Looking for a shaved ice business plan? You're in the right place.
This plan models a stand that earns its year in about five months, then pays insurance, a loan and its winter costs through the months it is closed. A lender will ask how much cash carries the stand through winter, what a cool, wet summer does to the numbers and whether the crew can be paid from sales on a hot day. A generic template has no answer to any of them.
In this article we walk through a complete sample plan for a seasonal shave ice and drinks stand in Salt Lake City, Utah, section by section, ending on five years of financials with the seasonal profit shown month by month in the first year.
Here is what you will take away:
- The executive summary: see how to put a short-season business on one page, so a reader sees the whole year and not only the summer
- The market and competition sections: learn how a stand describes its rivals and its short selling window without relying on a market-size figure
- The seasonal calendar: see how trading days, weather allowances and event bookings turn into a monthly revenue line
- The staffing plan: understand how student and part-time crews are rostered against sales so labor does not eat the season
- The start-up budget and the winter reserve: find out what a trailer-based stand costs to open and how much cash it holds back for the closed months
- The five-year financials: follow profit, cash flow and the balance sheet to see when a seasonal stand turns a real profit
- The cool, wet summer case: have an answer ready when a lender asks what happens if sales run 20% short
If you are planning a seasonal food stand, read this before writing your own. The business is fictional, so keep what fits your market and change the rest.
In this plan
If you need a shaved ice beverage business plan template for your own plan, start it in the Toolkit.
The Season at a Glance
Cleargate Shave Ice is a seasonal stand in Salt Lake City, Utah. A 14-foot concession trailer sits on a leased pad and sells shaved ice with house syrups, plus lemonades, slushies and Italian sodas. A portable kit takes the same menu to farmers markets, concerts, county fairs and school and corporate events. There is no alcohol on the menu. The stand opens in the last week of April and closes in the first days of October. Founder Maya Brandt owns the business with a family investor who holds a minority share.
The business needs $185,000: $85,000 of Maya's savings, $55,000 from the investor and a $45,000 bank equipment loan. Of that, $68,300 buys the trailer, shaving and cold-storage equipment and the event kit, $18,200 covers opening costs and stock, and $98,500 stays in the bank as the reserve for the pre-opening months and the first winter.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $181,450 | $287,250 | $360,650 |
| Net income after start-up costs | ($65,086) | $3,151 | $40,046 |
| Closing cash | $52,821 | $53,721 | $75,933 |
Three months of pre-opening overheads come before any sale, so Year 1 loses money even though May to September are each profitable. Year 2 is the first profitable year, though only just, and Year 3 reaches an 11.1% net margin, once the stand trades closer to its mature level.
The plan tests itself against a cool, wet summer. If sales run 20% below plan, Maya takes a pay cut, the crew roster shrinks, the stand asks the lender for a longer interest-only period, and no distributions are paid, the stand still closes every year with cash in the bank and is profitable from Year 3. The spring cash low is thin in that case, and the plan says so.
The pitch is narrow: fine, fluffy shaved ice made from block ice rather than crushed cubes, a short menu that two people can serve quickly in the heat, and a booth that can be booked for an event on a week's notice.
The Company
Legal name: Cleargate Shave Ice, LLC, a Utah limited liability company. Owners: Maya Brandt, majority owner and operator; a family investor with a minority share who takes no part in operations. Base: a seasonal pad lease on a busy corner in Salt Lake City, a commissary kitchen for prep, cleaning and water, and a winter storage unit. Start date: January 1, 2027, with the trailer delivered in March and the first trading day in the last week of April. Stage: pre-opening. The pad lease is in draft and the trailer is on order.
A short purpose
Sell cold, well-made shave ice and drinks on warm days in Salt Lake City, and keep the year's costs small enough that five months can carry twelve.
Goals for the first three seasons
- Open on schedule in April 2027 and trade 130 days in the first summer.
- Reach about $287,000 of revenue in 2028, the second season, and a small profit after tax.
- Reach about $361,000 in 2029 with a net margin above 10%.
- Repay the equipment loan on schedule and pay the first owner distribution in 2029.
