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How to Start a Food Truck Business
Owning any business is a complicated venture, but the food industry is particularly competitive. Food trucks are becoming an increasingly trendy way to sell food, and for good reason. By managing to successfully run a food truck, you cut a lot of maintenance, utility, and wage expenses that come with owning a restaurant.
Food trucks have a history of being greasy vans that aren’t very clean, but that stigma has changed in the last decade. Food trucks have become mini-restaurants with quality food and great service. It’s a simplistic way to go about fulfilling your restaurant dream, with less long-term stress.
With the rise of the food truck industry, we’ve put together a guide on how to run a successful food truck. Read more to learn about food truck business plans, marketing, finances, and much more!
How To Start a Food Truck:
Pick Your Food Truck Concept
So you’ve got your food truck concept in your head. A strong vision is important for such a large project. That being said, don’t be too prideful to make adjustments to your vision.
Just because you have a strong concept in your head, doesn’t mean that there’s customers willing to buy your concept. The end goal of any business is to be able to sustain itself and make money. That’s not to say you have to entirely compromise your restaurant’s identity to sell food, but be willing to make suggestions and make adjustments.
Consider the Competition
Depending on how many people regularly pass through your area, you may want to avoid areas that have similar food trucks. Cities are usually the places where food trucks thrive. Cities, boardwalks, and college campuses are all great places to open a food truck.
Not only is it beneficial because of how much business will pass through the area, but it also mitigates the negative sides of competition. For example, if your food truck sells cheesesteaks near a superior cheesesteak truck, they likely won’t take all of your business if you live in a crowded enough area. With enough popularity, their lines will grow too long, and people will start to come to your food truck.
Make sure that if you’re going to be sharing turf with a similar food truck that you offer something unique. If their truck is already established, offer something different. If their cheesesteaks are top notch, but expensive, try making your food cheaper in comparison. Special deals and unique food items are other ways to stand out in a crowd. Analyze your competition, and see what kind of audience they don’t appeal to.
In saying this, if you want to see more than just marginal success for your food truck, you’ll want to be the best food truck of your category. Scout the area and see if there are similar services nearby, as this information will be important going forward.
Write a Business Plan
Any successful business requires a good amount of planning, and it’s never too early to start. Business plans look different for every business, but what’s important is that your business plan suits all of your needs. That being said, if you’re planning on applying for a business loan, and getting people to join or invest in your business, your plan needs to be thorough.
Consider Permits and Regulations
There are various licenses and permits necessary to sell food in the United States. That being said, the laws can vary quite heavily from state to state. To run a food truck, you need to consider acquiring the following.
Most of these are necessary for all food-related businesses, but for some it depends on which state you live in. A business license, employee verification number, and food service license are all mandatory for any food truck in this business. However things like liquor licenses and sign permits depend on how your business operates and what state you live in.
In the restaurant business, a liquor license is a big investment that can see a big profit in the long term. That being said, it’s not typical for food trucks to sell alcohol. This is mostly because of the times that food trucks operate, and their public settings.
Just because it’s not common for food trucks to sell alcohol doesn’t mean it’s never a good idea. If it’s practical for your food truck to sell alcohol, it can be worth trying to obtain a liquor license. This is especially popular for food trucks near boardwalks, food truck parks, or at a festival where food trucks are welcome.
Create a Marketing Plan
Marketing is essential for any business, especially restaurants! Restaurants face heavy competition, which is why many restaurants fail after less than a year open. Create a restaurant marketing plan and consider the following aspects of your marketing:
Your logo might not seem all that important, but in the world of advertising and marketing it can mean more than you think. At the end of the day people will judge your restaurant based on performance, but that’s only if people actually try your restaurant.
The logo is the cornerstone of the entire branded experience. The colors and fonts you choose in your logo should be the same ones you use on your menus, and all of your branded materials.
In the modern age of owning a food business, how you brand yourself can make or break your business.
Keeping a clean consistent image can go a long way for people who’ve never tried your food truck. It’s not guaranteed, but people generally take you more seriously when you look like you have it together.
Good branding can open a lot of doors for any business, especially for food businesses. There are a lot of things that go into the branded experience, including:
It may seem like a lot, but in an industry as competitive as food, people are taking any advantage possible. It’s important to stay ahead of the curve. To learn more about the branded restaurant experience, read our article on restaurant branding.
A cost-free way to promote your food truck is through social media.
For a food truck, we recommend using FaceBook and Instagram. FaceBook is the single largest social media platform, and covers a wide range of ages. There’s room for all kinds of interactions with a huge base of users, which is why your food truck needs a Facebook page.
