Business lessons from a Hot Dog vendor

With all the talk about hot dog vendors on another thread on this Forum, I decided to watch a feature documentary tonight about the founder of NATHAN’S FAMOUS.

Nathan Handwerker was an Eastern European immigrant who came to America not knowing English. He worked as a dishwasher then waiter at a restaurant.

He decided to open his own hot dog stand in Coney Island in 1916 with his life savings of $300.

It was failing.

His competition was selling hot dogs for 10¢. Nathan cut his to 5¢ and went from taking in $60 to $260.

At the time hot dogs were getting a bad reputation as being made from unsafe ingredients. To gain exposure as offering health dogs, he gave uniformed hospital workers free dogs so other customers could see heath industry professionals eating his product.

By the 1920’s he was selling 75,000 hot dogs a weekend.

He was an extremely hard worker. He grew his hot dog stand a few feet each year until he decided to buy the whole block.

In 1933 it was valued at $100k. He was planning on offering $200k. He ended up spending $250k because he saw it as “not buying property, I’m buying a business for a lifetime. As long as I live. As long as my children will live.”

Eventually the company was sold for $18 million.