A hot dog cart business is one of the most lucrative enterprises to undertake since it’s based on retailing a basic human necessity: food. Fairly simple to start from the ground up, flexible and not too cost demanding, this type of business also comes with the advantage of being mobile, allowing you to move between locations and target the best areas in terms of competition and demand.

As easy as it may sound, you should also know that there are no shortcuts to success. Enthusiasm is vital when starting a new business but so is planning. So the first thing you should do to ensure your venture will succeed, even before making a financial commitment, is to research the basics.

The Basics of a Hot Dog Cart Business

1. Legal Requirements

As with any type of business, hot dog vending has its specific legal requirements and constraints. These often vary by city, county and state, and you can learn about the ones that apply in your area by contacting your local Health Department or the Department of Environmental Services.

At this stage, you’ll address issues such as:

• The street food vending regulations in your city;
• The types of food you’ll be selling and how they’re handled, stored, thawed, and cooked;
• Commissary requirements (the requirement to operate from a licensed commercial kitchen)*;
• The size, make and the equipment of the hot dog vending cart;
• The cart’s fresh water and waste water holding capacity;
• Safe food handling course requirement;
• Hygiene policies;
• Pre-approval inspection of the equipment.

* Most municipalities don’t allow hot dog vendors to operate a food service business from a residential kitchen and they require the use of a commissary – a licensed and inspected commercial kitchen. Vendors have to report to the commissary each day of operation to prepare the food that will be served from the cart and to clean the cart’s equipment at the end of the day.

After learning about the health and safety requirements, you should contact the Business License Department, since you’ll most likely need a business license to operate your hot dog cart.

You may also have to check the signage regulations in your area and see if there’s a limit on the maximum amount of signage you are allowed to use.

Start Your Own Business with a Professional Hot Dog Cart!

2. Research Target Market and Locations

The food industry gathers, by default, a wide range of available customers. So your target market can’t be restricted to just a group of people, since it potentially includes all those eating out or in search of a quick bite.

You could sell your hot dogs to:

• Students;
• Office Workers;
• Business People;
• Tourists;
• Concert goers;
• Everyone who resides in your target locations (see below).

Speaking of locations, just like with real estate, selling hot dogs is all about location. A mobile hot dog stand can make big profits as long as it’s parked in a spot that attracts a lot of exposure and pedestrian traffic.

Some possible locations are:

• University campuses;
• Business districts;
• Industrial parks;
• Touristic locations;
• Stadiums and sport centers;
• Farmers markets;
• Construction sites;
• Parking lots;
• Outside bars.

3. Research Your Competition

Most people are not patient enough to research all the aspects of their future business. But sizing up the competition is the research step that separates those that are truly serious about their goals from the others. As such, you should take the time to make a list with the street food and hot dog vendors from your area and then visit as many as possible. This will give you the opportunity to see how your competition is operating and to find those things you’ll want to implement or to avoid in your future business.

For example, you could learn about:

• Vendor’s attitude;
• What kinds of ingredients, condiments and toppings they’re using;
• Food preparation and handling;
• Unique recipes;
• Marketing and branding.

4. Write Your Hot Dog Business Plan

The next step is to write a business plan that covers your company’s structure, your product, your the target market, your personnel (if any), the marketing plan, competitive analysis, cash flow analysis (initial investment and start-up costs), and financial projections. Obviously, the more accurate the better, your success depends on it (no pressure!).

Your business plan should look something like this:

Budget

• Legal expenses for obtaining licenses and permits;
• Hot Dog Vending Cart price;
• Insurance (general liability, workers’ compensation if applicable);
• Operational cost for the first 1-2 months (salaries of employees if any, bills & fees);
• Initial stock costs ( 1-2 months);
• Incidental costs (napkins, foil, sanitizer, ice, propane, etc);
• Marketing promotion expenses.

Marketing Strategy and Sales Strategy

• Throw an opening party to let locals know you’re open for business;
• Engage in community events to sell your products;
• Advertise your products in community based newspapers, local TV and radio stations;
• List your business on local and directories;
• Leverage the power of internet and social media;
• Engage in direct marketing and sales;
• Encourage the use of Word-of-Mouth marketing (referrals);

Sales Forecast Template

50 hot dogs a day (approx. 30 people)
50 x $… = $… hot dogs
50 x $… = $… soda or water
20 x $… = $… chips or snacks
Gross daily income = $…

To calculate the approximate net profit, deduct a 30-35% cost ratio from gross sales.