What the next owner is buying

76.4%

gross margin on $119.4k of revenue. The product works, it is priced below what the market bears, and the trading season already turns a profit.

Four named actions reach +$4.2k a year

None of them requires growth beyond three wholesale accounts already identified. The largest single one is a conversation with the landlord.

The path to a profitable business

Action	Worth	Running result
Where it stands today normalised, twelve months to August 2026		-$21.5k
Price increase, 12.3% weighted, volume held	+$11.9k	-$9.6k
Three year-round wholesale accounts	+$3.2k	-$6.4k
Rent renegotiated to $3,000 a month	+$8.6k	+$2.2k
Closed-season utilities halved	+$2.0k	+$4.2k

Read this as the destination, not year one. These are full run rate figures, the shape of the business once all four are in place. Year one is slower because the price rise lands in October and the accounts in November, and because $6.0k of one-off wholesale income from last year is not assumed to repeat. On that basis year one lands near -$2.0k, roughly breakeven, and the full benefit arrives in year two.

Why the margin holds

Revenue register net sales plus wholesale channels	$119.4k
Cost of goods	$28.2k
Gross profit	$91.2k

At 76.4% every additional dollar of sales drops 76 cents to the bottom line. That is what makes the price increase and the wholesale accounts worth so much relative to their size, and it is why the fix is a cost conversation rather than a growth project.

Demand responds when something new is offered

Sundaes	$5.1k
Store freezer items	$4.3k
Delivery items	$3.0k
Freezer accounts	$1.1k
Bulk orders	$450
Lines introduced mid-season none of these existed before April and none replaced an existing product	$13.9k

12.4% of the year's sales came from products added part way through it. Sundaes went from nothing to $5.1k in five months. The freezer and delivery lines went from nothing to $8.3k. This is the most useful fact in the file for a buyer, because it is evidence about demand rather than about accounting: the counter absorbs new products without extra rent, extra fixtures or extra hours, and the shop has barely started testing that.

The trading season already works

Trading season, March to October eight months	$114.6k	+$2.8k
Closed season, November to February four months	$4.8k	-$24.3k
Full year	$119.4k	-$21.5k

Eight months of trading make money. The problem is that the lease runs twelve. That is a fixable structure, not a failing business, and it is precisely why the path above works without needing more customers.

What the building costs while it is shut

Rent	$15.3k	34% of the year's spend
Utilities	$4.1k	25% of the year's spend
Payroll	$4.0k	11% of the year's spend
Cost of goods	$3.6k	13% of the year's spend
Business services	$1.8k	34% of the year's spend
Everything else	$256	1% of the year's spend
Four closed months against $4.8k of revenue	$29.1k

$21.2k of that is rent, utilities and business services on an empty building. A third of the year's occupancy cost is incurred in the months that earn 4.0% of the revenue. Every year-round wholesale account chips at this, and a lease renegotiation removes it wholesale.

Where the money goes

Rent	$44.6k	37.3% of revenue
Payroll	$35.5k	29.7% of revenue
Utilities	$16.1k	13.5% of revenue
Business services	$5.5k	4.6% of revenue
Repairs, recurring	$3.9k	3.3% of revenue
Card and bank fees	$3.9k	3.3% of revenue
Advertising	$2.1k	1.7% of revenue
Everything else	$1.2k	1.0% of revenue
Normalised operating expense	$112.7k	94.4%

Rent is 37.3% of revenue against a 6% to 10% norm for food service. At $3,713 a month this shop would need about $445.5k of sales for occupancy to sit in a normal range. It is not a line to trim, it is the structural fact the business sits on, and it should be the first item in any purchase negotiation rather than an inherited condition.

What has to be solved

Occupancy cost is the structural issue

Rent and utilities together are 50.8% of revenue, and twelve months of lease sit on eight months of trading. Until that changes, every other improvement is filling a bucket with a hole in it.

What to do about it. Open the lease before agreeing a price. A reduction of $1,261 a month is worth more than every other action here combined, and at $2,451 a month the business breaks even on today's sales with nothing else changed.

Four months of the year earn almost nothing

November to February produce $4.8k and consume $29.1k. The building is paid for whether or not anyone is in it.

What to do about it. Three options, not exclusive: grow year-round wholesale until the winter carries itself, find a seasonal sublet or shared use for the space, or cut the standby load so a closed month costs less to hold.

Nobody has ever measured what brings people in

Advertising ran at $2,053 for the year with no way to say what it returned, and the owner's own read is that most custom is repeat. The mid-season product additions suggest the upside is real, but it has never been tested deliberately.

What to do about it. Set a customer count baseline from the register before the next campaign starts, then read it monthly. The register already carries unit counts, so this costs nothing but the discipline.

Discounting climbed at the end of the season

Discounts and comps ran 2.5% to 3.7% of sales through the spring and then 8.1% in July and 9.0% in August, about $3,100 across the two months.

What to do about it. Worth knowing whether that was a deliberate promotion or drift. If it is drift it cancels a quarter of the price increase before it starts.

A fifth of sales arrives as cash

$25.0k came through the drawer. The accounting system's card line cannot see it, so it does not appear in reported income, and a buyer will ask where it went.

What to do about it. Reconcile the cash to bank deposits before diligence opens. Card tips paid out of the till explain a large part of it. Answered in advance this strengthens the revenue story; answered under questioning it does the opposite.

The evidence underneath

How the starting figure was built

Register net sales gross sales $112.0k less $6.8k of discounts and comps and $33 of returns	$105.1k
Delivery and wholesale accounts billed outside the register	$10.8k
Other product income three separate wholesale lots	$6.0k
Less orders counted in both systems	($2.4k)
Revenue	$119.4k
Cost of goods	$28.2k
Operating expenses as booked	$114.0k
Plus August costs not yet entered the books were run two days after month end, so August rent, utilities and business services had not posted. Accrued at the three month average, and this is the only estimated figure in the document.	$5.8k
Less one-time reopening repairs March, bringing the shop back after a closed winter. The $3.9k spent April to July stays in as ordinary upkeep.	($7.1k)
Normalised operating result	-$21.5k

Three adjustments here are ones a buyer's accountant makes in the first hour: net sales rather than gross, unposted August costs accrued, and only the genuinely non-recurring repairs added back. They are made already, in the seller's own document, which is the point.

Reading the register against the books

The two systems disagree about revenue by roughly $17,800 across the year. It looks alarming and it is arithmetic.

Card payments	$92.2k
Less sales tax collected on those cards	($4.6k)
Less tips collected on those cards	($6.5k)
Card revenue	$81.1k
Register net sales settled by card	$80.9k
Unexplained difference	$233

The accounting system's card line is a bank deposit, gross of sales tax and tips, and it cannot see cash. The shop takes $25.0k a year in cash, 20.8% of everything collected. Strip the tax and tips and count cash separately and the two agree to $233 on a $119.4k business. Revenue here comes from the register, which counts every tender. Costs come from the books.

How to read this document

Everything except the path is history, and it traces to two files: the register's gross sales report for September 2025 to August 2026 and the profit and loss for the same period. Both are available. Fourteen product lines and twelve expense lines were read month by month rather than as annual totals, which is where the seasonal and product findings come from.

Every forward figure is labelled as plan and built from a named action with its arithmetic shown, never from a growth rate applied to last year. One historical figure is estimated rather than reported: the $5.8k of August costs that had not been entered when the books were run.

AI where it helps, human where it matters. Great Path Advisors

Seasonal Ice Cream Shop