I am just thinking of starting off slow with dogs, chips and drink for 5 bucks, not sure if this will work but worth a try. I will do standard toppings to start off. I have only heard of one other vendor in town but have never seen him. I don’t have alot of money but am figuring on spending about 3500.

You should be able to find a cart on Craigslist for $1000-$2000. Just make sure it passes your health department requirements before you purchase it. You can use the extra money for your other fees as Trentondog said (HD fees, liability insurance, product).
I can’t agree with Wild Dog more.  Once you start I assure you that your going to want more cooking room.  When you have limited cooking space it is a huge hassle.