Yaneek Page Starting a hot dog business
QUESTION: I am messaging you here because I have run out of options. I have been trying to get some current information about owning and operating a hot dog food cart business in Jamaica. All the information I am seeing is over five years old. Do you have any idea of the start-up costs and what I would need to start such a business here in Jamrock? I would really, really appreciate it if I could get some feedback from you. Jamaicans are so cagey with this information.
– Hopeful
BUSINESSWISE: The start-up costs for a hot dog cart business are likely to run you between $600,000 to $1.5 million or more based on the information I have been able to gather for you. Below is an example of what your start-up costs could look like at the lowest end:
I tem Estimate (J$)
Food cart and accessories: $280,000
Cooking equipment, gas, snack display: $45,000
Sneeze guard, serving utensils, supplies: $25,000
Food handler’s permit, endorsed pictures, etc: $2,500
Starting inventory – franks, buns, condiments: $20,000
Vending licence – including application: $3,000
Advertising and promotion for launch: $50,000
Storage containers, dispensers: $10,000
Sanitation, clothing, cleaning supplies: $30,000
Transportation and travel: $20,000
Contingency: $75,000
The minimum start-up costs that I have estimated could be more, or less, depending on your approach to acquisition and set-up, your ability to negotiate, choice of vendors, and so on. I also included a reasonable contingency amount of $75,000, because the best practice when estimating expenses is to ensure a buffer to cover unexpected costs, particularly for new ventures.
You will note that the single largest expense you are likely to incur is the purchase and commissioning of the hot dog stand, at a cost of approximately $280,000. This estimate was from a local manufacturer who was recommended by at least one major local meat producer and distributor of hot dogs and other hot dog vendors.
The manufacturer’s prices range from $280,000 to $800,000, and the timeframe for delivery is up to three weeks. Unfortunately, the only contact information for him is an alias and mobile phone number, which I will share with you elsewhere.
The other option for the acquisition of a hot dog stand would be for you to purchase a second-hand cart locally, or from outside the country. I was not able to find any used carts for sale in Jamaica online. But I was able to find used carts that appeared in good condition on eBay for as low as US$800.
However, eBay purchases can be moderately risky. If you were to import a new hot dog stand, the cost might be considerably higher as prices online from reputable manufacturers ranged from US$3,500 to US$12,000 and more. Importation of new or used equipment will incur considerably more costs to ship and clear Customs after paying the applicable duties and taxes.
To ascertain first-hand data on any special programmes or concessions that may be available to support the launch of this business, I contacted the two major producers of poultry and meat products, which both have, either directly or through their subsidiaries and partners, entrepreneurial programmes that incentivise people like you to invest in hot dog or hamburger stands.
One company could not provide details on their programme at this time as the responsible officer was on leave. The representative who was available did not want to provide inaccurate or outdated information and so refrained from sharing any details.
The other company contacted provided details of what is called ‘The Reggae Jammin’ Entrepreneurship Programme’, which promises the following support to entrepreneurs who meet their requirements:
? Branded shirts and hats to staff;
? Co-branding of cart – your logo may also be incorporated;
? Opportunity to operate at our sponsored events; and
? Special discount on all frankfurters.
Some of the eligibility requirements are that you must provide a business plan that outlines cart placement and target customers; if you will be operating on public property; a vending licence from the municipal corporation, formerly known as the parish council; a food handler’s permit; and two references, one from a financial institution and the other from a notable person.
They also shared that they did not have carts in stock, and, therefore, recommended independent manufacturers and importers of hot dog carts, locally.
While I hope these estimates are useful, I encourage you to take the time and create your own budget based on your research, market entry, and competitive strategy.
Good luck and one love!
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Yaneek Page is the programme lead for Market Entry USA, and a certified trainer in entrepreneurship. yaneek.page@gmail.com