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Frozen Yogurt Business Startup Costs

Published May 08, 2023 Restaurant
Frozen Yogurt Business Startup Costs
6 Best Tips For Starting A Profitable Coffee Shop
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“Quick summary” Are you considering opening a yogurt business? Well, you're headed in the correct direction! Frozen yogurt is a popular, delectable delicacy that is increasingly gaining popularity among customers.

Let's understand through some quick numbers - As per a report published by, the global frozen yogurt market size was valued at USD 2.0 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 5.5% from 2021 to 2028.

And the rising popularity of frozen yogurt as a healthy alternative to ice cream is the reason behind these whopping numbers.

Frozen yogurt has grown in popularity (over time) as a result of business owners' innovations in increasing the variety of flavors and enabling consumers to customize their frozen yogurt with the toppings of their choice.

It sounds like a fascinating industry, don't you think?

But let me tell you - It's also crucial to determine initial frozen yogurt business startup costs and comprehend what it takes to launch this kind of business before making the leap.

Don't worry! We have you covered.

In our blog post, we'll be considering the important steps you should take to launch a frozen yogurt business and even the costs associated with all these steps you should consider when preparing your budget.

The Types of Costs You Need to Know – Before Starting Your Frozen Yogurt Biz!

Before starting your frozen yogurt business, it's crucial to understand the different types of costs you'll encounter. These costs can include fixed costs such as rent and equipment, variable costs such as ingredients, and one-time costs such as permits and licenses. By knowing these costs upfront, you can create a solid business plan and budget for success.

The Types of Costs You Need to Know Before Starting Your Frozen Yogurt Biz!

1. Location Costs

When it comes to starting a frozen yogurt business, location is one of the most critical factors to consider. Suppose you are looking to start your frozen yogurt business.

In that case, you can't ignore the frozen yogurt biz startup costs associated with location, such as renting, leasing, or purchasing a property, security deposit, utilities, and insurance, as it takes up much of your startup and operational costs.

Your business's location can significantly impact costs, revenue, and overall success.

Keep reading to find out how much renting & leading space for your frozen yogurt biz costs and which factors surround location costs.

(A) Rent or Lease Costs

The cost of rent and lease for a frozen yogurt business can vary greatly depending on the location, size, and property type.

Here are some factors to consider when estimating the cost of rent and lease for a frozen yogurt business:

  • Rent: The cost of rent or lease of your space will depend on the location of the business, and it will range from around $1,500 to $15,000 per month, depending on the location. A key location in a busy area may cost you around $10,000 per month, while a space with less customer traffic in a less desirable location may cost around $1,500 per month.
  • The size: The property's size even impacts the rent or lease cost. A smaller property may cost around $1,500 to $3,000 per month, while a larger property may cost upwards of $10,000 per month.
  • Type of space: The type of space you choose for your frozen yogurt biz will also affect the location cost. A standalone building may cost around $3,000 to $15,000 per month, while a space in a shared commercial complex may cost around $1,500 to $5,000 per month.
  • Lease terms: The leasing terms of the space that you have chosen also have a huge impact on the final cost. You might be aware that longer lease terms may come with lower monthly rent, while a shorter lease term will lead to higher monthly rent. For example, a 5-year lease may cost around $10,000 per month, while a 1-year lease may cost around $12,000 per month.

(B) Security Deposit

While you are starting off your frozen yogurt biz, and (especially) if you are tight on budget, you need to consider every expense that comes your way. One such expense that is going to take a big chunk of your money is a security deposit while renting a space.

When finalizing the property, your landlord will ask for a security deposit as protection to pay off (in case you damaged the property or violated any of the terms). The amount of the security deposit will depend on several factors, such as the rental or lease agreement terms, the size and condition of the property, and the landlord's requirements.

If we talk about general terms, the security deposit for a commercial property can range from one to three months' rent or lease amount. So, that means if you are paying a monthly rent of $10,000, then the security deposit may be anywhere from $10,000 to $30,000.