The four revenue lines
| Line | How it earns | Year 1 share of revenue |
|---|---|---|
| Shave ice cups and bowls at the stand | About 86 sold on an average trading day in Year 1 at $7.25 | 44% |
| Lemonades, slushies and Italian sodas at the stand | About 56 a day at $5.75 | 23% |
| Event and festival booths | 34 event days at about $1,465 | 27% |
| Private, school and corporate bookings | 14 bookings at about $640 | 5% |
Permits and rules
A mobile food unit is generally regulated by the local health department. The usual path is plan review of the trailer, a mobile food permit and a licensed commissary or base of operations. Events can require separate temporary food permits or the organizer's vendor approval. A business also generally needs a city business license and a sales tax account. The plan budgets $3,500 for set-up and $1,800 a year for permits and renewals. Each requirement and fee must be confirmed with the issuing office before the trailer is built.
Salt Lake City and the Short Season
Why the window is five months
The stand is planned to open in late April and close in early October, and it earns its year inside that window. The calendar reflects planned trading days, not weather records. The plan does not rely on a market-size figure. It rests on the number of trading days it can reach, the sales on a warm day and the events that book vendors.
How a day's sales vary
July and August are modeled at about 1.2 to 1.3 times the season's average day, and May and September at about 0.8. Beyond Sundays, July allows four days and August two for heat, storms and closures. Late April and early October run at about half. A run of cool or wet days in June is the main risk in the plan and is the downside case below.
Who else sells cold treats
The stand competes with four groups:
- other shave ice, snow cone and slush stands and trailers
- ice cream, frozen yogurt and frozen custard shops
- drive-through and convenience-store drink sellers
- other event vendors competing for the same festival and market slots
Competitor names and prices are not quoted, since the plan has no verified source for either.
SWOT
| Strengths | Weaknesses |
|---|---|
| Low direct cost: ice and syrup are under a fifth of a $7 cup | Five months of income carry twelve months of cost |
| A short menu that a two-person crew serves quickly | Entirely exposed to weather |
| A portable kit that earns away from the stand | One founder is both operator and booker |
| Opportunities | Threats |
|---|---|
| Event organizers who want a cold-drink vendor on a hot day | A cool, wet June and July |
| School, team and corporate fundraisers booked a season ahead | Another stand opening beside the pad |
| More event days as organizers invite the stand back | Rising labor and event-fee costs against menu prices customers can compare |
Who Buys a Shave Ice
The walk-up customer
Families, trail users, office workers on a break and teenagers after practice. The purchase is small, impulsive and tied to heat: a $7.25 cup and a $5.75 drink for two people is the typical ticket, and a family order is $20 to $30.
The event guest
Someone who has already come for a market, concert or fair and is looking for something cold. The booth earns when the crowd is large and the day is hot.
The booking client
A school, a sports club, a company or a family that wants the trailer at a party for a flat fee plus sales. They book weeks ahead and are the most predictable sales in the plan.
What each wants
A short line, a clear price, a cup that is not mostly crushed ice, and a flavor that tastes of the fruit. The menu is 12 house syrups, three sizes and three kinds of drink. No alcohol is sold, which keeps the stand open to every event.
Booking Days and Pulling Foot Traffic
The four routes to a sale
| Route | What it is | Year 1 revenue |
|---|---|---|
| Stand trading | Six days a week, 130 days a season | $122,700 |
| Farmers markets | 20 weekly market days at about $900 | $18,000 |
| Concerts, fairs and school events | 14 larger event days at about $2,270 | $31,800 |
| Private and corporate bookings | 14 bookings at about $640 | $8,950 |
How the event calendar fills
Event applications go out in winter, when the stand is closed and the founder is available. Vendor deadlines vary by organizer, and a first-year vendor with no track record may be waitlisted, so Year 1 is planned at 34 event days and not more. By Year 3 the plan expects 58 event days averaging about $2,450, built on repeat invitations and referrals from organizers: about 20 farmers-market days at $1,150 and 38 concert, fair and school days at about $3,140 gross, before booth fees. The larger-event figure is the first number to test against a real festival's terms.
Pricing
Prices are set per item: a small shave ice at the low end and a large with toppings at the high end average $7.25 in Year 1 and $7.80 in Year 3. Drinks average $5.75 and $6.15. Prices rise about 3 to 4% a year. The menu has no discounts other than a punch card and group booking rates.
