Jan 142012
 
This entry is part 1 of 3 in the series Small Business Vending


Forget Business As Usual: Unusual Strategies for Growing A Small Start-up Business



Madison Square Garden in New York City is backdrop to local small business street vendor operating a hotdog cart -- which can be considered a viable economic development strategy.

On the national and global landscape, job loss, stagnating wages, economic downturns, corporate downsizing, mergers, acquisitions, and huge chains muscling out local enterprises all contribute to a sense of overwhelm that can only be overcome by personal determination, an entrepreneurial mindset, and innovative action by small business owners.

Economies of Scale

In the photo above, Madison Square Garden looms larger-than-life as the juxtaposed backdrop for the tiny street-level hotdog vending cart doling out New York-style Sabretts. I spent the summer of 2011 in New York, and on my way out of the city — before entering Penn Station to board my Amtrak train (Madison Square Garden sits atop Penn Station) — I made a beeline for my favorite hotdog stand for an Italian sausage. (My favorite hotdog stand is any one of them!)

My aunt and I had an animated — and revealing — conversation with the fellow manning the stand. As he dished up a generous serving of peppers, onions and spicy mustard, he bemoaned the difficulties faced by small business owners operating in the shadow of big business. Yet, the challenges faced by vending cart owners are not severe enough to make them trade in the income potential, lucrative venues, and unlimited foot-traffic. That conversation stayed with me over the next few months and partly sparked the idea for this article, (in fact, a whole series of them) about the vending industry, particularly street vending.

Why the Vending Business?

These vendors – most of whom don’t have the capital to open restaurants – are incredibly popular. They are investing in our economy and creating their own businesses during a time of financial crisis. They feed untold thousands of people delicious meals every day, usually at lower prices than are available in stores and restaurants. — Street Vendor Project (SVP)

If you didn’t have any idea about why vending makes good economic sense or how it fits into the whole scheme of economic development, the spokesperson for the Urban Justice Center’s Street Vendor Project summed it up1 nicely:

  • low capital
  • popular
  • invests in the economy
  • creates businesses during financial crises
  • feeds thousands of people daily
  • saves consumers money

Although focused on a different facet of the vending industry, the vending machine business, 1.800.Vending points out another important benefit: immediate cash flow.

“Your cash flow can start as soon as your equipment is placed. Most new businesses fail, in large part, from lack of cash flow in the beginning. One of the many benefits of vending machines is that your cash flow can start Day 1.”

Lowest Common Denominator: One

Vendors in Lagos are usually migrants from rural villages who cannot find regular work, but take up vending as a means of basic survival. — Street Vendor Project2

Economic development can happen on a grand scale or a small scale. We kicked off the economic development series last year with a vintage video starring a cartoon character epitomizing the small business owner of the era. There are more vintage videos coming up in that animated series, but the video below features a real character working as industriously as our fictitious Sudso…



Street vendor opening his mobile Halal shop3


The lowest common denominator? One man, one job. Or maybe, one family replacing lost income. Or one idea and investment that contributes to the local tax-base, employs a few folk, reduces unemployment, and contributes to the wealth of the nation.

Different Kinds of Vending

I saw a counter on the vending machines site referenced above that showed earnings from the vending industry in (virtual) real-time. According to the figures flying by, the vending industry is a multi-million dollar cash cow. Have you ever considered vending as an economic development activity to earn income, prime the small business pump for your family, neighborhood, and wider community? (I have!)

There are different kinds to consider …

  • vending machines (snacks, drinks, combo)
  • vending boxes
  • food trucks
  • pushcarts (hot dogs, ices)
  • newspaper stands
  • music and art vending
  • snack shops with mostly pre-processed food
  • candy dispensers
  • small, plastic toy dispensers
  • big, stuffed animal dispensers

You can likely think of many, many other kinds of vending activities (especially those that can fit into a dispensing machine) such as school or office supplies, fishing bait, travel-size personal products … The list goes on!

Let’s look at some examples of who engages in this type of small business vending activity.

Who Engages in Small Business Vending Activities?

. . . if there’s so much as a taco truck that makes daily stops here, I wanna know about it. — NYPD Detective Al Burns

The quote above is from a television show4 supposedly set in New York (of course it could have been filmed in Podunk, Montana!) but food trucks are so much a part of everyday scenery that it was a natural line to include in the dialogue. In a new made-for-T.V. movie-length pilot episode of The Firm, a food truck actually made it into a scene and was the reason a school guard didn’t see a criminal act take place.

