How to Start a Food Cart Business in 2023 [7 Steps]

07/03/2023
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Starting a food cart business in 2023 can be a great way to fulfill entrepreneurial dreams while tapping into the skyrocketing demand for street food. As the food industry continues to grow, food carts are becoming popular for entrepreneurs looking to enter the market with a lower startup cost. To get the best from the business, it is essential to have a well-thought-out plan in place to succeed in this industry.

This blog explains the market prospect of a food cart business, the cost of starting a food cart business, the advantages and the challenges associated with the business, and how to start a mobile food business.

food cart trike

Street Food Cart Business: Popularity and Market Prospect

Street food cart businesses have become increasingly popular in recent years, especially in urban areas. One of the biggest advantages of starting a street food cart business is its relatively low startup cost compared to a traditional restaurant. This makes it an attractive option for entrepreneurs who want to start a food business but have a limited amount of capital.

In terms of market prospects, the street food industry is expected to continue to grow in the coming years. According to a report by Grand View Research, the global street food market size was valued at $4.11 billion in 2021 and is projected to reach $6.63 billion by 2028, growing at a CAGR of 6.8% from 2021 to 2028.

Cost of Starting A Food Cart Business

There is no fixed amount for starting a food cart business. The cost of starting a food cart business can vary widely depending on factors such as location, menu, equipment, and licensing requirements.

The overall cost to get a food cart business functional includes the following:

  • The cost of purchasing mobile food carts
  • The cost of purchasing equipments and kitchen utensils
  • Cost of obtaining permits and licenses
  • Cost of foods and supplies
  • Insurance 

Overall, the total cost of starting a food cart business can range from $10,000 to $50,000 or more, depending on the above factors. It’s important to carefully research the costs and requirements applicable to the local area before starting a food cart business.

trike for food selling

Advantages and Challenges of Starting A Food Cart

Some of the advantages of starting a food cart business are:

  1. Lower Startup Costs: One of the main advantages of starting a food cart business is the lower startup costs compared to opening a brick-and-mortar restaurant. The prices of renting a commercial space, furnishing, and decorating are significantly higher than setting up a food cart.
  2. Flexibility: Food carts are highly flexible, as they can be moved to different locations based on demand. You can take your food cart to food festivals, fairs, or other events where potential customers are.
  3. Better Profit Margins: As the operating costs of food carts are low, the profit margins are much better compared to traditional restaurants.

A food cart vendor may be faced with different challenges, which include:

  1. Limited Menu Options: Food carts generally have a limited menu as they have limited space. This can be a challenge for customers who prefer a more extensive menu.
  2. Limited Storage Space: Storage space is also limited, so there may be a need to restock supplies frequently. This can be difficult when you are working in a crowded or busy area.
  3. Weather: Weather can impact food cart operations, especially during extreme weather conditions. Rain or wind can make setting up and operating the food cart difficult.

How To Start A Food Stand Business? 

Food cart business does not start with basic knowledge of how to open a food stand. It starts with well-thought out steps, as discussed below.

Step 1: Market Research for Food Cart Business

Market research is a crucial step to ensure the success of any business, including a food cart business. A well-conducted market research is needed to answer the question of how to start a food cart business. It helps to identify the best marketing channels to promote the food cart business. And also help to create effective marketing strategies and determine the best location for the business.

Who are the potential customers? Are they office workers, students, tourists, or local residents? What are their demographics, such as age, gender, income, and education? Knowing the target market will help understand their preferences and needs and help make an informed decision on how to start a mobile food business.

Step 2: Get Permits for Your Food Cart Business

Getting the necessary permits for a food cart business can be a complex and time-consuming process. Still, ensuring that the food cart vendor operates legally and safely is essential. Therefore, make sure to research all requirements in the proposed area and stay up to date on any changes or updates to regulations.

Permits for the food cart business are applied for with the local authority or the agencies assigned to issue the permit. The requirements may vary by location, so check with your local health department for specific requirements.

Getting a permit will require completing a business license application and paying a fee.

