The Costs and Benefits of Running a Mobile Business

Current shop owners share why this non-traditional business model works so well.

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The term "mobile business" may bring to mind street peddlers, ice cream carts or late-night food trucks. Although those associations are not wrong, they exclude an increasingly popular segment of mobile businesses that offer everyday services and products in a unique and convenient fashion.

Kush Kapila and his business partner Alex Helm founded Sterlings Mobile Salon and Barber Company in San Diego after realizing how unhappy they were with traditional business service. "It was just so hard for me to go at night to wait in line at a chain salon for a mediocre haircut and then I saw the explosion of mobile services and thought, 'Could we do this and run it like a mom and pop organization?'," Kapila says. With the goal of revitalizing and simplifying hair care, Kapila launched Sterlings Mobile a little over a year ago and today has a customer following of more than 1,300.

As Kapila and several other mobile shop owners explain, this business model comes with its own set of challenges, but by investing a little time, money and effort, it can become a great entrepreneurial opportunity.

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Reasons for going mobile

Emily Benson, owner of The Fashion Truck mobile boutique in Boston, Mass., always wanted her own shop, but couldn't imagine investing in a brick-and-mortar space in an average location. "I had seen food trucks in New York and I was like, 'Hey, if you can fit a whole kitchen in a truck, how easy would it be to put a store in a truck?' Benson says. "I thought it was a great way to keep my upfront expenses lower and also a great way to explore who my customers are." Two years later Benson has booked nearly 100 private parties for her mobile business and has three designated weekly parking spots to reach her customers.

Benson's desire to save money and still have the flexibility to make the business her own is a common sentiment among mobile business owners. When rent in New York City became too high for Tiffany McCrary to profitably operate her vintage clothing store, she had to find a brick-and-mortar alternative. "I decided to go mobile because I would be in control. I own my trailer, I can go wherever I want, and my rent doesn't increase," she says.

Moving from a 3,500 square-foot SoHo retail space to a 100 square-foot trailer shop aptly named The Mobile Vintage Shop in Bushwick, New York, was a challenge for McCrary, but she quickly learned to do a lot with a little space and realized another perk of mobile businesses: Mobile business saves money for the customers, too. "I can sell clothes affordably now," McCrary says. When I was paying SoHo rent, I had to price accordingly. Now everything in the shop is $10 or less and everyone seems to love that."

The flexibility of mobile businesses also allows those with another job to follow an entrepreneurial dream without disrupting their existing schedule. "Instead of having to hold traditional hours, it is up to the individual owner how they want to market themselves and how they want their business to operate," says Stacey Steffe, co-founder and President of the American Mobile Retail Association and owner of La Fashion Truck in Los Angeles.

The start-up costs

Because it's up to owners how much they want to commit to their business, the amount needed to start and operate a mobile shop varies, but typically the shop vehicle is the biggest expense. "From what we have seen, the average start-up costs of a mobile boutique are around $20,000," Steffe says. "With $20,000 out the door, you can pretty much have everything you want." The average price for a bare trailer can start as low as $8,000, and owners can spend $100,000 and up building it out and adding amenities. Business and retail permits are factored into this cost too, and vary based on location.

Another big expense mobile business owners face is the customization of their shop. Customization can range from very basic to very elaborate. An owner could start with basic shelves and light fixtures or add hardwood floors and stainless steel appliances. For Kapila, Sterlings Mobile's driving force comes from the experience it sells so the business partners invested in a higher-end trailer model right off the bat.