Instagram is another great way to promote your food truck. It’s not quite as straightforward as Facebook, but showing off your food visually can do for your business. In addition, despite having less users, Instagram is a very trendy social media platform.
Making your food truck experience “Instagrammable” helps spread your name online. In saying “Instagrammable,” I mean that people should want to share pictures of it. People love taking pictures of their food, but they do especially when you have a menu item with a funny name, or some kind of special item you won’t see elsewhere. Even something like the art on your truck could get people to want to share it if it’s good enough.
Your social media campaign may never take off, but it’s worth trying to establish some sort of presence online anyway. Almost everyone uses social media in 2020, and it’s entirely free, so there are no drawbacks.
How To Write a Food Truck Business Plan
Your business plan is sort of like a resume for your food truck. Provide as much relevant detail as possible to promote your best self. The easiest way to do this is by asking yourself as many questions as possible until you can come up with something that will help your case. Throughout this portion of the article, we’ll provide questions you should be asking yourself when creating your food truck business plan.
Food Truck Executive Summary & Description
Write out an explanation of your business and why it will be a success. This should be relatively short, but the more details you have the better. Here’s a list of questions you should answer in this section in your business plan.
Provide information about how you plan on growing your business in the long-term. This is especially important if you plan on applying for loans.
Continue to analyze why your food truck will be successful, but now do it in relation to similar businesses nearby. Look at what your competition is doing, why does it work? Tell your reader why you can execute this better.
Look for trends that similar food vendors in the area follow and analyze why they work. This part is more important for the market analysis, but you can learn a lot from how similar businesses that aren’t near you operate.
Don’t be afraid to address your weaknesses before making your business plan. A clear, objective look at your business model is healthy for making decisions about your business. Not being afraid to address the weaknesses of your business shows you where you can improve.
Food Truck Management
Describe the structure of your establishment and how it will be run. It helps to provide a visual tree of how the management chain will work out.
Continue to talk about how each member of your staff will contribute to the success of your food truck. Any relevant experience they have will help your business look better. It also helps to provide work history and resumes from your employees.
Explain in detail what your main products are, and why. How does your product benefit the customer? Talk about the product line including who your suppliers are, the total cost of production, and your intended sale price.
This part is relatively easy for food truck owners because the product benefit of most foods are pretty straightforward. Does your product feed customers fast and cheap? Do they provide healthy options? Vegan? Gluten Free? Keep asking yourself questions until you come up with something that helps your case.
Before the funding request, the last thing to do is to address any marketing costs you anticipate. There’s infinite ways to go about a marketing campaign, this plan doesn’t have to be set in stone. It’s not about creating a plan and sticking to it no matter what. It’s more about showing people that you have a thorough plan, and that you already have thought out marketing ideas already.
How will you attract new customers? How will you get them to keep coming back? These are the two biggest questions for any marketing campaign. You can’t run a great food truck without a loyal customer base. Explain this process in detail, from marketing strategy, to execution, and the intended result.
The funding request is where you’ll formally ask for the money required to run your food truck. It’s expected that you explain how much money you’ll need to run your food truck for the next five years. You should know exactly how much money you’ll need, how you want it, and how you’ll use it.
When mapping this out, provide detail as to exactly where this money is going, and how you’ll use it to see profit. Explain any long term financial plans and how you plan on executing them. Like the previous sections, be sure to be very thorough in this process. People aren’t going to give you money unless you give them a rock solid plan.
Now that you’ve told the reader how much money you want and what you want to do with it, it’s time to dive into specifics. Calculating in things like projected loss and expenses, prove to the reader using real numbers that your food truck will be a success financially.
From sba.gov :
“Supplement your funding request with financial projections. Your goal is to convince the reader that your business is stable and will be a financial success.
If your business is already established, include income statements, balance sheets, and cash flow statements for the last three to five years. If you have other collateral you could put against a loan, make sure to list it now.
Provide a prospective financial outlook for the next five years. Include forecasted income statements, balance sheets, cash flow statements, and capital expenditure budgets. For the first year, be even more specific and use quarterly — or even monthly — projections. Make sure to clearly explain your projections, and match them to your funding requests.
This is a great place to use graphs and charts to tell the financial story of your business.”
The very final part of your business plan should be the appendix. This is where you’ll show any legal documents or other paperwork necessary to run your business. This can include but is not limited to employee resumes, permits, licenses, references, patents, etc.
That was a lot of information to take in at one time, but now you have a better idea of what it actually takes to own a food truck. It’s a lot of hard work, but when done right it can be a highly profitable business.
The food truck industry has been evolving rapidly, and now could be the perfect time to capitalize on the trend. If you can find loyal customers in a populated area, running a food truck can be more profitable than running a restaurant.
via Blogger How to Start a Food Truck Business