So, given this hefty amount, it is more than crucial to consider the amount of security deposit when budgeting for your frozen yogurt business, as it can significantly impact your initial expenses(especially if you are short of funds).

(C) Utilities and Insurance Costs

Utilities and insurance costs for your frozen yogurt biz are another consideration that you should include while calculating the costs.

Here are some of the benefits of these considerations:

  • Cost Savings: Utilities and insurance will also cost you a lot because you might be considering employee insurance, space insurance, equipment insurance, and a hell lot of utilities. So, you need to consider and manage these expenses as well properly.

    By budgeting all the utility expenses, such as electricity and water usage, and managing them properly, you can easily reduce your overhead expenses while boosting your profits. In the same manner, by choosing the right insurance coverage and working with an experienced insurance agent or company, you can get the best coverage at competitive rates, which improves your bottom line.

  • Risk Management: The right insurance coverage per your business size and needs can help protect your business from unforeseen events, prevent financial losses, and minimize business disruption.
  • Sustainability: By managing your utility costs and reducing waste, you can promote your business's sustainability and considerably reduce your environmental impact. It can even help you in attracting eco-conscious customers and position your business as a socially responsible enterprise.

2. Equipment Cost

After location, the other crucial thing to consider while deciding the total frozen yogurt biz startup costs is equipment cost. For your frozen yogurt business, you need to purchase a variety of equipment such as a frozen yogurt machine, Point of Sale system, furniture and fixtures, refrigeration to store ingredients, and other necessary equipment.

In the below points, we will discuss the various equipment and its costs that will hugely impact the overall frozen yogurt business startup costs.

(A) Frozen Yogurt Machines

Frozen yogurt machines (by default) become a crucial part of your business. Because having a high-quality machine can make a significant difference in the end product that you provide to clients, let us tell you for your relief that a frozen yogurt maker doesn't take much from your capital. The price of your frozen yogurt machine is affected by various factors, such as the size, quality, and brand of the machine.

A basic frozen yogurt machine can cost anywhere between $400 and $1,500 on average. You can double the cost of the initial machine if you plan to use two to provide two different types of frozen yogurt.

You should also take into account supplementary expenses when buying a frozen yogurt machine, such as supplies, upkeep, and repairs.

  • Supplies: These normally include cups, containers, spoons, and toppings, ranging from $150 to $350.
  • Maintenance: Depending on the kind and frequency of use, the machine's maintenance costs might range from $175 to $270 annually.
  • Repairs: If only a minor needs changing only a small part, then the cost may be relatively low and cost you around $50 to $200. However, if the damage is more severe and requires replacing multiple parts or a major component, the cost can be significantly higher, ranging from $500 to $2,000 or more.

    Ultimately, the machines for your frozen yogurt business could cost anywhere from $725 to $6,220 overall.

Quick-Tip: Spending on a high-quality machine can be worthwhile in the long term, as it will help guarantee that your consumers always receive a high-quality product.

(B) Utensils & other necessary equipment

If you want to start a frozen yogurt shop, you need to prepare to spend money on serving items, including ladles, spoons, scoops, and cups.

Despite the fact that the precise cost of these things can vary depending on the type, quality, and amount acquired, the cost of all the equipment should be considered when creating a budget for your frozen yogurt business costs.

Startup Cost Average Cost Range (USD)
Blender: $50-$500
Food processor: $100-$500
Measuring cups and spoons: $5-$50
Mixing bowls: $10-$50
Spatulas and spoons: $5-$30
Tongs and ladles: $5-$30
Ice cream scoops: $5-$20
Whipped cream dispenser: $20-$100
Beverage dispensers: $20-$100
Storage containers for toppings and dry goods: $10-$100
Toppings dispensers (candy dispensers, cereal dispensers, etc.): $50-$200
Fruit slicers and choppers: $20-$100
Cutting boards: $20-$50
Knives and scissors: $20-$50

Note: In the list above, the costs we mentioned are approximate and will vary based on the location, quality, supplier, and other factors. Additionally, the list can also change based on your requirements, and you need to clear the business needs and make decisions accordingly.

