Are you thinking of starting a food truck? We’ve put together a list of steps to go through before you spend a large amount of money on equipment, marketing, and other projects.
Unless you have a substantial amount of experience in the food truck industry, we suggest that you get all the things below in order. In the long run, it will set you up for success and reduce the risk of starting a new business.
1. Come Up With a Game Plan
One of the first things you’ll want to do is make sure you’re putting in the amount of research necessary in order to start your food truck business on the right foot. Spend time researching the food truck industry in your area. You’re going to want to understand what the current market is like. Are laws becoming more food truck friendly? Is the market oversaturated? Is there a market for your menu and cuisine?
If you’re having a hard time figuring out where to start or if this is even the right venture for you, spend some time gathering valuable information. By watching youtube videos on how to start a food truck business that is digestible and easy to understand or reading some articles by real owners, you will be more confident in starting your own venture.
2. Develop a Concept and Menu for Your Truck
Think about what you’re known for cooking and what you think is going to be a big hit amongst the crowd in the communities you’re targeting. Some critical items you’ll need to research are:
- The demographics of your sought-after area.
- Where there might be a need for your concept or an open opportunity to run your truck.
- What people in your area feel they’re missing and see if your concept will fill that gap.
If your concept fits into that gap, start thinking of your target audience and who you’re going to want to reach through your food truck concept. You’ll also want to check out the competition and see if it’ll be feasible to make a profit in that location.
Part of figuring out your concept will be to determine what kinds of food you’re going to want to sell and establish the price points of these items. A few questions to consider are:
- What are your competitors charging for similar products?
- Is there a way to make these products stand out against the masses?
- Where can you cut costs for your customers while still making a profit?
These and many more questions are all things to keep in mind when pricing your products.
3. Work Out the Details of Your New Business
Running a business, let alone a food truck business, is hard work, so you’ll want to make sure you’re mentally prepared for the long hours that are ahead of you and the challenges involved. Even the process of buying the right truck for the job, hiring your employees, and developing your concept and marketing plan will all require a lot of preparation. One way to plan out your process from start to finish is to create a business plan to help guide you through your journey.
If you’re wondering where to begin, don’t worry, plenty of people have been in the same place. There are plenty of food truck business plan templates available to help walk you through the process from start to finish. A basic business plan typically includes:
- An executive summary
- A business overview detailing what products will be for sale
- The customer focus
- Who makes up the management team
- What factors will allow your business to stand out from the others
Be sure to fill this out as well as you can, as this is what could make or break your business deals with potential investors. They’re going to want to see everything in full including your market and competitive analysis, price points, timeline to opening day, and marketing strategy. All of these things combined will let them know at first glance how successful they think your business could be.
Don’t forget to research the necessary permits and licenses for your food truck. The rules and regulations vary in each state, county, or even in the different cities you plan on traveling to. Some of these licenses include a vehicle license, a vendor license, an employer identification number, health permits, and food handler’s permits. It’s important to know these items before your business is up and running or else you can run into some fines or legal troubles.
4. Research Where to Buy Your Truck and Equipment
When purchasing the vehicle for your food truck, there are a couple of options you’ll want to research.
One option is to purchase an old truck that needs some revamping, break it down to scratch, and then buy new or used equipment to support what you need it to. This can save you some money in the short run but keep in mind the additional maintenance it may need.
The second option is to purchase a brand new truck that has all the bells and whistles you’re looking for with the necessary equipment already provided. This is definitely the more costly of the two. Discover which truck size and model is right for you and if it fits your vision for your concept. Make sure it aligns with your goals and that you won’t need to make any drastic changes if you don’t have time for that in your plan.
Also, don’t forget to account for any of the equipment. The other necessary equipment you’ll need functions to serve your customers, like proper to-go containers and silverware, and maybe a few tables for your customers to sit at if there’s room at your food truck’s location.
You can research used equipment in your area by visiting a website like Roaming Hunger, which has used listings and can also help connect you with a food truck builder.