Gisela and Quinton Whipper own a profitable food truck and hotdog cart street vending small businessBut big cities and unreal TV shows are not the only place street vending is really taking place. As more and more people see how viable vending is as a small business activity, the popularity rises and unlikely venues become home to mobile entrepreneurship.

I had the pleasure of having an hour-long telephone conversation with one such vendor who started with a single hotdog cart and now owns two such carts and a food truck — in a small, southern city. He shared insights into why he chose this type of business for his entrepreneurial debut even though he doesn’t reside in a huge metropolitan area.

Everybody has a story while they wait for their hotdog. I like to talk to people . . . It’s rewarding!

He and his wife understand the value vending holds for economic revitalization and they’re not shy about sharing challenges, rewards, and a few tips. For now I won’t give you any more than that because my interview with them is the subject of the next post in this series. Okay, okay! Here’s a quote from Quinton Whipper, New York’s Famous Hotdogs . . .

While you’ll have to wait a bit to hear an insider’s story, who else is participating in the vending industry as a small business owner?

  • Answering Fifteen Questions, SVP Director Sean Basinski mentions how the First Amendment allows anyone to sell books, magazines, records, CDs, DVDs, political items and art in New York without a license which gives many young and emerging artists a chance to sell their work, even if they are not represented by galleries.5
  • So easy even a child can do it? In Boy Having Success With Vending Machine Business, we are told of a 9-year-old whose grandfather bankrolled his entre into the small business vending arena. According to the article, young Colin is the owner of three pop machines, a snack machine and numerous honor boxes (and his granddad serves as his driver when he needs to restock and gather his earnings!).
  • Rieva Lesonsky discusses how gourmet food trucks cater “everything from movie and television film crews to private parties such as bar mitzvahs.” An interesting example is when Yahoo! rented a truck to give out free whoopie pies at an event.6

So, who vends? Young and old. Freelancers and artists. Big companies, mom-and-pops, husbands and wives . . .

Thus Begins a Series …

This article gave an overview of how facets of the lucrative vending industry can be viewed as a viable economic development strategy for small business. In future articles I plan to discuss related topics, including:

  1. issues facing industry
  2. human interest stories and at least one interview
  3. applying today’s technologies (social media, mobile marketing) to vending
  4. vending venues
  5. the roles of special interest groups

Your comments and questions can also help focus and shape further topics of interest. Any feedback is greatly appreciated! :)

Thoughts?

I hope you will stay with me throughout this series. When you look around at friends, family, neighbors and see the puzzled expressions and hear the puzzlement in the face of the wealth all around, perhaps you can have a conversation with a dear one about some simple strategies for regaining their feet. One such strategy could include vending of some sort.

Share what’s on your mind in the comments below. Thanks for reading!


Image and Photo Credits: Madison Square Garden, 3 April 2005, courtesy of Baschti84, licensed under GNU Free Documentation License and Creative Commons. ~ Photo of Gisela Kloess and Quinton Whipper standing beside their New York’s Famous Hotdogs cart in Columbia, South Carolina. Used with permission.



                   

Resources for starting and managing a vending business from Amazon.com



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Footnotes

  1. Article: “SVP position on food truck bill” [NY], Street Vendor Project, Urban Justice Center. Accessed 30 Dec 2011.  [↩ go back]
  2. The Street Vendor Project provides useful information about issues street vendors routinely face, as well as strategies and solutions for dealing with those issues. Excerpts used in this reference come from the fifteen reader questions SVP Director Sean Basinski answered for the NY Times Cityroom Blog on October 7-9, 2009. Accessed October 2011.  [↩ go back]
  3. Video: Street vendor opening his Halal shop in Manhattan, New York – I originally viewed this video on the Inkwatu blog in an essay by Hilton Kean Jones about New York Street Food, 6 September 2008. Accessed October 2011.  [↩ go back]
  4. CBS, Unforgettable, Butterfly Effect. Spoken by NYPD Detective Al Burns (played by Dylan Walsh) to a colleague as he looked around the construction site in search of evidence.  [↩ go back]
  5. Street Vendor Project, Fifteen Reader’s Questions, Cityroom Blog.  [↩ go back]
  6. Network Solutions and other registrars have active sections on small business and (surprisingly) have an eye on the vending and street vending industry segments. Article by Rieva Lesonsky, Network Solutions, Grow Smart Biz Channel, Hot Trend: Food Truck Operators Add New Services, 25 July 2011. Accessed 15 Nov. 2011.  [↩ go back]

About Vernessa Taylor

Hi, I'm Vernessa Taylor. I write most of the articles, tutorials and reviews around here. Join in the discussions, share your thoughts, ask questions and lend a hand when you can. Need something? Ask! Check out my About page to learn more about me and my work as a technology consultant and internet coach. Don't forget to connect with me on Google+ and Twitter @CoachNotesBlog.