(C) Frozen Yogurt POS System

The Point of Sale (POS) system is considered to be one of the most crucial investments when beginning a frozen yogurt business.

The frozen yogurt POS system can be used to rapidly and accurately accept client orders, provide individualized recommendations, support marketing strategies, and facilitate inventory management.

Frozen Yogurt POS System

A simple point-of-sale system that includes hardware and software normally costs around $1,000. However, the price is mainly based on the system's features and functionality.

Additionally, installation, training, and ongoing support could cost extra. In accordance with Statista reports, more than 60% of businesses claimed they spent between $1,000 and USD 3,000 on the best-in-class POS system.

Aside from the initial cost, many providers of frozen yogurt POS systems could also demand that businesses buy hardware upgrades and software upgrades.

It's also crucial to take into account the possibility that POS software will require an additional monthly payment for features like customer assistance or data storage. Before purchasing a POS system, businesses should always take into account all recurring costs.

(D) Furniture and Fixtures

The cost of furniture and fixtures for a frozen yogurt business will depend on several factors, including the size of the business, the location, and the type and quality of furniture and fixtures needed. It is important to carefully consider the specific needs of your furniture & fixture business requirements and plan your budget around it accordingly.

Here are some common furniture and fixture item requirements that you will need for your frozen yogurt biz, along with their estimated frozen yogurt business startup costs:

  • Seating: Depending on the style and quality, chairs and tables can cost between $50 to $300 per set. And the overall cost is based on the total seating area in your space.
  • Countertops: The amount you need to spend on countertops for your frozen yogurt biz can vary depending on the material used, size, and design, and can cost you around $200 to $2,000.
  • Lighting: Lighting is another important thing to keep in mind for creating a welcoming atmosphere in your space, and it will take around $50 to $500 from total expenses.
  • Decor: Decor is some of the best add-ons to your overall space, such as wall art, plants, and other decorative items which can add to the business's ambiance. And the cost of decor will depend on the specific items chosen.
  • Display Cases: Display cases for frozen yogurt are also important but can cost between $500 and $3,000, depending on the size and quality.
  • Shelving: Shelving for storing inventory and displaying products for your materials can cost between $100 and $500 per unit.
  • Sinks and Faucets: Sinks and faucets in your frozen yogurt business kitchen are a must-have and cost you between $100 and $500.

(E) Refrigeration to Store Ingredients

Refrigeration to store ingredients and keep them fresh is crucial. So, definitely considering the cost for the same is important.

Recent reports show that a commercial refrigerator ranges from $1000 to $3000 USD. The price range to get high-quality refrigeration is between $7,000 and USD 20,000, which you most probably use in frozen yogurt business and processing facilities. Your geography and scope of business determine the size of refrigeration you require.

In addition, the continual cost of electricity is used to keep the refrigerated unit running. The overall expenses can also vary by location, with different states having different electricity tariffs. Consider the refrigerator's upkeep and repairs as well. The price of upkeep and repair work can differ based on the problem, location, and type of refrigerator.

Overall, it's crucial to plan ahead and consider all of the expenses associated with refrigeration, including the cost of purchase, energy use, upkeep, and maintenance.

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3. Supplies and Inventory Costs

Supplies and inventory costs are yet another crucial consideration when starting and running a frozen yogurt business. From cups and spoons to toppings and frozen yogurt mixes, the supplies you need can vary depending on your menu and the scale of your operation.

Even the quality of the materials you choose and the inventory management tools you will use for your frozen yogurt biz will also significantly affect the costs.

So, you need to consider your requirements properly and effectively manage your suppliers to minimize waste, control costs, and ensure that you always have the necessary supplies to serve your customers.

