Selling tacos on the street is more than just a business: It’s a cultural institution. Mexico City has at least 200,000 street vendors on its sidewalks, and it’s a vital part of the informal economy in both Mexico and Central America. On the other side of the coin_,_ 75% of the city’s population eats on the street at least once a week.
In the United States, taco cart businesses are also popular — especially in areas like California that have high populations of Hispanic immigrants. But you can't be flying under the radar with a food business, as there are a number of laws and requirements you need to know before you can start selling tacos on the street.
To find out how much financial backing you’ll need to start street vending, you have to first create a business plan. Startup costs vary greatly based on how you plan to sell your tacos. Generally, it costs:
- Around $8,000 for a small taco stand business or cart
- $50,000 to $250,000 for a food truck business
You also have to consider location costs. Sometimes, vending in flea market spaces or during festivals can cost around $125 per week, and this doesn’t even take into account the rent on a space to store a cart or park a truck overnight. There are also different costs if you need to rent a commercial kitchen.
If you don't have the funding, you can apply for a business loan or personal loan or turn toward crowd sourcing through a website like Kickstarter to make your taco stand dreams come true.
In order to have a legal taco stand business, you need to be a legal, tax-paying entity. This means you’ll probably want to set up an LLC, which is essentially a tax structure that dictates how you’ll pay the IRS. It costs about $250 to register, and you can do this either online or through your city’s department of small business.
Certain states will require you to publish an announcement of your LLC in local papers, and others won’t. Along with this, you’ll need to get an employer identification number to use when you pay your quarterly taxes. You might also need a sales tax certificate, which you can get through your state’s department of taxation and finance.
This should be a given, but you’re going to need to buy a truck, cart or stand to sell your tacos. You’ll also need to buy the equipment used for cooking. Research rental options if you’re trying to keep down costs. And you never know what a quick Craigslist or eBay search can net you.
There are a lot of permits you need to legally sell food on the streets, and every city and state is different. For example, New York requires a propane permit that costs about $70 if you plan on using a propane grill to cook your tacos. Contact your city’s local health department and small business administration to inquire about the following:
- Business License: Every business needs a business license to operate. You’ll need to first become an LLC and obtain the proper insurance, like general liability, before you qualify.
- Food Handler Permit: Some states require employees who handle food to take a food handler exam.
- Health Department Permit: Your stand, truck and kitchen will have to be inspected by the health department to make sure you comply with local food safety laws. This cost varies, but in New York, a food permit for a temporary food establishment costs around $70.
- Vendor License: Vendor licenses vary from state to state, so check with your local municipality. For example, New York City has different licenses for seasonal mobile food vendors vs. year-round mobile food vendors. These licenses generally cost around $10 to $200 and are renewed annually or biannually. It’s a sure bet that you’ll need some sort of vending license.
- Seller Permit: This allows you to purchase wholesale ingredients and food without having to pay sales tax on those items.
- Vehicle License: If you’re working in a food truck, you’ll need a specific license that ensures your drivers are properly licensed for the size of the vehicle. You might need a commercial drivers' license depending on the size of your truck.
Taco cart businesses are considered temporary food establishments. In other words, you may want to try more than one location. Instead of a specific street corner, focus on a city. You can gauge traffic once you launch your stand, and if things aren’t going well, simply move or try setting up at local food festivals and events. High-traffic areas where people are hungry (such as outside of bars) or in a rush (such as outside of major transit stops) are usually great options for a small taco stand.
There are a few cities you might want to avoid. At this point in time_,_ 10 major cities have outlawed street vending, including Los Angeles, a Holy Grail for Mexican food. Nonetheless, 10,000 to 12,000 vendors still sell food across the city’s parks, beaches and sidewalks, but you probably don’t want to risk it. Instead of the legal headache, opt for a city that allows street vending and keep your permits up to date.
The key to a great taco stand is a great menu. This business model is a dime a dozen, so you need to do something different than your competitors. If you’re in an area where there’s not much authentic Mexican cuisine, you may want to incorporate authentic ingredients like Oaxaca cheese, asiento (unrefined pork lard) and chorizo.
Alternatively, if you find yourself in a trendy neighborhood, consider creating a twist on a classic. While Nashville hot chicken isn’t a traditional ingredient, it will probably turn heads (and taste buds) in Tennessee, where this is a beloved food trend. A jackfruit vegan option could work well in an area with a large vegan and vegetarian community.
Don’t make your menu too big. Most mobile food stands offer only a couple of options for a main dish. Keep it simple to keep your costs down, expedite service and create a strong brand image.
Once all your ducks are in a row, it’s time to get down to business. Marketing is a key factor. Set up social media accounts for your taco stand. This way, if you move, fans can still follow you wherever you are.
Instagram is also a huge tool for food-based businesses. Take gorgeous pictures of your meals and consider creating a taco that’s hyper-shareable. For example, in New Jersey, the pizza shop Tony Baloney’s made it into Eater for its viral taco pizza, which costs a whopping $80. In New York, Black Tap Craft Burgers & Beers was subject to two-hour waits once its crazy shakes went viral. Eventually, the craze died down as other restaurants adopted the idea, but there's nothing wrong with riding the wave.
Consider signing up your business on Yelp, Google and Facebook. People often browse these sites for new places to eat, and a solid amount of good reviews can bring in a whole lot of business.