 Let me give you painful truths about "Hot Dogs Saved My Life" by Ben "insert some narcissistic middle name" Wilson. (as he tends to sign his automated spam emails) As well as some thoughts on his hyper sales-y website pretending to be a information resource. The book was written 9 years ago near the beginning of a street food resurgence by a failed furniture store owner. (This is by his own admission) He was an active vendor for less than three years before writing his book (and getting out of vending) as an attempt to position himself as an "expert" to sell carts, books, courses and private group memberships. This means good ole Ben has zero practical experience in food service beyond his very limited exposure in rural Tennessee. Take note of that location. Rural and city vending are massively different. The guest expectations are, again, massively different. In rural Tennessee, when he started selling hot dogs, he had ZERO street vendor competition. So, he has no experience with competitive intrusion in the food business. However, he does have significantly more experience as the face of a cart manufacturer than as a guy selling hot dogs on the street. The book is a phoenix story (or underdog if you prefer), filled with self-depreciating country humor and copies the chapter organization of the 1971 classic "See You at the Top" by Zig Ziglar (Ben's second chapter is titled "The Final Chapter" and the book continues for another 20 chapters, Zig's second chapter is titled "The End" and then continues for another 29 chapters) Even with dated references like the Cold War, USSR and the Wall of Berlin, Ziglar's book is a better inspirational read with useful life lessons, as are his other 30 books. Ben hasn't even updated his book, let alone written a new one, even though the business is significantly more competitive than 2011. For example, the FDA food codes have been updated two times (2013 & 2017) with over half the states (27 of 50) updating their codes to match. Unfortunately, Ben couldn't be troubled to update his "course book" effectively rendering his information as useful as researching an encyclopedia from 1950 expecting to find information on the moon landing. (which was in 1969 if you don't know) Ben makes light of health department rules because he lacks the experience, education and expertise to understand them. He even suggests ignoring rules with this gem in chapter 19 - "I am not allowed to serve cream cheese so, every now and then, and PURELY ACCIDENTAL, a small chunk of cream cheese will fall into my batch of finished onions and ..." in other words he has zero regard for health department codes and believes himself to be above them. Think about the guest ordering grilled onions without the warning of those onions including cream cheese. Hmmm. Dairy allergy? Lactose intolerance? My question is this: “concerning his cart manufacturing business: what rules does he decide to ignore because they are inconvenient? How would ignoring those rules impact the end user?” His base cart, called the "Cash Cow", does not even include a sink! If you want to be sanitary that will cost you an additional $500! (If you price the components, he uses for sinks that is $125 to $150 in retail cost parts and the rest is labor.) Hand washing is basic sanitation, but Ben “I’m an expert” Wilson does not believe it is a necessity otherwise his cheapest cart would include them. Don’t tell me “some states don’t require them” while this is true would you purchase food from someone that could not wash their hands? The current coronavirus panic has put hand washing to the front of everyone’s mind. Real food service professionals have been handwashing forever. Food service at the street level is all about quality, speed and efficiency. Yet a visit to his website is anything but efficient. Popups hawking “free” reports or videos in exchange for an email (which leads to dozens of spam emails from Ben “Let me interrupt your day with useless, very wordy emails” Wilson.) hit the visitor on every link clicked. The pages run ad on ad for courses, reports, videos, forms and other things to sell. Try to find answers to any real question a vendor may have. It can’t be done quickly. A popup stalls your search. His site tries to pass itself off as an expert resource of helpful vending information, when in reality the site is an annoying sales funnel and nothing more. Don't get me started on his paid group. I can assure you there are NO SECRETS to running a successful food business that you can't find for free on the internet. The "discounts" he offers to bribe someone into joining are not real discounts. Just comparison shop carts of similar design or any other product under his mafia discount nonsense. Back to the book and his useless marketing tips. I am talking about Chapter 19's impossible to implement "free water" scam. His explanation is buy water with labels advertising some other local business and get THAT business to purchase advertising on your water bottles covering the cost of the water. Effectively making your cost zero. Then every sale of water is 100% profit. Except he fails to mention you have to buy water in bulk for a massive price. One place I found online the price is $848.16 for 1488 bottles (Ben claims to have been selling 1500 bottles a month in rural Tennessee). Does that make sense for a potential advertiser to pay $1148.16 (Ben recommends tossing an additional $300 for