base

– Less Fat and Sugar than Most Premium Ice Creams

– Smoother and Creamier Texture (no ice crystals as in ice cream or ice milk.)

– Old-Fashioned Homemade Taste (made fresh every day.)

– Greater Density (less air whipped in, so it’s much more filling than soft serve.)

Italian Ice has:

– A Fruit-flavored ice mix with a smooth texture (very small ice crystals)

– A Sweet and Fat Free frozen product

– Made without Dairy or Egg products

– Made with Real Fruit Concentrate

– The Consistency of a Slushie

Both Frozen Custard and Italian Ice are lower in fat and sugar contents than other premium ice creams available on the market. Our product is creamier and smoother in texture than ice cream, and it is the only product available as hard serve from a soft-serve machine. This is because Frozen Custard is made using a unique machine called a batch freezer. This freezer pumps less air into the mix as it is rapidly being frozen. The final product is dense, smooth, and creamy.

Our product bases will be purchased from a company in Pennsylvania. We have contacted them about supplying us with products. They offer premade frozen custard base, to which Bauman’s Frozen Custard and Italian Ice will add flavorings and freeze in our specialty equipment. The Italian ice base mix arrives as a flavorless mix. We will add flavor concentrate from a company in Salem, Oregon that specializes in manufacturing fruit flavor concentrates from fresh seasonal fruit. We will offer at least 30 unique Italian Ice flavors each day. They will be frozen in a batch freezer and then stored in a display case at a temperature between 15-26 degrees Fahrenheit. This allows the Italian Ice to remain in a “liquid frozen” state similar to a slushie.

Market Analysis Summary:

The market we will engage in is the Eugene-Springfield metropolitan area. The specific market we will serve consists of a 25 square block radius around our scoop shop and includes the university student population and those primarily within walking distance of the shop in downtown Eugene. The overall age demographics of the population break down as follows:

– 13% over 65

– 25% between 45 and 64

– 28% between 25 and 44

– 12% between 18 and 24

– 23% of the population is under 18

The total population of the Eugene-Springfield metropolitan area is 316,000 people, of which 157,000 are female and 159,000 are male. Married-couple families make up close to 50% of the population, while people living alone make up an additional 33%.

Our local market has a mixed educational background – about half have a college degree or higher. While most people (72%) drive to work, the high concentration of downtown business and parking garages ensures steady foot traffic past our location. Median annual household income (including single people) is roughly $33,000, and 63% of the population lives in single unit structures (houses). These numbers tell us that we are situated in a relatively educated, affluent area of the state, in a destination area of town.

Within this population, we are focusing on two separate groups with different needs: 18-24 year olds, including students at the local university, and “first families” – young adults (25-35) with children under 13.

18-24 year olds have disposable incomes which they tend to spend on immediate gratification items, especially when those products have a prestige or individuality value. The population around the downtown area is highly populated by the 18-24 age demographic. We will also target “first families” (see above). They have limited entertainment dollars to spend each year, and our company can offer them some family bonding time for approximately $15, versus $30 to $40 for dinner or a movie. In both of these groups, we will aggressively target young women, who tend to brand loyalty in food choices, and often turn to indulgence foods in times of stress or celebration.

Market Segmentation:

The potential customer groups for Bauman’s Frozen Custard and Italian Ice are:

– 18-24 year olds

– First families

Our market research indicates about 38,000 potential customers in the Eugene-Springfield area who are within this age range. The target customer is going to be a part of the “town and gown” niche: half college students and half local residents. They have a tendency to spend more than they can afford on prestige products.

These are the grown children of the baby boomer population having children of their own. Most of their children are not yet teens. By targeting this group, we can not only generate a large volume of immediate business, but also create long term customers in the children. We also have found that families are eating out at ice cream and frozen yogurt shops more, because such places are often cheaper than other restaurants, allowing a parent to feed the family for under $15. We are conservatively estimating the population size as half of the local household population with children under 18. Because the average family size is 2.92 people per household, we estimate that population of all potential people in the household population to be 55,852. We do expect some overlap between 18-24 year olds and the first families population.

Our downtown location and increasing customer base will probably draw in customers outside of our targeted groups, including those attending the Saturday market, coming downtown to shop, or attending plays or musical events. We conservatively estimate this third market segment at about 3,160 people (1% of the total local population).

