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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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Opa! Greek Frozen Yogurt

Greek Yogurt is all the rage. It is thicker and creamier than regular yogurt and has better health benefits…but what is Greek Yogurt?

Greek Yogurt, which is also called strained yogurt, is yogurt that has been strained extensively to remove much of the liquid whey, lactose, and sugar. This creates the thick consistency and strong flavor.

US News & World Report reported on the health benefits of Greek Yogurt in a recent article.

Nanci’s Frozen Yogurt is excited to introduce a new Greek Frozen Yogurt recipe. We don’t feel you can really capture the essence of Greek Yogurt by simply adding a flavoring, so we’ve created a recipe that gives you the best and most authentic Greek Frozen Yogurt on the market.

Contact us for the details at info@nancis.com or 1-800-788-0808.

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Two Magic Numbers for Frozen Yogurt

The correct temperature setting on your soft-serve machine is critical for making a good frozen yogurt product and for extending the life of your mix. Every frozen yogurt shop owner should have a good food thermometer like this one: https://frocup.com/product/digital-thermometer/

Use a thermometer to check the temperature in the hopper (the reservoir where you pour the mix) and the temperature of the product when you dispense it from the machine.

Magic Number #1

Hopper Temperature = around 35 degrees F (between 34 to 39 degrees)

The hopper temperature is critical for keeping the product fresh The temperature in the hopper should be under 40 degrees F. Any warmer and the product can go bad. It should also be warmer than 32 degrees or else the product in the hopper will freeze. If you see the product freezing in the hopper, just raise the temperature a degree or two.

Magic Number #2

Finished Product Temperature = 17-19 degrees F

The temperature of the product when it is dispensed should be between 17-19 degrees F. This would also be the temperature of the freezing cylinder. Because Nanci’s Frozen Yogurt use pure fruit sugar, the temperature for our mixes needs to be a little lower than for cane sugar mixes. A sugar mix might come out stiff at 22 degrees, but Nanci’s mixes are better at around 18 degrees. This can easily be adjusted on your machine – just consult your manual or contact the manufacturer if you need help.

If your product ever comes out wet, soupy, or melted then you need to lower the temperature. Frozen yogurt should come out stiff, creamy, and frozen (not wet). It’s amazing what a difference a couple of degrees makes.

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Frozen Yogurt Toppings

Toppings are a critical part of frozen yogurt shop operations. They play a big role in customer satisfaction, but if not managed closely you an actually lose money on your toppings. You should try to be below 30 cents per ounce on your average toppings cost. If you can get down towards 23-25 cents per ounce you are doing great.

Be careful of expensive toppings that are very light, like whipped cream. Here are a couple of tricks to manage the more expensive toppings.:

  1. Put the most expensive toppings the farthest away from the last soft-serve machine so customers fill their cup on the less expensive toppings.
  2. Put the most expensive toppings at the back of the toppings bar so they are a little harder to reach.
  3. Use smaller serving spoons for the more expensive toppings.

Also, with fresh toppings, such as fruits, you should rotate the toppings to ensure that you always have fresh product in the toppings bar. If you have any problem with fruit flies contact us to purchase Fruit Fly Strips that will take care of the problem.

Here are suggested list of toppings. You can find recommendations for toppings supplies on our Equipment & Supplies page.

Dry Toppings

  • almonds
  • butterfinger
  • cap’n crunch
  • carob chips
  • cocoa pebbles
  • coconut flakes
  • fruity pebbles
  • graham cracker crumbs
  • gummi bears
  • heath toffee
  • jelly bellies
  • kit kat
  • m&m’s
  • peanut m&m’s
  • mini caramel cups
  • chocolate chips
  • mini peanut butter cups
  • nestlé crunch
  • non-fat granola
  • old fashioned granola
  • oreo cookies
  • peanuts
  • pecans
  • peanut butter chips
  • reese’s peanut butter cups
  • snow caps
  • chocolate sprinkles
  • rainbow sprinkles
  • thin mint cookies
  • twix
  • walnuts
  • yogurt chips

Fresh Toppings

  • strawberries
  • raspberries
  • blackberries
  • blueberries
  • peaches
  • mangos
  • kiwi
  • pineapple
  • bananas
  • cinnamon apples
  • mochi
  • cookie dough
  • fudge brownies
  • fat-free brownies
  • cheesecake bits

Hot Toppings

  • hot fudge
  • caramel sauce
  • non fat / no sugar-added fudge

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Review of Nanci’s Frozen Yogurt

Check out this review of our frozen yogurt mixes by The Frozen Yogurt Review website. This is a neutral third party that wrote this review — we have no affiliation or connection to them.