your time and trouble) for 1488 instances of advertising on a bottle of water that they don't even put in the hands of their own customers? Have you ever looked at a bottle of water to see what it was advertising? Have you tried to see the advertising on a bottle of water a stranger was holding? Would you run out and buy something from someone that was advertising on a bottle of water? Ben claims he got a furniture store owner to use this advertising method. (looks like that town had two failing furniture store owners.) You would have to find a business owner dumb as rocks to hand you $1148.16 for that little advertising exposure. Ads in weekly newspapers cost less with more exposure. Ads on the radio cost less, so exactly what is the benefit to the business you are trying to sell on your water bottle ads? Ben does say to seek a local bottler and getting pricing from them. What he leaves out is they will want you to purchase a pallet to even consider private labeling. Since the book was written in 2011 it makes ZERO mention of how to use social media for marketing, in fact the only mention of Facebook is for his own page so obviously he knew the benefits of Facebook to his business but not enough to recommend it to the reader. Ben has graciously added this "secret" Facebook course information as a on his website. Of course, for a price, you too can learn the secrets to hot dog business ads on Facebook. There is nothing, absolutely nothing, that is not already available for FREE from several hundred blogs on how to use Facebook for business. Any free information used for a restaurant is easy to modify for a street cart. How about his “expert” take on sanitation? Ben describes his glove use, in chapter 13 as, "I use one glove on one hand and then I don’t have to change gloves constantly. I am careful to use my bare hand for money and the condiment bottles; however, to hold the buns, I use my gloved hand. I still change it frequently to avoid using a glove with chili or mustard on it." Notice there is no mention of hand washing BEFORE changing gloves. Had Ben taken the food manager certification (or if he did take it, paid attention to the information) he would understand that his "procedure" is unsanitary as germs can live on money then be passed to the ungloved hand and then to his condiment bottle. Or perhaps he leans on the hot dog cart with the ungloved hand and transfers the germs directly to the cart where they can attach themselves to a hot dog boat, wrapper or hot dog bun when placed on what appears to be a clean surface. This is a point I have been making for years about the amateur nature of his "course book". The corona virus panic has suddenly thrust sanitation into the limelight, with carts, trucks and trailers posting what they are doing to maintain sanitation and protect their guests. Somehow, I bet no one will create a post about using a single glove trying to pass that off as sanitary. Let's talk about his "free" training? Since he wrote a book that gives him "expert" status to the general public. (Compared to a real expert working in the field for 40 years and training 100's folks to successfully run million dollar businesses) His "free" videos are a mixed bag of good information without encouraging dubious activity, while other videos are chock full dumb or flat out wrong information. The problem is a newbie can't tell which is which. One video he recommended buying at FULL RETAIL and paying SHIPPING just to test a product he thought was cool. (Amazingly it was not a product he was directly selling) Purchasing that product would have produced a slider sized sandwich (made of small diameter bologna) that would have to be sold at over $7 EACH to be profitable. Since sliders are traditionally sold in three's that is a $21.00 menu price. Again, failed furniture salesman mentality. There are other videos where he casually answers questions about hot holding with a different temperature. One video it is 140, another 143, another 145. In truth hot holding varies from state to state and has NEVER been 143. The temperature is always ended on zero or five. (Currently many states have adopted 135) All in all if you are looking for a light read and don't take the information as true or useful the book is a way to waste a few hours on a cold winter's night. Then when you are done with it throw it in the fireplace and get some real benefit out of it. If you want to learn there are plenty free resources and Facebook groups. Consider joining my Facebook Group. It is a highly moderated social learning* group (I don't allow immoral, illegal or unethical advice, general rudeness or non food vending related posts.), of like minded business folks focused on learning, teaching and helping vendors be successful. Just click on the logo below read the rules and answer the questions. You will find more accurate information on this free group than all the other private, secret and paid groups combined. *A social learning Facebook group is set up with a section called “units”, as well as the normal discussion posts. My group’s “Units” posts are set up as mini courses on different aspects of starting a street vending business. Each Unit has assignments to help you focus on learning the information and achieving the success you deserve in food vending. The group is also set up for free business mentoring for folks already up and running wanting to improve their business results. 
