What Do You Need To Start a Food Truck Business?
What Do You Need To Start a Food Truck Business?
Starting a food truck business is an exciting proposition that can deliver many great benefits for you and your local community.
Following your passion, making your own schedule, and reaping a handsome profit are great incentives to start a food truck. There is no doubt that starting a food truck business will take work, but it can be a profitable and personally rewarding venture.
Today’s post will discuss just what you need to get started with your food truck business and enter into this incredible industry.
What Do You Need To Start a Food Truck Business?
The following is a list of recommendations for you to get your food truck planning started.
1 Explore Other Food Trucks
Before you set out to start your own food truck business, I recommend exploring other food trucks. Have fun! After all, we’re talking food here!
Talk to other food truck owners and get the gist of what they are doing. Then, try out various menus and enjoy being a customer.
Determine what makes each food truck you visit special and what you would like to emulate in your own business!
Access what food trucks are doing wrong and what you should avoid starting your own food truck business.
2 Choose Your Food Truck Concept
As you move forward, you will decide on a food truck concept that works for your customers. While your menu plays a significant role here, your concept is a bit larger in scale. Your concept focuses on the entire food truck business that you plan to start.
For example, your concept will answer the following questions:
- What type of truck will you want?
- Would you prefer a large truck or trailer?
- What kind of experience would you like your customers to have?
- Where would you like to set up your business?
- What will your food truck business be known for?
- What food will you offer?
- How will you decorate your food truck?
- Where will you vend?
- How will you promote yourself?
There is a lot of questions. However, to minimize any risks, you should evaluate every aspect of your business in great detail.
Your food truck concept encapsulates your menu, brand, physical truck, customers’ experience, and the type of venue you will work in. A well-developed concept will highlight your strengths and help you take your niche in the market.
3 Decide on Your Food Truck Menu
Here comes the fun part – tasty food!
What will you serve out of your food truck? If you have previous culinary experience and want to specialize in a particular cuisine, you’ll be ahead of the game. Before deciding what you like to serve, research what your customers would like and what you think you can specialize in.
Consider the competition. If 12 other food trucks are offering Thai food, consider offering something different! (By the way, I love Thai food!)
Your menu will dictate much of your food truck budget, the equipment you’ll need to have, your marketing, and other important factors about your business. Remember, the more food items you serve, the more equipment and inventory you will need. That’s why many food truck businesses decide to serve one type of food.
Go deep into your menu planning. For example, let’s say you want to serve tacos. What type of tacos do you want to serve? Do you want to serve vegan tacos? Mexican-fusion-style tacos? The more detailed you are, the better you’ll be able to plan from here on out. List out your ingredients for the food you plan to prepare. You might want to sell coffee too! It’s also a way to get a head start on the information your local health department will need.
4 Decide What’s Going to Make You Different
What’s going to separate you from the competition?
Depending on where you plan to open a food truck, you might have a lot of direct and indirect competition. From other food trucks to traditional brick-and-mortar restaurants, competition can be fierce.
So what will be the thing – that special sauce – that makes you stand out from the crowd?
Many business people refer to this as your Unique Selling Point (USP) or your Unique Value Proposition. It answers the question of what’s going to be the thing that makes you different? For example, why will customers come to your particular food truck instead of going to a café or another street food vendor?
Focus on that thing and create your menu, your concept, and your messaging around it. Knowing your USP will make it easier for you and your employees to communicate your idea to the customers.
5 Write a Food Truck Business Plan
Just like every good sauce has a recipe, every successful business starts with a well-thought plan. A business plan will help ensure that you think about every element that needs to be taken care of before you fire up your engine and grills.
Business plans generally have a small but significant audience. They are essential for investors and banks who provide loans. The process of writing out the plan is so beneficial that it can’t be overlooked.
Many first-time food truck owners decide to skip writing a business plan, thinking they can keep every detail in their heads. But, believe me, when starting a food truck business – or any business whatsoever – the number of things you have to do has a snowball effect. Therefore, an essential part of your business plan is an action plan that will help you keep an eye on the things that need to be done by a specific time.
