Historically, street vendor food has been prevalent in the Bengal region. From Fuchkas to Jhalmuri to Bhelpuri, street food has been an intricate part of Bengali snacks. In recent times, there has been a boom of more evolved street food in the form of food carts. This is something cheap, fast, and brings a whole different range of cuisines to the taste bud. The increasing popularity of the food cart business poses a few questions. How profitable food cart business is? How to open a food cart business? This article details it all.
The State of Food Cart in Bangladesh
More often than not, food carts have been a success story in Bangladesh. While most food carts end up making a significant profit, some even go on to become full-blown franchises. The Coffelicious of Baily Road and Madchef from Dhanmondi are such success stories. Both of these restaurants started from a humble cart and expanded into several branches across Bangladesh.
However, there are challenges as well.
There is no correct estimate on the number of food carts in Dhaka. A conservative estimate would put the numbers ranging from 2,000 to 3,000. Recently, the Dhaka North City Corporation handed over 80 carts to prospective food vendors. The initiative was part of DNCC and FAO to provide healthy and safe street food to the city dwellers.
Constraints of Food Cart Business in Bangladesh
The success stories, the business prospect, and the easy return might make the food cart look like gold mines. However, like any other business, food carts also face some key constraints.
The initial cost of starting a food cart isn’t much. As a result, it is very easy to jump on the bandwagon. But the problem starts afterward. Carts are set up on streets and public properties. It might create a problem for the adjoining street or neighbors. A simple complaint to the local authority will easily see the cart getting removed from its place.
Then the owner needs to consider the matter of quality. Even though the food cart business is still in its budding stage, the high concentration at certain places makes things very competitive. A slight fall in quality will see the easy loss of customers. The high concentration also brings the constraints of innovation. Cart owners are constantly pushed to bring something innovative to stand out from the crowd.
But perhaps the greatest constraint is regarding regulation. Given the bureaucratic maze of Bangladesh, it might be thought that opening a food cart would bring about a lot of legal issues. But the problem here isn’t the regulation itself, the problem is that there is no regulation, to begin with.
Even though food safety authorities and different judicial mobile courts accept that the food carts are becoming increasingly popular and rampant in the city areas, there are not any initiatives to regulate their activity or food quality.
Some of the cart vendors do not even have the minimum trade license that enlists the cart as a business entity. Consequently, most of these carts become part of the informal economy and the government misses out on the tax revenue generated from the profit.
There is also the issue of paying spot money to unsanctioned authorities to retain cart spots. Considering everything, the food cart business doesn’t look as smooth as it might seem from the outside.
Steps to Start Food Cart Business in Bangladesh
Constraints aside, food carts can still be a profitable option for those willing to put in the effort. And it all starts with proper steps.
It is essential to think of the food cart as a full-fledged business. This will help to get into the idea of how profitable business models work and what are the responsibilities that come with managing one.
The first step is to get the business plan ready. Before chalking up the plan, collect some key data including –
- Demographic information
- Target audience
- Target audience median expendable income
- The food culture of the area
- The average size of the target audience at any given time
This information will help to properly design a food art outline including cart size, serving, menu, and price. Now, let’s move to the next step.
After the plan comes the budget. A few years ago, it was possible to set up a full-fledged cart under 50,000 BDT. But now it costs significantly more to set up a proper cart from the scratch. But it is still much less compared to physical restaurants.
A simple bare bone cart can be started under 100,000 BDT. This cost will cover the price of the cart along with the basic cooking utensils. At least 3 people are required to run a cart one being the chef himself. Going by the average industry standard of 15,000 BDT for the chef and 10,000 BDT for the associate, the effective month-end cost is 35,000 BDT excluding the food production and food produce cost. This is a meager amount compared to what a regular cart can make in a single day. Proper planning and a positive approach can see profit from the first month onward.
It’s already mentioned that the food cart scene in Bangladesh is completely unregulated. Whatever small regulation there is, it is based on the Hotel and Restaurant Act of 2014 which falls grossly short to regulate the food carts.
Yet the basic legal requirement for any food cart is a trade license. The process of obtaining a trade license is fairly simple.
- Get a K form from the zonal city corporation office. The K form is the designated form to enlist business entities.
- Fill up the form and submit it for verification by the local ward commissioner.
- The final submission of the form with 3 copies of passport size photo of the applicant, proof of municipal tax payment, and area rent documents.
- After a thorough survey by the licensing officer, the trade license is issued after payment of the issuance fee.
The food cart is emerging as a promising front away from the conventional restaurant business. While there are still a lot of issues in the sector, it can be an effective starting point for the small-scale entrepreneur. The proper regulation and formulation of a regulatory body will make the process much smoother.