Maybe you decided to open a food truck after enjoying the most delicious tacos of your life at a place like Mariscos Jalisco or Calbi BBQ. Or perhaps you realized that you couldn’t spend another day working from 9-5 in a gray cubicle full of paperwork, fluorescent lighting, and the sound of your coworker droning on during a sales call.
However you got here, you’re about to embark on one of the craziest journeys of your life—and if you take careful action along the way, the path you’re on could lead to a successful, sustainable business that allows you to spend your days doing what you love and being your own boss.
Wondering where to get started? Well, before you quit that day job and invest in a $50,000 truck, you need to figure out if your dream is even viable. So grab some takeout from your favorite truck for inspiration and sit down with your note-taking device of choice. You’re going to write a food truck business plan—and it will take some time. It’s essentially the recipe that will determine your future success.
What is a Business Plan?
If the idea of a business plan leaves you confused and a bit queasy—like you’ve eaten one too many fried Oreos—you’re not alone. Many first-time and early-stage entrepreneurs like food truck owners skimp on the formalities and neglect to write business plans until it’s time to apply for a loan.
However, your business plan can do a lot more than secure funding—it also serves as a guide to take you through each step of building your business. You can use your business plan as an accountability tool to make sure you’re staying on track with the goals you’ve set. As you write down your goals and work through the numbers, you’ll also gain a deeper understanding of what it will really take to turn a profit.
Keep in mind that your business plan should also include growth projections and ideas for expansion. Be realistic when it comes to profit plans, but dream big as you explore what the future could hold for your truck. Can you see yourself expanding to a brick and mortar restaurant someday or replicating your truck concept through franchises? Go ahead and jot those dreams down to give yourself something to work toward and to show others how serious you are about this truck.
Like your to-die-for buffalo chicken wrap or heavenly pulled pork sandwich, an awesome business plan contains several vital ingredients. And just like your scrumptious menu, your business plan should reflect your tastes and those of your target customers. Let’s take a look at the key ingredients to cover in your business plan as recommended by the U.S. Small Business Administration.
1. Executive Summary
Remember how in school all your reports had to have a strong summary at the end? That’s what an Executive Summary is for your business; it succinctly describes what your food truck is all about. Like your school reports, your Executive Summary should be written at the very end. However, we’re going to cover it first, because within your completed business plan, the Executive Summary appears before everything else—it’s effectively an appetizer for the main course.
The Executive Summary should cover any experience you have that qualifies you to run a successful food truck and explain why you’re entering this industry. Discuss what need your food truck addresses and how you plan to fill a gap in your local market. Describe what your truck will offer and where you plan to sell food. If you’re trying to find funding for your truck, be sure to include financial information about the costs and profit expectations for your business. At the end, briefly outline your goals for the truck and where you see yourself in the future.
Keep your Executive Summary to a single page. This section should function like a resume for your truck, highlighting key facts in a clear, easy-to-read fashion. Since you’ll be writing this section last, you’ll have already included more specifics in the other areas of your business plan.
2. Company Description
Next up is your Company Description—the section that really gets to the heart of your purpose, plans, and goals. Effectively serving as a mission statement, the Company Description should clearly describe what your food truck is all about (a focus on organic ingredients, fusion cuisine, etc.) and how it fulfills a need in your community. What does your truck do that no other truck can do? If there aren’t any other trucks in your area serving your signature item, make this clear. Or if another truck has similar items—but you know you can do them better—make your pitch here.
And don’t sell your winning personality short. The best businesses in any industry are those that are charismatic and likable enough to develop loyal fans. Explain who your target customers are and how you intend to woo them.
Whether you’re focusing on quality, value, nutrition, or location, use the Company Description to depict why your food truck will be a success. This is your chance to sell potential investors on your truck—and to remind yourself why you’ve taken on this challenging but very important mission.
3. Market Analysis
Why did you decide to enter the food truck industry? And what are your chances of success? Those are the questions you’ll be answering in the Market Analysis section of your food truck business plan.