0 Comments
 Deal in facts only. Do not rely on social media or mainstream media for your information. Too much of what is reported as news/facts is simply opinion. Much of that opinion is agenda driven rather than fact driven. As much as “flash is cash” in our business, “shock keeps us out of hock” in the news business. Every headline must garner more attention than the last. (My opinion – Something is terribly wrong with the reaction to this virus; the computer models are not mathematically sound and are based on too many “if” variables. If you used the EXACT variables to project your sales as these “scientists” are using to project infection rates you would be a millionaire your first year in business and a billionaire the second.) Use government websites to get official information with programs that could possibly help your business:
Avoid ALL non-government related websites and links that offer “assistance”. In times of uncertainty scam and artists pounce with a vengeance. Grants, loans, free money, tax credits all must come from some part of the government. Anyone offering guarantees to loans for a low-cost processing fee should be avoided. Any program requiring fees upfront is a scam. Fees deducted as a part of the loan AFTER approval and funding while unsavory are at least not scams. Keep yourself stocked (not over stocked) and as much as possible seek alternative suppliers for panic related stock shortages. Paper towels and bleach are sold at Lowes and Home Depot for instance. Often, they will carry bottled water too. Balance your inventory as much as possible. The easy example is hot dogs to hot dog buns. The old meme about 8 buns in a pack to 10 hot dogs in a pack. The first multiple they have in common is 40. So, you would need 5 packs of buns to 4 packs of hot dogs. Buying 100 packs of meat to freeze it may seem prudent but how long will it take you to sell that much meat and what will you do if buns suddenly are hard to find. Visit stores and areas you don’t normally visit. Rural folks tend to stay better stocked at home than city dwellers, so the stores in their areas may have slightly better stock levels. Stay on social media for your business. Emphasize what is important to your guests. Increase your posts, stay positive, lighten the mood. Post about: A. Sanitation – the entire population has turned into germaphobes. Point out your heath inspection scores, your commitment to sanitation, how small your operation is and how easy to sanitize your ENTIRE operation. Point out no shared items like salt/pepper shakers. Explain your opening and closing sanitation procedures. Point out no crowded dining rooms, no shared bathrooms, small healthy staff. B. Curbside pickup – bring their paid online order out to your guests so they can stay in the car or set up a neutral pick up area. Where once they notify you that they are there for an order pick up, you place the order on a table and walk away so they can retrieve the order maintaining social distance. C. Delivery – if you can. Delivery is a way to get some business that otherwise you would NEVER get. Delivery is scary BUT can effectively be done by a two-person team. Keep the delivery area small & manageable and publish delivery related information on your social media often during the hours you are open. Just be sure your food carries well. D. Team up – team up with other food trucks/trailers/carts and offer meals for school kids. This is something many restaurants are attempting with various stipulations. Remember the goal is to reduce public crowds gathering. Some restaurants are requiring dine in only which defeats the whole school closing thing. (My opinion – this program is more of a feel-good advertisement than a survive the crisis program for your business. I also expect push back once the panic dies down and things return to normal. If these families truly rely on schools to feed their children what do they do during, Christmas break, spring break and for the months of summer break? And will these restaurants still provide meals then?) E. Encourage local and small business – Posts focus on supporting local small businesses. Explain the benefits to the local economy when folks buy from small business. Brag about using local produce, butchers, bakeries, etc. Remember while a McDonalds or other franchisee may be owned and operated by someone in your community, they are supported by sharing pools of marketing money from OUTSIDE your local community. Major franchised businesses have co-ops for marketing money based on ADI (Area of Dominate Influence) markets. Those franchisees get marketing money NOT based on their own sales but the sales of the entire market. A poor preforming local is propped up marketing paid by the other franchisees. (My opinion – I know many, many {well over 100} franchise owners of Wendy’s, McDonald’s, Shoney’s, Burger King, Schlotzski’s and Quiznos. While they operate locally, they do have access to money and/or support from the franchisor. Which vendors & mom and pops simply do not have. So, while an argument can be made that they are “local”, they do have access to assistance a true local small business does not have.) Focus on catering and private events. As with social media point out sanitation, crowd control, ease of ordering and delivery of safe food. Private events such as a business using your services to feed an entire office or production line. The benefit is reducing their staff’s exposure to the general public. Remember every cost a business incurs that can be directly related to the virus may end up being a tax deduction or tax credit. Effectively making the cost of paying you being a wash to the private business. Sharpen the saw. Keep yourself motivated and be the light for your staff, family and community. No matter the outcome of this virus, whether half the worlds population dies or the virus is cured in April. Life goes on. Humanity survived the plague, Spanish Flu, Swine Flu, SARS, MERS and a bunch of other illnesses. Focus on what you can do. Educate yourself, practice cooking, practice wrapping your sandwiches faster, learn how to do your own accounting, learn how to do your own taxes, take a refresher course on food sanitation. Go on that diet, exercise more, listen to audiobooks, deep clean your equipment, do all that preventative maintenance that gets put off until something breaks. Look for new set up sites to use after this all