When life hands you a lemon, sell a lemon ice.
When the economy gets chilly, serve up a chili dog.
That's what more and more folks are doing this recession, turning to street treats -- hot dog carts and ice cream trucks. The initial investment is low, the income can be good, and there isn't a boss looking over your shoulder.
In the first three months of 2009, American Dream Hot Dog Carts, a manufacturer of mobile food-vendor carts in Florida, reported to the Wall Street Journal that it was selling 25 new carts a week, more than double its typical output. Other manufacturers are also reporting record demand for new hot dog carts.
On the ice cream truck side, Captain Tom's Ice Cream, which runs a fleet of about three dozen trucks out of its depot on West 67th Street in Cleveland, is enjoying a wave of driver applicants.
"We're getting a lot of good drivers," says Joshua Gee, Captain Tom's depot manager. "I hate to say it, but when people lose jobs, we get a good quality of driver."
He says his best drivers make more than $200 a day and are paid nightly, in cash.
But becoming your own boss by serving treats on the streets is not as easy as buying a hot dog or ice cream sandwich for 50 cents, selling it for a dollar and pocketing a 50-cent profit. Here's some of what you need to know:
The hot dog vendor
Cleveland considers hot dog carts a food-service operation, which means you're going to need a few permits. You'll need a food peddler's license, which is $60. To get that, you'll also need a medical screening to make sure you're free of salmonella, tuberculosis and other communicable diseases that no one wants on top of their Polish Boy.
The cart itself needs a mobile food-service license, which is $263.44. Because city code prohibits food from actually getting cooked on the sidewalks (carts can only keep food hot), your cart is going to need a separate location, called a "commissary," where the food is prepped and cooked and where your cart is stored and cleaned. That commissary requires a Class 4 food-service license, which costs $617 annually.
Some hot dog vendors in town share commissaries, says Matt Carroll, director of Cleveland's Department of Public Health.
If you want your cart to be downtown, you'll also need a sidewalk permit from the Department of Public Service. That's another $200. (To set up your cart in a location outside downtown, you'll need the approval of the council member in that ward, according to Carroll.)
To keep downtown carts spaced apart, the city has set aside about 70 locations where they can sit. The spots are awarded on a first-come, first-served basis, with the previous year's owner getting first dibs on his or her spot the next year.
How soon can you start seeing a profit? Basic carts start at about $2,000, so you're looking at start-up costs at more than $3,000, not counting food, insurance and other costs.
If your cost for a hot dog, bun and condiments works out to, say, 35 cents each, and you're pricing them at $1.25, you'll need to sell about 3,300 frankfurters before you start making a profit. Sell 150 dogs a day, and you'll clear $35,100 a year, not including profits from chips and soda. You can play with the numbers at the Hot Dog Profit Calculator at tinyurl.com/dogprofit.
Many of the city's vendors don't own their carts, and work on a percentage, usually 25 to 30 percent, of their total sales.
Remember to keep your cart clean.
"These license holders are inspected annually, and re-inspected upon any complaint," says Carroll. "Our inspectors also do additional spot checks during the summer months."
Don't let the red tape discourage you, though.
"It's a good business," says Drake Jones, a retiree who works a cart a few days a week in a thrift-store parking lot near the intersection of Lorain and Fulton. "You meet a lot of nice people."
The ice cream man (or woman)
To drive an ice-cream truck in Cleveland, you'll need some of the same permits as hot dog vendors. (Carroll urges would-be entrepreneurs to call the health department at 216-664-2324, and his office will guide them through the process.)
Some suburbs allow trucks; others don't. The ones that do will likely require permits and have rules ranging from when and where you can drive your truck to how loud you can play the vehicle's music.
The city of Cleveland performs background checks on drivers applying for licenses. Applicants who have been convicted of a violent or sexually oriented crime -- or any offense involving a minor -- cannot get a license.
With all the regulations, you might be tempted to just ignore the law and start selling. After all, who's going to call the cops on the ice cream man?
Plenty of people, especially in Northeast Ohio, says Gee, who's also worked for Captain Tom's Ice Cream in Cincinnati and Columbus. He's noticed that in Cleveland more people ask to see permits and licenses.
"You get people who will cut a window in the side of the van, throw some stickers on the side, put a house freezer from Sam's Club in the back, throw in some dry ice -- can't do that because you're throwing chemicals on ice cream -- and they'll just go," says Gee.
Gee recommends that you not only get a permit but post it prominently.
Ice cream trucks can costs a few thousand dollars for used models to $50,000 or more for new trucks with mini kitchens that dispense soft-serve treats.
To boost your sales, Gee suggests becoming part of the community. He advises traveling the same route with the same music at the same time every day. Offer low-cost items (he has a 25-cent frozen treat) and even give free penny candy to kids with no money ("you hate to see them walk away").
And if a parent gets on you for driving around in the evenings and spoiling appetites, Gee offers up a pat response:
"Why am I selling ice cream during dinner time? Well, why are you eating dinner during ice cream time?"