Repeat customers
A punch card and a text list bring locals back. The plan sets no repeat-rate target; the punch card shows how many locals return.
Spending to Be Found
Year 1 marketing budget
The first-year budget is $14,500: $6,500 of launch spending from start-up capital and $8,000 of operating spend. That is 8.0% of Year 1 revenue. Operating spend alone is 4.4% in Year 1 and 2.5% in Year 3, as events and repeat customers carry more of the load.
| Channel | Year 1 spend | What it does |
|---|---|---|
| Logo, trailer wrap, website and opening weekend (launch) | $6,500 | A recognizable window and an online presence before the first sale |
| Local social posts and boosted ads | $2,200 | Heat-day posts, daily flavor specials and map listings |
| Event application fees and sponsored booth donations | $1,600 | Entry to events where a first-year vendor has no record |
| Punch card and text list | $900 | Brings locals back through the summer |
| School, club and HOA partnership flyers | $1,000 | Fundraiser nights and private bookings |
| Photography and menu board updates | $800 | A fresh menu each season |
| Pop-up samples at markets | $700 | First tastes where the stand is not yet known |
| Website and map-listing upkeep | $800 | Hours, location and booking requests |
Marketing milestones
- April 2027: trailer wrapped, listings live, first trading day.
- June 2027: first event bookings confirmed for the August fair.
- September 2027: 13 private bookings completed, with the 14th in October; applications for 2028 events open.
- January 2028: applications for the second season's events sent to organizers.
How the Stand Runs
The pad and the trailer
A leased pad at $1,900 a month from April to October holds a 14-foot trailer with three-compartment and hand sinks, fresh and wastewater tanks, two block-ice shavers and a freezer for ice, plus slush machines. Power comes from a hookup at the pad and a generator at events. The trailer returns to a winter storage unit.
A trading day
Syrups are prepared at the commissary and stocked in the morning. Block ice is bought from a local supplier and held in a chest freezer. A cup takes about 30 seconds to shave and top. Two people serve a typical day and three at the peak, and the event booth is run by Maya with two or three crew.
Labor against the season
Labor is the cost that sets the margin. Payroll incl. on-costs is $120,140 in Year 1, 66% of revenue, and falls to 42% by Year 3 once pay raises are included as the crew roster stays close to its Year 3 size while sales grow. A busy July day can take 30 paid hours; a wet May day can take far fewer, so crew are rostered in advance to the weather forecast and sent home when a line does not form.
Equipment and upkeep
Two block-ice shavers, three chest freezers and two slush machines are the core. Blades, compressors and a generator are serviced annually at $1,200 in Year 1 and $2,800 in Year 3. A replacement reserve begins in Year 2. Maya's own pickup tows the trailer and event kit. The stand pays mileage, fuel and trailer registration, budgeted at $3,000 in Year 1.
Insurance and food safety
General and product liability for food and events, commercial auto cover for towing and event certificates of insurance. Insurance is $7,800 in Year 1. Workers' compensation for staff sits in the payroll on-costs. Every worker holds a food handler card, which local rules generally require, and the stand lead holds a food protection manager certificate. The insurance quote is a planning figure and should be checked against the broker's quote for the trailer and events.
Suppliers
Block ice, syrup concentrate, cups and lids and fruit for lemonade each come from at least two suppliers. Cups and lids are the items most affected by price swings.
Who Runs It
Maya Brandt, founder and operator
Maya has nine years in food service in the Salt Lake Valley: six at a coffee roaster's two cafes, rising to shift supervisor, and three as an events coordinator for a catering firm, where she booked vendors for outdoor events. She holds a food handler card and a food protection manager certificate. Her $85,000 is nine years of savings. She is paid $44,000 a year all year, including the winter months of bookings and permits.
The investor
A family member invests $55,000 for a minority share. The investor is paid through distributions only and has no role in operations.
Where the team is thin
Maya is both the operator and the person booking events. In the busiest weeks she cannot do both, so a stand lead is hired from the first season and the crew roster grows as event days rise. She has not built a syrup line before, so the 12 house syrups are tested over the winter.
