It’s a fact: The hot dog stand business model is one of the lowest barrier to entry business opportunities available to new entrepreneurs. If you’ve been researching the topic online, you’ve already read claims that you could get started for less than $1,000 and be in the black within your first day of business.
Well, in this post I’m going to try to set you straight on what it really costs to start a hot dog cart and what the operation costs will be each month. The last thing I want is for you to get into the dog-slinging business due to misinformation and not have enough money to give your dream of being a business owner a fair shot.
In addition to outlining the typical startup costs in the spreadsheet below, I also recorded an interview with Matt Gladfelter from Bow Ties and Hot Dogs about his experience starting out. As you’ll soon find out in the podcast, Gladfelter had a unique situation where he was able to find a used hot dog cart from an existing restaurant owner for less than $2,000. The cart could also be operated legally from a health perspective in his city.
One point that Gladfelter makes during the discussion is extremely insightful. When starting out there are three costs:
- Paper Cost – This is what you expect to pay to start and operate a hot dog business. The paper cost is outlined in the spreadsheet below.
- Ideal Cost – This is the amount you would expect to invest in a perfect world. The ideal cost is something that you will need to tweak and work toward within your business. For example, one way to cut costs would be to reduce food waste. As a business owner, you should be able to reduce cost overtime as you begin to understand how much food you’ll need to purchase for each event.
- Realistic Cost – Life happens. Things break. Hot dogs are accidentally dropped to the curb. Expenses come up that you didn’t realize would be important. It’s important to build in a bit of a buffer with your expected monthly costs of operation.
Factors that Determine Startup Cost
When evaluating the hot dog business, there are two important variable costs you need to keep in mind that are dependent on the rules and health codes where you live.
Investing in the Right Cart – Before you invest in a hot dog cart, you need to understand the local health requirements to vend legally in your city. The last thing you want to do is spend a couple thousand dollars on a cart that you won’t ever be able to use because it doesn’t meet health requirements, like no available hot / cold water source. Typically, you will be able to find this information by contacting the city hall and asking about their requirements for food vendors. As you can see, the cheap cart you’re able to find for sale on Craigslist might not be the great deal it is advertised as if you can’t use it.
As a hot dog vendor, your health requirements will often be lower than someone that wanted to start a burger stand, where they would need to actually cook meat. Still, you want to make sure that you’re passing any health inspection with flying colors. Not just for government regulations, but it will make your cart more appealing to prospective customers too.
Local Permits – While you’re at city hall, be sure to ask about any permits you’ll need to acquire to vend within city limits. As a general rule of thumb if you live in a big city like New York, you’ll pay a lot to get started. If you live in a smaller city, there are generally lower permits. Often these permits need to be renewed on a yearly basis so you’ll need to build these into your expenses. According to a real-life example from John Caruthers over at SeriousEats.com, at the time of writing in the city of Chicago it will cost $700 for a two-year license. In addition, you’ll also need to budget $100 for a fire safety permit.
Fortunately, once you’ve done the research within your particular city the costs to operate this type of business is pretty straight forward and consistent no matter where you’re located. A hot dog bun, Vienna sausage, and a mustard packet are about the same no matter where you’re located.
Note: If you would like to copy and paste this into a spreadsheet to enter your own information, you can find the template here: Cost Spreadsheet.
Hot Dog Cart Start-up Cost Break Down |
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| Equipment | Estimated Cost | Notes |
| Hot Dog Cart + Cooking Equipment | $3,000 – $20,000 | A hot dog cart will typically cost a few thousand dollars. A larger hot dog trailer that a couple employees can cook in will cost more. |
| Initial Product Inventory | $300 – $1,000 | This will include Hot Dogs, Buns, and any Condiments. |
| Permits and Licenses | $100 – $500 | Varies a lot depending on where you operate. |
| Website | Free – $2,000 | You may not even need one of these. A Facebook page can serve as a simple alternative. |
| Facebook / Twitter | Free | |
| Cash Register / POS | $200 – $1,000 | Can also use an iPad and an app for credit transactions. |
| Uniforms / T-Shirts | $0 – $1,000 | |
| Paper Products (Plates / Napkins, etc.) | $200 – $300 | |
| Misc. Expenses | $500 – $2000 | Plan for some unexpected expenses here and put it into the budget. |