How to Become a Food Vendor: Steps & Insurance Requirements

Over 56,000 street vendor businesses operate in the US. The street food vendor market will reach over $2 billion in 2021. Are you interested in learning how to become a food vendor? This article will examine the necessary steps to becoming a food vendor, like designing your menu, the licenses to get, the types of food vendor insurance that can boost income, and more.

How to Become a Food Vendor

There are many steps to follow when learning how to become a food vendor. You must develop a good business idea and make it official by registering your business. See the following sections for critical steps in creating a food vendor business.

Decide Your Brand Identity

A company that tries to appeal to everyone will have trouble finding success. By appealing to everyone, your brand may seem bland and forgettable. You will want to cultivate a brand identity focusing on standing out from your competition. Perhaps your food vendor business focuses on quick service. You could make your brand identity about quality, making people more likely to pay higher product prices.

Come Up With a Name

There is a lot of value that people place in names. Your food vendor business name is no exception. You will want to think hard about what your name should be. Your business name should embody your brand messaging and be easy to remember. A name should be simple, easy to spell, and just unique enough. Your name should communicate to customers at a glance what you are all about and what benefits you offer to them.

Register Your Business

Once you start offering services to customers with a name other than your personal name, you must register as a business entity. You can register your business with your state’s Secretary of State website. How you decide to form your business will offer various benefits and drawbacks. These business structures are compared below.

Business structureAdvantagesDisadvantages
Sole ProprietorshipYou remain the sole owner; simple to form.You are responsible for business debts and liability.
CorporationCan raise capital through stocks, protects shareholders from liability.Taxed on income and dividends, more expensive to form and maintain.
Limited Liability Company (LLC)Protects you from business liability, avoids corporate tax requirements.Ongoing fees cannot issue stocks.

Apply for an Employer Identification Number

An employer identification number or EIN is issued by the IRS. Your business will need to apply for an EIN to register your business on the federal level. With an EIN, you can hire employees and apply for business loans. You can apply for an EIN for free on the IRS website. With an EIN, you will also have a better time during tax season because your tax reporting will be easier to track.

Find Investors

Hopefully, you have saved some money to invest in your business. However, if you think you will have a long road to profitability, you will want to find investors. Contact people you know who might be interested in lending money or joining your business in a partnership. If you have a solid idea, a venture capitalist might pay for your initial costs for the promise of a short-term profit. An angel investor might be interested in your business if you pitch it to them. Angel investors help businesses they believe in for the opportunity to profit in the long-term.

If you can afford it, you will want to reach out to a logo design professional who will know the right colors and design elements to catch the eye of your customers. Your logo will be part of your customer’s first impression. A professional-looking logo will elevate the trust customers feel with your business brand.

Decide Your Menu

Try to design a menu that is simple but unique. This will keep your inventory costs low but offer a unique experience for customers. Common items to consider including are described below.

  • Hotdogs: Hotdogs are a popular treat in the US. Hotdogs can be customized with various toppings and condiments for a unique flavor. They are affordable meals perfect for a street or mobile food vendor.

  • BBQ: A benefit of BBQ is you can create intense flavor in dishes with simple ingredients. The trick to BBQ is in the preparation. You want to use tasty sauces and unique meat preparation methods to allow your products to melt in your customer’s mouths.

  • Popcorn: Popcorn is a low-fat snack that has great customization potential. You can prepare caramel corn and add different seasonings for a lightweight and delicious snack.

  • Shaved ice: Also known as snow cones, these treats get their name from the delicate texture of the ice used to make them. You can create delicious treats and unique offerings by combining ice with flavored syrup. 

Hire the Right Employees

While you may be fine running your business independently, the goal should be to expand your operations and increase profits. As you expand, you will want to hire additional food vending employees who can serve customers items from your menu. You will want to enlist the services of a bookkeeper who can track your business expenses and keep you profitable.

A food truck serving local customers.

How to Become a Food Truck Vendor

What if you want a business that can go wherever? In that case, you want to learn how to become a food truck vendor. Food trucks have lower overhead costs than traditional restaurants and can hit the road to test products in different markets.

Buy a Food Truck

An important consideration when learning how to become a street food vendor is buying a food truck. A food truck will cost between $30,000 to $100,000 for a used truck. While you will be paying more for a food truck than a stand or cart, you are granted the advantage of mobility. Your food truck will be free advertising as you drive around populated streets. You can also pick up and go to satisfy lunch or dinner rushes in profitable areas without investing in a building.

Local street businesses and food trucks thrive on word of mouth. If people don’t know you exist, then it is hard to convert them into customers since you don’t have a permanent building in the area. Advertise your business by handing out menus in populated areas. Take advantage of your food truck’s mobility to spread the word to customers who will enjoy your products. You can visit underserved areas to take advantage of the lack of competition.

Become Active on Social Media

Customers love engaging with brands on social media. Make an account on Twitter, Facebook, Tiktok, or Instagram and post content relevant to your customers. Someone scrolling through their feed might get in the mood to visit your food truck from a post you make.

Create a Website

People often look up businesses online before committing to spending money on them. Take advantage of your customer’s natural curiosity by creating a website. Post content on your website to draw people's interest in your area. Figure out what your customers will search for and aim to rank higher on search engines to increase your organic traffic.

Reach Out Influencers

Influencers are members of social media sites with large audiences. People hold influencers they follow with a high level of trust. Paying influencers to promote your product will increase your brand's reputation and likability. One downside of using influencer advertising is that your business's reputation will likely take a hit if they get involved in a scandal.

