The food concession business has many facets. There are many steps to take and things to go through in order to legally and successfully begin a concession business. But two aspects that will help you in life as well as are very important to food vending are preparation and organization. Without these two things, running the food concession business, or any business for that matter, is difficult if not completely impossible. Some of the areas you need to be organized in with regard to not only life, but your business are finances, inventory, and employee issues, just to name a few.

First and foremost, you must be organized in your finances. Being disorganized in this area can have detrimental financial consequences for both your business and your life overall. You must be consistent in things like price of your food. In order to price your food fairly and accurately while still making a profit is to compare prices, use common sense and the profit formula. These three things combined can help you price your products so that you are an affordable place to eat while you make a profit for your business.

Comparing prices of your food to prices of like products from other restaurants is a great way to gauge the prices for your products. Be careful that you are not looking at a place where the prices seem overly expensive. Many restaurants inflate their prices in order to receive more money for their products than they are worth. If you do not want to be that type of restaurant, steer clear of these types of restaurants. Another type of restaurant to analyze carefully is a sit-down, stationary restaurant. Many of these restaurants are reasonably priced, but some are not. Beware of the differences of a sit-down restaurant and a food-on-the-go type restaurant.

The second thing to look at while trying to set prices is common sense. It is common sense to think that if you charge too much for a product, people will not buy the product. Furthermore, some patrons will no longer even patronize your business because of high prices. Be careful. You want to make a profit, but you don’t want to gauge your customers. They won’t have much loyalty if they can barely afford you. Most concession stands that set up in a permanent location use locals as a huge portion of their businesses. If you are looking to gain that “everyday-lunch” crowd, making sure your “price is right” is a very important thing to think about. It is also common sense to know that people will pay three bucks for a hamburger. They may not pay three bucks for a hot dog. Keep your prices proportional.

The third thing to remember when pricing is by using the profit formula. Your price should be roughly three times more than the base cost of your food. For example, if it costs you $.50 to make a hotdog, your charge would be reasonable at $1.50. Doing this will take care of the food cost itself for one third, employees and overhead for one third, and profit for one third. You will again be using common sense to make the decision about adjusting. The profit formula doesn’t always apply. Sometimes if you were to do this, it might cost an outrageous sum of money. At the same time, if you make the product extremely cheaply, don’t cheat yourself out of charging a reasonable price.

For example, if you are selling French Fries made from fresh potatoes, estimate a few cents for the potatoes, say ten, a few cents for the oil say two. The combine total is twelve cents. Selling these fries for $.36 would be ridiculus. This is where the common sense comes in. On the other hand, if you sell a steak sandwich that costs you $3.00 to make, you may have to shave some money off the price from $9.00 to $7.00 if customers won’t pay that much. This formula is also a great tool to make you realize just how much your food is costing you and will help you be mindful of keeping your prices down, for the benefit of both your customers and you.

Remember that your costs aren’t just so that you can make the $1.50 off that hot dog. Your costs will play a part in whether or not that customer comes back for another hot dog. You may get someone to pay three or four dollars for a hot dog. But will they be back? Did you just make three dollars off of a customer who would have bought one of those every day for the next week, making you $21.00? These are all things to keep in mind when deciding price.