Have you ever walked down the streets of New York City and came upon a hot dog stand business? Vendors line major streets, the smell of fresh hot dogs, ketchup and sauerkraut fill the air with a divine aroma that makes your mouth water.
And while you may just be passing through, the vendor owns their own hot dog cart business that is putting food on their table.
If you've always wanted to know how to start a hot dog cart business, this guide can help.
How to Start a Hot Dog Business in 7 Easy Steps
1. Register Your Business
You'll want to first focus on registering your business if you're not opting for a sole proprietorship. Registering will cost money, but most of the process can be completed online.
A few of the things that you'll want to do initially are:
- Create a hot dog business plan
- Find a location
- Choose a trailer or cart to use
If you're operating as a sole proprietor and want to sell your hot dogs under a different name, be sure to register as a doing business as or DBA.
Once you've done all of this, you'll need to follow the remaining steps to get your business up and running.
2. Obtain a Permit from Your Local Department of Health
You've registered your business, and now it's time to obtain your permit. You'll want to call your local health department to discuss what you must do to meet all of the permitting requirements.
The department will be able to tell you:
- Foods you can and can't sell
- Equipment that you'll need
- Cart requirements
Depending on the state, you may need different equipment, such as two or more sinks. Once you meet all of the requirements, you'll want to apply for and obtain your permit so that you can legally operate your hot dog business.
But, you still need to obtain a license or two before opening your stand.
3. Obtain Your Hot Dog Business License
Just because you've registered your business doesn't mean that you have all of the right permits and licensing to operate your business. Food is an industry that is highly regulated, and you'll need to obtain and maintain your license to begin and/or continue selling food.
Conduct a quick Google search for the county clerk of your city to discuss the type of business license that you'll need to operate.
You may need two or three licenses.
If you're working with a lawyer to help incorporate your business, they should be able to help you obtain all of the appropriate licenses needed to operate in your city/state.
4. Apply for Your EIN and Resale Number
An Employer Identification Number (EIN) is, essentially, your business' social security number. The great part is that the IRS allows you to apply for an EIN for free online. You'll need to meet a few requirements when applying:
- You must have a valid tax ID:
- SSN
- ITIN
- Your principal business must be located in the US or one of its territories
When applying, so long as you meet all of the criteria, you'll immediately receive your EIN. You can choose to print the EIN, save it or download it for your own convenience.
5. Purchase an Insurance Policy
Anything can happen with your hot dog business. You'll be focusing a lot on your hot dog business profits, but you also need to focus on risk management. If a customer wants, they can claim that your food gave them food poisoning and file a lawsuit against you.
Insurance will help you fight these claims, but not having insurance can bankrupt your business.
Most states have what is known as hot dog cart insurance, or something similar. These policies often offer $1 million to $2 million in coverage. The coverage will also extend to your equipment, in many cases, which will help you cover the cost of your cart being damaged or stolen.
And if you're operating out of a food truck rather than a stand, you'll also need commercial auto insurance.
Don't know what types of insurance are offered or that you'll need to operate your hot dog business?
Speak to a local insurance agent. These agents are highly knowledgeable and can help you secure the insurance you need to operate with the least risk possible. It's possible that you can even save money on premiums by using the same insurance provider for all of your needs.
6. Purchase Your Inventory and Seek Out Vendors
How will you source all of your ingredients? Most hot dog businesses will secure contracts with vendors, or you can go to a store like Sam's Club and buy in bulk. You'll want to sit down and weigh your options, but most people prefer working with a supplier that can help them routinely source items.
Speaking of items, what items will you sell? Only hotdogs?
You can sell:
- Chips
- Drinks
- Candy
A lot of people will start with one main food item and then add to the list slowly over time.
7. Discuss a Commissary With Your Health Inspector
Operating a hot dog truck business or even a stand requires you to work closely with health inspectors. For the safety of everyone involved, health inspectors will look at how you cook your food and store it.
If you're using unsafe practices, you can be confident that your business will be shut down - even temporarily.
Depending on the state, you may need what is known as a "commissary." A commissary is a place that meets all local codes where you can:
- Prep food
- Clean your wares
State Health Departments do not want you to use your home as a commissary because you need to follow very strict guidelines.
You might have a lot of hot dog business ideas, and these steps are a basis for making them a reality. Spend your initial time forming your business in accordance with local requirements, and be sure to seek out reputable vendors to supply you with food.
Once everything is obtained, you can then execute your hot dog cart business plan and start focusing on making sales.