If Maya is out
A stand lead who has worked one full season can run the stand alone for a few days. A longer absence would close the events line. The plan carries no key-person insurance cost, which a lender may ask about.
Outside help
A local accountant who works with food businesses reviews the first-year books each quarter, and a small business advisor helps with pricing and the permit order.
Five Seasons in Numbers
Cleargate earns its year in about five months, so the financials are built around that window. Year 1 is shown month by month, from three pre-opening months to a first trading day in the last week of April. Later years are annual.
What it takes to open the window
| Use of funds | Amount |
|---|---|
| Concession trailer: 14-foot build with three-compartment sink, hand sink, water tanks, awning, serving windows and wrap | $40,000 |
| Ice shavers, block-ice freezers, slush machines, syrup stations, refrigeration | $14,500 |
| Portable event kit: two canopies, tables, battery shaver kit, generator, coolers | $9,000 |
| Point-of-sale, signage, menu boards, smallwares and a storage cage | $4,800 |
| Entity set-up, health plan review and permits, lease and contract review | $3,500 |
| Launch: logo and wrap design, website, grand-opening weekend, sampling at markets | $6,500 |
| Pre-season crew training and syrup recipe testing (wages and ingredients) | $3,200 |
| Opening stock: syrups, cups, spoons, lemons, soda and block ice | $5,000 |
| Reserve for the pre-opening months, a cool wet summer and the first winter | $98,500 |
| Total uses | $185,000 |
| Source of funds | Amount |
|---|---|
| Maya Brandt, savings | $85,000 |
| Family investor, minority share | $55,000 |
| Equipment loan (5 years, interest only for the first 12 months) | $45,000 |
| Total sources | $185,000 |
Maya Brandt puts in $85,000 of her savings and a family investor takes a minority share for $55,000 (the percentage is set in the investor agreement and is not shown here), together 76% of the $185,000 raise. A five-year bank equipment loan of $45,000, 24% of the raise, runs at 10.5% with interest only for the first 12 months, so principal repayments start in 2028. The rate is a figure for this example, not a quoted rate. The lender takes a lien on the trailer and a personal guarantee. The trailer, equipment and event kit come to $68,300, opening costs and stock to $18,200, and the cash reserve to $98,500. After the opening costs and stock already paid from the raise, the reserve also carries the stand through the spring trough of 2028, when the downside case has the least room, and pays the first year's operating outflow of $45,679 and leaves $52,821 at the end of Year 1, which carries the stand through its first winter. The loan stays at $45,000 rather than being paid from the reserve, so the owners' savings and the investor's cash stay available through the first season. Maya tows the trailer with her own pickup, so no vehicle is bought; the stand pays mileage and wear.
Planning figures
- The stand trades six days a week, closed Sundays, on 130 trading days a year after weather and closure days are allowed for: 5 in late April, 24 in May, 25 in June, 23 in July, 24 in August, 25 in September and 4 in early October. Beyond Sundays, July allows four days and August two for heat, storms and closures; July has the most of any month. July and August run at about 1.2 to 1.3 times the average day, May and September at about 0.8, and the shoulder weeks at about half. The calendar reflects planned trading days and is not drawn from weather records.
- A mature trading day in Year 3 sells 128 shave ice cups and bowls at $7.80 and 84 drinks at $6.15, about $1,515 a day. Year 1 averages about $945 a day over 130 days, roughly 142 items, because the stand builds a following. Prices rise about 3 to 4% a year.
- Event and festival booths run on a portable kit with its own crew. Year 1 has 34 event days: 20 farmers-market days at about $900 and 14 fair, concert and school days at about $2,270, averaging about $1,465 a day. Year 3 has 58 event days: 20 market days at about $1,150 and 38 larger-event days at about $3,140, gross sales before booth fees, which sit in the event vendor line. Year 5 has 64 days averaging $2,750. Event days fall mostly in June to September.
- Private, school and corporate bookings are a flat booking fee plus sales: 14 in Year 1 at about $640 and 30 in Year 3 at about $720. They are the smallest stream and the most predictable per booking.
- Direct costs are ice, syrups, cups, lids and drink ingredients: 17% of shave ice sales, 25% of drink sales, 20% of event sales and 18% of bookings. Across the plan they run at 19.7% of revenue in Year 1. Cups, lids, spoons and lemon fruit make up most of the cost.