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How to Become a Licensed Food Vendor

When learning how to become a licensed food vendor, you will notice several types of licenses and permits you need to provide services. These licenses are outlined below.

Vendor License

States require that businesses that offer taxable goods or services to customers acquire a vendor’s license. Your vendor’s license helps you pay sales tax to the government when people buy your food products. You can apply on your state's website for a state vendor’s license.

Mobile Food Facility Permit

To operate a mobile food business, you may be required to apply for a mobile food license. Check your local laws to see if you must obtain this permit. You can apply for a mobile food facility permit from your local health department.

Food Handler’s Permit

You and your employees must obtain a food handler's certificate to handle and serve food. This certificate signifies that you have passed a food safety course and know the proper procedures for handling and storing food.

Food Service License

This license lets customers know that your food vendor business has passed an inspection and can safely serve food. Once you obtain a food service license, you must pass regular inspections with your local health department. 

Liquor License

The ability to sell alcohol is strictly regulated for businesses that manufacture and sell it. If you want to sell liquor, you must plan to apply through a lengthy process to get approved. Obtaining a liquor license can take up to 6 months or even longer.

How to Become a Food Vendor at Festivals

Do you want to know how to become a food vendor at festivals? You will need the right equipment for the job and must get permission from the people in charge of the festival.

Speak to the Festival Owner

You must obtain permission to sell your food products from the owners of a festival. You may be forced to leave if you show up at a festival without permission. The owner may require you to pay for a booth to ensure they benefit from your food services.

Get a Temporary Permit

It is possible to obtain a temporary food handler’s permit that can allow you to sell food at a festival. You will want to reach out to the festival owner to find out which agency you need to contact to get your temporary permit. Typically you can obtain a temporary permit that allows you to serve food for a short duration, between 1 to 5 days. Your temporary permit allows you to sell both packaged and unpackaged food.

Get the Right Equipment

Since your space to serve food at the festival is more limited, you must invest in the right equipment. You may need a vehicle capable of refrigerating ingredients and mobile food preparation stations. Look into buying coolers to keep your food fresh and thermal bags to keep prepared food warm.

Stay on Top of Deadlines

Since the festival is a temporary event, you must keep track of your timeline. You must secure your food handler permit before the start of the festival. You must contact your local city council beforehand to ensure you meet all legal requirements. The earlier you prepare, the better. Try to have everything sorted weeks or even months before the festival so there are no surprises.

Account for Weather Conditions

You should prepare for the weather conditions of the festival. If the weather is expected to be hot, you must invest in equipment like a refrigerator that can keep drinks cold and certain food items from melting. You may encounter weather events like rain that might ruin your products. To combat rain, you want to invest in food storage that will repel potential moisture.

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Insurance Requirements for Boosting Income

To protect your business income, you will require certain types of insurance. If you neglect purchasing insurance, all your business income will go to defending yourself against lawsuits, car accident claims, and paying for property damage.

General Liability Insurance

Your standard general liability policy protects you from bodily injury, property damage, and advertising claims. This means if you get sued, this policy can cover financial obligations and court costs from the lawsuit. Thimble is our choice for general liability insurance. They offer simplified policies that are easy to buy. You can purchase short-term general liability from Thimble and set the policy period to the hour. Over 75% of their customers are first-time buyers. The Better Business Bureau gave Thimble an A+ rating.

Professional Liability Insurance

Professional liability insurance protects your business from claims related to copyright issues, negligence, and failure to fulfill a contract. Hiscox is our recommendation for this policy coverage. The company serves 500,000 customers and offers worldwide professional liability insurance if needed. Hiscox has an A rating from financial rater AM Best.

Commercial Property Insurance

A commercial property insurance policy protects your business building and equipment from damaging events. Typically this policy covers fires, theft, vandalism, water damage, wind, lightning, and explosions. If you need a commercial property insurance policy, look no further than CoverWallet. With CoverWallet, you can purchase and manage policies from multiple insurance providers like Hiscox, Markel, and Progressive. CoverWallet is highly reviewed and has an A+ rating from the Better Business Bureau.

Commercial Auto Insurance

Commercial auto insures your vehicles when you use them for business activities. Personal auto insurance does not cover most work-related activities. Commercial auto has higher coverage limits and protects your business vehicles from damage and your business from accident liability. Tivly is the company you should choose for commercial auto insurance. They have a vast selection of over 200 partners to choose from. You can get commercial auto with options like gap insurance and rental reimbursement coverage. Tivly has an A rating from the Better Business Bureau.

Workers’ Compensation Insurance

Workers’ comp pays the medical costs for injured employees. It will also help them compensate for lost income if their injury causes them to miss work. It is required coverage in most states for businesses with employees. The Hartford is your best option for workers’ compensation insurance. Their policies benefit AARP members and offer a wide network of medical coverage. The Hartford has nurse case managers for your policy who know how to facilitate employee injury care best. This company has an A- rating from AM Best.

Business Owner’s Policy

A business owner’s policy combines the coverage of general liability insurance and commercial property insurance. You can save money through this comprehensive insurance option compared to buying separate policies. NEXT is our recommended pick for a business owner's policy. Their BOP has the same coverage as the general liability policy, so you can be assured you are missing out by combining coverage. NEXT handles its own claims, so you don’t have to worry about calling different companies for the same issue. You can save 10% or more on your insurance premiums when you choose NEXT for bundling more policies. NEXT has an A- from AM Best. The Better Business Bureau gave NEXT a B+ score. NEXT has served over 420,000 business owners.

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