Crash Course in Sweet Entrepreneurship
I sat down with my father that March to discuss summer employment opportunities. We brainstormed potential internships, but I really was intrigued when he threw out the idea of starting my own business.
One of my first ideas was an ice cream truck business. I couldn’t recall seeing ice cream trucks in town, which seemed peculiar, considering the favorable weather and number of families in our Silicon Valley, Calif. area. After some research, the concept seemed challenging but potentially lucrative. It turned out there were rival trucks, yet I felt confident in my ability to compete. After working through multiple obstacles, I developed what I thought were reasonable projections of the work and money this business would require to get started. I teamed up with my younger brother, Pete, and Foster Brothers Ice Cream Truck was born.
Planned Tweets and Sweets
To deal with area competition, we decided on an alternative business plan. Being in Silicon Valley, we thought it appropriate to utilize technology to gain a following and communicate with customers. We started a website and Facebook page, and planned to use Twitter to update followers on our locations. We also concluded that by providing an upscale experience—with better products, a good-looking truck and friendly service—we could be more appealing than the competition. In doing this, we hoped not only to cater to children, but also to create nostalgia and generate business from all generations. Lastly, we decided that while selling in neighborhoods and at parks could be effective, being available for private bookings such as birthday parties and corporate events could generate more income in a shorter time.
I soon realized that expectations can (and will) clash harshly with reality. Getting the business running was more stressful, time-consuming and challenging than I had envisioned. We bought a former mail truck that needed immense amounts of work. While we tried to do as much as possible on our own, getting the 1984 AM General vehicle painted and trips to the mechanic resulted in higher startup costs than anticipated. I navigated a labyrinth of business permits, licenses and background checks that gave me the feeling I was in over my head. We formed an LLC (limited liability company). I also found an ice cream wholesaler, negotiated discounted prices, kept accounting records and marketed the truck to potential customers. With my brother in school until early June, I did most of the startup work myself and gained an appreciation for the hours that go into building a business.
Dishing Out Ice Cream
As the weather warmed, Foster Brothers Ice Cream finally served its first customers. Business was decent, but it soon became clear that we could not compete with rival trucks in established spots. While waiting outside of an elementary school one day, another driver threatened us, forcing us to leave. We quickly realized that selling at parks and throughout neighborhoods netted relatively low profits per hour.
After working a school function for a few hours and making more than $800, a lightbulb went off. I decided to alter the business plan and pursue private bookings exclusively—and in a more aggressive manner. Instead of attempting to take market share, we would solely address a new, underserved market.
This proved fruitful, and we soon were working up to three or four events daily. We placed business cards in shops and sent emails pitching our services to area families. Local papers covered our story, aiding marketing efforts. I contacted summer camps, which hired us to treat their campers. Corporate bookings were also very successful; we pitched employee appreciation events to companies and eventually served various Silicon Valley businesses and departments at Stanford University. We even established relationships with catering companies who hired us to handle desserts at their events. The new approach was profitable beyond our wildest dreams, but more important, I loved my job. The sense of ownership was a tremendously satisfying feeling.
On the way home from a successful corporate event on July 15, the business suddenly came crashing down. We were broadsided by a minivan that ran a red light. Pete and I were unharmed, but the truck was nearly totaled. We had to cancel all remaining bookings and close down the company while awaiting a compensation verdict from the other driver’s insurance company.
Undeterred and Rolling Again
I learned how important it was that I kept up to date with accounting. I was forced to prove the truck’s value and show our lost business bookings. This process also opened my eyes to the complicated insurance world. After six weeks of daily calls to the body shop, mechanic, independent appraisal firms and insurance companies, we finally received compensation. Only then, after locating unfathomably rare spare parts at a junkyard in rural Alabama, were we able to get the truck repaired and working for one final event before retiring for the summer.
Starting this business taught me lessons that will last a lifetime. Foster Brothers Ice Cream made people happy, and we were given a crash course in real life, experiencing extreme highs and lows. I cannot wait to grow the company again this summer; I would love to run businesses for the rest of my life.
Joe Foster is a rising junior majoring in economics. He’s put on his marketing, accounting and general manager hat to get Foster Brothers Ice Cream ready for the 2011 summer season and is looking forward to selling ice cream sandwiches, ice pops and shakes all summer long.
photo credit: Foster Brothers Ice Cream, Eric Lawson, AlmanacNews.com