Below, we will be considering the expenses related to frozen yogurt mix & supplies, followed by cleaning supplies as well as packaging materials and the tips to manage it effectively. Let's find out!

(A) Frozen Yogurt Mix and Toppings

Frozen yogurt mix and topping are among the key ingredients that frozen yogurt businesses will use. So considering its supply and Inventory is vital to ensure minimum expense and maximum utilization.

Quick tip: It's important to compare prices from different suppliers to find the best deals and consider bulk purchasing to save on costs. (But make sure to manage it properly)

Here are a few things that it includes:

  • Cost of Frozen Yogurt Mix: The cost of frozen yogurt mix can vary depending on the type and quality of the product. The cost of a frozen yogurt mix typically ranges from $25 to $50 per pouch. Premium mixes can cost around $60 per bag. Premium frozen yogurt mixes will typically cost more than standard mixes, but they can provide a higher profit margin due to their perceived value.
  • Cost of Storage: Proper storage of frozen yogurt mix and toppings is essential to prevent spoilage and waste, so you need to spend on storage equipment like freezers and their electricity consumption. A small freezer can cost around $150 to $300, while a larger one can cost around $800 to $1000.
  • Cost of Toppings: The cost of toppings can be based on the type and quality of the product. Standard toppings like candy or sprinkles can cost anywhere from $5 to $20 per kg, while premium toppings like fresh fruit or nuts can cost upwards of $30 per kg. And, if you offer a variety of toppings, then you can entice more customers. On the other hand, you should even balance its cost.

(B) Packaging Materials

The cost of packaging materials for a frozen yogurt business can vary depending on several factors, such as the type and size of the packaging, the ordering quantity, and even the suppliers that you decide to go with!

Let's run some quick figures: If you are using plastic cups with lids to serve frozen yogurt, the cost per unit can range from $0.05 to $0.25, while the cost of spoons can range from $0.01 to $0.05 per unit.

Suppose you are also offering take-out options or are selling pre-packaged frozen yogurt cups. In that case, you also need to consider the cost of additional packaging materials such as bags, boxes, or labels. The cost of these materials can range from $0.10 to $1.00 per unit.

Here's advice: It might be appealing to go for the cheapest option available, and it is beneficial in the short term, but in the long term, it will not be suitable as it can impact the customer experience leading to negative reviews and bad brand reputation. Therefore, balancing the cost with the quality and overall customer satisfaction is essential.

Ultimately, the best way to determine the right cost for your packaging materials for a frozen yogurt business is to research various suppliers, compare prices, and calculate the total cost based on the required quantity.

(C) Cleaning Supplies

To determine the accurate frozen yogurt business cost of cleaning supplies, you need to make a list of all the cleaning supplies you use, including the quantity and price of each item.

Some of the common cleaning supplies for a frozen yogurt business will include:

  • All-purpose cleaner
  • Disinfectant wipes
  • Glass cleaner
  • Degreaser
  • Floor cleaner
  • Scrub brushes
  • Sponges
  • Mops
  • Brooms
  • Dustpans
  • Trash bags

Once you have a complete list of your cleaning supplies and their prices, you can calculate the total cost by adding up the cost of each item. And on average, a small to medium-sized frozen yogurt business might spend anywhere from $50 to $150 per month on cleaning supplies.

You may want to set a budget for cleaning supplies each month or quarter to ensure that you have enough funds to keep your business clean and maintain the hygiene standards at your workspace.

4. Marketing and Advertising Costs

To operate your frozen yogurt biz for a long time and to do it profitably, you need to market and advertise your business which also requires a huge chunk of money. It can be a significant expense, especially for small businesses with limited budgets.

So, developing a comprehensive marketing strategy that balances your goals with your budget and leverages a mix of traditional and digital marketing channels is essential. The costs will cover developing a user-friendly website, social media management and marketing, and influencer marketing.

