The Cost of Running a Concession Stand

People decide to get into the concession business for many reasons. It may be to satisfy a desire to be self-employed; as a stepping stone into the food business; or as a way to travel around the country seeing new sights, meeting new people and making some money along the way. There may be an underlying assumption that it is an inexpensive way to own your own business. However, many people do not always understand all of the costs associated with owning and running a successful concession stand business and find themselves in over their heads after a short amount of time.

With the right planning and knowledge of what you will need to get started, you can get things up and running with much less than it costs to open a traditional brick and mortar business. And, with a concession stand, you can always start small and grow. This article is intended to provide a general overview of what to expect when opening a concession stand business.

Type of Concession Stands

When considering opening a concession business, you will need to consider the type of stand you want to have. There are numerous opportunities to sell food at campgrounds, carnivals, county fairs. ballparks, and various city locations, so knowing where you want to sell will help you determine the type of booth you will need.

There are fixed booths with smaller footprints, designed to sell one specialty item such as hot dogs, there are mobile carts that can be equipped to sell more than one main item with the flexibility of going from location to location, and there are trailers with the largest capacity and ability to sell many different foods. Each type has it's benefits and limitations, with the costs varying from less to more expensive.

Regardless of where you want to set yourself up, your budget will be the determining factor as to the type of vending stand you can afford. And, regardless of the stand you decide upon, it must be clean, professional looking and attract customers.

Type of Equipment

The type of equipment you need will be determined by the food you want to sell. Most concession food equipment has a small footprint to fit the tight spaces of a vending stand. If you plan on selling hot dogs, you will want to invest in a good, reliable hot dog cooker, as that will be the basis of your sales. If you plan on selling snow cones to supplement your hot dog sales, they are affordably priced and have a high profit margin, so that will easily offset any initial costs. Other equipment you may need includes deep fryers, popcorn machines and food merchandisers. Note that, unlike for back-of-the-house applications, the equipment used in concession stands is visible to your customers so it should look clean and appealing.

Concession Stand Supplies

Never underestimate the importance of investing in good quality concession stand supplies. The disposable goods that you wrap up your food in will accompany your customers as they leave your stand, and if your food items are wrapped well, with no leakage, in attractive and easy to open wrappers, it will go a long way in advertising your food. So invest in sturdy hot dog bags, French fry bags, food and deli wrap, as well as cups, lids and straws, to keep your customers clean and happy. Your concession stand may also require condiment dispensers, utensils, trash receptacles and more. The cost of these items can easily be added to the price you charge for your menu items when calculating how to set prices.

Employees

After the initial excitement of opening a new business wears off, you may find that handling your concession stand alone is too much work. Rather than soliciting help from family and friends, you may want to bring in some part time employees to help with your workload. Even though minimum pay wages vary from state to state, you can rely on the fact that getting help running your stand is an affordable way to remain open as many hours a day as possible, helping you reap a profit from your business. 

Food Costs

While food costs vary, investing in high quality foods will pay off at the cash register. Customers want to buy good food and if yours is fresh, tasty and high in quality, this will become your best selling point. Your stand will gain a reputation for selling the finest fast food around, and the lines will snake around your cart. We've all witnessed this phenomenon and people usually find that it's worth the wait to get the tastiest food from outdoor vendors. So calculate food costs into your formula for success but don't cut back when it comes to quality.

Other Fees and Expenses to Consider

Way before vendors can start selling, concession stands owners need to consider the cost of the space they want to rent and any permit and license fees required to open up shop. Owners also need to consider insurance premiums and maintenance fees for the overall upkeep of their business. You also need to pay yourself, just as you would get a salary from a traditional job, so you can pay your rent, car expenses, utilities and any other expenses.

If you account for all of these different costs in your budget and into your overall business plan, chances are you can run a successful concession stand. If you start small, it will also be easier for you to handle your own finances. As your business grows, you may need to hire an accountant who can keep the books for you and advise you on all business and other money matters.