You can read the full review on their website at: http://www.thefrozenyogurtreview.com/2014/03/12/review-nancis-frozen-yogurt-mix/

Review of Nanci’s Frozen Yogurt by TheFrozenYogurtReview.com

“Whenever I go into a frozen yogurt store I am curious to see what type of frozen yogurt mix they use.  Last month I had a delicious mix of chocolate and low fat vanilla. The yogurt tasted perfect! It was creamy, cold, and had a delicious clean and rich flavor.  It was not too sweet and it also did not leave a poor aftertaste. I asked the cashier what product they used and she told me Nanci’s. This young lady was very helpful and gave me a little bit of background on Nanci’s frozen yogurt mix. She shared that the customers have always complimented on the stores flavors and that she has not heard of any of their customers being unhappy with the frozen yogurt product.

“I believed it. My cup of fro-yo was delicious. The chocolate was dreamy and the vanilla was velvety! I wanted to share my experience with you guys because the one thing that left me shocked is that Nanci’s frozen yogurt is a dry powder mix!! Dry powder mix? Yes it is a powder base and all you need to do is add water!!! I thought this was amazing that a powder base mix could taste so creamy, milky, and fluffy!

“After talking to the store employees about the frozen yogurt mix they used I went home and did a little research and contacted Nanci’s. I emailed the owner and he got back to me right away which showed me professionalism and dedication to his company. He was more than happy to give me information on his frozen yogurt mix so that I could share it with The Frozen Yogurt Review readers.”

 

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New “Just Add Water” Mixes

Many powder frozen yogurt mixes require milk and/or fresh yogurt in order to make a smooth, creamy frozen yogurt product. We feel that when you have to add milk, you lose many of the advantages of the powder — like cost savings and not needed to refrigerate the mix.

For the last 6 months we’ve been working create a just-add-water mix to rule them all. We had two goals in mind when we started this process: 1) eliminate the need for customers to add milk, and 2) create mixes that stay smooth and creamy even after several days in the machine.

We feel that we’ve achieved both our goals — while still keeping the same great taste our customers love!

We’ve made upgrades to the following products:

  • Vanilla Frozen Yogurt Base Mix
  • Chocolate Frozen Yogurt Base Mix
  • Plain Tart Frozen Yogurt Base Mix
  • Stevia Vanilla Frozen Yogurt Base Mix (no sugar added)
  • Stevia Chocolate Frozen Yogurt Base Mix (no sugar added)

Read below for more details on the “Just Add Water” Mix and our new High-Yield Stevia Mixes.

New “Just Add Water” Mix

The most exciting part about Nanci’s new mixes is that you only need to add water! The base mixes already include milk, yogurt powder, probiotics and all the ingredients needed to make creamy frozen yogurt.

We still recommend adding air into the mix using the machine’s air tubes. Click here to read more about adding air.

Many shops have previously been adding milk to the base mix. In our testing, adding milk to the new base mixes can actually make them too thick. Plus, just adding water will result in significant cost and operational savings. Most importantly, they taste every bit as good as our original mixes made with milk.

New High-Yield Stevia Mix

Our new Stevia-sweetened mixes, both Vanilla and Chocolate, are also now High-Yield mixes. So instead of using 2 gallons (8 quarts/7.5 liters), you should use 2.5 gallons (10 quarts/9.5 liters). The final yield per bag is 3 gallons of mix. You may also need to add an additional 1-2 ounces of flavoring with the higher yield.

If you don’t use the increased amount of water, you may find that the mix is too thick and won’t feed into your machine.

Also, for the Stevia Mixes be sure to only add water and not milk. This is important for the consistency and also to keep the total sugar count low. Milk has naturally occurring sugar that will increase the amount of sugar per serving.

The previous Stevia mixes had to be mixed with warm water, but the new mixes can be added to any temperature water and they will dissolve fine.

Cost Savings with New Mixes

By only needing water, our mixes can provide you a significant cost savings. Here is an example scenario for a typical store on the East Coast, USA.

Previous Base Mix (with half milk and half water)
Cost per Gallon of Mix: $9.80
Cost per Ounce: $0.068

New Just Add Water Base Mix
Cost per Gallon of Mix: $8.40
Cost per Ounce: $0.058

For the Stevia Mixes there are even greater savings. Here is another example comparing the previous Stevia Vanilla and the new Stevia Vanilla (both made with water):

Previous Stevia Vanilla
Cost per Gallon of Mix: $9.20
Cost per Ounce: $0.064

New High-Yield Stevia Vanilla
Cost per Gallon of Mix: $7.67
Cost per Ounce$0.051

For questions about our new mixes email us at info@nancis.com or call 1-800-788-0808.

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November Flavor Deals

Flavor Deal of the Month One of the things that makes Nanci’s unique is our wide variety of flavors. We have more than 100 flavors and 250 possible flavor combinations…have you tried them all?

For the rest of November you can get 25% off any of these three great flavors:
  • Concord Grape
  • Toasted Coconut
  • Gingerbread

Available in Gallon or Half Gallon sizes. While supplies last.