Keep reading to know more about the frozen yogurt business costs associated with entire marketing and advertising!

(A) Creating a Website

The cost of developing a website for your frozen yogurt business is based on different factors, such as the complexity of the website, the features required, and the web development agency or freelancer you choose to work with.

Here are some approximate figures to give you an idea:

  • Basic Website: A simple website with a few pages, a basic design, and standard features such as contact forms and photo galleries can cost you around $1,000 to $3,000.
  • Ongoing Maintenance and Updates: Apart from development, you also need to consider ongoing maintenance and updates for your website, such as security updates and content updates. It might cost you $100 to $500 per month.
  • E-commerce Website: If you plan to sell frozen yogurt or related products online, you'll need an e-commerce website that your customers can use to browse and purchase products which cost you $3,000 to $10,000, depending on the number of products, payment, and shipping integrations, and other features.
  • Custom Website: If you want to develop a customized website with sophisticated features, you need to spend around $5,000 to $20,000 or more for the development.

(B) Promotions and Discounts

Promotions and Discounts are a crucial part of your overall marketing plan. Customers love this and feel important(when you offer appealing discounts and promotions) while increasing customer experience.

The cost of offering promotions and discounts for your frozen yogurt biz will vary depending on the type and frequency of promotions.

Check out some of the ways you can offer discounts & promotions along with their cost:

  • Discounted Menu Items: This can include offering a percentage off a specific menu item, such as 10% off all frozen yogurt purchases on Tuesdays. For example, if you offer 10% off all frozen yogurt purchases on Tuesdays and 50 customers take advantage of the promotion, and your average purchase is $5, the cost would be $25 (10% of $5 x 50 customers).
  • BOGO (Buy One, Get One) Deals: This can include offering a free menu item with the purchase of another menu item, such as buy one frozen yogurt, get one free. If 100 customers take advantage of the promotion, and the cost of frozen yogurt is $3, the cost would be $150 (100 free frozen yogurts x $3 each).
  • Loyalty Programs: This can include offering rewards for repeat business, such as a free frozen yogurt after purchasing 10. If 50 customers participate in the program, and frozen yogurt costs $3, the cost would be $15 (50 free frozen yogurts x $3 each).

(C) Social Media Marketing

The cost of social media marketing for frozen yogurt biz can vary widely depending on the social media channels you use, the level of engagement you will require, and the scope of the marketing campaign.

Here are some potential costs you can consider:

  • Content Creation: If you hire a professional, content creation can cost anywhere from $50 to $250 per hour. Assuming that you are going to spend 10 hours per month on content creation, the cost would be $500 to $2,500 per month.
  • Advertising: If you spend $200 to $350 per day on social media advertising, your monthly cost could range from $6,000 to $10,500 per month. This factor will also vary based on the number of channels.
  • Influencer Marketing: Depending on the influencer, their followers, the number of influencers, scope of advertising - the cost will vary based on that. Suppose you partner with one influencer per month at a cost of $500. Your monthly cost for influencer marketing would be $500.

So, by keeping in mind all the factors mentioned above and their cost - you will be spending somewhere around $10000 for social media marketing per month.

5. Legal and Administrative Costs

For starting and running a frozen yogurt business(without much hassles), you need to include various legal and administrative costs that can quickly add up. From Business registration fees to Legal and accounting fees and even permits and licenses, there are many legal and administrative expenses that come with starting a business.

Failing to comply with legal requirements can result in hefty fines or even legal action, which is why it's crucial to understand the frozen yogurt biz startup costs associated with these responsibilities upfront.

Let's discuss all the relevant legal costs that you need to consider to ensure no problems later on! Keep Reading!

(A) Business Registration Fees

When starting a frozen yogurt business, it's important to factor in the costs of business registration fees. These fees can vary widely based on your location and the legal structure of your business. The fees can range from a modest $50 to a steep $800 depending on the state and type of business entity you choose.