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Frozen Custard Shop Business Plan Example

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5 CAGR

Potential Customers Growth

18-24 Year Olds 3% 38,040 39,181 40,356 41,567 42,814 3.00%

First Families 4% 55,852 58,086 60,410 62,826 65,339 4.00%

Other 1% 3,160 3,192 3,224 3,256 3,288 1.00%

Total 3.52% 97,052 100,459 103,989 107,649 111,441 3.52%

4.2 Target Market Segment Strategy

The 18-24 year olds go out for ice cream more than any other age group. Within this group, the “town and gown” niche is important because they heavily populate the area around the store’s location. They are reachable through R&B music and prefer prestige products, which matches our product offering.

The “first families” were chosen because they are a growing population who go out for ice cream more often. They are easy to market to because of their specific lifestyle. They all have young children, so marketing tactics geared towards children may be effective in generating sales.

To reach the first families, we will sponsor a little league ball team and offer the players a free frozen custard on days they win a game. We will also invite local elementary schools to tour our facilities and make their own creation.

4.3 Industry Analysis

The frozen dessert industry had sales of over $20.7 billion last year, with $13 billion from “away from home desserts.”

The industry is expected to grow by 7% each year through 2008. There are several competitors in the community, including Pearl Street Ice Cream Parlour, Ben and Jerry’s Homemade, Cold Stone Creamery, and Prince Pückler’s. Each store has a unique product that differentiates it from others in the marketplace.

Based on supermarket statistics in 2001, ice cream volume sales by quality segment were: super premium (3.5%), premium (51.5%), and regular (45%).

In recent years, the ice cream and frozen dessert industry has seen significant growth, particularly in the premium and super-premium categories. Bauman’s Frozen Custard and Italian Ice will serve premium products.

4.3.1 Competition and Buying Patterns

Consumers choose frozen desserts based on perceived quality, ambience, and individuality. Our target markets value good taste, prestige, customization, and comfort.

The 18-24 year olds seek trendy places where they can socialize comfortably and be seen by their peers. They want unique products that emphasize their sense of individuality.

The young families in our targeted market are cost-conscious and health-conscious. They want family-friendly places with comfortable atmospheres and familiar and adventurous flavors.

4.3.2 Competitors

Bauman’s Frozen Custard and Italian Ice faces approximately 15 competitors in the Eugene area, including national chains and local shops.

Each competitor has a unique product that differentiates them. Cold Stone Creamery offers customization for a premium price. Dairy Queen offers a full menu of fast food items in addition to ice cream. Ben and Jerry’s emphasizes socially and environmentally conscious production. Baskin-Robbins has a wide variety of flavors. Prince Pückler’s and Pearl Street Ice Cream Parlour have a nostalgic feel and use high-quality local ingredients.

Strategy and Implementation Summary

Bauman’s Frozen Custard and Italian Ice will succeed in the Eugene market by selling a unique, high-quality product and focusing on the local market. We aim to increase brand awareness among our target market and become the first name they think of when they want a frozen treat.

Our competitive edge is our unique product offering and friendly customer service. We will emphasize product consistency and strive to provide a great customer experience.

5.1 Competitive Edge

Bauman’s Frozen Custard offers rich and creamy, low-fat frozen desserts. Our friendly, neighborly approach to customers sets us apart from the competition.

5.2 Milestones

Before opening the business, we will run taste tests, raise awareness among potential investors, and develop a company logo, signage, and packaging. We will also create newspaper advertisements to generate brand awareness and run a “Grand Opening” campaign after opening the scoop shop.

