Category: Frozen Yogurt Business

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Considering Opening a Frozen Yogurt Shop?

Frozen yogurt shops are one of the hottest retail concepts around. It is a fun way to meet a lot of people and become a presence in your local community.  Nanci’s Frozen Yogurt can help refine your concept with low investment cost and high margins. No need to pay high franchise fees. Give yourself the best chance at success by running the numbers and understanding some business basics first. Check out the profit calculator for a customized analysis for your concept.

There are several key drivers to making a profit with a frozen yogurt store. It is important to emphasize profit versus sales. You may have great margins but if your customer base is too small, your sales won’t be enough to drive those high margins to success and profit. You should think of these profit drivers as dials or levers – you can adjust the dials various ways to maximize profit.

 

Key Profit Drivers

Sales Revenue

  • Volume (the number of customers per day and the number of ounces of yogurt sold)
  • Price per ounce
  • Sales of additional items (non-yogurt items)

Costs

  • Labor costs
  • Rent & utilities
  • Product costs (don’t forget to include the cost of free samples)
  • Supplies (cups, spoons, napkins, etc.)
  • Store and equipment maintenance

 

Turning the Dials

INCREASE SALES REVENUE

  • Get more customers. Typically this will mean more costs (like advertising and marketing), but you can also be creative and find traffic generating ideas with no or little cost. Another way to drive more traffic is to improve your product by offering new or unique flavors and by creating a unique product compared to your competitors. Nanci’s products are ideally suited for this – contact us to discuss further.
  • Increase the price. You can increase price and often not affect sales volume, but this is tricky because there is an elusive price Tipping Point. When you cross it your volume will actually decrease because either customers will stop coming or they will buy less. This Tipping Point is unique to every area and every store. One approach is to keep your base price per ounce high but then use discounts and promotions to give customers a lower effective price. Remember that it is much easier to lower your price than it is to raise it.

 

LOWER COSTS

 

When evaluating costs there are Fixed Costs and Variable Costs. Fixed Costs are costs that are the same regardless of how many customers you serve. For example, your rent cost will be the same whether you serve 10 customers or 300.  Rent is a fixed cost. On the other hand, cups are a variable cost because you only incur costs for each customer.

  • One of the largest single costs for your store will be rent. There are a couple strategies to take when deciding on a location. For the purposes of simplicity, we’ll break it down into two strategies at opposite ends of the spectrum, even though in reality there are various strategies in between these two.

High Rent / High Volume. If the location is high rent it needs to also be a high traffic area to drive your sales volume. High rent areas may also allow you to charge more per ounce. In order for this strategy to work, you must have a large number of customers.

Low Rent / Low Volume / Low Cost. If the location is a very low rent property that means it’s probably off the beaten path and doesn’t have as much natural traffic. Generally, this would result in less traffic and lower sales volume, although there are stores that are in horrible locations and still gain a “cult following” and have lots of traffic. A low rent location may also mean you need to charge less per ounce, lowering your sales revenue. In order for this strategy to work you have to keep your costs extremely low and find ways to generate traffic in spite of your location.

  • Labor will most likely be your single highest cost. The big question here is whether or not you can run your store with just one employee. Our profit model shows that unless your store has strong volume (150 customers per day or more), you could lose money having two employees staff your shop. Of Course there are other factors to consider, like employee safety and or employee fraud.
  • Product Costs.This is also a tricky area, because your entire concept is based on your frozen yogurt mix. If your product isn’t good, you won’t succeed. But at the same time, you want to keep those profit margins robust. Nanci’s solves this issue with mixes that are high-quality and available to you at a very competitive wholesale price.
  • Most likely, the customers will demand free samples, but at the very least you should understand how many free samples you are giving away and how it is affecting your costs. One option is to have the sample cups behind the counter so the customer has to request one from an employee. Studies show that when shoppers make eye contact with a store employee they are less likely to steal something – I’d like to think this principal holds true for abusing the free samples as well.

The general belief in the business world, is that you need two or three food retail shops to be able to do it full-time and quit your regular full-time job and work for yourself. Depending on your available capital, you may want to consider opening 2 or 3 shops at the same time. This will also give you immediate brand relevance and can often protect your area from incoming competitors.  Visit FroCup.com for information on machines to get started.  Discounts are available if you order more than one machine at the same time.  FroCup and Nanci’s can help you outfit your new store with all the equipment you need.

Feel free to call 480-834-4290 or email info@nancis.com with any questions.

 

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Frozen Yogurt Training Videos

We’re excited to introduce three new training videos available on our website. We’ve kept them short and sweet, but packed with useful demonstrations.

