How to Start an Ice Making Business in South Africa
This is a guide on how to start an ice making business in South Africa. An ice business can be a great way to make money, has low barriers to entry, and can be seasonal.
Ice making can be profitable especially if done correctly, it’s not really a fictional business. There are many ups and downs. This is due to the seasonal nature of the business; ice is most in-demand during the holiday season. The demand decreases later and even more during the winter.
The reason the demand is so high during the holiday season is that people go out more and need ice due to the heat. Many more fun parties and events are organized during the holiday season.
To succeed in this business; you have to think about the whole year and not just from month to month. Barriers to entry are pretty low, but maintenance is high.
Obtain operational premises
You have to find a space to work, it doesn’t have to be a commercial building. Ideally, it should be large enough to allow you to make all the ice. You can build a really large outdoor room that you will work from especially if you have a large yard or can use your own garage or similar facility.
I don’t recommend going out to rent operating premises when starting out. This will only reduce your profit margins and it may take some time before you sell enough ice to cover your overhead.
Buy an ice machine
These machines range from as little as R2, 000 for personal use to over R50, 000 for business use. Try to maximize your budget, if you have R20, 000 to spend, buy one for that amount, otherwise you will not be able to meet the demand.
It is expected to be able to produce over 60,000 bags of ice on demand, which cheap machines will not be able to do. Invest in your car, especially if you’re hoping to stock restaurants and other businesses.
Have your own water supply
You need water to make ice, a lot, you can’t use municipal water or tap water, which will reduce your profit. It’s best to have your own water supply, or go to a water source like a river or use the rain.
Ice machines that are not easily accessible from a river often use rainwater, collecting rainwater and then purifying it. This costs much less than using municipal water, which you may have to pay for and is of poor quality.
Market your business
Your ideal target market is businesses, you won’t make a lot of money selling to individuals. You have to go to restaurants, hotels, bars, nightclubs, and other outlets that serve refreshments. That’s where the money is, these outlets usually buy in bulk. This is why you need to have a good car because they will think you are unreliable when you don’t deliver on time.
Register your business
Some companies will not work with an unregistered business, make sure you register your ice-making business. Currently, R125 when done through the CIPC, the cost of registering a private company has never been lower.