Frozen Custard Shop Business Plan Example


– Milestone: Frozen Custard Taste Tests

– Start Date: 8/1/2004

– End Date: 9/25/2004

– Budget: $150

– Manager: MB

– Department: ProDev

– Milestone: Italian Ice Taste Tests

– Start Date: 8/1/2004

– End Date: 10/25/2004

– Budget: $150

– Manager: MB

– Department: ProDev

– Milestone: Business Logo/Sign Development

– Start Date: 1/1/2005

– End Date: 1/30/2005

– Budget: $400

– Manager: MB

– Department: Marketing

– Milestone: Investment Campaign

– Start Date: 8/15/2004

– End Date: 2/10/2005

– Budget: $200

– Manager: MB

– Department: Admin

– Milestone: Product Packaging

– Start Date: 12/10/2004

– End Date: 3/10/2005

– Budget: $200

– Manager: MB

– Department: Marketing

– Milestone: Design Advertisements

– Start Date: 1/20/2005

– End Date: 3/30/2005

– Budget: $250

– Manager: MB

– Department: Marketing

– Milestone: Open Doors

– Start Date: 4/1/2005

– End Date: 4/1/2005

– Budget: $0

– Manager: MB

– Department: Marketing

– Milestone: Grand Opening Ad Campaign

– Start Date: 4/18/2005

– End Date: 6/18/2005

– Budget: $2,000

– Manager: MB

– Department: Marketing

– Milestone: Brand Awareness Campaign

– Start Date: 4/10/2005

– End Date: 7/20/2005

– Budget: $1,100

– Manager: MB

– Department: Marketing

– Milestone: Targeted Ad Campaigns

– Start Date: 5/15/2005

– End Date: 10/31/2005

– Budget: $4,000

– Manager: MB

– Department: Marketing

– Totals

– Budget: $8,450

5.3 Marketing Strategy:

Bauman’s Frozen Custard will use multiple methods to approach its target markets. Our most difficult task will be attracting customers for the first tasting, so we have a two-tiered approach. First, a mass mailing campaign will create customer awareness and generate trial. This will include coupons and our “Grand Opening” offer: with a coupon, your first dessert at Bauman’s in April or May is free. The initial cost of this offer will be offset by repeat sales later. After this initial campaign, our marketing strategy will focus on our two target markets separately.

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For 18-24 year olds, Bauman’s will distribute flyers on campus and at the bus station. We will also seek permission to place fliers on apartment rental doors and apartment complexes. To further reach the “Town and Gown” niche of this market, we will purchase radio ads on specific radio stations that feature R&B music.

To reach the “first families” more effectively, we plan to sponsor events and help out with local elementary schools and after-school activities. Specific plans include sponsoring a little league team, offering a shop tour to elementary school students, and giving coupons and promotional information to children to bring their families in.

All of these marketing campaigns will be supplemented by ongoing “brand awareness” campaigns, with advertisements in the local paper, interviews with the college newspaper (as the owner is a graduate), and fliers posted at popular local events. We will highlight our community service involvements as part of our “good neighbor” approach to doing business in this area.

5.4 Sales Strategy:

Our sales strategy focuses on providing the highest quality products and services to our target customers. Once a customer enters our store, it is our job to make sure their experience with us is enjoyable. Product offerings and prices will be clearly posted behind the counter, and scoopers will be educated about the ingredients and processes involved in each one, so they can answer customer questions. Customers can taste any product before choosing. “Flavors of the day” will rotate throughout the flavor options, and we will keep a running tally of flavor choices, correlated with weather patterns, to determine customer favorites.

In addition, our seating area will be comfortable, clean, and attractive, with booster seats available. Our restroom will include a changing table, which young families will appreciate. Customers can help themselves to free water from a container on the side of the counter.

We will initially offer three sizes: 5oz., 7oz., 9oz. sized cups. Prices will be based on size, with a 5oz serving priced at $2.00, the 7oz. at $2.50, and the 9oz. at $3.00. There will be additional topping options at $0.35 each, thus increasing the sale price.

5.4.1 Sales Forecast:

Our sales will largely be determined by foot traffic in the area, the season of the year, and current weather conditions. We estimate first year sales of approximately $66,840, $97,760 in the second year, and $113,402 in the third year following this plan.

These sales forecasts are based on several real-world observations. On a rainy Friday afternoon in May, we observed 25 people an hour making a purchase from one of our future competitors located in a mall. During a weekend evening in May, we observed 40 people an hour making a purchase at an ice cream shop in Eugene, OR. We chose to use the first observation (25) and cut it in half for the approximate number of hourly customers we would have after being in business for several months. We also assumed that there would be a 60% increase in summer month sales over winter month sales, based on information given to us by the manager of a local ice cream store chain.

Bauman’s Frozen Custard and Italian Ice plans to have a soft start, inviting only family and friends over for the first few weeks. This will help the owners gain experience in managing a scoop shop and be better prepared for the summer rush. Because we have little brand recognition, initial sales beyond that are predicted to be low, averaging less than half of the observed hourly rate over the year and less than a third of the observed rate during the startup months. We expect our sales to follow a seasonal trend, peaking out in July (the first year we assumed to still be building a customer base) and reaching a low in December and January.

For the second year, we expect to see a total 46% increase in sales due to a normal annual sales volume and the dramatic difference between the monthly average of the startup months and their counterparts in the second year. In the third year, we expect a more conservative 16% increase in sales revenues.

Our sales forecast assumes a 10% increase in costs over the next year due to the increase in dairy product and sugar prices, which is a reasonable assumption given the current market data.

Frozen Custard Shop Business Plan Example

Frozen Custard Shop Business Plan Example

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