In addition to registration fees, you may need to obtain a business license or permit, register for taxes, and file annual reports. These requirements can also vary by location and business type, so it's important to do your research and budget accordingly for all associated fees and costs.

To navigate the process successfully, you may consider consulting with a local attorney or business advisor who can guide you through the registration and licensing process and help you avoid any costly mistakes. By taking the time to understand the fees and requirements involved in registering your frozen yogurt business, you can set yourself up for success and avoid any surprises down the road.

(B) Legal and Accounting Fees

Legal and accounting fees are crucial expenses for a frozen yogurt business as they help ensure the business remains legally compliant, financially stable, and protected from potential legal and financial risks.

Proper legal and accounting practices can help prevent costly legal disputes, financial penalties, and tax issues that can cripple a business's operations. Through this, you can focus on your core operations and growth while ensuring that all your legal and financial affairs are handled professionally and efficiently.

Let's have a look at the figures for legal & accounting fees:

  • Legal Fees: Legal fees for your frozen yogurt business vary greatly depending on the complexity of the legal matter and the lawyer's hourly rate. Any routine legal matters, such as drafting contracts or reviewing lease agreements, can cost you $500 to $3,000.

    However, incorporation or forming a legal entity can range from $1,000 to $2,500. Intellectual property registration, such as trademark or patent application, can range from $1,000 to $5,000. These are approximate figures for a few general legal requirements. You can consult with your legal advisor for a better understanding.

  • Accounting Fees: The cost of accounting fees can vary depending on the complexity of your business finances and the type of services you require. Basic bookkeeping services can range from $150 to $500 per month, while tax preparation and filing services can range from $500 to $2,500 annually.

(C) Permits and Licenses

The cost of licenses and permits for a frozen yogurt business can vary depending on the location and specific requirements of the local government.

Let's find out some of the most crucial ones:

  • Business License: A business license is a must-have to operate any type of business, and the cost for the same can range from $50 to several hundred dollars, depending on the location.
  • License for Fire: A fire permit is also crucial to ensure that the establishment meets fire safety standards which can cost you somewhere around $50 to $200.
  • License for Food Service: A food service permit is yet another necessary requirement for any establishment(If you are in the food industry). The cost to obtain a license for food service can range from $100 to $1,200, depending on the location and the size of the establishment.
  • Health Permit: A health permit is also required to ensure that your restaurant meets the health and safety standards(It is very, very important for your Frozen Yogurt biz). Depending on the location, the cost can range from $50 to $200.

6. Employee Costs

As you are already aware that the best employees are an asset to your business. So, as a frozen yogurt business owner, you need to spend on employees, their supplies, and the benefits given to them to operate your business efficiently.

It's essential to understand the costs associated with hiring and managing employees to develop a comprehensive budget and ensure that you can afford to pay your staff fairly while still generating a profit.

Keep reading to know more about the costs associated with hiring and managing staff.

(A) Hiring and Training Costs

The hiring and training costs for staff in a frozen yogurt business can vary depending on several factors, such as the size of the business, the number of employees, the experience level of the staff, the location of your business, training needed, etc.

Check out some of the frozen yogurt business startup costs that you will incur while hiring & training staff:

  • Recruitment Costs: These costs include advertising job openings, screening resumes, and conducting interviews. The cost for the same can range from $100 to $500, based on the platform and applicants.
  • Training Materials and Equipment: These costs include the cost of purchasing or developing training materials such as manuals, handouts, and videos. You can expect to spend around $200 to $500 for the training materials, such as manuals, handouts, and videos.
  • Trainer Fees: If you hire a professional trainer to conduct the training for your staff, you will need to pay for their services. If you hire a professional trainer, you can expect to pay around $1,000 to $5,000 for their services, depending on the length of the training program and their level of expertise.

So, consider all these hiring and training costs as they will require some considerable expenses from your total revenues.

