Concession stands can turn up to a 94 percent profit on foods like cotton candy, shaved ice and popcorn – not surprising considering they consist mainly of sugar, water and corn! When you factor in their low operating costs, concession stands have far better profit margins than restaurants, but high profit margins alone doesn't make them profitable. On the flip side, you have relatively heavy initial capital expenditures, such as pretzel warmers, popcorn machines and heat lamps, that delay profit realization, as well as staffing, utilities, licensing and space rental that can kick up your operating costs. But if you purchase your equipment outright, manage the stand efficiently and base your menu around foods you can turn easily, you can start earning a profit in under one year. Start by building your menu around proven sellers which have the highest profit margins.
The most profitable concession stand foods are cotton candy, shaved ice, popcorn, funnel cakes and nachos.
1. Cotton Candy
With profit margins ranging from 87 to 94 percent, cotton candy gives you the most bang for your food-cost buck. Made of regular white granulated sugar with a touch of flavoring and food color, cotton candy costs around 13 cents per serving (including paper serving cone) and typically retails between $1 and $2.50, giving you a lot of latitude for adjustment depending on the venue and clientele. A modest 20 cotton candy sales a day at $1 retail nets you $17.40 profit each day and around $6,200 in profit per year. Commercial-capacity cotton candy machines range from around $200 to $600 retail.
2. Shaved Ice
Shaved ice comes in at a close second, with a profit margin ranging from 80 to 88 percent. A single serving of shaved ice costs around $0.30 cents, which breaks down to 10 cents for two ounces of syrup, around $0.07 cents for ice, $0.12 per cup and $0.01 cent for a spooning straw. You stand to take home $20 per day and around $6,500 per year in profit if you sell and average 20 cones of shaved ice each day. Commercial ice shavers range from around $300 to $600, depending on capacity.
Popcorn can make up for those not-quite-hot-enough-for-shaved-ice days by returning a 74 to 82 percent margin based on a retail price of $1 and food costs of $0.26, which comprises $0.16 for the popcorn and $0.10 for paper container. Commercial popcorn machines range from $200 to $2,000 and more, depending on capacity.
4. Funnel Cakes
Funnel cakes can pull in a desirable $10,512 yearly profit based on a food costs of $0.54 per serving – $0.27 for batter mix, $0.07 for powdered sugar, $0.06 for frying oil and $0.14 for an 8-inch paper plate. The value in funnel cakes extends beyond their 73 to 82 percent profit margin, though. You can use a commercial funnel-cake fryer, which ranges from around $350 to $650, for other favorites such as corn dogs, French fries and onion blooms (just not at the same time or in the same oil).
Nachos kill it in concessions; not only are they a customer favorite but they're a real thirst-maker, perfect for operations that sell super-profitable fountain drinks. One 3-ounce portion of tortilla chips costs $0.45 per serving, a 3.5 ounce serving of nacho cheese sauce costs $0.70 per serving, and a paper tray will run you about $0.09. Totaled, that gives you a profit margin of 60 to 75 percent and a yearly profit of $12,500 at sales of 20 servings per day. A hot-topping dispenser, which you can also use for other hot liquid toppings and beverages, ranges in price from around $200 to $600, depending on capacity.
Things to Consider
Long queues and wait times turn customers away as quickly as poor service, so don't try to go it alone to save on labor. You need at least two employees running a concession stand – one to take orders and the other to fill them. Don't be shy, either, when it comes to presence. At informal events, such as country fairs and regattas, the more pronounced and garish your concession setup, the better. You want your customers to know you're there. The final tip is to keep it clean. Just like in a restaurant kitchen, clean your work area as you go. Errant crumbs and food debris, dried condiments on work surfaces and soiled uniforms can make your entire operation appear sloppy and amateurish to potential guests.