The videos include:

  • How to Prepare Nanci’s Mix
  • How to Add Air into Mix
  • Soft-Serve Machine Overview

You can view the videos at www.nancis.com/training

Here’s our new Intro to Nanci’s video as a teaser…

 

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Improving Your Customer Service

Customer Service is the root of many businesses, particularly the Frozen Yogurt industry. For most people, going out to grab a cup of froyo isn’t just about the smooth and creamy treat melting on your tongue and tickling your taste buds.  It’s about the experience.  Customer Service is not a transaction — it is the relationship with your customer. It’s making that frozen desert into a little cup of personal bliss for each customer.

Important basics to remember

-SMILE! Even the friendliest person in the world might come across as indifferent or fake if that is what their face says. Remember, the amount of communication between two people is predominantly non-verbal.

-BE ATTENTIVE.  No one likes to be ignored. Greet customers as they enter, and bid them farewell as they leave. On occasion your shop might be very busy — perhaps a line out the door and around the corner (good for you!) — but remember to keep checking in with the customers as they come in and as they wait. It does not matter if they are at the front of the line or just stepping into the back, their business matters.

-BE PROFESSIONAL. Hop off the counters, and wash your hands often. Quit touching your face and looking at your feet. Be confident in how you carry yourself in the workplace and show respect even when disrespected (hey it happens). Keep composed and be ready to work!

-MAKE SUGGESTIONS, GET CREATIVE. Most frozen yogurt shops have local favorites or signature flavors.  These are perfect things to suggest to new customers or returning customers wanting to try something new. Don’t be afraid to experiment! Finding weird and new ways to combine flavors and toppings reinvents the experience for customers and brings back that first-time feeling that is both exciting and mysterious.

-KEEP BUSY. I’m sure everyone is familiar with the “if you can lean, you can clean” phrase seen often in the food industry work place. As an employee, often times work can drag on, which can begin to reflect in your mood and in turn reflect out towards others. Staying on top of cleaning and regular store maintenance in between gaps in customers will not only improve business but also helps pass the time. Take a little extra time cleaning the tables or floors. Or prepare for the rush hour.

-DEVELOP RELATIONSHIPS. There is nothing quite like walking into a neighborhood shop and being greeted by a familiar face and even by name. This sense of familiarity and friendliness creates a community feel to your shop. People like to feel that they are making a purchase from people, rather than a corporation or a business. You can also develop relationships with neighboring businesses and their employees. Not only can they be a great marketing resource for you, but they can be great customers as well.

Most importantly, always remember that the customer comes first. The customer is the point and purpose of a business. Make coming to your store the highlight of your customer’s day.

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Should you buy a frozen yogurt franchise?

Many entrepreneurs who want to start a frozen yogurt business start by looking at franchise opportunities. People ask us all the time, should I buy a franchise or do it on my own?

We feel that in most cases entrepreneurs are better off doing their own concepts and here’s why.

There are three main reasons to buy a franchise:
1. To buy into a brand that has strong brand equity.

Our thoughts: there are only a couple of frozen yogurt brands with national name recognition, but it is very expensive to buy a franchise and they aren’t even available in most markets. Internationally, there really aren’t any brand names.

Conclusion: you’re better off building your own brand.

2. A franchise provides step-by-step guidelines on how to start and run your business.

Our thoughts: this can make sense if your business is extremely complex or difficult to start…but frozen yogurt shops just aren’t that complicated. With thoughtful research and help from suppliers you can easily figure it out on your own.

Conclusion: you’re better off creating your own concept.

3. Gain access to proprietary products that are only available if you own that franchise.

Our thoughts: with products like Nanci’s Frozen Yogurt available, who needs a franchise product?!? In most cases, you’ll pay a premium for product that the franchisor will sell you…and it may not even be as good as other products on the market.

Conclusion: it’s not worth paying the franchise premium for your mixes. Contact us at Nanci’s to talk more about our mixes.

So unless you feel very strongly about one of these three reasons, you’re better off starting your own yogurt shop with your own brand. This gives you complete control of running the business and puts all the profits in your pocket instead of the franchisor. Read our blog article about the keys to starting your own frozen yogurt business.

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How to Make a Profit with a Frozen Yogurt Business

Frozen yogurt shops are one of the hottest retail concepts around. Many people see how simple the concept is, the low investment cost, and the high margins and think it is a no brainer. They expect to open their shop and start turning an amazing profit right away. But it’s not quite that simple. Check out the profit calculator on our website for a customized analysis for your concept.

There are several key drivers to making a profit with a frozen yogurt store. It is important to emphasize profit versus sales. You may have lots of sales, but if your costs are too high you won’t make any profit. You should think of these profit drivers as dials or levers – you can adjust the dials various ways to maximize profit.