- Maya is paid $44,000 a year all year, with 27% on-costs for payroll taxes and benefits. A seasonal stand lead is paid $40,500 a year for the six months from April to September, with 18% on-costs. Student and part-time crew are paid the $16,200 full-year figure prorated to the months they work, which is about $15.60 an hour at about 20 hours a week, with 15% on-costs. Maya's full salary is about 16% of Year 3 revenue, and the crew and lead make up most of the rest. The crew roster runs from 1 in April to 6 in July of Year 1, peaks at 9 in Year 3 and at 10 in Years 4 and 5. Pay rises 3% a year from Year 2.
- Pad rent is $1,900 a month from April to October, $13,300 in Year 1. A commissary kitchen costs $450 a month all year and a winter storage unit $175 a month. Health departments may require a licensed commissary or base of operations for a mobile unit, so the plan budgets one; the rule and permit requirements must be confirmed with the Salt Lake County Health Department before a lease is signed.
- Card and wallet fees run at 2.8% of revenue, since nearly every sale is a card tap. Event vendor fees are $210 an event day in Year 1 and $240 in Year 3, a planning figure. Larger festivals often charge a booth fee plus a share of sales, so the fee line is the most exposed cost in the event stream.
- The business is an LLC taxed as a corporation. The model applies the 21% federal corporate rate and a Utah rate of 4.5%, a planning figure to be replaced by the rate the Utah State Tax Commission publishes, and carries the Year 1 loss forward. The carryforward uses the operating loss only; the $13,200 of start-up costs is not carried forward, which is conservative. Distributions are paid from after-tax profit as dividends to the owners and are not deducted in the model; the owners' own tax on them is for their CPA to confirm. Maya's pay is a deductible wage. The choice of tax election belongs with a CPA.
- Equipment is depreciated straight line: the trailer over 10 years, shaving and cold-storage equipment over 7, and the event kit, point-of-sale and signage over 5. Start-up costs of $13,200 (set-up and permits, launch marketing and pre-season training) are expensed at opening.
Where each season's revenue comes from
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Stand: shave ice cups and bowls | $80,700 | $118,550 | $129,800 | $139,300 | $147,800 |
| Stand: lemonades, slushies and Italian sodas | $42,000 | $61,750 | $67,150 | $72,700 | $77,100 |
| Event and festival booths | $49,800 | $92,000 | $142,100 | $161,200 | $176,000 |
| Private, school and corporate bookings | $8,950 | $14,950 | $21,600 | $25,500 | $28,100 |
| Total revenue | $181,450 | $287,250 | $360,650 | $398,700 | $429,000 |
| Growth on prior year | – | 58% | 26% | 11% | 8% |
Shave ice is 44% of Year 1 revenue and 36% of Year 3. Drinks add 23% in Year 1 and 19% in Year 3. Events are the fastest-growing line, from 27% of Year 1 to 39% of Year 3, and they carry more risk than the stand: they rest on organizers' invitations and on the weather on the day. Growth is 58% in Year 2 and slows to 8% in Year 5 because the pad trades a fixed number of days and the plan adds no second trailer.
