Barb Fitzgerald, author of Food Booth: The Entrepreneur’s Complete Guide to the Food Concession Business, shares her insider tips about opening a concession booth. She covers getting started, choosing the right food service equipment, picking a menu, finding profitable fairs and events, and more. [21 min.]
Start off by giving us an overview of the food concession business.
You know, until recently, the concession business has been kind of a step-child of small businesses, but now with so many people losing their jobs, it’s become a lot more legitimate. In fact, a lot of people who are unemployed are risking their small savings to start a concession, and I think they’re finding that they can make money at it, which is really empowering for them. You know, I’ve talked to some who after starting the concession business say even if they were offered back their job, they’re not sure that they would take it because of the risk involved. Because I think a lot of people are reconsidering the notion that working for a big company is just not the best way to go anymore. In fact, I think the food concession business is different from any other business. The one thing, nearly anyone can run a concession business. You don’t need to have any kind of experience or a college degree — you don’t even need to be a good cook. It’s also good for people who want a business that doesn’t take up all of their time because it can be customized to suit their lifestyle. For example, some people use a concession to supplement their income and for paying for college, and others might use a concession as a backup in case they lose their job, or because they’ve become unemployed. And I see a lot of retirees who use a concession as an excuse to travel. But for many people, the concession is their sole source of income. I also see a lot of families who get involved in the concession business because the entire family can participate, including the kids. I think it’s the perfect family business. There’s no other business I know of that you can start so easily and so inexpensively, but still make so much money. It’s also a lot of fun. Actually, there are two types of concession business — there’s temporary food booths that sell food at fairs and festivals, and then there’s stationary food stands that sell from permanent spots like coffee trailers and sidewalk carts, and like the food stands that you see in front of Home Depot. Most of my work has been with temporary concession booths, selling food at special events, so that’s what I’ll be talking about today.
How much does it cost to get started?
Well, compared to starting nearly any other business with the same potential, a concession business can be started fairly inexpensively. For example, someone starting a restaurant might spend upwards of $300,000, whereas a concession can be started for as little as $5,000. I recommend that people start modestly, though. There are so many variables and decisions to make that it’s good to get a feel for the business before committing to a specific booth or menu. And this is particularly true for people who have never had any business experience. But your goals and the size of your budget will mostly determine how much you want to spend. I started really slowly by just squeezing a little bit out of each paycheck, but some people might have enough money to jump right in and buy all the equipment they think that they need. Unfortunately, some people start by buying a big booth and lots of equipment, but then they find out that it takes quite a few years to develop the business. A big expensive booth might also make more money than a small booth, but that’s only true for people who have been in the business a long time and are doing really big shows. It’s also a good idea to start small so that you can also modify your business as you go. In fact, if you start with a menu that doesn’t require a lot of equipment, and you already have the vehicles you need, and you just want to try out a few shows to see how it goes, you can start a small concession for less than $5,000. And actually, it’s even possible to open a concession for around $500, because some fairgrounds have built-in facilities complete with kitchen appliances. With the cost of renting the facility, getting a health permit and buying inventory, a person could sell food at the event. In fact, non-profit organizations do this a lot for their yearly fundraiser. It’s an easy way for anyone to make some quick cash.
Here’s a question that everyone wants to know the answer to: what kind of income can you make?
Well, that’s varies a lot. Basically, as I see it, there’s three groups of food concessions. There’s people like retirees and people who use their concession part-time to supplement other income that usually run small booths at small events. These folks might gross between $5,000-$20,000 a season. Then there are some concessionaires who get most if not all of their income from their concession, they might gross between $20,000-$50,000. They usually do a lot more events during the season. And a lot of them have other businesses or part-time jobs in the winter because they don’t want to use their concession money to pay the bills all year. If they did that, they would never build up any of their savings. And then there are some vendors who run really high-volume concession businesses, selling mostly at large regional and state fairs. They usually have really big booths and lots of equipment and a big staff and they sell a lot of food. They might gross between $50,000-$200,000 a season. These types of concessions are expensive to buy and very expensive to operate, and it takes many, many years of experience to build up to this size of operation. It’s important for new vendors to understand that it requires a lot of years to establish a schedule at good events. And then once established, then the income level is mostly determined by their menu, the choice of the venues that they go to, their sales capacity, their ability, and even their ambition.
