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The Hotdog King
For many years, whilst I rotted away in my cubicle at my day job, I fantasized about diving headfirst into a new line of work… one that would get me outside and allow me to be my own boss. I dreamed of operating my own hot dog stand. I crunched the numbers, found suppliers for various types of hot dog carts, and dug up the local laws and regulations to start slinging wieners. This article is where I have decided to store all that hard work… you can benefit from my research, and in so doing, become rich selling hotdogs.
You will find that selling hotdogs is not very complicated. For the most part, the food you would be selling is precooked and not likely to spoil. Finding and paying for supplies is not difficult and the Total Addressable Market (TAM) is basically the entire country. Everyone eats… and most people will eat a hotdog. We will go over the things you do need to consider. We will go over the possible upsides and downsides.
How Much Does it Cost?
You can make a lot of money selling hot dogs if you find the right supplies and sell at the right price. That said, let’s do a little back of the envelope math to nail down what exactly may be possible. Let’s break up our expenses into two types of expenses: one-time lump sum costs and per unit costs.
One-Time Lump Sum Costs
Food and Business Licenses
Initial Food Prep Materials
One-Time Lump Sum Costs
Hot Dog Bun
Hot Dog Wrapper
Cart Maintenance / Cleaning
Total Per Hot Dog
Hot Dog Cart Vendors and Supplies
Here are several Hot Dog Cart Vendors that you can buy a new cart from. That said, in larger cities you will likely find that you may be able to pick one up off craigslist a bit cheaper. Just make sure the cart is still in good repair and all the cooking widgets still work.
- The ‘Hot Dog Cart Store,’ also has a showroom in Sevierville, TN
- ‘Top Dog Carts’ is based out of Sanford, FL
- Willy Dogs, has a ton of information in addition to its carts… it will even help you with your business plan.
- The ‘Hot Dog Cart Company,’ has a showroom in Jackson, MI
- The ‘Hot Dog Cart Store,’ also has a showroom in Sevierville, TN
When it comes to buying hot dog cart supplies such as hotdogs, buns and such then look no further than your local bulk discount warehouse. Sam’s Club and Costco both sell everything you need both in person and online. Sam’s Club caters to the needs of small business owners and has everything you need when it comes to common restaurant items (napkins, condiments, sanitizers, gloves, etc.).
How Much Money Can You Make?
Ignoring the lump sum costs and focusing on the per unit price of selling a hot dog you can see that it can be quite inexpensive. The expenses I have outlined can vary. If you are looking to sell all beef hot dogs you may find the amounts go up… conversely, there are ways to get lower prices by going for more traditional hotdogs and/or buying bulk.
If you sell your hotdogs for $2.50, which is not unreasonable, then you would be making approximately $1.05 per hotdog. If you sell 200 per day, 5 days a week (with three weeks’ vacation) you would be making:
200 dogs X 5 days X 49 Weeks X $1.05 = $51,450
But that’s not all. You can work as long or as short as you want. Also, with each hot dog sale you can turbocharge your profits with a drink or side item like a bag of chips. Selling a ‘platter’ with 2 hotdogs, a can of soda and a bag of chips for $8 is not too unreasonable. The total cost would be somewhere around $3.00. Therefore, you would be making approximately $5 per meal…. Sell 100 meals per day and now you are making $500 per day worked results in a total profit of:
$500 per day x 5 days x 49 weeks = $122,500
Now that’s a bit better. The industrious hot dog vender could easily amp this up. Instead of working 8-hour days, why not 10? By doing this you would be getting close to $150 k per year. It’s not like the work is too terrible. Working during your lunch break would mean just sitting at your hot dog stand. Additionally, if you hit your quota early on some days you can just pack up and leave. No need to pull a full shift if the steamer is empty.
Now let’s think about a few other considerations that may impact sales. Some of these factors could make or break your hot dog enterprise so make sure you take note or at least be realistic about how you have factored them into your business plan.
Location, Location, Location!
The location you set up shop to sell hot dogs at is incredibly important. To illustrate this, let’s consider probably the single most popular places to sell hot dogs: New York City. New York auctions off hot dog selling licenses for certain locations on a yearly basis. They auction off over 3100 licenses, largely at city parks, every year. The cheapest one recently went for only $700 in a place called Inwood Park. The most expensive hot dog stand license sold for almost $300,000 in Central Park.
Both amounts are for the same amount of real estate. Both are in city parks. Both are in New York City, but the value difference comes from the amount of foot traffic. The location where you place your hot dog stand will depend on people casually walking by. It is not likely that you will be able to garner clientele that are willing to drive to your hotdog stand specifically to purchase from you. There will have to be another reason they are in the location to start out with.
Experiment with the Location
A key advantage with a hot dog cart is that it is mobile. You can move it around whenever you please. You can take advantage of specific locations at different times of the day. Hitting up the local industrial plant when shifts change over may be a profitable enterprise… but only for 1 or 2 hours a day. From there you could move down to the local park right after a college ends its weekly pep rally.
Learn where the flow of people goes in your community. The keener you are to recognizing where people are at and converge the more you will be able to pick up on profitable locations. Experiment with places that others would normally discount. If you have set up shop and it appears deserted… leave. Go somewhere else.
