Do you want to start a hot dog cart business? If YES, here is a complete guide to starting a hot dog cart business with NO money and no experience plus a sample hot dog cart business plan template.
A hot dog and sausage cart business may sound easy, but the truth is that if you are looking to start this type of business and do not want to get frustrated, then you have to do the needful to make sure that it stands the test of time. Quite a lot needs to be done to see that your hot dog and sausage cart business takes off within the period that you have projected.
A hot dog and sausage cart business is one of the businesses that an entrepreneur can successfully start on the corner of a busy street or in a mobile shop without breaking the bank for cash.
At the same time, big – time investors can leverage on the high demand for hot dog and sausages to set up their own hot dog and sausage carts in strategic locations all around key cities in the united states of America and in other parts of the world via franchising.
Thus, if you have the desire to start your own hot dog and sausage cart business, all you need do is to read this article and you will be well equipped.
Steps to Starting a Hot Dog Cart Business
1. Understand the Industry
Players in the Hot Dog and Sausage Production Industry mainly produce hot dogs and sausages from slaughtered animals or a combination of byproducts from slaughtered animals.
Basically, sausages can be classified as either fresh, cooked or dry: fresh sausages are made from meats that have not been previously cured and must be refrigerated and cooked before eating; dry sausages are cured sausages that are fermented and dried; cooked sausages are made with fresh meats and then fully cooked (examples of cooked sausage include hot dogs and liver sausage).
It is important to note that while hot dogs are technically cooked sausages, they are not included in this product segment. A report published by IBISWORLD shows that over the five years to 2016, the revenue for the Hot Dog and Sausage Production industry has tended upward thanks to the status of the product as a staple in consumers’ diets.
The report further stated that over the next five years, merger and acquisition activity will cause the industry’s major companies to leverage on brand value and economies of scale to increase their market share, pushing up their revenue and profit growth.
The Hot Dog and Sausage Production industry is a thriving sector of the economy of the United States which generates well over $15 billion annually from more than 521 registered hot dog and sausage restaurants scattered all around the United States of America.
The industry is responsible for the employment of well over 31,712 people. Experts project The Sandwich and Sub Store Franchises industry to grow at a 1.1 percent annual rate between 2011 and 2016. Smithfield Foods and Tyson Foods are the leaders in the Hot Dog and Sausage Production industry; they have the lion market share in the industry.
The Hot Dog and Sausage Production industry has minimal barriers to entry, with low startup capital and no specific licensing requirements.
On the other hand, the high level of competition and market saturation in a declining industry can prove challenging to aspiring entrepreneurs who want to start their own hot dog and sausage restaurant. Most players in the hot dog and sausage restaurant line of business are small to medium size establishments that cater to the local community.
The hot dog and sausage cart business will continue to blossom because people will always want to eat when they are hungry and can’t afford to go home to fix meal for themselves.
Despite the fact that the industry seems over – saturated, there is still room big enough to accommodate aspiring entrepreneurs who intend opening their own hot dog and sausage cart businesses in the United States of America. Over and above, the Hot Dog and Sausage Production industry is a profitable industry and it is open for any aspiring entrepreneur to come in and establish his or her business.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who buy/eat hot dog and sausage cut across all genders and age group; male and female, adults and children all eat hot dog, sausage and other snacks hence the demographic composition for hot dog and sausage cart business is all encompassing.
The truth is that, when it comes to selling hot dog, sausage and other snacks, there is indeed a wide range of available customers. In essence, your target market can’t be restricted to just a group of people, but should extend to all those that reside around the locations where you have your hot dog and sausage carts and who have the purchasing power.
3. Decide Which Niche to Concentrate On
There is no known niche area when it comes to the hot dog and sausage cart business. Every player in this line of business are basically involved in preparing, serving and selling hot dog, sausages and other snacks alongside coffee, water and other beverages.
Naturally, it is common to find a standard hot dog and sausage cart engaged in preparing and selling all the under listed;
- Hot dogs (except from poultry)
- Sausage products (except from poultry)
- Breakfast sausage products (except from poultry)
- Poultry sausages (including hot dogs)
- Coffee, bottled water and beverages
The Level of Competition in the Industry
The competition that exists in the Hot Dog and Sausage Production industry goes beyond competitions amongst hot dog and sausage shops in your location; you are expected to compete with fast food restaurants, mobile food trucks, regular restaurants, sandwich shops and any other outlets that also sell hot dogs and sausages.
So, it will be right to say the competition in the Hot Dog and Sausage Production industry is tough. The truth is that no matter the level of competition in an industry, if you have done your due diligence and promote your products or business properly, you will always make headway in the industry.