blows over. Be prepared for changes to guest buying patterns, a flurry of new sanitation laws and new restrictions to how and where vendors operate. Get involved with or closely follow your local government so when new damaging restrictions are proposed you can provide real input and defend your business to the uneducated. Understand we are all in the same boat. This panic is affecting the entire US. We all are facing the exact same issues. The difference is some people are better prepared than others. Follow other vendors in your area to see what they are doing. Support them and ask them to support you. Sales are going to be very unpredictable and extremely erratic. Prepare for the worst and expect the best. Don’t give up. This situation will result in some vendors closing or just giving up. That means a possible glut of equipment up for sale as well as a number of newbies buying that equipment and going into business as your competition. These newbies may undercut prices or do other self-defeating procedures that will doom their business. Be ready for changes, whatever they may be. Simply put this is not the time to panic. The strong have and always will – survive. Or you can just curl up and suck your thumb hiding behind that fort of toilet paper you bought waiting to be saved by those that are STRONG.  Join my Facebook Group. It is a highly moderated (I don't allow immoral, illegal or unethical advice, general rudeness or non food vending related posts.), positive group of likeminded business folks focused on learning, teaching and helping vendors be successful. Just click on the logo to the left, read the rules and answer the questions. You will find more accurate information on this free group than all the other private, secret and paid groups.
This is one of the three most often asked questions on Facebook groups with the least understanding of what is being asked. Most people really mean to ask, “what is the cheapest way to process credit cards?” A POS (point of sale) system is a computerized cash register. A POS often DOES NOT necessarily have integrated credit card processing. Credit card processing can be completely stand alone from the cash register. A POS can be an app like https://loyverse.com/us/pricing (FREE!) or Square (without using their card processing) or a physical machine like HarborTouch, Posi-Touch, NCR, Panasonic, etc., etc. All the average food vendor needs is basic inventory, net sales, taxes, discounts and sales mix capabilities in a POS. Processing credit cards can also be a part of a POS system or POS app. As can labor/payroll or distributor ordering add-ons or loyalty programs. The most important question – “What do I REALLY need at this stage of my business and how will it impact my profit.” Since over 80% of ALL payroll is direct deposit taking debit and credit is well past mandatory. A cash only vendor is or soon will be dying a slow death. The question is which credit card processor to use. I have already discussed credit cards at length here. This post will be showing the math and impact on your menu of the different payment strategies. Old School Approach  This old school price model shows a vendor using Square as credit card processor. Only 10% of his sales are in credit or debit processing. At the end of the day his bank account would have $298.92 in deposits since the Square would keep $1.08 in processing fees. Meaning the vendor is taking responsibility for processing fees. The guest credit card receipt will not have weasel words to explain an additional credit card fee. If two guests come up and order the same items, one pays cash and the other pays credit, they are charged the EXACT same price. No potential for service slowing complaints. This vendors menu is easy to read no confusing pricing and no easy to overlook disclaimers. Cash Discount Program (CDP)  A cash discount program is offered by several processing companies and utilizes rules allowed by all the credit card issuing institutions. At its basic form a vendor lists their menu pricing to include processing fees (usually 4% above cash price) and then offers a “discount” to guests opting to use cash. Then the credit card processor deposits money less the 4% processing fee. Effectively giving the vendor the same amount of money as if all his guests paid in cash. The menu becomes clumsy to read. Legally this program requires either TWO prices listed - one for cash and one for credit. Just like your local filling station. Or...  Your menu MUST include a disclaimer explaining the service charge and cash discount. Like this one. (Weasel words!) Any vendor with more than a day’s experience knows reading a menu is NOT a guest’s strong point. Let alone any language barrier. Now imagine those same two friends ordering the EXACT same food. One pays with cash and one pays with credit. Do you think for a second that the credit card purchaser will not complain? Even a half-hearted complaint will be heard by other guests and how you handle it will be remembered. No matter what the end result of the conversation may be, you have just increased your service times just to save a few pennies. Not exactly smart business. There will be guests that will happily pay the full amount credit listed on your menu. Think about that. If they happily pay the credit card amount, they are saying your food is worth the price! Then why would you discount someone choosing to pay in cash??? Does your food have less value for them? Smart Vendor Pricing If your guests don’t complain about a 4% service charge being already figured into your pricing, why not just drop the cash discount nonsense, raise your prices officially that extra 4% and you reap the profits rather than the scammer that convinced you use a CDP? In this example you can see the Average check increased $0.40 (4%) to reflect the menu price increase. Look at the deposits for the day. The smart vendor made an extra $10.89 with the exact same guest count. In other words, the vendor DID NOT give away hard earned money to have “free” credit card processing. The menu on the other hand contains pennies. If you are a tax included vendor this scares you. Let’s fix that. Best Practice Vending  A vendor that includes sales tax (or the state does not tax food sales) should price on the quarter. Making for less coin change needed. (Please don’t argue about change slows you down. It DOES NOT.) Be brave price on the quarter.
