While it is great to hear about successful entrepreneurs, the truth is that we can all learn something from anyone that is running a business.
I was reminded of this a couple of weeks ago when I traveled up north for a long weekend on Lake Winnipesaukee in New Hampshire. While sitting on the beach I saw all of the kids suddenly rush to the docks with their parents not too far behind. I quickly discovered that they were all chasing the ice cream boat. It was a very small boat with a large ice chest in the middle and a huge “Ice Cream” flag.
The driver of the boat couldn’t have been more than 15 years old. He had several dozen ice cream varieties displayed on a board. Regular selections were $3 and if you wanted a “novelty” ice cream such as SpongeBob or Spider-Man, it cost $4. When he ran out of a particular selection he placed a piece of black electrical tape over it on his board.
He was raking in the money. There wasn’t a single kid on the beach that didn’t have an ice cream in hand as he putted away from the docks. He returned every day, and it resulted in the same outcome each time. He put an ice cream in the hands of every kid, as well as most of the parents on the beach. I later learned that he has a route that he follows around the lake, refilling his inventory multiple times daily.
Every entrepreneur can learn something by breaking down his simple, yet brilliant business model. There are four main reasons why his ice cream boat business is a booming success.
1. It provides value and convenience. On a hot summer day, who doesn’t want an ice cream? Instead of having to leave the beach and go back up to the cottage to get a frozen treat, the boat brings it right to you. The fact that every single kid on the beach was eating ice cream proves that the parents felt his service provided value and convenience.
Meanwhile, what parent is going to let their kid be the only one not eating ice cream? Evidently none, because every visit I witnessed resulted in the teen selling one to every single child and a good majority of the adults as well.
2. No price gouging and taking advantage of the consumer. Ever go to a sporting event and complain about an $11 draft beer or $8 bottle of water? Sure, they have a high overhead, but they take full advantage of price gouging and nail the consumer for every dollar they can.
The ice cream kid has his product priced right. He keeps it affordable even though he could probably fetch much more than $3 for a Nutty Buddy on a hot summer day.
3. Nice profit margin and low overhead. I have no idea where he is buying his inventory from, but it is safe to say that he has a nice four- to five-time markup on his ice cream. Aside from his inventory, he has to buy dry ice and gas for the boat. These are small expenses, leaving a very nice profit margin.
4. A unique market with zero competition. Guess how many other ice cream boats I saw on the lake? Zero. For the time being he is the only game in town and has no competition, but with success comes imitation, so I wouldn’t be surprised to see multiple ice cream boats buzzing around the lake next summer. He saw an opportunity and jumped on it.
Simple ideas often turn into successful businesses, and we can all learn something from the ice cream boat kid. If you are currently struggling, step back and evaluate your business model. If you are a budding entrepreneur, make sure you have a viable product or service with a demand and a solid business plan to accomplish your business goals.