You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your food kiosk business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a food kiosk business?
There are a number of ways to open your own food kiosk business. You can rent a pre-built kiosk, buy into a franchise that provides specs and plans for the kiosk and product, or start from scratch. If you are selling pre-packaged nom-noms, you can open shop at a rented kiosk for about $5,000. Purchasing a franchise may require an investment between $10,000 and $50,000 depending on how complicated your recipes and equipment might be. If designing and constructing a walk-up restaurant with commercial grill and kitchen, your costs can run up to $100,000.
What are the ongoing expenses for a food kiosk business?
You will need to maintain enough stock on hand for one to two weeks of business while ensuring that consumables like napkins, tableware, and trays are available. There will be maintenance for equipment, tech support for your point-of-sale computers and the rent or lease. Your food expenses will vary depending on the type of menu you offer.
Who is the target market?
Your location will in part dictate your menu. Middle-aged professionals will walk past you in their office park, teens and young adults crowd the malls while entire families jam tourist attractions. Electric blue gummy candy won't work for the professionals and hand-carved chocolate treats will be out of the teenagers' budget.
How does a food kiosk business make money?
You will turn a profit on each item that you sell to the hungry public.
How much can you charge customers?
You can expect to charge between $4 and $15 per item on your food kiosk.
How much profit can a food kiosk business make?
Your busy snack shop in the office park lobby can generate an income of $40,000/yr for you. If you are operating a popular spot at a crowded tourist attraction, it is possible to take home $100,000 a year after operating costs.
How can you make your business more profitable?
You will always need to monitor your food costs to maximize profit. Prepare or stock only enough product that can be sold by its "Best By" date. Find that perfect price point that generates return business while delivering the highest profit margin possible.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your food kiosk business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
Federal Business Licensing Requirements
There are federal regulations regarding what can and cannot be added to, sold as, and processed with food. Attached is a resource from the Food and Drug Administration detailing the process of starting a food business: How to Start a Food Business
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a food kiosk business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Certificate of Occupancy
A food kiosk business is generally run out of a small indoor space. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a food kiosk business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your food kiosk business will be in compliance and able to obtain a CO.
When selling food, you will need licensing from a local health department; all establishments serving food are required to pass a health inspection. Tips for faring well on a health inspections
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a food kiosk business
It is rare that a food kiosk will draw customers across town, so don't focus on direct mail campaigns. Instead, you need to target marketing dollars at the pedestrians near your kiosk. Offer coupons to tenants in the office park to appear with their morning mail. Work social media to generate buzz around your location. In an amusement park, you need to ensure your logo appears on the website, in walking maps, and on billboards at the entrance to the park. Invite foodie bloggers to review your new product. Your business is destined to grow organically and on the viral web.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
The food must look amazing and be served by bright, smiling employees. Your first six months will be spent offering free tastes to passing shoppers. It may even benefit you to send a free lunch to one office every Friday to build interest in the kiosk they run past each day. Once they have tasted the absolutely delicious sandwich, snack, or drink, they will come back for more. But don't let quality control slip or your customers will vanish as quickly as they came.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Food Kiosk Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Many food kiosks are owned and operated by individuals who loves providing a delicious treat to a wide variety of customers. You will likely need to work long hours on your feet and will be materially involved in every aspect of the business.
What happens during a typical day at a food kiosk business?
Your food kiosk can be a one-stop shop for coffee, muffins, and daily newspapers or perhaps it will have a mini-kitchen that churns out freshly pressed sandwiches. Whatever you are serving, you will:
- Open and close on time every day of business, according to your hours of operation
- Maintain a clean and attractive kiosk
- Balance your books, order supplies, restock the shelves
- Wait on each customer while providing exemplary service
- Hire and train part-time assistants
- Cook and prepare food
- Maintain positive relationships with a variety of vendors
- Market using social media
What are some skills and experiences that will help you build a successful food kiosk business?
The difference between running an ordinary kiosk and one that is crazy busy lies in research before you start your business. To make the biggest splash in the neighborhood, you will need to know:
- Popular fast food trends--what is the snack everybody wants to eat right now?
- The local hole in your neighborhood market--what location needs a new option for grab-and-go treats?
- Basic business knowledge
- Certification in food safety standards
- Depending on your product, the proper training in preparation of food in a high turnover environment
- Basic money handling skills
- The ability to serve thousands of people with a smile
What is the growth potential for a food kiosk business?
If you are offering a unique and sensational menu, there is every opportunity to turn your kiosk into a franchise, especially if food preparation is fast and minimal. Should you have landed a spot in a large amusement park and are enjoying huge success and unable to control the lines, opening a second kiosk inside the park is an excellent possibility.
TRUiC's YouTube Channel
For fun informative videos about starting a busines visit the TRUiC YouTube Channel or subscribe below to view later.
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a food kiosk business?
When selecting your menu, make sure your recipes are thoroughly tested before turning the public into guinea pigs. You must wow them from the very first bite. Foot traffic is your friend. While you are preparing to open the new kiosk make sure to post billboards, posters, and brochures advertising the new business. Once you are ready to sell, your grand opening budget should include staff hired to hand out free samples throughout the mall or office complex. If you are opening inside a tourist attraction, little marketing will be required beyond including your location on park maps and websites.
How and when to build a team
Most of the prelimanary tasks like developing the menu, finding a location and contacting vendors can be accomplished by you. If you intend to be open more than 8-10 hours a day, you will need to hire assistants two weeks ahead of the Grand Opening.