The vendor now receives $13.88 MORE in deposits than if they fell for the “free” processing scams. Compared to the “old school” price model once they accounted for credit card processing in their menu prices, they made $14.96 MORE in deposits. The menu is easy to read with no service charge, cash discount nonsense disclaimer. Two friends ordering the exact same items pay the exact same total, no questions, comments, or complaints. Accounting for credit card processing in your menu prices is just like accounting for the bacon, cheese, meat, bun, condiments, wrapper, napkins, and a carryout bag for your Bacon Cheeseburger. It really is just that simple.  I see this question often on Facebook groups and usually don’t answer because I can’t really think of anything “I wish I had known”.
My first vending operation was as a fundraiser operating off my restaurant’s food license. I provided food for shoppers attending a “Trash or Treasure” yard sale event held in a National Guard Armory. Our restaurant sold Coca Cola products and at the time Coke USA would loan small food trailers to restaurants as long as they bought post mix Coca Cola products to sell. They even provided cups! Coke dropped off the trailer Friday evening, gave brief training on the equipment and hook ups and told us they would be back Monday morning for pick up. Since the event ran only a few hours on Saturday that gave us way more time than needed for our event. We sold $1.00 hot dogs, $0.50 Coke and Chips. With every purchase we gave discounts and coupons for our restaurant as well as gave away logo t-shirts, coffee mugs and plastic cups. All profits went to the charity, our only goal was to promote our restaurant while raising some money for charity. At the end of the day we raised $425. Which does not sound like a lot but at $2.00 a combo that was a lot of guests we served. I remember running the P&L statement for the trailer and was surprised how much money we put on the bottom line to donate. I had the trailer pay for 2 employees, myself, ALL the Coke products plus all the food, coupon printing, flyers and give-a-ways. Still managed to write a check for the charity for $425. We got so much good press and community support from that one event the restaurant rode a wave of coupon redemption and positive comments for several weeks. What do I wish I had known? Nothing. What do I wish I had done differently? Started sooner. At that point I was 3 years into my career as a mediocre fast food manager. I had done a couple of good things and lots of ok things. Nothing special. I was very reserved, intelligent but painfully, almost cripplingly shy, full of self-doubt. I never thought I was good enough for anything or anyone. When I looked at my P&L for that event and realized I created 28% profit I was stunned. So, stunned I ran the numbers a second time, then a third time. A got the same result. Everything was paid in full and there was still $425 left over. I had done something WELL and could prove it! The very next day I took the trailer to our “central” park and set up near the playground. I operated a few hours before I had to go to the restaurant and run the closing shift. All by myself I pulled in more profit than I would make that night as a restaurant manager. Of course, the trailer went back Monday morning and it took me another year or so to get all the information, licenses and money necessary to operate under my own business rather than under the restaurant. But I did it. You see in 1981, there was no internet, food carts were a thing in big cities but virtually unheard of in rural America outside of the county fair. Social media was 25 years away, home computers with 20 megabits of memory were still years away from popularity. Every bit of information required time on a landline phone or physically going to the health department, city hall or the fire department. Mobile food vending was so unheard of that most officials I dealt with were clueless as to how to license one. Some permits officials thought I might need had nothing to do with food. On city suggested I needed a door to door solicitation permit! Nearly every code, regulation or restriction has sprang up over time to fill someone’s personal agenda. As rules were added I adapted. The mass of red tape, permits, licenses, restrictions that newbies whine about today were added slowly over time. Death by a thousand cuts for vendors of long tenure. Yet for nearly 40 years I survived it. A newbie should expect:
My advice? Start NOW. Research- read your state's food codes then move to county and city for food vendor restrictions. Note how much all the licenses and permits cost. See what is on the county and city commissioner’s agenda for the coming sessions. You don’t want surprises. Menu- based on your research and state restrictions develop your menu. Think in terms of what is missing from the food scene in your area or what can you measurable do better. More convenient location, higher quality food, better sanitation, faster service. Suppliers- find affordable high-quality food, paper and cleaning supplies as well as services you may need like credit card processing, a commissary, grease disposal etc. Work out the cost for each and shop around for better deals. Location- decide if you will operate at a set location (and where), travel a set route (with locations), vend at fairs, festivals & events, do private catering or a combination of all. Again, track costs involved with each. Once you do open ALWAYS be looking for your next site. Equipment- price used equipment that meets your menu needs. Understand you are purchasing EQUIPMENT not a business. Do not buy new until you have proved yourself in food vending. There are over 3000 used trucks and trailers for sale today. You don't want yours to be one next year. Once you have equipment on order then do all your permits and licenses. Some of your licenses will require floor plans of your equipment that is why you wait till this point for permits. Business Plan- write one. Do the market research, test your food on friends, family, co-workers and at church. Above all make your business plan prove to you the menu and business is viable BEFORE you spend any money. Marketing- Once you start your licensing process also set up and start your social media and overall marketing strategy. Facebook alone WON'T cut it. Mentor- Partner with an experienced food truck operator or food specific business coach to get your questions answered, provide guidance and support. If you want to be profitable from day one you will need the help of experienced folks. Even if you have food service experience at ANY level a vending business is very different. Short order cooking is good experience as is waitressing. Management training is helpful BUT all that experience WOEFULLY under prepares someone for owning and operating your own business. Notice purchasing equipment is NOT the first thing to do. Many people buy equipment then ask questions. By then it is too late. As a business owner you do not want an asset just sitting while you research how to use it. For me the work was always fun. I never once thought I was working hard. I was having fun and getting paid well to have it.  The debate rages on every single day on credit card processing fees. Newbies want information on who is the “best” processor, when what they really mean is “cheapest”. Someone with something to sell always answers “check my page” or “DM me and I’ll help”. Then my favorite answer always shows up: “charge them a fee that’s what I do.” The comments will also be flooded with “Square” and “Clover” followed with the naysayer’s complaints with each company.
EVERY, and I do mean every, company has complaints against how it operates. Customer service, late/slow deposits, hidden fees, frozen accounts, middlemen, differing rates, equipment fees, on going charges, etc., etc. Square has them, Clover has them, as does all the other companies. Asking for my opinion or some else on a public forum like Facebook groups will only get a limited answer based on extremely limited experience. I have worked in this business since 1977 and taken credit cards since 1990. I started with Square in 2010 and with all that time in food service have only used a total of 5 different processors. Each with problems and benefits of their own. You should also understand there are two different types of processing companies out there. Square (PayPal Here, Intuit ToGo, etc.) are flat fee aggregators. Meaning the fee is exactly the same no matter which card is used and no merchant account is required. This makes the threshold to get started much simpler for the average food vendor. Clover (and a ton of other services) are merchant account processors. Meaning they require a merchant account (which some people will not qualify for) as well as possibly charge variable fees based on card type and brand. Comparing the two accounts types is unfair as they have completely different benefits and application requirements. To get a full understanding of each processor type and unbiased reviews go to https://www.merchantmaverick.com/review-category/mobile-credit-card-processing/. Pick the processor that meets your financial needs and has rates and fees your business can afford. Also understand what you need out of the hardware they offer. Do you need a simple POS or one with lots of inventory control, payroll functions, loyalty programs, etc. or do you just need to process credit cards? Here is what you need to know about accepting credit and debit cards. Keeping it simple for street vending.