Step 3: Buying A Street Food Cart 

Street food carts come in a variety of sizes and designs. Consider the type of food you plan to sell and how much space you’ll need to prepare and store your ingredients. When choosing cart to buy, as much as it is important to focus on functionality, the aesthetics of the food cart is equally essential. 

Motrike cargo trikes are best suited for food cart businesses. Motrike offers different types of bikes with visually appealing designs that can be customized to fit your need. Some of the products are:

To ensure stability, all Motrike’s cargo tricycles are built with top-notch components and strong frame materials like high carbon steel and aluminum alloy. The cargo tricycles also offer plenty of storage space, allowing enough space for a food cart business.

In addition, Motrike cargo tricycles are designed to be safe for humans and the goods transported. These cargo tricycles feature a spacious aluminum container that is both waterproof and resistant to UV rays, keeping the transported goods dry and safe from the damaging effects of rain and sunlight while traveling through the city.

All these features makes Motrike bikes an excellent choice as street food carts.

Motrike food trike

Step 4: Choosing Your Concept, Menu & Suppliers

Choosing a concept, menu, and suppliers is critical in starting a food cart business. Make sure to thoroughly research, test the menu, and choose a reliable supplier to set the food cart business up for success.

Based on the initial business research, a clear concept should be decided to create a roadmap for the business. The concept should reflect the target market, the location of the business, and personal preferences. Consider the type of food you want to serve, the atmosphere you want to create, the impression you want to leave on your customers, and other unique features that will set your business apart from competitors. Choose a suitable supplier to deliver the best quality products within a reasonable price range.

Step 5: Creating Your Food Cart Business Plan

Creating a food cart business plan is very crucial to business operations. A proper business plan should be tailored to suit the food cart business in line with the concept and mode of operation.

The food cart business plan should contain the following:

  1. A detailed business description that shows the mission statement, concept, and competitive advantage.
  2. A well-conducted market analysis that shows data on demographics, customer preferences, and industry trends.
  3. A marketing strategy that puts the targeted audience to account and how to reach them effectively.
  4. An operations plan covers the business’s day-to-day operations, including your hours of operation, staffing, and equipment.
food selling trike

Step 6: Get Funding For Your Food Stand

Depending on the scale of the business and mode of operation, a street food cart business requires funding to execute the plan. A small scale business can be funded with personal savings, depending on how much the owner has saved. It can also be funded by friends and family members. 

Personal savings might not be enough to fund a large scaled food cart business. When this is the case, consider sourcing for funds through microloans, small business administration loans with low interest, and flexible repayment plans. Fundings can also be sourced through angel investors in exchange for a percentage of ownership.

Step 7: Start Your Food Cart Business

All the processes mentioned earlier are part of the planning stage. starting a food cart business comes at the last stage. Before you start, it is expected that the necessary planning has been put in place. A popular adage says, “he who fails to plan, plans to fail” This statement is particularly relevant in business and entrepreneurship, where careful planning is often the key to success.

Once there is adequate planning, and the necessary licenses have been gotten, It’s time to Start!! Set out to carry out everything you have planned and achieve your goals.

How Motrike Power Up Your Food Cart Business

Motrike specializes in manufacturing high-quality cargo and food carts. They have over 15 years of experience producing suitable food carts for food vendors. Motrike offers you the best by using high-end durable components in the manufacture of different parts of the food cart.

The high-performing electric assistance of the Shimano 6 gears save the rider the stress of pedalling through a long ride. 

Motrike work site

Overall, Motrike power up your food cart business by providing effective and efficient mobility, durability, and safety. By partnering with Motrike, you can take your food cart business to the next level and reach new heights of success.

Conclusion

Starting a food cart business can be an exciting and rewarding venture for those passionate about food and entrepreneurship. While it requires hard work and careful planning, following the steps outlined in this blog can help you get started on the right foot. 

From identifying your target market to sourcing ingredients, choosing a location, and marketing your business, each step is critical to the success of your business. 

You can create a thriving mobile food cart business that delights customers and generates profits by staying focused, motivated, and committed to your goals. So why wait? Start planning your food cart business today, and take the first step towards achieving your dreams by contacting us!

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