(B) Payroll and Benefits

Payroll and Employee Benefits also affect the final cost of operating a frozen yogurt business. So, here are some of the expenses regarding Employee Payroll and benefits that you can keep in mind while deciding on the total cost.

  • Employee Salaries: F frozen yogurt employees can earn anywhere from minimum wage to $15 per hour or more, depending on their job duties. Assuming an average hourly rate of $10, and an average of 3 employees per shift working 8-hour shifts, the weekly payroll cost would be around $960 per week or $3,840 per month.
  • Payroll Taxes: Employers are responsible for paying payroll taxes, which include Social Security and Medicare taxes, federal and state unemployment taxes, and state and local income taxes. These taxes can add an additional 10-15% to the total payroll costs.
  • Other Benefits: Offering benefits such as health insurance, paid time off, and retirement plans can help attract and retain employees, but they can also add to the payroll cost. For example, offering health insurance could cost anywhere from $200 to $1,000 per employee per month, depending on the level of coverage.

(C) Uniforms and Supplies

In addition to payroll and benefits costs, there are other costs associated with employing staff in a frozen yogurt business, such as employee uniforms and other expenses.

Have a look at some of the potential costs you can consider while accounting for uniforms & supplies:

  • Employee Uniforms: Many frozen yogurt businesses require their employees to wear uniforms(especially for chefs), which can add to the cost of employing staff. The cost of your staff's uniforms will depend on the quality and even the number of employees. Suppose a cost of $25 per uniform, and you will need 2 uniforms per employee; the cost for 5 employees would be $250.
  • Employee Discounts: Some frozen yogurt businesses offer employees discounts on their products. While this can be a valuable perk for employees, it can also add to the cost of the frozen yogurt business founders. The cost is based on your number of employees and how much discount you are offering!
  • Employee Theft: Unfortunately, employee theft can be a problem(Not necessarily for all businesses). But, implementing proper security measures, such as cameras or cash handling procedures, can help reduce the risk of employee theft. The security systems can cost around $500 to $2000.

7. Contingency Fund

Contingency funds are crucial for any business and become helpful when it comes to uncertain situations. Businesses need to set aside some emergency funds while starting the business and even add some proportion of income every month.

A contingency fund can also help you take advantage of new opportunities or invest in new initiatives that can help grow your business. Read on to find out more about the importance of having a contingency fund and how much proportion of funds to set aside every month.

(A) Importance of Having a Contingency Fund

Having a contingency fund is important for any business, including the frozen yogurt biz. A contingency fund is a reserve of cash or other assets that a business can use in case of unexpected events. Having a contingency fund is essential for your frozen yogurt business as it acts as a safety net during tough times and even protects the business from unexpected expenses while ensuring long-term viability.

Here are some reasons why having a contingency fund is crucial for a frozen yogurt business:

  • Unexpected Business Expenses: Your frozen yogurt business may face unexpected expenses, such as equipment breakdowns, repairs, or maintenance costs. Having a contingency fund can help cover these expenses and avoid a financial crisis.
  • Off-Season: A frozen yogurt business may experience a slow season(In winter, maybe), which can impact its cash flow, and a contingency fund can help in those circumstances while redistricting the financial blow.
  • Economic Downtime If your frozen yogurt business gets affected by economic downturns, that may reduce sales and profits. A contingency fund can help the business survive during tough times.
  • Natural Disasters: Natural disasters, floods, hurricanes, or earthquakes might also impact your frozen yogurt business, and contingency funds can help cover the costs of repairs and help the business recover from the disaster.

(B) Recommended Percentage of Frozen Yogurt Biz Startup Costs to Set Aside

We recommend you set aside at least 10% to 20% of the total frozen yogurt business startup costs in your contingency fund. You can use this fund to pay for unexpected expenses or emergencies that may arise during the startup phase or even while operating your business in the long run.

By setting aside a contingency fund, you can better prepare for any unforeseen circumstances and avoid having to dip into your personal finances or take on additional debt to cover these expenses in your frozen yogurt business.

