Whether you’re looking for a new career path or are a seasoned veteran in the restaurant business, starting your own food truck is a massive emotional, financial, and physical undertaking that you should not approach lightly.
In some respects, food trucks follow the same formula for success as any other business: a savvy plan, a unique angle, great customer service, and some old-fashioned elbow grease. But at the same time, food truck owners experience certain obstacles and circumstances that set them apart from any other type of hospitality service.
To ensure you’re fully prepared for the responsibilities that come with owning your own food truck, here are the 7 most important questions you should ask yourself before you get behind the wheel.
Need answers to all the questions below? Get the How to Start a Food Truck: The Definitive Guide
1. Am I Prepared for the Upfront Costs of Starting a Food Truck?
Let’s face it—no matter what kind of business you want to start, there are going to be financial risks involved (although the magnitude of these risks might vary). Prospective food truck owners, especially, must anticipate all kinds of upfront hurdles that are likely to come their way.
The most obvious, and essential, upfront expense is the cost of the food truck itself, in addition to the kitchen equipment it carries. But food truck operators need to be aware of the following as well:
- Permits, especially those required to park and vend on city streets. Regulations will vary depending on the areas you serve, so be sure to research before you set up shop for the day.
- Insurance, including everything from auto insurance to general liability.
- Funds for repairs and other roadblocks in the event of any breakdowns as you travel from one location to the next.
- Any necessary procedural updates to meet the board of health standards.
- Allocations toward salaries and benefits for any employees you decide to hire.
2. How Can I Fund My Food Truck?
If you’ve determined that you don’t have the cash-on-hand to juggle your baseline expenses, the next question to ask yourself is: what’s the best way for me to build up my capital?
Answering this question requires you to think strategically. Not only will you need to brace yourself for the upfront costs, but you’ll also have to budget in enough money to keep yourself without seeing any profits in the immediate future.
However, as with most aspects of new business, there is no one formula for success when it comes to financing. Here are a few ideas and common ways to fund your business:
- Small Business Loans – Whether it’s from a bank or from the SBA, getting a loan is one of the best options if your credit score is great.
- Raising money – For individuals who have a dependable professional network, convincing family and friends to back a new business idea might be enough to get their feet off the ground. Other have gone through Kickstarter and other fundraising websites.
- Borrowing against assets – Entrepreneurs who already have wealth built up in their home have found borrowing against their home equity a worthy option to further investigate.
3. What Does It Take to Run a Food Truck?
The ability to run a successful food truck is so much more than manning the grill on a busy weekend. Even the best chefs and restaurateurs are doomed to fail if they aren’t ready to grapple with the administrative demands of food trucking.
One way to describe running a food truck is to look at two things: costs and revenue.
Costs:
The successful food truck owner should know where all the major costs will be. Any food service on wheels is paying for gas, generators, and parking spots, which are all costs that your brick-and-mortar competitors won’t have to consider.
Once you know the costs, it’s important for food trucks to factor in their own unique variables to the standard menu price point equation. Be sure that your meals, whatever they may be, give you wiggle room to support you in the long-term.
Revenue:
The day-to-day grind on the streets is essential to building brand visibility within your local communities, but private events and bookings—such as food festivals, graduation parties, and even weddings—are other lucrative opportunities to diversify your revenue streams. And don’t forget about having a solution for order ahead, pick-up, and delivery.
The ability to physically move your business proves to be a food truck’s greatest asset or its most formidable weakness, depending on how you use it. Regardless of how often you relocate, make sure that your customers are fully aware of where you plan to set up shop for the day.
To find catering and event opportunities in our area, start with Roaming Hunger.
4. Where Can I Buy a Food Truck?
When it comes to sourcing a food truck, you have three options:
- Buy a used food truck
- Build a new food truck
- Rent or lease a food truck
Each option comes with benefits and costs. Buying a used food truck, for example, comes with the risk of unknown problems with the engine and the kitchen. Building a new food truck will come with a lot less risk, but it will be more expensive. Renting is also an option, but often supplies are limited and the monthly costs can be high.
A great place to start your search for your new mobile business is a reputable online site that offers food trucks, carts, and trailers for sale. Sites like Roaming Hunger’s Marketplace provide detailed information on the types of equipment that are included in a sale, such as food storage, sanitation stations, and extra perks like air conditioning.
5. Do I Have a Business Plan?
Before you invest too much time and money into any part of your food truck business, you need to ask yourself: do I have a strategy for sustaining this business in the long-term? And what is my plan to get there?
Business planning provides the perfect opportunity to step away from the day-to-day grind and see the larger, encompassing strategy you’ll need to turn your food truck into an entire fleet.
The plan and model by which you run your food truck will include the objectives that you believe will drive the most future value and potential. Include your ideal customer, employee efficiency, partnership opportunities, and efforts to continue establishing your personal brand within the communities you serve.
In order to make these objectives effective, however, it’s important that each bullet point in your plan is linked to a meaningful goal. Use the SMART goals philosophy to create objectives that are specific, measurable, achievable, relevant, and constrained to a designated time period. Even if you don’t hit these goals the first time around, these SMART constraints will give you valuable insights into how to improve for your next business planning sprint.
6. What Makes Me Different From the Competition?
In most circumstances, a potential customer looking to grab a quick bite has a wide range of options to choose from. What will make them wait in line at your window instead of choosing a sit-down restaurant or a nearby lunch cafe?
If you’re feeling overwhelmed by the competitive nature that is the restaurant industry, it’s essential to remember that there are a number of tangible benefits that make food trucks a more worthy venture than the average restaurant, and these advantages are the key to leading the pack in your local food scene.
Where restaurants are cemented to a single location, you can experiment with different streets, parking areas, and seasonal events. Similarly, a sit-down spot is limited to advertising outside of its store-front or with an external, paid campaign.
Food trucks are their own advertising, and your visibility is limited in only the places you visit. Finally, as you expand your brand to include additional trucks, recognize that proportionally lower costs to open a food truck (versus an entire restaurant) make new food trucks a much smaller risk. This allows food truck owners to make much bolder choices that can result in a higher payout.
7. How Can I Grow My Customer Base?
As the saying goes, a stagnant business is a dying one, and organizations that are not concerned with consistently attracting and delighting new customers will be hard-pressed to keep their spot on the street. The question for you, therefore, is how you can continue to market and publicize your food truck in the weeks or months after you cut the “first day of business” ribbon.
Fortunately, there’s more than one way to drive fresh sales to your food truck. Changing up your menu from season to season helps your truck stay relevant beyond the summer months, and experimenting with customer loyalty programs (such as a free side after a certain number of visits) are relatively simple places to start.
Regardless of the tactics you decide to use, the key to new customer engagement at any level is connecting with the communities you serve. Perhaps this means volunteering your time and efforts toward a fundraiser that your customer base is passionate about. You may not yield a huge sum of profits from these types of events at the end of the night, but they more often than not will prove their value over time.
At the end of the day, word-of-mouth marketing will always yield the highest traffic and customer interest, with over 90% of consumers believing suggestions from family and friends over an advertising campaign. In an industry where so much depends on a customer’s taste, the bottom line for any customer growth is continuing to create delicious, buzz-worthy food that people are excited to talk about. If you’re equipped with the right recipes and ready to answer these 7 crucial questions, then your food truck is already steered in the right direction.
Continue on to our “What I Wish I Knew” article for advice from over 50 food truck owners on what they learned starting a food truck business.
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