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profit margins at hot dog carts

Hi Steve, I had a question I thought you might be able to help me with.

In your experience if you had multiple carts and hired employees to run them do you know what the profit percent would be factoring in the food cost, hourly pay for the employee and misc. expenses?

I figured the net profit margin would be around 50% but I haven’t started my business yet and wanted to ask you first.

Thanks!

+++++++++++++++++++++++++++

I don’t know your exact numbers so it’s hard to say.

What makes it even more difficult is that you can’t accurately compute your net profit margin unless you pay your employee as a percentage of sales.

If you pay them hourly, then the profit margin depends heavily on how many dogs they sell per hour which can be all over the place.

The biggest cause of failure in situations like this is not acting until you get everything worked out on paper. It’s called “analysis paralysis”.

Instead of sitting around crunching numbers, just get out there and try it for a month. If it works, keep going.

If not, tweak things like employee compensation, hours worked, etc. until you hit the numbers you want. For example, if your employee is selling hot dogs from 10 to 3 and 80% of the sales come between 11 and 1, cutting out those three low productivity hours will skyrocket your net profit margin.

Good luck!

-Steve

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