Key Profit Drivers

Sales Revenue
  • Volume – the number of customers per day and the number of ounces of yogurt sold
  • Price per ounce
  • Sales of additional items (non yogurt items)
Costs
  • Labor costs
  • Rent & utilities
  • Product costs (yogurt mix, flavorings, toppings, etc.) – don’t forget to include the cost of free samples
  • Supplies (cups, spoons, napkins, etc.)
  • Store and equipment maintenance

 

Turning the Dials

Increase Sales Revenue

  • Get more customers. Typically this will mean more costs (like advertising and marketing), but it you can also be creative and find traffic generating ideas with no or little cost. Another way to drive more traffic is to improve your product by offering new or unique flavors and by creating a unique product compared to your competitors. Nanci’s mixes and flavors are ideally suited for this – contact us to discuss further.TippingPointCORRECTED
  • Increase the price. You can increase price and often not affect sales volume, but this is tricky because thereis an elusive price Tipping Point. When you cross it your volume will actually decrease because either customers will stop coming or they will buy less. This Tipping Point is unique to every area and every store. One approach is to keep your base price per ounce high but then use discounts and promotions to give customers a lower effective price. Remember that it is much easier to lower your price than it is to raise it.

Lower Costs

When evaluating costs there are Fixed Costs and Variable Costs. Fixed Costs are costs that are the same regardless of how many customers you serve. For example, your rent cost will be the same whether you serve 10 customers or 300.  Rent is a fixed cost. On the other hand, cups are a variable cost because you only incur costs for each customer.

  • Rent. One of the largest single costs for your store will be rent. There are a couple strategies to take when deciding on a location. For the purposes of simplicity, we’ll break it down into two strategies at opposite ends of the spectrum, even though in reality there are various strategies in between these two.

High Rent/High Volume. If the location is high rent it needs to also be a high traffic area to drive your sales volume. High rent areas may also allow you to charge more per ounce. In order for this strategy to work, you must have a large number of customers.

Low Rent/Low Volume/Low Cost. If the location is a very low rent property that means it’s probably off the beaten path and doesn’t have as much natural traffic. Generally, this would result in less traffic and lower sales volume, although there are stores that are in horrible locations and still gain a “cult following” and have lots of traffic. A low rent location may also mean you need to charge less per ounce, lowering your sales revenue. In order for this strategy to work you have to keep your costs extremely low and find ways to generate traffic in spite of your location.

  • Labor. Labor will most likely be your single highest cost. The big question here is whether or not you can run your store with just one employee. Our profit model shows that unless your store has strong volume (150 customers per day or more), you could lose money having two employees staff your shop. Of Course there are other factors to consider, like employee safety and or employee fraud.
  • Product Costs. this is also a tricky area, because your entire concept is based on your frozen yogurt mix. If you mix isn’t good, you won’t succeed. But at the same time, you shouldn’t throw money away on an overpriced product. Nanci’s solves this issue with mixes that are high-quality, premium mixes, but at a very competitive price.
  • Samples. most likely, the customers will demand free samples, but at the very least you should understand how many free samples you are giving away and how it is affecting your costs. One option is to have the sample cups behind the counter so the customer has to request one from an employee. Studies show that when shoppers make eye contact with a store employee they are less likely to steal something – I’d like to think this principal holds true for abusing the free samples as well.

The general belief in the business world, is that you don’t really make a substantial profit on food retail shops until you own three or more. Depending on your available capital, you may want to consider opening 2 or 3 shops at the same time. This will also give you immediate brand relevance and can often protect your area from incoming competitors.

Don’t forget to check out the profit calculator and feel free to call 1-800-788-0808 or email info@nancis.com with any questions.

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Increase Sales Part 3: Marketing Tips

Drive Traffic to Your Frozen Yogurt Store with Marketing

“You can have the best product or service in the world, but if people don’t buy – it’s worthless.” Noel Peebles, Marketing Expert

 

I would add to this quote that if people don’t know about it – it’s worthless.

With the increasing competition in the frozen yogurt industry and stores popping up on every corner, you have to make consumers aware of your shop. Each community is different and some marketing tactics will work in some areas and others will not. The key is to try different things and find what works for you. And remember that what worked yesterday, might not work tomorrow.

The only limit to your marketing is your own creativity. Some ideas can be expensive, but there are plenty that are not.

Here are some ideas we’ve gathered from our customers.