The 2027 calendar, month by month
| Month | Stand: shave ice cups and bowls | Stand: lemonades, slushies and Italian sodas | Event and festival booths | Private, school and corporate bookings | Total revenue | EBITDA |
|---|---|---|---|---|---|---|
| Jan 2027 | $0 | $0 | $0 | $0 | $0 | ($15,332) |
| Feb 2027 | $0 | $0 | $0 | $0 | $0 | ($15,332) |
| Mar 2027 | $0 | $0 | $0 | $0 | $0 | ($15,332) |
| Apr 2027 | $1,300 | $700 | $0 | $0 | $2,000 | ($13,727) |
| May 2027 | $10,700 | $5,550 | $4,000 | $1,300 | $21,550 | $1,967 |
| Jun 2027 | $15,900 | $8,300 | $10,350 | $1,900 | $36,450 | $13,928 |
| Jul 2027 | $19,150 | $9,950 | $13,300 | $1,900 | $44,300 | $20,230 |
| Aug 2027 | $19,100 | $9,950 | $13,300 | $1,900 | $44,250 | $20,189 |
| Sep 2027 | $13,450 | $7,000 | $8,850 | $1,300 | $30,600 | $9,232 |
| Oct 2027 | $1,100 | $550 | $0 | $650 | $2,300 | ($13,486) |
| Nov 2027 | $0 | $0 | $0 | $0 | $0 | ($15,332) |
| Dec 2027 | $0 | $0 | $0 | $0 | $0 | ($15,332) |
Nothing is earned in January, February or March. Sales start in the last week of April, peak at $44,300 in July and are $2,300 in the first days of October. May to September produce $177,150 of the $181,450 year, or 98%. Operating profit is positive from May to September and negative in the other seven months. Each closed month carries $15,332 of cost here, a twelfth of the year's overheads, so January to March cash reads lower than it will be in practice. A closed month costs about $6,900 on the cost lines themselves; the spring cash note below shows the breakdown. On the calendar view, cash is lowest in April, at about $37,000 before receivables, and about $36,600 in May after them. That view charges closed months more than their real cost, so the cost-line view is the better guide: on it the lowest point of Year 1 is the year-end balance of $52,821. The monthly view and the year-end balance are calculated separately and differ by about $2,600 at December. The gap comes from how the model's monthly view and annual view carry loan interest and working capital, and the model does not reconcile the two; the year-end figure is the one carried into later years.
Seasonal payroll
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Founder and operator (Maya Brandt) | $44,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Stand lead (seasonal, April to September) | $40,500 | Month 4 | – | – | – | – | – |
| Student and part-time crew (about 20 hours a week each) | $16,200 | Month 4 | – | – | – | – | – |
| Total payroll incl. on-costs | $120,140 | $134,113 | $141,875 | $148,085 | $148,085 |
At year end only Maya is on payroll, so the seasonal rows show dashes. Over the season the team peaks at 8 people in Year 1 (Maya, the stand lead and 6 crew), 11 in Year 3 (Maya, the lead and 9 crew) and 12 in Years 4 and 5 (with 10 crew). The stand lead is paid for six months, $20,250 before on-costs. Crew are added as event days rise, and there is no second lead. Maya's $44,000 starts in month 1 and is included in costs, so profit here is what remains after she is paid.
Profit and loss
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $181,450 | $287,250 | $360,650 | $398,700 | $429,000 |
| Direct costs (ice, syrups, cups and drink ingredients) | ($35,790) | ($56,658) | ($71,136) | ($78,641) | ($84,618) |
| Gross profit | $145,660 | $230,592 | $289,514 | $320,059 | $344,382 |
| Payroll incl. on-costs | ($120,140) | ($134,112) | ($141,875) | ($148,085) | ($148,085) |
| Rent | ($20,800) | ($21,400) | ($22,000) | ($22,700) | ($23,400) |
| Utilities | ($3,000) | ($3,300) | ($3,500) | ($3,600) | ($3,700) |
| Marketing | ($8,000) | ($8,500) | ($9,000) | ($9,500) | ($10,000) |
| Insurance | ($7,800) | ($8,300) | ($8,800) | ($9,200) | ($9,600) |
| Professional fees | ($3,000) | ($3,000) | ($3,200) | ($3,300) | ($3,400) |
| Software subscriptions | ($1,200) | ($1,300) | ($1,400) | ($1,500) | ($1,500) |
| Card and wallet processing fees | ($5,100) | ($8,050) | ($10,100) | ($11,150) | ($12,000) |