6 Create Your Food Truck Brand
Think of some memorable brands right now. What makes them memorable to you?
Creating a food truck brand will help you stand out in your market and help you and your staff rally behind your mission.
The effectiveness of your food truck brand to break through the noise and emotionally connect to your customers will be a powerful mechanism to achieve more excellent sales and repeat business.
Your brand serves as not only your introduction to new customers but a promise of the value and the quality of food you deliver.
Your brand is a soup of elements that include your logo, slogan, color scheme, menu, personality, and message.
My recommendation is that when it comes to your branding, be clear, concise, and memorable.
7 Develop a Food Truck Budget
Now that you have a good idea of your concept and menu, you must construct a budget. List all of the things that you’ll need to start your engine and serve your first customer.
Adding up all the food truck startup costs may seem intimidating at first. My suggestion is that you power through and be as honest as you can about the costs.
When you first start, you might not understand the total costs of your food truck operation. That’s okay. Your budget is an organic document that means it will grow and change.
Write everything down as best as possible and keep adding to it as you determine other costs.
During this time, you’ll want to spend time figuring out where and how you will get the money to fund your food truck business. You will also want to calculate the costs of goods sold, projected sales, etc.
8 Look for Locations to Park Your Truck
When it comes to retail, your location matters.
You will want to take some time to research your available location options to vend. For example, if there are private food truck pods in the Portland, Oregon area, you may approach the management and ask if you can sell.
Many cities are offering more and more food truck pod locations, such as Los Angeles, San Diego, Austin, and Nashville. They are often privately managed.
Commonly, the management will determine if you can or cannot sell there based on your menu. So, for example, if you sell pizza and the food truck pod already has an established pizza truck, they are probably not going to let you in that specific pod.
Additionally, check other resources such as your local parks and recreation department and your department of transportation. They may have established areas where you can vend.
Finally, look for private options to vend. This could be private commercial lots or parking areas where workers are getting off for lunch.
9 Create an LLC
You will want to create your business structure in the state in which you plan on doing business. A variety of business formations exist, and you should review the one that makes the most sense.
The correct formation of your business will open up new doors for you and serve to protect you from personal liability should disaster strike.
For example, opening an LLC (you have other options) will allow you to open a bank account, get an EIN to hire people, and establish yourself with wholesale vendors.
10 Start Networking
Build out your professional network. Start today!
The more people you know in the food truck industry, the better. When it comes to networking, don’t view other food truck businesses as competitors but collaborators.
For example, find out who are the best food truck manufacturers are and which one you should avoid. Additionally, get referrals to licensed contractors who can help you build your food truck or fix repairs.
11 Buy Your Food Truck
Everything you have done so far has led you to this point in your food truck planning: It’s time to buy your food truck.
Don’t be afraid to take your time and look around for available options. Depending on the city you live in, you might have to travel out of state for more opportunities.
There are a variety of ways to get a food truck. You can shop for a used food truck or have a food truck manufactured for you to your specifications. Alternatively, you could also rent or lease a truck. You might consider looking at all the pros and cons of each of these options.
For more information, check out this article for top considerations when buying a food truck.
12 Shop for Food Truck Equipment
Depending on your food truck menu, you will need to buy and install commercial-grade food truck equipment. If you purchase a used truck, you may already have equipment but may need to upgrade, repair, or reposition your equipment in a manner that meets the needs of your business.
There are several essential factors you need to consider when buying equipment for your truck. These include your food truck budget, available space, and the power associated with adequately running your vehicle.
Like the food truck itself, you may decide to buy it brand new, have a custom-made piece of equipment manufactured, buy equipment used, or rent a particular piece of equipment.