As a business owner you have 4 choices:
Don’t take cards. I hope from the stats in numbers 1 & 2 above you understand taking cards is a necessary evil in street and event vending. In my 40 years of experience (through observation and actual time studies) credit card transactions are significantly faster than counting out change. Yes, there can be internet issues, connect issues, etc. that pop up from time to time. Cash has its own set of problems like breaking a Hundred dollar bill early in the day, using a counterfeit pen to verify bills, opening new rolls of coins, having to get more ones or fives, lots of cash on hand makes your business an easy target for robbery. Convinced to take cards yet? Since taking cards is a MUST DO for a food vendor let’s figure the best way to handle those pesky fees. Pass the fees along to your guests as a “convenience fee”. Seems smart right? Not really. Charging a fee comes across as petty and cheap from a guest perception point and is illegal in 10 states. Where the fees are legal, they have a 4% cap since the merchant CAN NOT PROFIT from charging a fee. “Convenience fees” become overly complicated when a debit card is presented rather than a credit card. https://www.thebalance.com/credit-card-surcharges-315423 Convenience fees are also frowned upon by the credit card issuers and each has a specific policies AGAINST these fees in most circumstances. https://www.creditcards.com/credit-card-news/credit-card-convenience-fees-cost-surcharges-1280.php Setting a minimum purchase complicates things as well. Debit cards present different rules than credit cards. It is also against the credit card issuer rules to set a minimum fee for debit cards. https://www.thebalance.com/debit-card-minimums-illegal-or-just-annoying-315267 OK, OK, no charging additional fees, what should a vendor consider? Offer a cash discount program (CDP). This type of program is allowed and actually spelled out in card issuer policies. https://s3.amazonaws.com/Harbortouch_Files/VBN_CashDiscount_101818.pdf A cash discount policy means a vendor must list TWO different prices for each product. Just like a gasoline station does that offers a cash discount. The pump will list one price marked “Credit” and one price marked “Cash”. Of course, the credit price is higher accounting for the processing fees. There are a number of companies that offer CDP processing, all of which use some promise of “free” (to you) processing. The bottom line for a legal CDP is to have a menu that clearly spells out both a cash and a credit price as well as other notifications that explain and/or alert your guests to the two-tier pricing system. The problem with this system is guest confusion and overly complicated price structures. Street or event vending is very much time bound. The faster you take and fill orders the more money you will make. But with CDP the order taking process is slowed down by lengthy explanations for a two-tier price system. As well as the complaints about having to pay more because the guest has no available cash. In food service every obstacle you place to a smooth order taking process gets magnified into a negative review, bad word of mouth or no repeat guests when another service or food related issue pops up. The simplest thing to is: Do the math when setting menu prices. Wow what a concept! Just like pricing your menu to account for the price of food and propane, just price your menu assuming EVERYONE is going to use a card. What?! Can it really be that easy? Yes, yes it can. Let’s look at a product that everyone freaked out about when Square raised fees to 10¢ + 2.6%. Soda. Coca Cola is available from Sam’s Club for 32.05¢ each. Most folks sell it for a dollar. When Square raised their price, people panicked, whining about the increase on a percentage basis for the least expensive product they sell, a soda. That makes selling a soda all by itself cost a vendor 44.65¢ when a card is used. I can’t tell how many posts whined about 13% charges, blah, blah, blah. Yet if Coke raised the price to 45¢ the vendor would either suck up the increase or raise their own price. When I price a menu, I assume everyone will use a card. When Square added that 10¢ transaction fee, I just added 25¢ to some of my higher food cost items to compensate. So that one-dollar soda became a $1.25 soda. Still cheaper than a convenience store and well cheaper than from a vending machine. The gross profit (which is sales less cost of goods) would look like this: Before: $1.00 - $0.3205 - $0.0275 = $0.6520 gross profit After: $1.25 - $0.3205 - $0.10 - $0.0260 = $0.8035 profit Look what happens when someone pays with cash. Cash: $1.25 - $0.3205 = $0.9295 Does it make any sense to use a cash discount program? Does it make any sense to add a surcharge (which is legally limited to 4% and you can’t show a profit from that charge)? Does it make financial sense to just refuse accepting cards? If you are stumped the answer is “NO”. I can hear someone saying, “I don’t deal with change it slows me down.” Food service is a nickel and dime business. Charging even dollars went out with the turn of the century. The only people charging on the even dollar are amateurs or mathematically challenged. Perhaps it is time to pull out the addition and subtraction flash cards from elementary school and learn how to deal with our nickel and dime business. |
Bill MI have had a passion for helping people since an early age back in rural Kentucky. That passion grew into teaching and training managers and owners how to grow sales, increase profits, and retain guests. You’ll find a ton of information here about improving restaurant and food cart/trailer operations and profits. Got questions? Email me at Bill_Moore@live.com Archives
December 2020
|
RSS Feed