| Event vendor fees and booth space | ($7,150) | ($10,350) | ($13,900) | ($15,800) | ($17,300) |
| Hauling: fuel, mileage on the owner pickup and trailer registration | ($3,000) | ($3,600) | ($4,000) | ($4,200) | ($4,400) |
| Equipment service: shaver blades, compressors, generator | ($1,200) | ($2,200) | ($2,800) | ($3,200) | ($3,600) |
| Equipment replacement reserve | $0 | ($2,000) | ($3,500) | ($4,500) | ($5,000) |
| Permits, health inspection and license renewals | ($1,800) | ($1,900) | ($2,000) | ($2,100) | ($2,200) |
| Cleaning supplies, uniforms and food-handler cards | ($1,500) | ($1,700) | ($1,800) | ($1,900) | ($2,000) |
| Bad debt allowance (school and corporate invoices) | ($300) | ($600) | ($900) | ($1,000) | ($1,100) |
| Annual pay raises (3% a year) | $0 | ($4,023) | ($8,640) | ($13,731) | ($18,586) |
| EBITDA | ($38,330) | $16,256 | $52,099 | $64,593 | $78,511 |
| Depreciation | ($8,831) | ($8,831) | ($8,831) | ($8,831) | ($8,831) |
| Interest | ($4,725) | ($4,274) | ($3,221) | ($2,053) | ($755) |
| Income tax | $0 | $0 | $0 | ($11,054) | ($16,924) |
| Net income before start-up costs | ($51,886) | $3,151 | $40,046 | $42,654 | $52,000 |
| Start-up costs expensed at opening (set-up and permits, launch marketing, pre-season training) | ($13,200) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($65,086) | $3,151 | $40,046 | $42,654 | $52,000 |
Year 1 loses $51,886 before start-up costs and $65,086 after them. Three months of pre-opening overheads fall before any sale, and the stand sells at about three-fifths of its mature daily level. Year 2 is the first profitable year, at $3,151, a 1.1% margin, because the stand builds to about 92% of its mature stand sales. Year 3 earns $40,046, an 11.1% net margin, and Years 4 and 5 reach 10.7% and 12.1%. Tax is nil through Year 3 because losses are carried forward, then $11,054 in Year 4 and $16,924 in Year 5.
Cash through the cold months
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($63,879) | $10,452 | $47,816 | $50,935 | $60,393 |
| Trailer, equipment and event kit | ($68,300) | $0 | $0 | $0 | $0 |
| Funding received | $185,000 | $0 | $0 | $0 | $0 |
| Equipment loan principal repaid | $0 | ($9,552) | ($10,604) | ($11,773) | ($13,071) |
| Owner distributions | $0 | $0 | ($30,000) | ($38,000) | ($45,000) |
| Net change in cash | $52,821 | $900 | $7,212 | $1,162 | $2,323 |
| Closing cash | $52,821 | $53,721 | $60,933 | $62,095 | $64,418 |
Closing cash is positive at every year end and is lowest at the end of Year 1, at $52,821. Year-end balances are not the low points of each year. From January to April the closed stand spends money before its first sale. Each closed month is charged an even share of the year's overheads in the monthly calendar, which overstates its real cost. On the cost lines themselves a closed month costs about $6,900 in Year 1: Maya's pay with on-costs ($4,657), insurance ($650), the commissary and winter storage ($625), software and professional fees ($350), loan interest ($394) and utilities ($250). January to March therefore cost about $20,800. April adds the pad rent ($1,900), the stand lead and the first crew (about $5,500) and the closed-month cost, about $14,400 before any April sales. Net of early April sales of about $2,000, the January to April outflow is about $33,000. Each later spring uses that year's own cost lines and early April sales, and comes to about $33,000 in the base case and about $29,500 in the downside, where Maya is paid less and the crew is smaller. These are planning estimates, not a month-by-month run. On the base case the spring low is about $20,000 before the 2028 season, about $21,000 before 2029, about $28,000 before 2030 and about $29,000 before 2031. A seasonal credit line is worth arranging before the first spring. Distributions of $30,000 in Year 3, $38,000 in Year 4 and $45,000 in Year 5 are paid only from cash the model shows the stand can spare: in each year they are covered by operating cash after loan principal. The equipment loan is repaid in full during Year 5.