First, you’ll need to look at trends in the food truck industry to figure out what kind of performance you can expect. According to a report by the National League of Cities, the food truck industry earns about $650 million each year. That’s a lot of cheddar—and trends suggest that profits will quadruple over the next five years to $2.7 billion. It’s a good time to start a food truck, and you can highlight that fact in your Market Analysis.
Next, consider your potential audience. Who is your target market? Why will they eat at your food truck? Where will your truck go to find them? How many people will be interested in your menu—and how many of them can you reasonably expect to serve each day? You’ll also need to factor in your pricing plans and any licenses or local restrictions that could impact your ability to attract more customers.
Your Market Analysis should display your knowledge of the food truck industry and show readers that you’ve done your homework. It should also help you figure out whom you’re selling to and what obstacles you’ll face in reaching them. Outline what you know about the success of food trucks in your city and the potential customers you’re hoping to serve.
4. Organization and Management
The Organization and Management section is the area of your business plan where you’re going to describe who will run your kitchen day-to-day and who will handle the back office duties.
If it’s only you and a partner or two, this section should be pretty straightforward. First, outline the ownership and organizational structure of the truck’s team. Who’s in charge? How are the profits split? What is each team member’s role? If you and your partner(s) have discussed this already, you might not think you need to write it down—but it’s essential to show that you’ve thought the process through and that you’re not letting any tasks go unmanaged.
Next, give a bit of background on each of the core members of your team. List each person’s experience, skills, and other qualifications and explain how these will contribute to the truck’s success. Don’t forget to include personal qualifications in addition to professional training. If you’re passionate about this project and driven to succeed, anyone reviewing your business plan will be more likely to pay attention to what you have to say. So why are you and your partner(s) the right people to run this business?
5. Services and Products
If you’ve been dreaming about owning a food truck because you love cooking and sharing new recipes with others, this is the section you’ve been waiting for—your Services and Products.
Here you’ll explain what your truck will offer and how it fits into your customer’s wants or needs. Whether you’re salivating to share your legendary spicy meatball sandwiches or orgasmic gourmet cupcakes, describe the unique benefits customers will enjoy when they eat at your truck. What separates your truck from other vendors in the area—and why should fans choose your food? This is your chance to create a unique selling proposition for your truck, so have fun with this section! Go nuts infusing your passion for food into your business plan. Leave no doubt that your cuisine creates mad-loyal fans who will fight their way to your truck again and again.
In this section, you should also extrapolate on any ideas you have for future products and services. Will your truck have a full menu rather than a signature item? Are you thinking about booking events and catering gigs? Do you eventually want to open a chain of trucks or a brick and mortar location? Explain what your truck is currently capable of offering and how you’d like to expand in the future.
6. Marketing and Sales
Now that you’ve thought about the reasons people will choose your truck, you need to start planning strategies to let them know where you are and what you have to offer. Old school tricks like smoke signals and carrier pigeons won’t cut it, so start thinking about some other ways to convey messages to customers.
In the Marketing and Sales section of your food truck business plan, you’ll outline your best ideas for finding and attracting new customers—and retaining old ones. Describe how you’ll get initial attention from customers and what you’ll do to bring them to your truck. Will you give away free samples to people passing by? Send out press releases to local news organizations to announce the opening of your truck?
Then, start thinking about your plans for long-term growth. How will you keep customers coming back for more? Should you use Facebook or Twitter to let people know where your truck is heading each day? Will you pursue catering opportunities to bring awareness to your brand? Offer incentives or a rewards program for frequent diners?
The food truck industry is a competitive business—remember that you’re not just competing against other trucks, you’re fighting against fast food restaurants, convenience stores, casual dining spots, and even brown bag lunches. You need a way to get people’s attention and have them salivating over the mere mention of your truck’s name. Whether you create a catchy name for your business like our friends Bowled and Beautiful from “The Great Food Truck Race” or commission an unforgettable truck design like Maximus/Minimus’s giant mobile pig, dare to be original and you’re sure to get noticed.