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  42 Responses to “Vending: An Economic Development Strategy for Local Small Business Success”

Comments (40) Pingbacks (2)
  1. Vending is one of the most efficient way to climb your way up into the system. If you want to have a business especially food and you dont know about your market yet, start with a vending machine or shop and increase your capital as your profits do.

  2. Hi Vernessa, the first thing that comes to mind for me when I think about vendors is the Kogi Korean BBQ food trucks. I first heard about them when I visited my daughter in LA back in 2009. They were growing in popularity at the time but since then they became so popular that they were featured on major news outlets across the nation. The day I saw the truck the line was about 2 blocks long, so I never got a chance to give the food a taste, but my daughter tells me its delicious. They started out by going to all the popular clubs at closing time and giving free samples to the bouncers. You can imagine how this marketing technique helped the word spread quickly – but they also integrated social media and used it to there advantage. Back then they didn’t have a permanent location but they would make surprise visits to businesses in the area and get the word out using Twitter. It was a brilliant strategy and I can see how others could follow that business model with similar success.

    Thanks for the post Vernessa. I’ll be sure to follow along with the series.
    Ileane recently posted..JustRetweet Keeps Twitter Sharing SimpleMy Profile

    • Hi Ileane – The “nite life” is a lucrative market. Until I started doing the research for this series, I didn’t realize catering to the late-night crowd was even a strategy street vendors used. I’m glad you mentioned how the Korean BBQ food truck owner uses social media to get the word out. One vendor mentioned in the article also uses Twitter and FaceBook to his advantage, especially when he’s got a promo going. Next time you’re in L.A., you might have to get in that line so you can get your grub on!
      Vernessa Taylor recently posted..Vending: An Economic Development Strategy for Local Small Business SuccessMy Profile

  3. The human element makes street vendors worth dealing with.
    In the south there are people even grandma’s under tents selling diners and fish sandwiches.

    Me i’m addicted. They treat you right they are real and they have quality.

  4. wow i’m really excited for this series, i’ve been reading about small business success through vending a lot lately and hopefully through your series i’ll hear about some original ideas.

  5. I considered vending a few years ago. In fact, it is still planted in the back of my mind. Who knew that vending is helping to stimulate the economy in these times? This is going to make me brush off my two paragraph vending business plan.

  6. I think that our hairdressers, taxi-drivers, hot-hog or hamburger vendors hold so much information about our lives, somehow we very much like to share our stories with them :). I think starting a small vending business is in our blood, this is the first thing that would pop into my mind, if I had to come up with something I could do.
    Anna recently posted..DO NOT EVER go to the dentist and let them TREAT you unless you are in pain! Do you agree?My Profile

  7. Vending machine seems profitable. I am not sure if vending business is suitable for me but I would want to try food cart or videoke machine. I just wish there are more vending machine dealers in my area. The story of 9-year-old boy, who has vending machine business, seems inspiring. Thanks for sharing your insights.

  8. Very interesting that you have brought to notice targeting the night life for your business. Great.

  9. Most common franchising today is food cart or food business. The investment is not that high and also the
    place is not hard to find where you want to place your cart.

  10. Yes. I agree with the above statement. A pushing nature is required facing the risk element, if we want to achieve success after success. This reminds me the book ” Who moved my cheese”Thanks…

  11. Vending is a great business strategy for small businesses because of its great advantages and opportunities. As a small business owner, vending can make your income boost. And like as you have stated, despite of economic downturns, it still continues. Nice share!

  12. Hello Vernessa Taylor. You know you have stated your good opinion for the vending business. I believe that big business was came in a small business, in fact, the small business are the first step in taking into a big business success. For me, the government must consider the small business vending for it also provides useful benefits to the people. thank you for sharing your useful ideas with us. I really appreciated it. Keep up the good work.

  13. Competition for business success is highly competitive nowadays. So we really need effective strategies in order to achieve our main objective. Vending is a great business strategy because of its great advantages and opportunities. This strategy is a good companion for our business success.

