How We Bought an Ice Cream Store
“what do you really want to do with your life”
So this all started in a bar in 2003 when I met my wife Beth. I knew she worked in an Accounting office and I also knew she hated it so I asked her “what do you really want to do with your life” she said I would laugh and I said if it has anything to do with business I would never laugh. She said, “I want to own an Ice cream store”. I said that sounds pretty cool.
Fast forward 3 years later we got married and went to Hawaii for our Honeymoon. On the way home I asked, were you serious about owning an Ice cream store? She said absolutely. So the hunt was on. When we got home I started looking on Loopnet and calling brokers. Beth wanted to have a store in Long Beach Island which is only a 30-minute drive from us but during the summer that same drive could take up to 1-2 hours because of summer traffic.
“The realtors that had just sold us our house mentioned they had clients selling an ice cream store”
I was concerned because I still owned the wholesale bakery and I knew starting a new business would take a lot of my time, to begin with, and adding that kind of commute was going to make things very stressful. We did look at some very promising locations in that area but the realtors that had just sold us our house mentioned they had clients selling an ice cream store in Lavalette NJ which was much closer to our new house. So we went to look at it.
It was a shit show. My wife and her father looked at it and said it needed to be bulldozed. I looked at it and knew I could change this turd into a Diamond.
The owners wanted to sell the store outright but I convinced them to Lease it to us with the option for sale. We were not only buying an ice cream store we were also buying the property. Now I just want to have a side note here. Buying a business and running it for a profit is a great thing. You can have the flexibility of being a self-employed person. Most of the time you are committed to that business for a minimum of three to five years of being there every day before you can actually sit back and bring in managers that will allow you to step back. So that being said you are buying yourself a job until you make your job a true business.
“If you have the opportunity to also buy the property that that business is housed in you should absolutely try to buy it”
The reason I’m telling you this is if you have the opportunity to also buy the property that that business is housed in you should absolutely try to buy it. The business is a great way to generate cash over the years but the property will most likely be where you make your biggest exit profit from.
“That property once we subdivided was worth more than 6 times what they paid for it”
That was another lesson I learned from my dad at an early age. I can remember my parents arguing in the kitchen when my sister and I were in bed. My mom was freaking out that the price of the property that my mom and dad’s restaurant was in was $250k which was over 3 acres on Rt. 88 in Brick NJ. My father was convincing her that it would be worth a lot more someday. He was so right. All said and done, that property once we subdivided was worth more than 6 times what they paid for it.
“So I totally renovated the building because you can’t half-ass first impressions on a food establishment.”
So knowing we would have the opportunity to lease this business and building while we were learning the ice cream business and seeing if it would be worth it was ideal. So I totally renovated the building because you can’t half-ass first impressions on a food establishment. So we went from downright dismal to shore shabby chic and we opened in May of 2006 my Daughter was born in August of 2006 so you can imagine how stressful that summer was for us.
“We sold the store for double what we paid. “
Conclusion:
But I knew as soon as Memorial day weekend came we had a winner and even though we had a contract that would have allowed us to lease for 2 more years. I wanted to buy it before we opened for the next season.
Now we had numbers from the first season opened so the bank knew we knew what we were doing and they gave us the loan to purchase my wife’s dream. We spent 15 summers there including going through Hurricane Sandy and having to rebuild it again after 3 ft of water. As of January 2022, we sold the store for double what we paid. So we had 15 years of positive cash flow from the business and 15 years of paying down the Mortgage debt and 15 years of depreciation on the building and all of the equipment in the store. So even though we doubled the purchase price we probably multiplied our initial investment by a minimum of 10 to 15 times.
Stay tuned for the story of how we sold the store after owning it for 15 years.
