When I opened our first ice cream shop in 2019, I could get a sense of the business by being in the store. I could see the line, watch products move, and notice when we had too many—or too few—employees working.
As we grew to three retail locations and a production facility, instinct was no longer enough. I needed the numbers to tell me what was happening, especially when I could not be in every shop.
Most modern POS, payroll, and banking systems already contain much of the information an owner needs. The job is to create a routine for reviewing it. Some of these five areas should be monitored daily; others need a consistent weekly or monthly review.
1. Daily sales dollars
Sales are the financial pulse of the shop. As an owner, you should know how many dollars the business brought in yesterday, what it is selling today, and whether that performance makes sense for the season.
In this article, sales volume means the dollar amount of net sales after discounts and refunds, using the same definition every time. The purpose is to understand how much revenue came into the shop and whether it was enough to support the day's operating costs.
Ice cream is a seasonal and weather-sensitive business. Comparing July sales with January sales will not tell you much. Use historical sales for the same month, week, day of the week, and operating hours to establish what normal performance should look like.
Then ask why the shop is above or below that expectation. Was the weather unusually hot, cold, or rainy? Was there a local event? Did operating hours change? Did a new product increase sales? The goal is to understand what moved the number and whether the change is likely to continue.
Most modern POS systems make real-time sales data readily available. If you are not reviewing it today, start now. A week or month is too long to wait before discovering that sales have changed.
2. Labor cost as a percentage of sales
Once you understand sales, compare them with the labor required to produce those sales.
For this operating review, the basic calculation is:
Labor percentage = employee wages ÷ net sales
In our operation, I use a target below 20% as an important benchmark. Labor in this calculation means wages paid to employees; it excludes employer payroll taxes, benefits, owner compensation, and other labor burden. That target reflects our operation. Another shop should establish its own consistent definition and target based on its wages, service model, menu, and production method.
If labor percentage rises, sales may not be keeping pace with the scheduled staffing level. That reduces the margin left to pay food cost, rent, utilities, debt, and other expenses.
For a simple example, if a shop produces $200 in sales but pays $300 in employee wages that day, labor percentage is 150%. Employee wages alone exceeded sales by $100 before accounting for food cost, rent, utilities, or any other expense. The shop operated at a loss for the day.
When sales and labor information are connected, this percentage can be monitored during the day. That gives the owner or manager time to make responsible staffing decisions based on actual demand. A rainy afternoon, slower evening, or unexpected sales increase may require a different plan than the original schedule.
Adjusting labor does not mean understaffing the shop or creating unpaid work. Maintain safe coverage, service standards, required tasks, and accurate records of all employee time.
3. Food cost
Product pricing may remain fixed for a season while ingredient and supplier costs continue to change. If you do not monitor those costs, the margin you expected when setting the menu price can disappear before you realize it.
Begin with the major costs that have the greatest effect on your products. For many shops, ice cream or ice cream mix will be one of the largest. Cones, cups, toppings, packaging, dairy, and mix-ins may also require attention.
Consider a hypothetical example. Suppose your pricing model assumes a 20% profit margin, a 30% food cost, and an ice cream mix cost of $25 per gallon. If that mix price rises to $40, the cost increased by 60%. If the menu price and portions remain unchanged, that increase may consume much or all of the profit margin built into the price.
Do not reprice the menu because of one invoice. Monitor major vendor prices and recalculate representative menu items periodically. That gives you time to determine whether a change is sustained and adjust pricing, purchasing, or product mix before profitability declines.
4. Cash flow and cash availability
A profitable shop can still encounter trouble if the cash needed for payroll, rent, taxes, and vendors is not available when those obligations are due.
Know the difference between sales recorded and cash available.
Most newer shops accept both cash and card transactions. Cash may be available immediately after it is counted and deposited. Card sales generally reach the bank later, depending on the processor, payout schedule, bank, weekends, and holidays. A sale made today may not be available to spend today.
Your regular cash view should include:
- Cash currently available in the bank
- Cash on hand and deposits that still need to be made
- Card settlements expected from the POS or payment processor
- Payroll and payroll taxes due
- Sales tax obligations
- Rent, debt, and major vendor payments
- Outstanding checks, transfers, or card balances
The bank balance alone is not the answer. Some of that money may already belong to the tax authority or be committed to payroll and vendors.
Without a clear view, an owner can fall behind on suppliers, employees, rent, or tax obligations even while the shop appears busy. Review cash availability frequently enough to see a shortfall before the payment is due.
5. Inventory
Whether you operate one shop or ten—and whether you make your own ice cream or purchase it from a supplier—you need enough inventory to meet upcoming demand.
Track flavor consumption and other high-volume products consistently. Use that information with expected sales, delivery schedules, production capacity, lead times, and safety stock to decide when and how much to order or produce.
Every ice cream owner eventually experiences a sales day that consumes far more inventory than expected. Running out of one flavor is frustrating. Running so low that the shop cannot open or serve an acceptable menu creates a direct loss during what may be the busiest part of the season.
A useful inventory system does not have to be complicated. It needs to show what is on hand, what is being consumed, what is already on order or scheduled for production, and when the shop is likely to reach its minimum level.
Make the review part of operating the business
These numbers should not be something you examine only when cash feels tight or the shop has a bad month. They are part of day-to-day ownership.
Sales and labor can often be checked daily or in real time. Inventory exceptions may also require daily attention during busy periods. Food-cost trends and a deeper cash review can follow a consistent weekly or monthly schedule based on the operation.
The important part is creating a repeatable view that does not depend on memory.
You do not need a special tool to follow this process. You can build the review using reports from your POS, payroll system, invoices, inventory records, payment processor, and bank.
If you want a ready-to-use system, the Weekly Shop Scorecard and Labor Planner brings the five reviews into one Excel workbook. It includes highlighted input cells, a next-week wage plan, a daily flavor-replenishment view, a procedure guide, and a manager action log.
Operating multiple locations?
If collecting sales, labor, cash, weather, and inventory information takes too much of your morning, learn how Open Shop’s Morning Brief design-partner program is being developed with working operators.