Balance sheet
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $52,821 | $53,721 | $60,933 | $62,095 | $64,418 |
| Accounts receivable | $1,491 | $2,361 | $2,964 | $3,277 | $3,526 |
| Syrups, cups and dry stock | $7,505 | $8,966 | $9,980 | $10,505 | $10,923 |
| Trailer, equipment and event kit (net) | $59,469 | $50,637 | $41,806 | $32,974 | $24,143 |
| Total assets | $121,286 | $115,686 | $115,682 | $108,851 | $103,010 |
| Supplier payables (syrups, cups, ice) | $1,373 | $2,173 | $2,729 | $3,016 | $3,246 |
| Equipment loan | $45,000 | $35,448 | $24,844 | $13,071 | $0 |
| Paid-in capital | $140,000 | $140,000 | $140,000 | $140,000 | $140,000 |
| Retained earnings | ($65,086) | ($61,936) | ($51,890) | ($47,236) | ($40,236) |
| Total liabilities and equity | $121,286 | $115,686 | $115,682 | $108,851 | $103,010 |
Break-even and labor productivity
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | -21.1% | 5.7% | 14.4% | 16.2% | 18.3% |
| Net margin (before start-up costs) | -28.6% | 1.1% | 11.1% | 10.7% | 12.1% |
| Payroll incl. pay raises as share of revenue | 66% | 48% | 42% | 41% | 39% |
| Revenue per full-time equivalent at year end | $181,450 | $287,250 | $360,650 | $398,700 | $429,000 |
| Average monthly revenue | $15,121 | $23,938 | $30,054 | $33,225 | $35,750 |
| Monthly revenue needed to cover operating costs | $19,100 | $22,250 | $24,646 | $26,520 | $27,600 |
| Debt service cover (EBITDA / interest + principal) | -8.1x | 1.2x | 3.8x | 4.7x | 5.7x |
Year 1 averages $15,121 of revenue a month against $19,100 needed to cover operating costs, so it loses money. Year 2 averages $23,938 against $22,250 of operating cost, which is enough to turn a profit after interest and depreciation, narrowly. The monthly average hides the shape: May to September produces 98% of Year 1 revenue, so five open months carry twelve. Payroll falls from 66% of revenue in Year 1 to 42% in Year 3, the ratio that matters most in this trade.
A cool, wet summer: sales 20% lower
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $145,160 | $229,800 | $288,520 | $318,960 | $343,200 |
| Net income before start-up costs | ($57,520) | ($8,177) | $20,429 | $31,773 | $36,654 |
| Net income after start-up costs | ($70,720) | ($8,177) | $20,429 | $31,773 | $36,654 |
| Closing cash | $47,712 | $47,143 | $62,092 | $87,311 | $115,853 |
This case cuts every revenue line by 20% in every year, a harsher test than one bad season. The response: the crew roster shrinks by a fifth in Year 1, and by a further eighth from Year 2, Maya takes a 20% pay cut, marketing falls 20% in Year 1 and a further quarter from Year 2, and card fees, booth fees, hauling and bad debt fall with volume. The stand also asks the lender to extend the interest-only period to 24 months, a term to negotiate rather than one already agreed; the figures here include it. No distributions are paid. On those terms the stand loses money in Years 1 and 2, earns $20,429 in Year 3 (a 7.1% margin) and never closes a year with less than $47,143 in the bank. Equity ends Year 1 at $69,280. Downside cash runs above base in January to June of Year 1 because of the pay cut and the smaller crew, and in Years 3 to 5 because distributions stop; both are stated reasons. The spring low is tighter in 2028 and 2029 only; later it is looser, because distributions stop in the downside. The downside's lowest Year 1 month is April, at about $44,700 before receivables. Using the downside's own cost lines, about $29,500 of January to April outflow, the downside spring low is about $18,000 before the 2028 season, about $18,000 before 2029, about $33,000 before 2030 and about $58,000 before 2031. A seasonal credit line is the first thing to ask the bank for.
Sources
- Internal Revenue Service, corporations. The model uses the 21% flat federal rate under 26 U.S.C. section 11, in effect for tax years since 2018; rates can change. https://www.irs.gov/businesses/corporations
- Utah State Tax Commission, corporate franchise and income tax. The 4.5% state rate in the model is a planning figure, not a rate confirmed for this plan. The Commission publishes the current rate, https://tax.utah.gov/, and that rate must be used before any figure is relied on.
- Salt Lake County Health Department, Environmental Health food protection. Mobile food unit permits, commissary and temporary event rules are described generally and should be confirmed with the department.
- Salt Lake City business licensing and Utah State Tax Commission sales tax registration. Fees and rules are not quoted.
- Trading days, sales per day, event gross, crew hours and on-costs are the plan's own figures.
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