Just ensure you are good at preparing the varieties of hot dogs, sausages and other snacks you have on your menu, you can deliver excellent customer care services and you know how to attract and reach out to your target market.
But over and above, there are several hot dog and sausage carts/shops, fast food restaurants, mobile food trucks, regular restaurants, sandwich shops and any other outlets that also sell hot dog and sausages, scattered all around the United States.
So, if you choose to start your own hot dog and sausage cart business in the United States, you will definitely meet stiff competitions and you should be ready to compete for customers.
4. Know Your Major Competitors in the Industry
In every industry, there are always brands that perform better or are better regarded by the customers and general public than the others. There are some of the leading hot dog and sausage carts or shops in the United States of America and in the globe;
- Simones’ Hot Dog Stand
- Puka Dog
- Weenie Beenie
- Fritzi Dog
- Hot Doug’s
- El Güero Canelo
- Walter’s Hot Dogs
- Angelo’s Coney Island
- Top Dog
- Dirty Franks Hot Dog Palace
- Hot Dog Heaven
- Rutt’s Hut
- Happy Dog
- The Varsity
- Olneyville New York System
- Uncle Franky’s
- Dat Dog
- Franks ‘N’ Dawgs
- Gene & Jude’s
If you are planning towards successfully launching a business and maximizing profits, then you need to ensure that you get your economic analysis right and try as much as possible to adopt best practices in the industry you choose to build a business in.
Hot dog and sausage carts/shops business is not a Green business; as a matter of fact, you will come across several hot dog and sausage carts/shops, fast food restaurants, mobile food trucks, regular restaurants, sandwich shops and any other outlets that also sell hot dog and sausages when you drive through town.
So, if you are mapping out your economic analysis, you should carry out thorough market survey and costing of what is required to rent a space where you are expected to open your hot dog and sausage cart business and the amount required to purchase microwave oven, bread toaster, cooking utensils and equipment, baking flour, food ingredients and other supplies and also the running cost of the business.
Over and above, if you are considering starting a hot dog and sausage cart business, then your concern should not be limited to the cost of purchasing a mobile truck/cart and purchasing microwave oven, bread toaster, cooking utensils and equipment, food ingredients and other supplies, but also on branding and on how to build a robust clientele base. The truth is that if you are able to build a robust clientele base, you are sure going to maximize profits in the business.
5. Decide Whether to Buy a Franchise or Start from Scratch
When it comes to starting a business of this nature, it will pay you to buy the franchise of a successful and well – established fast food restaurant or hot dog and sausage shop/cart brand as against starting from the scratch. Even though it is relatively expensive buying the franchise of an established fast food restaurant or hot dog and sausage cart/shop brand, but it will definitely pay you in the long run.
But if you truly want to build your own brand after you must have proved your worth in the Hot Dog and Sausage Production industry, then you might just want to start your own hot dog and sausage cart business from the scratch. The truth is that it will pay you in the long run to start your hot dog and sausage cart business from the scratch.
Starting from the scratch will afford you the opportunity to conduct thorough market survey and feasibility studies before choosing a location to launch the business. Please note that most of the big and successful hot dog and sausage cart business and fast food restaurants around started from the scratch and they were able to build a solid business brand.
6. Know the Possible Threats and Challenges You Will Face
If you decide to start your own hot dog and sausage cart business today, one of the major challenges you are likely going to face is the presence of well – established hot dog and sausage carts, fast food restaurants, mobile food trucks regular restaurants and sandwich shops et al and any other outlets that also sell hot dog and sausages, food and other snacks.
The only way to avoid this challenge is to create your own market. Some other challenges and threats that you are likely going to face is economic downturn; if the economy is in a bad shape, history has it that businesses such as hot dog and sausage carts usually struggle to maintain their old customers or even welcome new customers.
So also, unfavorable government policies can also hamper the growth of your hot dog and sausage cart business. There is nothing you can do as regard these threats and challenges other than to stay positive that things will work well for you.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
You have the option of either choosing a general partnership, limited liability company which is commonly called an LLC, or even a sole proprietorship for a hot dog and sausage cart business. Ordinarily, sole proprietorship should have been the ideal business structure for a small sale enterprise, but people prefer limited liability Company for obvious reasons.
As a matter of fact, if your intention is to grow the business and have chains of hot dog and sausage carts across the United States of America and other countries of the world via franchising, then choosing sole proprietor is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships.
Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholders meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your hot dog and sausage cart business; limitation of personal liability, ease of transferability, admission of new owners, investors’ expectation and of course taxes.
You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.
8. Choose a Catchy Business Name
When it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Usually it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
If you are considering starting your own hot dog and sausage cart business, here are some catchy names that you can choose from;
- Sofia Grant® Foods, LLC
- Diana Banks™ Hot Dog & Sausage, LLC
- Mama Bee© Hot Dog & Sausage, Inc.
