As the number of events across the world increases, the demand for mobile bars is increasing significantly. As a result, many entrepreneurs are shifting into the mobile beverage truck business to unveil the hidden treasures. A portable bar is such a lucrative business that any individual with an enterprising spirit would wish to start.
If you would like to try it, you will have to get the basics, including the mobile truck, glassware, personal business license, cold storage, a temporary event notice, etc. You will need money to finance the above necessities and the other expenses like promotional and purchase costs.
This article discusses various startup costs that will guide you in determining the amount of money you will need to set up a mobile bar. Check them out:
Cost of equipment
You will have to get the right equipment, including the transportation truck, the glassware, bottle openers, cocktail napkins, cocktail straws, paper towels, corkscrews, and liquor pour spoons. Other equipment which you might need include dump sinks, hand sinks, blender stations, speed rails, etc.
When putting together, the total cost can be overwhelming to an average person. However, you need to prepare enough to purchase all the necessary equipment. Also, you should research the best gear before the purchase. Remember, the equipment should make the first good impression of the business to potential customers. Typically, the cost should range between $10,000 and $ 125,000 depending on the company’s size.
As a rule of thumb, you have to pay your employees even during the startup when they generate little or no revenue. Sometimes the high costs like purchasing the equipment and the stock may take almost all the capital leaving you with little money for sustaining the business.
If that happens, you may consider applying for mini loans to cover the remaining expenses and maintain efficient business flow. Some financial institutions can provide instant online loans, thus enabling you to cater to your financial needs promptly.
Incorporation and licensing cost
To start operating as a business, you will have to comply with the standing law provisions. Thus you will have to decide on the type of your entity then obtain the necessary licenses. Your choice of business entity will determine the legal obligations of your mobile bar.
If you choose to incorporate your business, you will have to incur the cost of filing your articles with your state, ranging between $ 50 and $ 725, depending on your condition. However, most countries/ states have a standard fee of below $ 300. If you choose any of the other business entities, such as sole proprietorship or partnership, you will still incur the cost of obtaining licenses and permits.
Cost of inventory
Stock is the primary factor when it comes to mobile sales. You may find it tricky to determine how much inventory to carry on your first sale since you cannot tell your target audience’s consumption habits. Luckily, most beverages don’t go rancid quickly, and hence you can carry as much stock as possible provided that your finances allow.
Experts advise that you allocate approximately 20% of your budget to inventory. However, the stock needs are recurrent, reducing credit sales to avoid going short of your capital.
Like any other business, you will encounter competition in the market. You will need to market your products to counter the competition and maintain your competitive edge. You should, however, be careful when choosing the marketing strategy for your business. Go for the cheap advertising strategies, which promise a higher conversion rate.
The marketing cost should only take between 0% and 10% of your budget except in extreme circumstances where it may take up to 15% of your budget. Examples of cheap forms of advertising include social media advertising and content marketing, among others.
A professional business person should be inclined towards the improvement of customer experience. You can collect sufficient information about customer needs from your business website. You can also use the website to create your brand awareness and attract more leads and traffic.
If you don’t have one, look for the most reputable website service providers like weekly, Wix, and square space to help you in customizing your business website. Though these service providers may provide essential services for free, you will need the premium option to reap the most benefits. The premium subscription should not exceed $40 per month.
You will need a considerable amount of money to start up a mobile bar. We have discussed the necessary costs that you must incur in the preparation and operating processes. However, the article is not inclusive of all expenses. Don’t hesitate to take an emergency loan if the costs are too high.