  • Cross marketing with local businesses. Network with gyms and other retails to place coupons or signs in their shop. Host theme nights. Create nights for special interest groups – like book clubs, girls night out, religious study groups, singles groups, etc.
  • School fundraisers with your local elementary school.
  • Coupon mailers.
  • Daily deal websites. Living Social, Groupon, AmazonLocal, or Google Deals.
  • Create a flavor contest. Have people submit their ideas for a flavor via Facebook and in store. Pick three finalists and put their flavors in your machines for one week – with their photo and name above the machine with their flavor. Keep track of how many ounces of each flavor is consumed to determine the winner. This will create a buzz and cause the finalist to get friends and family to come eat their flavor.
  • Group contests. Similar to the Create a Flavor contest above, but have groups compete against each other. This can be especially effective with sororities. The winning can get a donation to the charity of their choice.
  • Street marketing. A sign holder or a person in a frozen yogurt costume can draw attention to your shop.
  • Sponsor or advertise at local races. Just about every community has 5K, 10K, triathlons, and other races throughout the year. There are many options for advertising, including dropping coupons into the bag each racer gets.
  • Social marketing. Leverage Facebook, Instagram, and other social media sites. There are many creative contests and games you can do combine social media with in-store interaction.
  • Online marketing. Create a free Google Places account, as well as other online directory listings. Google AdWords or Facebook advertising can also be effective.
  • Loyalty programs. Tools like Perka can help you put together customer loyalty programs and punch card systems.

 

We’d love to hear your ideas. Email us at info@nancis.com

 

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Increase Sales Part 2: Improve Customer Experience

Improve the In-Store Experience for Your Customers

Kids Activity Area

Most frozen yogurt stores don’t offer a great place for families to relax and enjoy their frozen yogurt. A kids area is a great way to entertain children, so parents can enjoy their time in your shop. Parents will be much more likely to visit your store, if they know their children will be entertained. Even if your shop is small, you can use a corner for some simple kids activities.

A few ideas for a kids area include:
    • Paper and washable crayons/markers
    • TV with kids movies on a loop
    • Small toys or games
    • Simple crafts
    • Video game system – like a Nintendo Wii

Live Music

Ask local musicians to play music on weekends or evenings. Many musicians will play for free or just for tips. If you don’t have room inside your shop, maybe they could set up on your patio and you could put out additional chairs.

Games

Have easy-to-play group games available for customers to use and return. Ideas include trivia games (i.e. Wits & Wagers), Jenga, Catch Phrase, etc.

Do you have other ideas you’d like to share? Email us at info@nancis.com

CLICK HERE TO READ PART 3: MARKETING TIPS

 

 

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Increase Sales Part 1: Expand Menu

Expand Your Menu Beyond Frozen Yogurt

A great way to increase sales, gain new customers, and supplement your frozen yogurt sales is to add new menu items. If you are competing with a large chain, an expanded menu can be extremely effective, because the big chains are restricted on what changes they can make.

There are two different types of menu items you can offer:
  1. Self-service menu items
  2. Full-service menu items.

Self-Service Menu Items

For self-serve frozen yogurt stores, the consistency of the self-serve concept may be very important – both for the customer experience and for in-store operational processes and employees. Here several ideas for self-serve menu items:

  • Belgian waffles. Using a rotating Belgian waffle maker, customers can make their own waffles. This concept is commonly used in hotels and works extremely well. You can charge by the waffle or even by the ounce.
  • Pre-packaged salads
  • Soups
  • Pre-packaged sandwiches
  • Cookies or other pastries
  • Oatmeal
  • Coffee

Full-Service Menu Items

  • Smoothies
  • Sandwiches made to order
  • Full breakfast. Items may include eggs, omelets, breakfast burritos, hash browns, etc.
  • Crepes

Before making any menu changes, you should check your lease agreement to make sure you aren’t prohibited from offering additional food items.

Do you have other ideas you’d like to share? Email them to us at info@nancis.com

CLICK HERE TO READ PART 2: IMPROVE CUSTOMER SERVICE

 

 

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Benefits of dry powder frozen yogurt mix

Nanci’s has manufactured liquid yogurt mix in the past and now manufactures and sells dry frozen yogurt mix, so we fully understand the pluses and minuses to each. In our local market (Phoenix, Arizona) we used to offer a liquid frozen yogurt mix that was a terrific product, but about 27 years ago, we developed our first dry mix and since then we have added to that product line and have decided that dry frozen yogurt mix is the way to go – so our dry mixes have become our signature products.