So what you’re saying is, it’s really a flexible kind of business. You could do it part-time and keep your day job, at least for a while.
Oh, absolutely! In fact, if you can, you should keep your day job until the concession becomes established. For a lot of people, that can take several years. Also, for most people, the concession business is seasonal, but the bills still need to be paid in December. So it might take awhile before the concession earns enough to safely quit your job. In fact, this is one of the hard things about the business. Because during the first few years, it can be a balancing act between allowing yourself enough time to work the concession without causing problems with your job. But some people can make decent money, even during the first season. I’ve seen a lot of new vendors show up the second year with a better booth and a stronger commitment to the business, because they now see its potential.
Barb, I’m sure it depends on which area you decide to specialize in, but in general, what kind of equipment do you need?
Well, the largest outlay for equipment is usually on support vehicles like trucks and trailers. A lot of people overlook this cost, and they also usually need some type of living quarters while they’re at events. The support vehicles, including the licenses, the fuel, the insurance, can sometimes cost more than the rest of the concession business. Then after the booth, there’s a need for food service equipment like deep fryers, grills, hot dog steamers and so on. This type of equipment depends entirely on the menu, so to start a small concession business, some menus can be served with equipment you have at home. For example, a couple of large electric roasting pans and a cooler might be almost all you need to serve baked potatoes at a festival. Though you can’t make a killing with minor equipment, you can still just try out some events to get a feel for the business. Then, when people buy restaurant equipment, they should try to use equipment that can be used for more than one menu, for example, grills and deep fryers can also be used to cook all sorts of menus, while a soft-serve ice cream machine can only serve ice cream.
Talk about selecting a concession trailer or booth. What are some things you want to think about?
Sure. When people think of food booths, they mostly think of concession trailers, but there are other types of booths like tents, stick joints, vans and push carts. Different booths are better for certain types of menus, certain venues, and the person’s physical ability. Trailers are generally easier to operate because they don’t need to be assembled and the equipments is all ready to go, while a tent or stick joint are more labor intensive, because the booth and equipment needs to be set up at each event. Trailers cost anywhere between $500 for an RV conversion to maybe even $100,000 for some of the very fancy manufactured trailers. By using a pop-up tent, is the cheapest way to get a booth, which costs about $200, and that works real well for people because the equipment isn’t pre-installed, so you can rearrange your equipment within the booth all you want. I think the most common way that people start their business is by buying a pre-owned concession trailer. Usually pre-owned trailers come pre-equipped, they already have a menu that they’re set up for, and a lot of the sellers are willing to train their new owner.
I can think of dozens of concession items — hot dogs, Sno Cones, popcorn, doughboys, ice cream — the list is really endless. What are some of the best items to sell, and which seem to be, in general, the most profitable?
