The food cart model

Starting a Food Cart is one of the most ideal and affordable ways to enter the
food industry. Lower risks and investment makes the food cart one of the
most popular among the various However, for making your, you need to
have a good product that should be in demand and a good location which will
ensure your long-term viability in the market. In recent years, the food cart
business has been flourishing with street food lovers flocking from miles
around. A food cart business is a manageable way to get started in retail
without committing a lot of money that goes into the setting up of the
restaurant.  

1. Product
While starting up a food cart business, the first thing you have to consider is
what product you will be selling. Your choice of product will also determine
the equipment that you are buying. Since food carts are essentially a
variation of the quick service restaurants, fast food, and items that can be
prepared easily and quickly should be preferred. Momos, noodles,
sandwiches are some of the popular items that are sold on a food cart.
However, there is extreme competition in the food cart business; thus, you
need to have a USP that would set you apart from the local vendors. It could
be an innovation or variation of an existing product, but at the same time, it
should be affordable.

2. Deciding the Location 

Besides your target market and competition, the location is a key
consideration in setting your price.
Before finalizing the location understand your target audience and
competition. It is better if the competition is less in your area. Food cart
businesses are more successful and have better prospects near offices,
supermarkets, train stations, terminals, college and universities where there
is a good crowd because of busy interjections.  It is advised to assess the
security and the accessibility of the area in which you are setting your food
cart. You should go around and observe your location for a few hours on both
weekends and weekdays before you go ahead.

3. Licensing and Registration 

Just standing on the road is not allowed for any Food Cart Business. In
2015, The Food Safety and Standard Authority of India  (FSSAI)
started the registration of the Street Vendors in the whole of India
under the Municipal Corporation.

All the vending areas and every cart are handled by Municipal Corporation
whether in Delhi or any other city.  

4. Cart and Equipment 

Starting a food cart in india does not need much of the investment.  The cost
of your food cart will depend on the type of cart you wish to purchase. You
can get a decent quality aluminum cart for around Rs 40,000. You can also
get them customized according to your needs. Carts are also fairly easy to
maintain. You will have to purchase a commercial cylinder for your food cart
business which will cost you around 2000 and every month you have to pay
Rs. 1000. Your choice of product will also determine the equipment you
need.

The raw materials that you would require will depend on what you are
selling. It is advisable to start with a week’s worth of raw ingredients and
then make the weekly or monthly purchase according to your sale.

5. Menu Pricing
For deciding on the pricing of your product, first, you need to research your
competitors and their target audience. Even if in the locality you are the only
food cart serving Pizza or anything, you cannot raise the price high because
that will lower down your profits as your customers can go to another vendor
who will be selling at a cheaper rate. You should price higher in an upscale
mall and much lower if in public markets.

6. Staffing
Since a food cart is a small food business, you do not need a lot of
employees. Two people are sufficient to run a food cart, during rush hours.
For slow hours, you can employ one person who would prepare the food
items as well as sell them. However, since 90% of the preparation of food
items is done beforehand, you’ll need two people to prepare the semi-
finished items. For example, momos and sauces are already prepared in
advance. At the time of sale, the momos are only steamed and sold to the
customers. You can hire cooks for Rs 8000-10000.

7. Profits
Food car are highest profit making business in india. Although the net profits
very much depend on your sales, the profit margins are on the higher side,
with the average being 50%. Granted, that the food costs and the other
infrastructure costs are minimal, however, the low selling price and high
competition eat into the profit margins.

It is advised that you have at least 6-12 months’ worth of running capital
before you venture into a Food Cart Business. Because in the worst case,
there might be a possibility that despite your best efforts, your food cart
business fails. However, the money invested in starting a street food
business is very less as compared to a full-time restaurant. The overall
investment required to set up a food cart is around Rs 1 lakh and can go up
or down depending on the type and quality you want to open.

The Pros and Cons of Opening a Food Cart

Like all food businesses, the food cart also comes with its own set of benefits
and challenges.

The Advantages of Starting a Food Cart Business

There are many advantages to launching your own food cart
Business:

 The start-up costs are low in a Food Cart Business as compared to a

restaurant. Setting up a Food Cart Business is easier than setting up
a restaurant.
Even big fast-food chains are using food carts for their events or
promotions.
 Another advantage of this business is that if you picked a poor
location, you could move your cart to another place.
 Another reason is that depending on your target market and
marketing strategy, you can make a food cart either mobile or
stationary.

The Challenges in a Running a Food Cart Business

While there are a lot of advantages in a Food Cart Business, there are
also a few challenges that cannot be ignored.

 There are many regulations and laws to comply with which might be
difficult at times. For example, a lot of times the local Police can be
uncooperative and issue a Challan  against these street vendors.
  At times, if there is a restaurant near or in front of the food cart, the
restaurant owner creates problems for then Food cart vendor as
there is a likely possibility that customers will be more interested in
street food because of its low price. There is a lot of competition out
there already.
 There might be days when the business is extremely low because of
the weather. Also if you are changing your location because of any
reason, keeping your customers updated about your latest location
is a challenge.
Undoubtedly, starting and running a food cart business requires a lot of
groundwork. But it will work well if you focus on the quality of your food and
proper hygiene is maintained. If you are interested in starting your venture
in the Food Business industry, beginning with a Food Cart Business is a great
idea, to start with.