Event sales are pretty similar to your daily sales but, to me, are much more of a gamble. Some events will be a home run where you have access to thousands of people willing to spend top dollar (think theme park prices) and you’re expecting to make over $1000 for the day. Some events will have only about 100 people who aren’t hungry and don’t want to spend money and you end up making $100 or less.
It will be up to you to figure out which events are worth the risk, and in some cases the only way of knowing is to participate. With that being said here are a few tips we’ve picked up along the way that will help you with the process of identifying if a catering or special event is worth your time.
How to Estimate the Value of a Special Event
It is very difficult to plan for events since many of them come up almost last minute. But every city should have a yearly schedule of major events. So here’s how you can plan for a few events in the financials of your business plan (but definitely include that you plan to vend at special events):
- Target around 4 major events that are held locally.
- Contact the event organizers to determine event costs or special requirements.
- You will also want to know expected attendance, number of vendors, number of food purveyors, and the type of event
- Contact city officials to determine special permit needs.
- Based on event attendance projections, assume 1-10% of total attendance conversion at your truck.
- The timing of the event directly affects sales. Events held from 10-3pm will generate good sales, but events held from 2-6pm will not. Attendance is slow to build in the beginning and drops off before ending, and you want peak times to coincide with normal eating times.
- Project sales for that day based on your conversion and your menu prices.
- Add that day’s sales to your monthly tally (but subtract the difference in revenue between that and a normal vending day if you will lose a normal day of service).
For example, there is an event here in ABQ that is expected to hit over 10,000 people. I assume that 3% of the attendees can eat at my truck. That’s 300 people, which believe it or not is a conservative estimate for this event. I will have a special $10 menu that day.
Recall in our earlier example that the avg monthly sales was $8,000. In this month, our total sales would be $10,500 since we are adding the difference of $2500 for the special event to our normal rotation in place of the the normal day of service.
Now recall that special events are a huge question mark. If you see events as poorly attended in your area, you may opt out of participating in them. If that is the case, you may want to build your own event. If you go this path, remember that initially your event will be low in attendance, but over time you can build it up to be great. Plan for it in your business plan and show it in the financials. Then document that in your assumption to make it clear the fluctuations in your plan.
Some regional events in your area, you will know up front will be a hit based on your experiences living in your community. We knew that the C&C fest would be a hit. I had been the two years prior and knew what to expect. The event was a smashing success for us, as we sold out of food and made a statement in ABQ as a food truck.
We had no idea what to expect at National Train Day, and it was also a trial-by-fire opening day. Luckily this had also turned out to be a huge success for us as we made over $500 serving $4-6 sandwiches. Looking back, had we had our current menu prices we would have easily topped $1000.
But with those successes, we also faced great gambling failures. One of our bigger failures was the 75th anniversary of the SunPort, which I have previously mentioned. The city had big plans for the day, but got a lackluster response from the community. Participants in the headlining plane pull, did not eat at all. Looking around, we noticed none of the trucks were selling food (and asking them about how they did resulted in blatant lies). I think we did about 10 sales that day resulting in slightly less than $100 in sales.
The only benefit to having participated in the event was that I arranged a photo of the truck pulling the plane. From a marketing standpoint that was great, but otherwise not worth our effort.
Even if you complete all of your due diligence, you’re going to run into some events that are duds. Sometimes these low attendance events aren’t the fault of anyone other than Mother Nature bringing along some rain clouds on the day of your event. This is simply part of the ups-and-downs of running this type of business. You will, however, overtime begin to figure out when the best events happen and weed out the ones you know will not be profitable after you’ve been operating for a few years.