Well, actually, the menu is probably the most important decision you make in starting a concession business, because all the other planning such as the booth and the support vehicles and equipment and licenses and the events and the size of the staff — all of that will be determined by the menu, because it can be hard for new vendors to find events. Common wisdom says they need a menu that’s unique in order to get booth space. But the problem is unique menus sometimes don’t bring enough customers. And there’s a reason that carnivals and most concessionaires sell typical fair food —bbecause the fair food is easy to sell and it has a high profit margin. Sometimes new vendors should start with unique menus so that they can get into events, and then, as they need to, they can slowly expand their menu later to include items that sell better. But your goals should also determine your menu. If you want a concession business that would be easy to operate and give you some extra spending money, you can set yourself up fairly simply with an easy, single-dish menu. However, if you plan on starting a living from your concession, you’ll probably need to sell one that’s more high ticket and high volume. In addition to that, there are two important elements you should also consider when you’re planning on your menu. For one thing, the logistics of a menu is important. Managing enough food to serve thousands of people is an experience that most people outside the food service business have never had. In fact, many concessionaires sell as much food in a single weekend as some restaurants sell in an entire month. When you’re planning your menu, you need to keep in mind that menus are labor-intensive and hard to manage. Some of them are more labor-intensive and harder to manage than others. Then to make money, your menu should nearly sell itself. If you have good signs and your booth is displayed well, but you still need to talk people into buying it, it might not be the right menu. There’s a critical mass at each concession business that your sales must reach in order to make money, and everybody’s critical mass is a little bit different. And one other important component to your menu and the way it fits into your operation is, how efficient is it? No matter what you sell, you must be able to serve it really fast, because at every event, your money is made during a short window of time, and the faster you can dish your food up, the more money you’ll make. Whatever you do, it’s important to get the right balance in your concession, with a menu that’s logistically comfortable and one that sells well enough and at a high enough profit that’s right for you.
So you’ve bought the right equipment, determined your menu, you bought a concession trailer — how do you go about finding fairs and carnivals and other venues to set up your booth, and how do you know which ones will be worth your time and effort?
Well, establishing a schedule of events is a real long process, although it does get a lot easier each year. Until recently, the traditional manner of finding events involved using published event listings. Now, thanks to the Internet, though, finding events has become a lot easier. But frequently Internet sites only list large events, to the exclusion of small festivals, so a combination of printed and Internet sources gives you the widest search. First off, until recently,vendors usually, traditionally, would just call the state department of tourism to get a calendar of events brochure, but to save money, it’s possible that some states now only provide their calendar on their website, so luckily, with the Internet, you can also search a variety of websites that have special event listings. For example, festivalnet.com is a really good site. Also, all the state and county and city websites usually have listings of events in their area. And it’s also a good idea to contact all the fairgrounds that are in the area that you’ll be working, or the Chamber of Commerce’s, and any special interest organizations that you can think of that might sponsor events such as horse shows or swap meets. As far as analyzing an event’s quality — it’s hard to know if an event is worthwhile. I usually recommend people phone the event coordinator and ask a lot of questions to get a mental picture of the event before they sign up for booth space. When I call, I like to know what the activities are. I like to know the event’s location, and the expected attendance at the event. I also want to know how many booths that are going to be there and if any of them are going to be selling the same menu as I am. I want to know what the space fees are and whether or not they’re going to be charging admission for people to get through the gate. But without actually going to it, it’s really hard to know if it’s a good event.
Do you need to get licensed through your city or state, or are there other requirements like approvals from the health department?
Sure, a lot of concessionaires do everything they can to avoid being licensed. The thing is that temporary food concessions fall into a sort of bureaucratic gray zone, and for some people in some areas, much of the red tape can be avoided, but you can never avoid the health department, because they issue the standard license for the concession business. And their inspectors will show up at almost every event you go to. So it’s important to learn about the health department regulations before you decide on your menu or your booth, because your licensing requirements will have a lot to do with what type of concession and equipment you need, and the events, and your menu. So keep in mind, temporary concession booths and stationary food stands each require a different license and have a different process of getting a license. One is called the temporary restaurant permit, and the other is called a mobile food unit license. It’s important to understand the difference so that you can get the right license for your business. A lot of health departments, when you call them, will not guide new vendors correctly towards the right license that they need, and it creates a lot of problems for them. They don’t realize that there’s a difference in these licenses. People who work with food also need to get a food handlers card, which also is issued by the health department. Beyond that, the licenses you need are just typical business licenses that are issued from the city or the state or the federal government, and each person needs to inquire into what licenses in their area and their operation are appropriate for them.
Barb, what resources are there for entrepreneurs getting started in the concession business. Talk about the websites and forums and trade associations and magazines, anything that you might think would be of interest.