    Your idea is very inspiring, Thank you and keep up the good work!

  14. Hello Vernessa, it is good to feel reading this blog. I appreciate your ideas and discussion about vending business. You know there are many kinds of small business that needs to grow more and much better if they have go the support from the government. In your blog you have simply stated the benefits of the vending business. Not only that, you have encourage them to be inspire and strive more for their best. Thank you for sharing these.

  15. I think the vending business is a great way to start making money. Vending cart can get pretty expensive but if you have the money and the drive I think it should work out just fine. Oh, and other thing don’t forget your vending permit lol.

  16. I have to admit that I never saw myself getting into an article about vending. lol I also think it takes a lot of passion for these folks to do what they do. I had a cousin spend around $40,000 for one of these things, a vending truck, but she fell out of having to go out every day to sell to the market and thus it became a white elephant. And in an area like central New York, you pretty much can only do it seasonal because you never know what’s coming 6 months out of the year as far as horrible weather (except for this year), so one’s pricing point might have to be altered to cover those down times.

    Fascinating reading.
    Mitch Mitchell recently posted..A MLM RantMy Profile

    • Hey Mitch,

      That’s why we never say never! LOL Depending where you enter in, vending can be an expensive proposition (or not). I know veterans in NY whose cost are significantly lowered because they don’t have to pay the licensing fees. They’re a “protected class” when it comes to selecting vending as their business model.

      I mentioned that I’m writing up another part of the series. The folk I interviewed for it talked about the seasonality of vending, too, even though they’re in a state not known for harsh weather. I’m guessing street vendors in NY were glad for the break in weather this year.
      Vernessa Taylor recently posted..All Sales Are Final. (Your Refund Policy Sucks!)My Profile

  17. Ah, Vernessa, the memories. If there is one thing I miss about my 17 years of working in Philly, it would be the food trucks. Fruit salad in the morning and Szechaun chicken for lunch. And, after a particularly rough day, a stop at the hot dog cart for a hot sausage.

    I had a chance to grill a vendor – he was a sock seller!! – and it was then that I first learned how lucrative the vending business was. Since that conversation, I’ve played around with guessing how much each truck makes a day. It’s not unusual for them to make a couple thousand.

    Did you see that Food Network competition, The Great Food Truck Race? That was Vending 101!

    Okay, I’m off to read the next chapter! And, no, I never wanted to have a vending business.

    Cheers,

    Mitch
    Mitchell Allen recently posted..Home of the One Million Product ChallengeMy Profile

    • No I missed The Great Food Truck Race. (Okay, I admit, I probably only watch the Food Network about once a year, but that’s a series I’d like to see. I’ll see if they re-broadcast online.)

      Philly, NY, LA, those are the cities that come to mind when I think of curbside food! I like to play those number games, too, with all kinds of business ventures. I would like to own a mobile cart or food truck … been feeling the area out. We’ll see.

      See you at the next stop!
      Vernessa Taylor recently posted..Social Media: Equalizer for Mobile Small Business VendingMy Profile

  18. Hello Vernessa,
    I’m assuming you are targeting businesses in the area you live Kansas City. Clever and you obviously understand what it takes to get a business the exposure and traffic businesses seek. I like you style and easy to follow and understand.Is it efficient to me?

    • Hi James,

      Thanks for the kind words. I think we have our wires crossed a bit, though. I don’t live in Kansas City but I did almost go there once (Kansas City, MO I think) to speak at a conference but got bumped when the then- Attorney General decided at the last moment to make an appearance. Must have been an election year! LOL

      Yeah, I have a keen interest in small business, particularly “micro-enterprise” and exposure is one thing they usually lack. Thanks for coming over.
      Vernessa Taylor recently posted..Social Media: Equalizer for Mobile Small Business VendingMy Profile

  19. Hi Vernessa ,
    Small business vending is a good business and I thought about this business but I didnot get enough time to do some market research on it but still without knowing much about this market I could say that UK vending market is rapidly growing year on year in many sectors and that is why I am a bit more interested in this business but still I have a limited knowledge in vending business so I cant take a stand for it at this level.

    • Hi Syeda,

      You have the right idea about doing your research before jumping in. You could find quite a bit of information online about the different kinds of vending businesses. Also, your city library and business associations will likely have research on the market that is already compiled. I wish you success if you decide to take this route to fulfill your entrepreneurial dreams. :)
      Vernessa Taylor recently posted..Get Around Those Grammar GoofsMy Profile

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