- Hot Dogs on Wheel®, Inc.
- Yummy Yum™ Hot Dog & Sausage, Inc.
- Tasty Tasha™ Hot Dog & Sausage, Inc.
- Hot Dog King© Hot Dog & Sausage Cart, Inc.
- One Stop® Hot Dog & Sausage Mobile Cart, LLC
- Jessica Scholes© Hot Dog & Sausage, Inc.
- Indiana Brothers© Hot Dog & Sausage, Inc.
9. Discuss with an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. Here are some of the basic insurance covers that you should consider purchasing if you want to start your own hot dog and sausage cart business in the United States of America;
- General insurance
- Health/Medical insurance
- Liability insurance
- Workers Compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own hot dog and sausage cart business, usually you may not have any need to file for intellectual property protection/trademark. This is because the nature of the business makes it possible for you to successfully run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
11. Get the Necessary Professional Certification
When it comes to operating a hot dog and sausage cart business, you do not need to have any formal training or special certification before you can be allowed to open and operate a hot dog and sausage cart business in the United States of America and in all countries of the world.
All you need is informal training that will expose you to the in and out of preparing varieties of hot dogs, sausages and other snacks and effectively running the business.
12. Get the Necessary Legal Documents You Need to Operate
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentations.
If you do, it won’t be too long before the long hand of the law catches up with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run your own hot dog and sausage cart business in the United States of America;
- Certificate of Incorporation
- Business License
- Tax Payer’s ID/Tax Identification Number
- Foods and drinks handler certificate
- Health inspection Certificate
- Proof of district-issued food and drinks manager identification card
- Copy of license for the service support facility and/or a recent inspection report
- Business Plan
- Non – disclosure Agreement
- Employee Handbook
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
- Building License
- Franchise or Trademark License (optional)
13. Raise the Needed Startup Capital
Starting a hot dog and sausage cart business can be cost effective especially if you choose to start on a small scale by running a hot dog and sausage cart business in a street corner.
Securing a standard and reliable mobile cart and purchasing microwave oven, bread toaster, cooking utensils and equipment, baking and food ingredient supplies and serving wares et al are part of what will consume a large chunk of your start – up capital.
If you choose to start the business on a large scale, you would need to go source for fund to finance the business because it is expensive to start a standard large scale hot dog and sausage cart business. Here are some of the options you can explore when sourcing for start – up capital for your hot dog and sausage cart business;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for Loan from your Bank
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends
14. Choose a Suitable Location for your Business
When it comes to choosing a location for your hot dog and sausage cart business, the rule of thumb is that you should be guided by the demand for hot dogs and sausages and easy access to wholesale purchasing of food ingredient supplies directly from farmers or wholesale food distributors.
Of course, if you are able to secure a central location for your hot dog and sausage cart business, it will give people easy access to your mobile cart. It is important to note that a business facility in good location does not come cheap hence you should be able to allocate enough fund for leasing/renting in your budget.
If you are new to the dynamics of choosing a location for your hot dog and sausage cart business, then you should feel free to talk to a business consultant or a realtor who has a full grasp of the city and perhaps country you intend starting your hot dog and sausage cart business.
Most importantly, before choosing a location for your hot dog and sausage cart business, ensure that you first conduct a thorough feasibility studies and market survey. The possibility of you coming across similar businesses that just closed shop in the location you want to open yours can’t be ruled out.
This is why it is very important to gather as much facts and figures before choosing a location to setup your own hot dog and sausage cart business. These are some of the key factors that you should consider before choosing a location for your hot dog and sausage cart business;
- The demography of the location
- The demand for hot dogs and sausages and other snacks in the location
- The purchasing power of the residents of the location
- Accessibility of the location
- The number of hot dog and sausage carts, sandwich shops, fast food restaurants, mobile food trucks, regular restaurants and canteens in the area
- The local laws and regulations in the community/state
- Traffic, parking and security et al
15. Hire Employees for your Technical and Manpower Needs
On the average, there are no special technology or equipment needed to run this type of business except for bread toaster, cooking utensils, food service equipment (microwave, toasters, dishwasher, refrigerator, blender, etc.), Storage hardware (bins, utensils, racks, shelves, food case), Counter area equipment (counter top, sink, ice machine, etc.), Computers and receipt issuing machines, Sound System (For playing music), Point of Sale Machines (POS Machines), CCTV Cameras and Flat Screen TVs.
You will definitely need computers/laptops, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.
As regard leasing or outright purchase of a kitchen facility, the choice is dependent on your financial standings, but the truth is that to be on the safe side, it is advisable to start off with a short – term rent/lease while test running the business in the location.
