It is expected that opening a traditional restaurant can carry a lot of risks. Once you choose a location, you are locked in – potentially for years, depending on your lease agreement. Apart from that, you will likely spend much more money for rent, utilities, and other expenses from operating at a bricks-and-mortar location.
On the other hand, food stands and trucks are mobile which can relocate to the hottest spots at any moment. The startup costs are also considerably lower, with the vehicle often being the largest expense.
Additionally, you can set up shop anywhere. Major urban centers with high-volume foot traffic tend to be the most lucrative, with some food carts generating $3,000-plus daily.
However, do not discount county fairs and other travelling venues, which generate heavy demand for hot dogs, ice cream, burritos, funnel cakes, tacos, smoothies, and other delicious treats you could conceivably sell from a mobile food business.
Many traditional restaurants also invest in dedicated food stands to expand their reach. Going mobile allows them to set up pop-up shops or attend local festivals.
For more reasons to launch a career in this field, read our guide on the benefits of starting a food truck business. This article discusses opening a food stand and taking payments from your customers.
How to start a food stand business?
Every jurisdiction is slightly different. Thus, the exact steps for launching a food stand vary depending on the geographic area you plan to serve. Below are some of the most general aspects you will need to consider when setting up your food stand.
Know your target market
This is the most essential starting step for all businesses. A target customer determines what, where, and how much of whatever you sell. There must be a ready market for your culinary creations for your business to grow and succeed. For tips on how to create customer personas, be sure to read our article here.
Study the competition
When starting a food stand business, you must check out the local competition. This means tracking the locations of other mobile food stands. It also means being aware of bricks-and-mortar eating establishments within walking distance of every place you plan to sell food.
There is no rule preventing two taco stands from operating on the same block, but it is essential to understand what you are up against before committing any resources.
Outsource financing
Starting a food stand can cost anywhere from a few thousand dollars to several tens of thousands of dollars. It all depends on the type of equipment you will need and whether you will be renting a stand, purchasing a pre-built structure, or buying into a franchise. Local permitting and food stand requirements can also affect startup costs.
If you can finance everything out of pocket, that will help you start on the right foot without any debt. Otherwise, you may need funding from investors, banks, friends, and family members. Either way, developing a business plan is essential. Be sure to check out our small business resource page for more tips on starting a new venture.
Register your food stand business
The next step involves choosing a legal structure for your business.
Sole proprietorships are common among solo entrepreneurs due to the low startup and maintenance costs. However, with this legal structure, your personal and business assets become intertwined.
Partnerships make sense if two or more owners are involved with the business.
Due to this structure's legal protections, many prominent and established companies favor corporations.
Limited liability companies (LLCs) offer a good balance of setup effort and legal protection.
Source equipment
The type of food stands you launch and what equipment and supplies you will need.
For example:
There may only be a need of displays, tables, shelves, and a vehicle to transport these items if selling canned goods.
If cooking meals or keeping inventory cold, you will need a lot more equipment – e.g., stoves, freezers, and gas canisters. These extra items may also increase your permitting and licensing costs (covered in the next section).
Obtain permitting and licensing
Most municipalities require that food stands secure proper permitting before they operate. Contact your local city hall to find out what requirements apply to your business. It is possible that you may need to go through a separate permitting process with each jurisdiction to serve different geographic areas.
Start taking payments
Although it is possible to sustain a cash-only food stand business, the pandemic has encouraged many businesses to accept card-based and contactless mobile payment options that do not involve a direct exchange between merchants and customers.
eatOS offers a range of point-of-sale (POS) solutions for food stands. Our full-featured countertop POS terminals can handle even the most complex payment tasks – including barcode scanning and receipt printing.
To quickly accept payments in the field, we recommend the eatOS payment system that can securely process credit, debit, and contactless payments wherever your food stand business takes you.
Launching a business is not easy, but with the tips above, you now have the information you need to go from idea creation to your first hungry customer. When you are ready to start making sales, keep eatOS in mind. Our POS solutions helps you in taking payments and running your business easier. To request a free demo of our POS solutions, contact us today.