Quick Tip: It is important to factor this contingency fund into the initial budget and to regularly review and update the contingency plan to ensure it remains relevant and effective as the business evolves. It can include re-evaluating the amount set aside for the contingency fund or revising the plan to address new potential risks.

By taking a proactive approach to risk management and maintaining a contingency fund, the business owner can help ensure the long-term success and sustainability of the frozen yogurt business.


Starting a frozen yogurt business might be a fun business. But, it goes a lot in starting and operating a successful business.

But we hope our comprehensive guide will help you out in determining which things to consider before starting a frozen yogurt business, the effective steps to operate it, and the cost for each and everything.

The initial investment may end up falling between $80000 and $150,000 if you take into account all the variables, including location, supplier, hardware requirements, renovation, licenses, and marketing. Even though it is expensive, you can eventually benefit from owning and operating a prosperous frozen yogurt business if you make well-considered decisions and use clever marketing strategies.

Still, if you are looking for expert guidance on getting started or regarding the costs associated with it, reach out to the expert at OVVI. Our team will understand your requirements and get back to you!

Frequently Asked Questions(FAQs)

Yes, it is surely possible to make money with a frozen yogurt business. You just need to make the right decisions to manage the business efficiently and effectively. (This goes for every business, and frozen yogurt is not an exception.)

One advantage of the frozen yogurt biz is that the cost of ingredients is relatively low compared to the selpng price, leading to higher profit margins enabpng frozen yogurt businesses to make money.

On the other hand, frozen yogurts are quite trending right now and have become a popular dessert option, which is yet another way to attract customers and make money.

Here's a quick tip from our experts: It is important to conduct market research and develop a sopd business plan to ensure that the business is profitable. And with careful planning and management, a frozen yogurt business can be profitable.

The profit margin of a yogurt shop is quite significant due to the high markup on the products. Studies have shown that a typical 10-ounce serving of frozen yogurt has a 500% markup, which means that the selling price is five times the cost to produce it. It is even after subtracting the cost of cups and spoons.

So while it may seem unbelievable that yogurt can sell for more than 59 cents an ounce when it costs less than a dime to make, the markup allows yogurt shops to get some amazing profit margins.

The frozen yogurt business can be profitable if managed effectively. As you mentioned, one of the reasons for this profitability is the low core costs associated with the business.

According to industry reports, chain yogurt shops report an average annual sales volume of $750,000 - $800,000, assuming they have been open for at least 2 years. It suggests that there is significant revenue potential in the frozen yogurt industry, especially for established businesses with a loyal customer base.

To maximize profitability, it's important to focus on providing high-quality products and services that meet your customers' needs. And do manage your expenses effectively to minimize expenses and maximize profitability.

The target market for the frozen yogurt business is as follows:

  • People who love yogurt or frozen items. 
  • Health-conscious consumers who are looking for a healthier alternative to ice cream. 
  • Fitness enthusiasts who are looking for a post-workout treat. 
  • Millennials and younger generations who are interested in trying new food trends. 
  • Families with young children who are looking for a fun and interactive dessert experience. 
  • Vegans and vegetarians who are looking for plant-based dessert options

If you want to start a froyo business and are looking for some quick & helpful pointers to get started, then check out the below list.

You need to:

  • Research extensively and develop a detailed business plan. 
  • Determine your budget(stick to it) and secure funding from reliable sources. (If needed)
  • Choose the right location and lease or purchase a space. (Check out some tips in leasing or purchasing a space in the blog above).
  • Obtain all the necessary permits and licenses to start your Froyo business. 
  • Purchase high-quality equipment and supplies(As per your requirements)
  • Develop a stellar menu and decide on the pricing. 
  • Hire and train staff(To manage your operations and fulfill customer requirements). 
  • Market and promote your business with personalized and appealing strategies. 
  • Conduct ongoing research and make adjustments on the go.