If things work out as planned, then you go on a long – term lease or outright purchase of the property but if not, then move on and source for other ideal location/facility for such business.
When it comes to hiring employees for a standard hot dog and sausage cart business with more than one outlet, you should make plans to hire a competent Chief Executive Officer (you can occupy this role), Admin and Human Resources Manager, Merchandize Manager, Bakers/Cook/Chef, Manager, Sales and Marketing Officer/Sales Girls and Sales Boys, Accounting Clerk, and Cleaners. These are some of the key employees that you can work with.
The Service Delivery Process of the Business
When it comes to the business service process of a hot dog and sausage cart business, there are no hard and fast rules about it. Basically, it is the duty of the merchandise manager to help the organization purchase food ingredients and packaging materials.
They source for good purchasing deals and also ensure that they only purchase at the right prices that will guarantee them good profits.
Once the hot dog and sausage cart business is in full operation, the hot dogs and sausages and other snacks are prepared and they are listed on the menu. Hot dogs and sausages, snacks and drinks purchased from a hot dog and sausage cart is usually take away since it is a hot dog and sausage cart and they may not have the capacity to accommodate all their customers per – time.
It is important to state that a hot dog and sausage cart business may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated hot dog and sausage cart business process is not cast on stone.
16. Write a Marketing Plan Packed with ideas & Strategies
Generally, running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a hot dog and sausage cart business, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands that determine the market direction for the hot dog and sausages production industry.
These are some of the marketing ideas and strategies that you can adopt for your hot dog and sausage cart business;
- Introduce your hot dog and sausage cart by sending introductory letters alongside your brochure to corporate organizations, car owners, taxi companies, transport companies, households, sports organizations, gyms, schools, socialites, celebrities and other key stakeholders throughout the city where your hot dog and sausage cart will be positioned.
- Advertise on the internet on blogs and forums, and also on social media sites like Twitter, Facebook, LinkedIn to get your message across
- Create a basic website for your business so as to give your business an online presence
- Directly market your products
- Engage in road show in targeted communities from time to time to promote your hot dog and sausage cart business
- Join local hot dog and sausage carts/fast food restaurant business associations for industry trends and tips
- Provide discount days for your customers
- Advertise our business in community based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of Word of mouth marketing (referrals)
17. Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you sell your hot dogs and sausages and other snacks and beverages at rock bottom prices is to purchase your food ingredient supplies directly from farmers or from food ingredient wholesalers in pretty large quantities.
The truth is the higher the quantity of items that you purchase directly from farmers and wholesalers, the cheaper you tend to get them.
Another strategy that will help you sell your hot dogs and sausages and other snacks and beverages et al at the right price is to ensure that you cut operational cost to the barest minimum and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products.
18. Develop Iron-clad Competitive Strategies to Help You Win
The availability of varieties of hot dogs and sausages and other snacks and beverages in your hot dog and sausage cart, your business process and of course your pricing model et al is part of what you need to stay competitive in the industry.
Another possible competitive strategy for winning your competitors in this particular industry is to build a robust clientele base.
Ensure that your organization is well positioned, key members of your team are highly qualified and your hot dogs, sausages, other snacks and beverages listed on your menu can favorably compete with some of the best in the dog and sausage production industry.
19. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If your intention of starting a hot dog and sausage cart business is to grow the business beyond the city where you are going to be operating from to become a national and international brand by opening chains of hot dog and sausage carts and franchising, then you must be ready to spend money on promotion and advertisement of your brand.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Your corporate identity has a lot to do when it comes to building a business that is profitable and lasts long.
Here are the platforms you can leverage on to boost your brand awareness and create corporate identity for your hot dog and sausage cart business;
- Place adverts on both print (newspapers and food magazines) and electronic media platforms
- Sponsor relevant community based events/programs
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your hot dog and sausage cart business
- Install your billboards in strategic locations all around your city or state
- Engage in roadshows from time to time in targeted neighborhoods to create awareness for your hot dog and sausage cart business
- Distribute your fliers and handbills in target areas
- Contact corporate organizations, car owners, taxi companies, transport companies, households, sports organizations, gyms, schools, socialites, celebrities and other key stakeholders throughout the city where your hot dog and sausage cart is located informing them about your hot dog and sausage cart business
- List your hot dog and sausage cart business in local directories/yellow pages
- Advertise your hot dog and sausage cart business in your official website and employ strategies that will help you pull traffic to the site.
- Position your Flexi Banners at strategic positions in the location where your hot dog and sausage cart business is located.
- Ensure that all your staff members wear your branded shirts and all your carts, vehicles, trucks and vans are well branded with your company logo et al.