That’s kind of hard because it’s no different today than when I started 25 years ago. There are very few good resources of information to help new concessionaires to conduct due diligence, and there’s a lot of bad information out there, but there are things that people can do. But first they should visit some events to get a sense of the business. This is probably the most important thing that they can do. And it’s the best way to get some ideas for planning their concession. A lot of people approach food vendors when they’re at an event. Unfortunately, most vendors aren’t interested in telling someone how to get into the business, because it only increases the competition and it’s already a really competitive business. I also find when people approach me that it’s hard to give them information, because where do you begin? There’s so much to the business that can only be learned by experience, and every business is completely different, depending on who’s running it and what their goals and their background and their situation is. Then they should visit some websites of events in their area. Most of them will have a page for food vendors, and that gives them an idea of what’s expected of food vendors when they sign up for space. Also, they should visit some restaurant equipment stores to learn about food service equipment and get some prices and some ideas for menus. They should also check out websites for different fair associations and the National Association of Concessionaires.
What are some of the things that truly set successful concession business entrepreneurs apart from those that just do okay?
I think the reason some vendors make six figures and more and some don’t, basically comes down to three things: their ambition, their having a good instinct for the business, and salesmanship — both with their customers and also to event coordinators for getting booth space, which, in a lot of the big events, politics plays a big role in that. But for most vendors, I don’t think they want to run that type of concession business, or they can’t run that type of concession business. So I would say, anyone starting a concession business should first ask themselves some very important questions. They should start by asking, what is their purpose for starting a concession business? Is it just to earn extra money or is it to replace their entire paycheck? Maybe it’s just a way to keep the kids busy over the summer. Then they should ask, what do they expect to achieve from this concession business? In other words, how much is enough money? Do they need $20,000 for a new car or $100,000 for a down payment on a house, or maybe they just need to get their bills paid. They should also consider their financial resources and how much they can afford to invest in their concession. Luckily, a lot of people can start really reasonably and they don’t have to spend a lot. They also need to consider how much financial resources they have to pay their bills to see them through until the concession starts making the money that they’re expecting from it, and possibly, the most important question is, what is their background and their capabilities, and what’s their limitations? Do they come to the business with previous experience? Are they in good physical shape? Because the concession business is a hard business, physically, to run. Do they need to balance their concession with other responsibilities, such as a job or raising kids? And how much energy do they have? It takes a lot of energy to run a concession business through the concession season. So most people eventually get to the point where they can balance their goals and their capabilities with a concession that’s logistically comfortable, but also makes enough money for them. New concessionaires who start without having this discussion are usually disappointed in the business.
What are some of the biggest mistakes that you see people making when starting out in the food concession business?
Well, one big mistake that comes to mind is that when people come in with misconceptions about the business, many people are way overconfident. They think they only need to buy a trailer and drive to the state fair to make a ton of money. I think they get this idea from hearing that the business is a gold mine for anyone who does it, and there’s a lot of very bad information being peddled out there on the Internet. Actually, the concession business is like any business — it takes time, effort and hard work to make good money at it. Usually the folks who do really well in the first season are the ones that do a lot of research and planning before they get started. In fact, I get letters pretty frequently from people who are ecstatic when they do well, thanks to getting good information upfront. Another mistake I see is when people don’t realize how competitive the business is, and that it requires a lot of focus on marketing with good signs, lighting, good customer service. And maybe the most important thing is selling themselves to the coordinators so that they can get into events — that’s not an easy thing to do. Because coordinators, when they’re looking for vendors, they have a very generic application, so it becomes the vendor’s responsibility to go above and beyond to sell themselves and make the coordinators want to have them at their event. I think that focusing on having good food, good signs, and efficiency in their business so that they can push out a lot of food when they need to are all really important. You know, what makes the concession business a really great business and an unusual business, I think, isn’t that it makes a lot of money. It’s because nearly anyone can do it. Even folks who have never dreamed that they could actually become self-employed are able to start a concession business. And I think that’s the real beauty of it.
Barb Fitzgerald is the author of Food Booth: The Entrepreneur’s Complete Guide to the Food Concession Business. You can visit her website at www.foodbooth.net.