Complying with Government Regulations
Buying ingredients and selling hot dogs is the easy part. The painful part will be complying with all the government regulations. This includes all levels of government: Federal, State, Count, City and possibly others. Doing the research up front to determine the actual requirements is a must. Write down each regulating body, the requirements, contact information for the organization and send them an email to see if anything has changed. Below are some of what you will be expected to comply with when running your own hot dog cart business:
- For business licenses you will need to start by contacting your State’s Department of State. This is generally where you can find specific information about the differing hoops you will have to jump for your specific industry (in this case selling hot dogs). Many states require you also to obtain a Sales Tax License at the State Level as well.
- Counties and Cities may also have a business license that you may need. If you plan to operate in multiple counties or perhaps across various city borders, then you may need to have multiple business licenses.
IRS and Tax Compliance
- Tax Compliance with the IRS may be the simplest requirement. Supposing you have set up a Limited Liability Company in your state (very simple process, contact Department of State), you can register for an Employer Identification Number (EIN). This entire process takes a few minutes and can be completed here: ‘Apply for an Employer Identification Number Online’
- Sales tax requirements can vary widely state by state and even county by county. Ultimately, you will need to figure out where you will be operating at and calculate all the various taxing organizations that may apply. To make things simple, a company called TaxJar has found a way to automate determining how much tax should be charged for most jurisdictions. They also can link up with Stripe for payment processing. There are many solutions for collecting taxes… just pick one and carry on. Taxes can feel overwhelming but at the end of the day, automation is your friend.
- Here is a Youtube Video specifically detailing Hot Dog Stand Sales Tax:
Food and Sanitation Requirements
- Likely, your state and county have very specific requirements. Learn what they are FIRST prior to spending any money. There are usually highly specific requirements for hot dog carts. Hot Dog Cart Vendors will send you the specifications for their carts so you can get a thumbs up from your Local Department of Health before selecting a design. Every jurisdiction has different requirements so don’t make any assumptions.
- Another Key requirement that may come off as unexpected is that you may find yourself having to park the hot dog cart at a Community Kitchen. Many Health Codes will not allow you to park your cart overnight at your house or keep it in your garage due to concerns about public safety.
- Parking Permits: The physical land your cart will sit on will likely belong to someone or some organization. You will need to pay a permit or otherwise get permission (in writing). In New York City, annual permits can be several hundred thousand dollars.
- Certification from the Local Fire Department: Cooking will likely require propane or some other heat source. Setting the block on fire should be in reference to your proprietary blend of hot sauce, not a literal torching of main street.
- Food Handler Permits: Holding things at the appropriate temperature and handling food so your patrons don’t get sick is an important skillset. You will likely need to prove you, or your staff are up to the challenge.
- Other: There are likely numerous requirements that will be specific to the exact location you are selling hot dogs. This may include where you set up your stand, where your fuel source can be sitting, whether you can have signage among other things. Becoming connected within your local area with Food Truck owners may be a beneficial activity.
Insuring a Hot Dog Stand
Like any business, you will want to protect your rear end in case something terrible happens. Perhaps you buy some hotdogs that eventually get recalled… and you end up selling a few. What if someone gets sick? What if your fuel source gets struck by lighting and takes out a historic landmark? Anything can happen… that’s why you better buy insurance.
You can insure your hot dog cart, but unless you are spending your entire savings on it (not recommended) then the loss of the cart itself or some inventory should be minimal. The type of insurance that you are looking for is liability insurance. According to insureon.com, the average Food Truck (sic. Hot Dog Cart) owner pays approximately $100 a month for insurance. This type of insurance typically has about $1,000,000 worth of coverage. Here is a link to the details.
Dealing with Competition
This is where things get real. Good ideas don’t grow on trees and there is no such thing as a free lunch. There will be competition. Either it already exists, or once people see you out there hustling and making money they will decide to start their own cart. Here are a few ways to deal with it:
Learn From the Competition
- When and where are they placing their carts? Are they busy?
- How much are they selling their food for? Are they using cheap supplies?
- How are they branded? Are they keying in on a local sports mascot?
- What could they be doing better?
Put the Competition out of Business
- Offer competitive deals on meals. Even if their prices are comparable, if your buyers think that the process of buying a meal is simpler they may choose you over your competitor.
- Use better ingredients. This includes all beef Hotdogs or even offering Turkey based hot dogs as an option.
- Have a few sets of tables and chairs where folks can sit down. If itis hot outside, then offer free water. A little good will can go a long way.
- The National Hot Dog and Sausage Council – The National Council, based out of Washington D.C. is a good resource for business plans, ideas and supplies.
- A DIY Approach to Building Your Own Cart can be found here.
- Hot Dogging with Dan – Youtube channel about a hot dog stand owner that has a few thousand subscribers.
The Last Dog Standing
Starting a hot dog stand can be a great way to break out of a normal 9 to 5 job… or a great side gig that gets you a little extra cash. Either way, if you have additional resources or insight, please add them in the comments below and we will try to work them in to the article. Remember, everyone eats… they could be eating something you sold them. Hotdogs are a great way to help sustain a comfortable financial future and enjoy a Baseball game.