How to Start a Food Concession Business

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Food concessions can be a lucrative business if you’ve got the right location, product, and marketing plan. You will find concession stands at many events, fairs, festivals, and sports games. Be sure to have a clear business strategy so you can maximize your profits.

Write a Business Plan for Your Concession Business

Your first step to starting a food concession business is developing a detailed business plan. This document will help you to attain financing from an investor or a lender and will enable you to clearly outline your business strategy. The elements of your business plan should include:

  • Executive summary: A brief overview of what your business does and why it is needed in the current market. Showcase reasons why you predict your business will be successful, and offer your topline financial projections. Clearly state how much money you are looking to raise for your business.

  • Company overview: Provide background on your company, its legal entity form or structure, and how long you have been in business. If you own and operate other concession stands or other businesses, provide information on your experience here.

  • Industry analysis: Research the market and provide your results here. Why is your concession business needed in this market? What problem are you solving?

  • Competitive analysis: What other concession businesses are in the area you wish to operate? How will you differentiate yourself from them?

  • Customer analysis: Who is your target market? What are they looking for that you can offer? Provide your customers’ demographic, geographic, behavioral and psychographic details.

  • Marketing strategy: Outline how you will promote your business and communicate with your target market. Use the Marketing Mix to develop your plan.

  • Operations strategy: Provide details of your business launch schedule and what milestones and objectives you need to achieve in order to reach your financial projections over the next year.

  • Financial projections: Tell investors the amount of funding you’re seeking, and what it will be used for. Explain how your concession business will generate revenue and when you will meet your revenue goals. Make note of your expenses, such as location fees or rent, electricity use, operational costs, food costs and staffing. The location you choose for your food concession business may depend on the fees you pay for the spot. 

  • Appendix: Attach your financial statements, balance sheets, cash flow statements and any other relevant documents investors will need to see.

Review Your Licensing, Permits and Insurance

Once you've attained the financing you need for your concession business, you will need to get the right licensing and permits. This will depend on your state and whether you’re a mobile or stationary concession business. Visit the U.S. Small Business Administration website to learn about which permits and licensing your concession business will require.

When food preparation is involved, you will need to take health and safety food regulations into account. You may need to pass a food safety exam and have your concession business inspected by the authorities. Check your local state, city and county licensing offices to understanding which laws you need to follow, what kind of exams you need to pass and which inspections you need in order to open your business.

Don’t forget about insurance, which is a critical item you need to consider. If you are a mobile concession business, you may need commercial auto insurance for your vehicle. If you plan on hiring employees, you will need workers' insurance.

Purchase Your Supplies and Products

Depending on whether you’re a mobile or stationary concession business, you will need to purchase supplies and equipment to help you run your shop. If you’re mobile, you will need to look into handcarts, food trucks and other mobile food kitchens. If you’re stationary, you’ll need to ensure your location has commercial kitchen equipment for high efficiency.

Other items you will need include:

  • Cold food storage capabilities
  • Food warming and holding equipment
  • Cooking equipment like deep fryers, grills and ovens
  • Serving utensils
  • Plates and cutlery
  • Aprons or uniforms
  • Cash registers

Market Your Business

Develop a marketing plan focused on the Marketing Mix to ensure you’re maximizing the potential of your concession business:

  • Product: What items will you sell in your stand? Do your customers want burgers and hot dogs or do they want ice cream and cotton candy? You may find it easier to start by selling a single kind of product, such as popcorn or cotton candy, as you don't need complex cooking equipment like a grill. 

  • Place: Where will your concession stand be? Will you move around or will you be stationary? Consider the foot traffic you will need in order to turn a profit. Many food concession businesses choose to sell at or near festivals, sports games, carnivals, amusement parks, markets and parades. Take note that you may need to apply for a permit to sell food at such events, which can take several weeks or months to attain. 

  • Price: How much are your customers willing to pay for your food? Compare your prices to your competition. Consider the margins you need to turn a profit, taking all your operational expenses into account.

  • Promotion: How will you communicate with your customers? Will you use advertising, direct mail, personal selling, sales promotions or public relations? What is your unique value proposition?