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Here's How Much it Costs to Start a Tiny Food Stand Business

By Amy Zimmer | October 1, 2014 8:05pm
 The chef and founder of Smorg Jr.'s Goa Taco shared the start-up costs behind his food stand.
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BROOKLYN — Chef Duvaldi Marneweck envisioned his tiny Goa Taco food stand as something he could start simply, planning it with just the "basics and absolute necessities" since he had limited capital.

Marneweck, a South African native who most recently had been cooking in kitchens of Perth, Australia, folds a paratha — a flatbread popular in India's city of Goa that he calls "the buttery love-child of a tortilla and croissant" — like a taco. Then he fills it with delicious flavors inspired by his world travels, like charcoal-roasted pork belly with chipotle mayo and pickled red cabbage; seared skirt steak, feta caprese, and a fried egg; and a banh mi-inspired combo with poached turkey or tofu.

But starting a business in New York City isn't easy, no matter how small.

Marneweck moved to New York this summer for his wife's research gig at Columbia. He launched his food stand in July at "Smorg Jr." at the Park Slope Flea on Seventh Avenue, an offshoot of the wildly popular Smorgasburg run by the Brooklyn Flea founders.

His projected start-up budget was $4,000. It ended up costing nearly double.

"It ended up being way more costly than I thought it would be," said Marneweck. 

As a veteran cook who started commercial kitchens from scratch, he had a clear vision of his start-up needs. Still, he was still surprised the red tape he found here.

"There are so many permits you need," he said, adding, "Little things add up, from printing tickets to the grills and gas bottles."

Here's a breakdown of what went into it:

1. Find the right product and name (cost: years of experience)

One morning several years ago, Marneweck was hungry but had few things in his house except for paratha bread. So he made a bacon and egg with it and was hooked.

"We were referring to them as 'delightful treats,'" he recounted. "I knew it was a good product. We figured out a quirky name for them. The word taco was the closest description because of its shape."

He sources the ingredients from the "right suppliers that do the right thing and have good meat and high standards" rather than something "factory-farmed and hormone-fed."

"People absolutely love it," Marneweck said. "At the market, people walk back and say, 'Thank you so much. That was the best thing I've ever eaten.'"

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2. Find a location (cost: $125 a week)

Having a good location is critical, Marneweck said.

He toured the Smorgasburg on prior trips for his wife's academic conferences and applied to the popular Williamsburg market before moving here, but didn't land a spot. The Flea offered him space at Smorg Jr., in front of P.S. 321, on Seventh Avenue and First Street, which costs $125 a week to rent for Saturday and Sunday, and is paid on a week-to-week basis, Marneweck said.

Three of the five new vendors who started at Smorg Jr. didn't return after the first weekend since business was slow, Marneweck said. That part of Park Slope often empties on weekends. But Goa Taco plans to stay through the market's November run and has seen an uptick in business post-Labor Day.

Now Marneweck is setting up pop-ups at bars and elsewhere, spending Labor Day weekend on the North Fork of Long Island at the Greenport Harbor Brewing Company and at Park Slope's Mission Delores last weekend. He will be at Spuyten Duyvil in Williamsburg next Thursday night.

His goal is to have a pop-up shop in someone else's space or find a short-term lease.

"At the moment, it would be impossible to lease a place. I don't have a credit rating or history here. Unless you have a ton of money to put down, it's too difficult," he said. "It was hard enough to find an apartment, never mind a commercial lease."

3. Start an LLC (cost: $1,250)
The first step in starting Marneweck's business was registering it as an LLC, or a limited liability company.

"I've never done any of that before. So, I spent hours and hours and hours on the Internet trying to get information on the steps to do it," Marneweck said.

He finally found the website run by the city's Department of Small Business.

It cost Marneweck about $250 to register his business as quickly as possible. He also had to spend $1,000 on publishing in different newspapers that he was setting up an LLC, which is required by state law, he explained.

4. Get documents for paying sales taxes (cost: free)
To run a business, you first have to get an EIN — or Employer Identification Number — through the Internal Revenue Service

Once you have that, you can then get your sales tax certificate of authority through the New York State Department of Taxation and Finance, Marneweck said.

5. Obtain other permits (cost: more than $250)

To sell food from a temporary food establishment, Marneweck needed various permits from the city's Health Department, including a permit for the establishment (roughly $120), a propane permit (roughly $70) and food permit (roughly $70). He also needed to take a health exam, which he did online. It was "basic stuff" for him since he was a chef with culinary schooling, he said.

6. Buy equipment (cost: roughly $6,000)

Just as starting the LLC was more labor intensive than Marneweck thought, finding cooking equipment and other needed tools "took hours and hours and hours of research."

It cost roughly $6,000 for everything from napkins, utensils and chopping boards to tables, materials to build the stall, the grill spits, charcoal and other items. Some things he bought online and some he bought locally, mainly from cooking equipment shops in Chinatown.

"I was trying to save on every single thing," he explained. "There were silly problems I ran into, like the spit that I worked with needed electricity but there was no electricity at the market."

He could have bought generators, but that would have cost $1,000. He found a $300 solution that was more labor intensive. He bought a motor that could run on battery but had to convert it to running on a car battery.

"The motor took way longer than I thought to get here [from California]. It arrived the day before I had to do the market," he said. "I had four hours to rig something up."