5. How Will You Fund Your Food Truck?
Funding your food truck can be overwhelming at first, but with a little organization you can figure out where to cut costs, how to gain some extra money, and how to save. Take a look at your finances and see where you can be cutting costs in your typical expenses from month to month. Maybe there are some places where you’re wasting money like subscriptions you don’t use anymore or opportunities to cut back on the cost of some bills.
After looking through your business plan, start researching how much money your products will cost, such as the necessary equipment that might not have been included in your truck pricing, and begin to think about the typical wage you’ll be paying your employees. Think of the different POS systems that are easy to use on the go and find a price that you feel comfortable paying for the features that come along with it. You’re going to want to make sure that you’ll have enough money from the start of getting your food truck off the ground. So explore all your options, possibly with friends or family who may be able to lend their free time to help you out as you’re getting started.
If you’re in need of a large amount of supplementary funding, consider all options that can provide your necessary capital efficiently and without putting strain on your current financial status. If you’re a homeowner, look into heloc requirements or current SBA loan rates. This way you only borrow the amount of money you need at the time and can make payments each month until it’s paid off. Some other ways to fund your business idea include…
- Rent a food truck if you can find someone locally to give you a good monthly price
- Use credit cards as a source of capital
- Apply for a personal loan to help you cover initial costs
- Seek out investors to give you money
In addition to start-up costs, it’s important to prioritize a financial nest egg on the side as well. Begin setting aside money for additional expenses that may come up throughout the process of starting your food truck. You also never know when your truck may need a repair or a new piece of equipment or you’ll need to introduce different pricing to your menu to keep up with the competition.
6. Develop a Marketing Plan
A key to making sure your food truck is successful is ensuring you have a quality marketing plan in place to showcase your business.
You’re going to want to create a logo or hire a company to create a logo that embodies your brand. Create something that is easy for customers to recognize and that will fit on the packaging of your food.
What will your food truck wrap look like? Ensure the outside of your truck grabs customers’ attention as they’re passing by and that you’re keeping up with the current trends of your target audience to make sure that you’re specifically capturing their attention. List prices outside your truck in a way that’s easy to read and decipher for your guests.
Hire a photographer to take pictures of your truck, team, the available food options, etc. that you can use in your marketing materials. How will you create a strong social media presence for your food truck? Create accounts for each social media platform you plan on updating. Generally, you’ll want an Instagram account and a Facebook account. Both accounts will feature your food and locations. Having “Instagrammable” food is an important aspect of your business as customers will do a majority of your marketing themselves by posting it on their social media.
You’ll also want to show up on food truck sites such as Roaming Hunger. Along with their food truck marketplace, they list over 19,000 food trucks on their site and help local food trucks find vending and catering opportunities.
7. Can You Hire a Team?
Do you have a plan for hiring? Will it be you and family members or will you have to find extra cooks, drivings, etc.? You will need to know how many workers you need to operate, and if the number changes based on whether you’re doing catering or street service. The last thing you want is to give up profitable opportunities because you can’t find extra help. Trust us, this happens a lot during busy seasons.
If you’ll need to hire, one way to decipher if a person is right for the job is to set up a test run to see how they work in a tight space with other coworkers to get a feel for how they’d be on a typical work day. Once your interviews and test runs are done, you’ll be able to start forming your “dream team” to begin preparing for opening day.
When preparing for your grand opening, you might want to practice a typical busy day by having a soft launch where you invite friends and family to come to the truck so your chefs can get acclimated to how busy it’ll be once you’re open.
When starting a food truck, it can be difficult to keep track of all the things that need to be done before opening day. That’s why you want to take the time and go through the steps above. Especially before you spend a lot of money.
And if you ever get to the point where your plan seems like it’s too risky, take some time to explore the weak spots. There are many successful food truck ventures. Unfortunately, there are also many that go out of business every year. You want to stack the odds in your favor by taking the time to understand the market and how your business will operate.
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