In the Sales section, think about the number of sales you’ll need to make in order to keep your truck running—and how many sales you’ll need to make to turn a profit. You can break this down by average menu prices or by the cost of particular items, but you should have an idea of what you’ll need to sell to meet your goals. Also be sure to factor in the number of days and hours you’ll actually be selling, taking time out for any days you’ll take off or time you might lose to truck problems or inclement weather.
7. Funding Request
Are you looking for funding for your food truck? Whether you’re trying to get an investor to help you with the cost of outfitting your truck or to assist with licenses in your city, the Funding Request section should explain how much money you need, what you’ll use it on, and how you’ll repay any loans. If you’ll need additional funds over time, specify so here and clarify when and what type of money you’d like to receive.
Though you might not be accustomed to asking for money in this capacity, keep in mind that your Funding Request could be a great financial opportunity for the right investor. The key here is to sell your potential investor on the benefits of getting involved with your food truck. If your truck can acquire the loyal fans you’re seeking out, a small upfront investment could prove to be a very lucrative deal for the person who subsidized your initial costs.
With that in mind, be clear about what you’re looking for, what you’re willing to offer in return, and what opportunities the funds could provide for your business. And remember that finding an investor isn’t necessary—a lot of successful food truck owners bootstrapped or worked with partners to get their trucks up and running. Explore your options thoroughly before committing to any funding plans.
8. Financial Projections
In the Financial Projections section, you’ll get more specific about your plans for your food truck business. Based on the sales plans you’ve already established, create monthly or quarterly projections for your income, costs, and miscellaneous losses over the first year. After you’ve covered the first year’s projections, create quarterly or annual estimates for the next four years of your business.
If this is your first food truck, you’re probably going to be making a lot of assumptions and guesses in this section. That’s okay—as long as you clearly specify where you’re assuming a particular factor and how it contributes to the bottom line. You don’t have to have all the answers right now, but you should be able to explain how you’ve arrived at your projections and be able to back them up with supporting data.
Finally, you may also want to create an Appendix to supplement your business plan. Though they aren’t required to do so, many business owners create appendices that are provided upon request to people viewing the plans. The Appendix contains additional files and documentation such as photos of your menu items or truck concept, reference letters or resumes, research and statistics on the industry, copies of your licenses and permits, and other information pertaining to your truck. Even if you aren’t planning to share your business plan with potential investors or consultants, it’s still extremely valuable to have all of this information collected into one secure place for yourself.
Fill Out Your Business Plan
Feeling like we pushed you off the high dive during your very first swimming lesson? That’s totally natural. Writing a business plan is a time-intensive task, and it requires answers to a lot of questions that you probably haven’t even considered yet. But more importantly, it’s an action that shows your true commitment to your dream. Though it’s true that not every successful food truck owner started out with a plan, each of them did invest the time and dedication required to build a sustainable business up from the ground. Your business plan is a reflection of all of the thought, passion, and energy you’ve put into your food truck goals. Most importantly, it will serve as your roadmap to success.
If you’re ready to start working on your own food truck business plan, sign up for our email list below to receive the FREE FoodTruckr Business Plan Worksheet when it’s released next week. This exercise guides you through each of the sections covered here with helpful questions to help you lock down your truck’s goals—and it’s only available through our email subscription.
Want to learn how to build a subscriber list for your food truck business? One of our managing partners here at FoodTruckr has put together an AMAZING FREE GUIDE that will teach you everything you need to know about getting started with Messenger Marketing! Click here to get your free guide.
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So glad to see that you’ve included info for business plan writing. So many would-be business owners panic at the thought of a business plan or don’t think they really need one. And using a professional business plan writer can cost thousands of dollars which is out of reach for most entrepreneurs. I am happy to offer a free business plan writing tutorial at http://businessplanmentor.com . (Hope it’s ok to post the link.) You’re doing a great job here Pat!