13 Get Your Food Truck Permit & Licenses
Before you serve your first customer, you will be responsible for obtaining the proper permits and licenses to legally sell food out of your food truck. You will need the most common business licenses to get our business license, EIN, driver’s license, food handler’s permit, seller’s permit, etc.
Other necessary permits include your building’s department that ensures your food truck is up to code and meets the safety requirements. Finally, you have to get a license from your local health department.
Other specific food truck documents are a parking permit, event permit (if you will vend at public or private events), a commissary agreement.
14 Develop a Marketing Campaign
Before you get started serving, you are going to want to have a marketing plan in place. You will want to target your ideal customer through a variety of channels.
Your marketing strategy may include:
- Having a website
- Social media accounts
- Email marketing
- POS marketing
- Exterior signs
- Bright and engaging menu board
- Your food truck exterior wrap
- Working with local communities
- Reaching out to private events
For more detailed information on food truck marketing, read our other post, The Best Way to Market Your Food Truck.
15 Hire Amazing Staff
Chances are you going to hire staff. However, hiring a reliable, honest, and trainable team is sometimes more challenging than it seems. Even the most eager job applicants may not be a good fit. Therefore, as a food truck operator, one of your primary roles is hiring and maintaining a motivated and reliable staff to cook and serve your customers.
Before hiring your staff, you’ll need to determine just what kind of skills you are looking for. These skills are contingent on your menu, your whole operation, your schedule, and who you are serving.
16 Experiment With Your Menu
Developing a delicious menu will be the key to your success. You may have your signature meal or product offering, but you will also want to experiment with other options. You’ll get your ideas from your personal experiences, your training, creativity, staff suggestions, and your customer feedback.
Experiment with your food truck menu to offer tasty and unique food offerings. Additionally, experiment with other ingredients – perhaps leftovers from your signature meal. Or experiment with other ingredients to create meals with a higher profit margin.
17 Start Slow & Then Build Outward
Your food truck business will have lots of moving parts (both literally and figuratively!). Take each step in stride and be methodical about your planning. Start slowly to complete your project faster.
Take the time to develop your concept, your menu and construct your budget. Then move outward and search for the food truck that will work for your menu and your budget – research permit requirements. With your food truck success, you will have the option to start a brick-and-mortar restaurant business if that is your wish.
What Do You Need to Start a Food Truck
Conclusion
Starting a food truck is an incredible opportunity to be the entrepreneur you’ve dreamed of becoming. It provides you the vehicle to be independent, creative, and profitable. With proper research, planning, and budget development, you will be well on your way to a successful start.
Questions:
Is it profitable to have a food truck?
Yes! Having a food truck can be incredibly profitable. However, your food truck revenue ultimately depends on a few factors that are often within your control.
For example, offering the right menu to the right people will determine your number of sales. Therefore, these two factors are squarely within your ability to influence.
The other factors include the number of sales you have per day, the number of days you work per week, and your fixed and variable costs. If your revenue exceeds your expenses – including salary, taxes, and any interest payments, you’ll be well on the way to profitability.
Why do some food trucks go out of business?
The first year or two will show if your food truck is viable or not. The top reason why food trucks fail is financial mismanagement. The food truck startup funds will soon run out, and you need to be ready to have a sustainable food truck within 3-6 first months of operation.
After that, your costs might be higher than your sales, you might waste a lot of inventory, or you are just not selling enough – whatever the reason, your numbers will show you where you are at. Therefore, it’s a good idea to keep track of your numbers through a POS system and be ready to make some adjustments if needed.
Among other reasons why food trucks fail are bad operational practices, lack of internal culture, truck or trailer breakages, poor marketing, fierce competition.
How much money do I need to start a food truck?
The ultimate price of your food truck startup will depend on the size of your operation.
For example, if you have a food trailer, you will need a truck to pull it to need pricier vehicles.
Or, if you develop an expansive food menu, you will need more gas, more equipment, and more inventory, resulting in higher startup costs. So, you will need some money to start a food truck. However, you can create a food truck with no money if you have a smart funding mix.