Here are some of the reasons we are believers in dry mix:

  • With Nanci’s Frozen Yogurt dry mixes you don’t compromise taste, texture, or quality compared to liquid. We have done many blind taste tests between liquid and dry and no one can tell them apart.
  • Nanci’s dry mix has great probiotics you want in frozen yogurt. We have a unique method of micro-encapsulation that protects the good bacteria in the dry form. When you eat the frozen yogurt the probiotics come to life and deliver all the great health benefits yogurt is known for.
  • Less expensive than liquid mix. In addition to the price of the mix, liquid mix is expensive to store and ship. Nanci’s dry mix is usually at least $1 per gallon less expensive than comparable liquid mix plus the savings on storage and shipping.
  • Easy and inexpensive to store – you don’t need a ton of refrigerated space. Liquid mix actually comes frozen solid and it takes 1-3 days to thaw before you can pour it into your machine. This can cause logistical problems when you are out of product and requires a large amount of expensive freezer and refrigerator space.
  • Easy to use – you can use it right when you need it. Our dry mix is very easy to mix up – you just stir it into water or milk and then pour into your machine. It literally takes 3 minutes.
  • You can customize it if you want. Dry mix is very flexible. You can adjust the amount of liquid to affect the creaminess/iciness and you can mix and match flavors with the base mix.
  • Liquid mixes are pre-flavored, so storing in inventory a good variety of mixes can be prohibitive. We’ve solved that problem with our 100 flavor concentrates that you can combine to create more than 200 amazing flavors.
  • With dry mix you’re in control. You can control the level of flavor the overall texture from extra creamy to cold and icy. With liquid mix the factory is in control, not you.

If you want to talk more about the dry frozen yogurt mix versus liquid frozen yogurt mix give us a call at 1-800-788-0808 or email us at info@nancis.com. You can also get more info on our mixes on our Frozen Yogurt Mix webpage.

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FrozenYogurtParts.com Guest Blog

Frozen Yogurt Parts Logo

Happy to have a guest blog article from our friends at FrozenYogurtParts.com today…

“January is the best time to replace your soft-serve machine’s wearable parts for the new year.  Each machine runs best with new blades, o-rings and lube.  Preventative maintenance includes not only regular cleaning of your machine, but also proper lubrication and checking for any wearable parts that may have seen better days.

Now is a good time to remove the side panels and visually inspect for leaks, debris or loose connections.  You should also take the temperature of the hopper and freezing cylinder on standby and auto modes and compare that to what the machine is saying to check that it is still calibrated correctly.  Ensuring that your machine is running properly and that it is consistently producing a quality product throughout the year will be essential to your customer loyalty and profit margin at the end of the year.

Cleaning your machine is an important aspect of maintenance to help the longevity of your machine. Get in the habit of cleaning your machine at least once a week.  This process includes running Stera Sheen sanitizer through while the machine is on wash mode, effectively killing any harmful bacteria.  If your machine goes weeks without being thoroughly and properly cleaned bad bacteria may build up and could lead to spoiled product.  The process of cleaning the machine is simple and can be done by any properly trained employee.

Lubrication is another key element to keep your machine running reliably.  The main component of the machine that requires lube is the back end of the shaft that sits deep inside the freezing cylinder.  Pull the shaft out and pull off the rubber seal that fits on the end of it.  Lubricate between the seal and the shaft.  O-rings should also be regularly lubed after each cleaning.  The best values on Stera Sheen, Petro Gel and Haynes lube are found at FrozenYogurtParts.com.  These lubes work great for frozen beverage and other types of machines as well.

There are various important machine parts that wear down over time.  The scraper blades, for example, which attach to the shaft on the inside of the freezing cylinder wear down and don’t scrape the edge of the cylinder with the exactness and precision that they once did.  This leads to the freezing of product on the inside surface of the cylinder and can lower the overall quality of your product.  These scraper blades are different with each individual machine make and model so be sure the blade is rated for your model of machine before buying replacements.  FrozenYogurtParts.com makes it easy by packaging all the wearable parts together in an easy to order kit for each machine model.  Best practice is to replace the blades every 3 months.

Replacing parts before they crack will save you from costly damage to other components of the machine and keep you from having a machine down during peak season.  Understanding your machine is important to maintaining it over time and creating your finished soft-serve or frozen yogurt masterpiece.”

Contact info@FrozenYogurtParts.com to see if they can save you money on replacement parts today!  Use coupon code NANCIS5 for a first-order discount at FrozenYogurtParts.com

View Taylor and Stoelting Machine Service Manuals and Parts Diagrams

FrozenYogurtParts.com also lists service manuals and parts diagrams for the most popular ice cream machines made by Taylor, Stoelting, Donper, Spaceman, Electro Freeze, and Aurel – Pasmo. From there you can also buy parts to replace the wearables on your ice cream machine.