Food trucks have been around since the early 20th century but evolved into an exciting new venture for foodies and first-time restaurateurs during the mid-2000s. This exciting phenomenon provided an opportunity for budding businesses to operate with low costs while remaining mobile. These capabilities, in turn, reached new customers and profitable locations.
According to SD Food Truck Pros, the food truck industry had an annual growth rate of 7.5% from 2015 to 2020 and is a two-billion-dollar industry. If you’re thinking about joining this community, here are some of our best tips for launching a successful food truck business.
1. Do Your Research & Find Opportunities
One of the most important building blocks to starting a new business is to do your research. There’s a lot of competition out there, so look to see where there are gaps in the market or opportunities to bring unique cuisine to a particular area. Make sure that you establish who your competitors are, and then brainstorm ways to make your truck and business stand out. There may also be towns or cities that don’t have an emerging food truck industry. If this is the case, there’s a huge opportunity to be a pioneer and start something exciting.
Many populated cities already have an industry of food trucks, but there are always chances to distinguish yourself from the crowd. Try to create foods and flavors that people will remember, and take chances! If you’ve created a unique flavor of ice cream or pizza toppings, people will be sure to talk about it. Stay up to date on the latest trends, source your ingredients locally, and try to cultivate relationships with your customers. You may be able to stand out in the presentation of your food and the truck’s fun appearance as well. These are a few ways that you can become a household name within a community and see success quicker!
2. Keep an Eye on Your Finances
In order to track your expenses and profit margins, you should create a thorough budget, factoring in every cost imaginable. Running a food truck may be more cost-effective than opening up a full restaurant, but there are many expenses to account for.
The Truck
The food truck itself, along with the kitchen equipment, will be a significant portion of your funds. Make sure to invest in a high-quality food truck to make the most of your money. Double-check that the equipment is up to standards of safety (i.e. fire extinguishers and first aid), has proper food storage, and that everything is in working order. You can easily find an independent seller to purchase a food truck secondhand, but you should expect to pay $50,000 on the lower end, before customization.
Necessary Permits, Licenses, and Insurance
The permits and licenses you’ll have to acquire will differ depending on where you live and are aiming to sell your food. There will most likely be specific requirements by county, city, or state. Make sure you check out the specific rules and regulations, along with general business licenses, food service licenses, and vehicle licenses. Pay special attention to these business laws to ensure you avoid legal issues that could arise.
Staff Members and Essential Supplies
While you may be caught up by the major expenses, don't forget to budget for the supplies and staff necessary to keep the truck running efficiently. You’ll need to determine what supplies you need in addition to the food itself, such as gloves, containers, utensils, and cleaning supplies. Pinpoint a fair hourly wage for your employees, factor in expenses for uniforms (if necessary), and think about what kind of POS system you’d like to use.
If you’re looking for ways to fund your food truck, there are many options you can explore. You can get a loan from the Small Business Administration (SBA) or apply for a personal loan if you have a good credit history. Another popular funding source can be a low interest home equity loan, which allows you to borrow money based on the equity you’ve built up in your home. In addition to the money you may have put aside for this venture, you can ask your family or friends for a loan. Make sure you have a payment plan and share your proposal with them if you decide to take this route. Whichever method of funding you choose, make sure to make regular payments and stay on top of every expense, from your staff’s paychecks and daily supplies to regular truck maintenance and permits.
3. Plan Out Every Single Detail
All in all, the best thing you can do to find success is to stay diligent and plan for every detail and expense. Make sure to create a business plan early, including your market research and executive summary detailing your menu, projected costs and profits, and future goals. This plan can also include a description of your business, target customer base, management structure, marketing plans, and financial projections. Make sure you’re incredibly thorough with this document, especially if you’re using it when making an official funding request.
Another important step is to plan out all of the details regarding your menu. This is where you can get creative and find ways to surprise your customers’ palate. You may want to take special care in where you source your ingredients, and how you label everything on your menus. Take into consideration food allergies and make sure there’s a good range of offerings. Decide how often you’re going to change your menu, and whether you’d like to change things up seasonally or not. This may also be a great time to scout for prime food truck destinations, which are often parks, farmer’s markets, bars, food festivals, or annual events.
4. Promote Everything
Last but not least, make sure you market your business in any way possible. Starting a website can be a great hub for information regarding the food truck’s locations, hours, and menu. Using social media channels can be an impactful way to highlight your business in an engaging way. Write a Facebook post about the founder’s story, or put up an Instagram story poll asking customers to choose their favorite food offering on the menu. Have your customers tag your food truck’s account and repost their images. Whatever it may be, highlighting the food truck’s unique charm will attract an exciting new customer base. If you have a younger employee or family member that’s savvy with social media, ask if they’d be willing to make some content or run the accounts.
Starting a food truck is a great business opportunity that will combine your love of food with your entrepreneurial spirit. With low operating costs and initial investment, this venture may lead to a quicker profit turnover than opening up a restaurant. By remaining detailed, optimistic, and adventurous, you can build a loyal customer base and start your path to success.
