Trends, surveys and thoughts of the barbequing business (Part One)
There is much to learn before starting your own barbecue business or if you’re building one. We’ve reviewed numerous current surveys and research reports to cover what the industry is saying. Hopefully you will find some information to help you prepare and improve or even get started.
Industry Size and Growth:
The US barbecue restaurant industry was worth $4 billion in 2021.
The US barbecue restaurant industry has seen steady 2 percent growth each of the last five years.
Number of businesses:
The USA hosts 17, 243 barbecue restaurants.
Number of staff employed:
The BBQ restaurant industry employs 372,986 people.
Trends and challenges:
Trends in the barbecue industry include:
- Spicy, smoky, and savory top the chart as the most popular barbeque flavor combination.
- Barbecued vegetables and plant-based proteins and spice rubs with exotic flavors are growing in popularity.
Challenges in the barbecue industry include:
- Rising meat prices are cutting into profit margins.
Labor shortages present a challenge to all food related businesses.
Most popular states:
The most popular states for barbecue businesses are Minnesota, Kansas, and Missouri.
The least popular states for barbecue restaurants:
Rhode Island, Massachusetts, New York
What is the mix of people working in barbeque?
24.3% of barbecue cooks are female, while 71.8% are male.
Average level of education:
The average barbecue cook is high school educated.
The average age of a barbecue cook in the US is 38.7 years old.
What’s the cost of starting a small barbecue business?
Startup costs for a small barbecue business range from $8,500 to $24,000. Your first primary expense is the purchase of a food truck, or a down payment on a truck to carry a trailer of equipment. Then you’ll have the equipment cost including a commercial smoker and a grill.
You’ll need at least the basics to launch your barbecue business:
- Commercial smoker
- Grill tools
- Serving utensils
- Packaging and support equipment’
What can you expect to earn?
Based on averages, the price of a barbeque meal is around $15. If you function as a one-man-band, with a mobile stand or food truck, your profit margin should be about 40 percent.
In your first few years, you could sell 20 meals per day and bring in nearly $110,000 in annual revenue. This would mean almost $44,000 in profit, assuming that 40 percent margin.
As your brand gains popularity, you could rent a space, hire a staff, and cut your profit margin to about 20 percent. You might sell 200 meals per day, giving you about $1,100,000 in annual revenue and a profit of $220,000.
What are the barriers to entry?
There are a few barriers to entry for a small barbecue business. Your biggest challenges will be:
- Making grilled meats that stand out in a crowded market
- Financing startup
- Now that you know what’s involved in starting a small barbecue business, it’s a good idea to hone your concept in preparation to enter a competitive market.
- Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
If you want to hone and improve your skills, you can take online video classes for less than $1,000. You can also find a host of free grilling and barbecue videos on YouTube. And there is always the hands-on experience of Lang Q-School.
Products or services:
You might consider specializing in barbecuing a certain type of meat or offer a variety.
And you could also choose a style of barbecue like Kansas City or St. Louis barbecue. You could also offer a variety of side dishes. Potential products include:
- Pulled pork and pork sandwiches
- Beek brisket and brisket sandwiches
- Chicken and chicken sandwiches
- Pork ribs
- Baked beans
- Potato salad
- Corn bread; banana pudding
Is there a general rule for pricing barbeque products?
A barbecue meal could range from $10 to $18 depending on the size and the number of sides. The average is around $15. Your expenses will be based on ingredients, packaging, and fuel. Your profit margin should be about 40 percent.
Serving your target market:
Your target market will be very broad so you should spread out your marketing on sites like Instagram, Facebook, and LinkedIn. You could also get some recognition by entering a barbecue competition and offering something unique only on certain days or times to make it more exclusive.
The good old government:
Starting a barbecue business require licenses and permits. A barbecue will need the following in some form, depending on the requirements in your area:
- Food service license
- Food handler’s permit
- Building health permit
- Liquor license
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA). You may deal with trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. You could check with the SBA for requirements. Above all, don’t take this lightly, it can result in heavy fines and even closure.
To be continued next month.