How many times have you crossed a food truck on your way and thought to yourself, “I should start a food truck business!” Though it’s not the easiest thing to do, it’s not so hard either.
Earlier, food trucks used to be like stalls from where you could grab a quick plate of junk food, but not anymore. Food trucks are like portable restaurants now with French, Italian, Thai, and all kinds of cuisines from all around the world.
If you are someone who is thinking of starting a food truck with no experience, we have curated this ultimate guide for you. Let’s go!
Why Start A Food Truck?
The restaurant industry has grown by around 2 percent in the past few years, but the food cart business has an annual growth rate of almost 8 percent. Even though it had started in the 1960s, it rose to immense popularity in 2008, and by 2019, there were over 23,000 food trucks in the US, generating a revenue of $1 billion every year.
As more and more people are turning to food trucks to satiate their hunger or cravings, running a food truck business seems like a great idea. The great part is that the average cost to start a food truck is not much, starting from $30,000, though the exact amount would depend on your state. On the contrary, the cost of starting a restaurant can range from $175,000 to $750,000.
Since food trucks are mobile, you can take your business to wherever your customers are located. You don’t have to be confined to a single location, even during the day or throughout the week. For instance, you can take it to a corporate office location during lunch hour, and take it around a college around its closing time, or you can take it to a park during weekends.
You don’t need to buy or even rent a retail space or a building for it. Food truck operating costs are much lower than a regular business like a restaurant, and you can start small. Moreover, you don’t need a lot of wait staff, and you can use the saved money on licenses, permits, insurance, and maintaining a good quality of the food you serve.
How To Start A Food Truck Business
Now that we have covered the ‘why’, let’s talk about the ‘how’ of it:
#1 Find Your Target Market
Before you do anything, you need to find your target market. A food cart business is not like a regular business, where you open a store and customers will start dropping by.
You need to know what kind of people visit which area, what is the footfall, how often they visit there, do they come there on weekdays or weekends, during the day or at night, what is their purchasing power, and so on. You can also run surveys to find out more about your target market.
#2 Build Your Food Truck Brand
In the early days, a food cart business was just a regular food cart, and no one would pay much attention to its branding. However, with the amount of competition that exists today in the industry, if you don’t build your brand, your food truck business would just drown amongst the others.
- Unique business name – Think of a catchy or quirky name that can give the idea of what you sell the moment your customers hear it.
- Attractive logo – Create a logo that is attractive enough to grab the customer’s attention and it’s memorable enough that they can visualize it with your food.
- Visual guidelines and a distinct voice – You need to pay attention to the colors of your brand, its fonts, how they match with what you sell, and your mission. Your voice also matters a lot, so make sure you maintain it whether you are casual, formal, funny, serious, or whatever goes best with your food.
- Unique customer experience – Your food truck sells food, but every food truck does that, and it’s not enough to build a valuable customer base. You need to provide such a unique customer experience that your customers start valuing your business not just for its food but for the overall experience it provides.
- Social media presence – Doesn’t matter if you’re an online business, a brick and mortar store, or a food truck business. Every business needs a social media presence to flourish and build its brand.
#3 Draft A Business Plan
There are various questions that you need to answer like:
- How much will your food truck startup cost?
- How much time will you take to recoup the initial costs?
- Who will look after the business administration like payroll, taxes, and accounting?
- What are your future plans for expansion?
There will be a lot of questions like these that will keep popping up from time to time if you don’t have a business plan in advance with answers to them. Here is what your food truck business plan should include:
#1 Executive summary – This would be a detailed overview of your food truck business, the food you serve, the competitive landscape, how your food rises above the competition, future prospects, growth opportunities, and more.
#2 Company description – Here you can include your legal structure, your vision and mission statements, list down the partners or owners of the business, and more.
#3 Market analysis – Under this section, you can cover the food industry, its impact on your business, how your food truck business will stand out from the competition, what kind of trends exist in your industry, and so on.
#4 Organization and management – Here you can cover the structure of your organization, the management, staff, their roles, responsibilities, qualifications, and remunerations.
#5 Product and service – Businesses cover their products and services here, but since you will be starting a food truck business you can cover the kind of food and the cuisines you will be selling. You can include your business model, pricing structure, details of food production, resources, delivery if you provide, etc.
#6 Marketing and sales – For your food truck business to succeed, you will need a well-planned marketing and sales strategy in place. How will you market it, what modes of marketing will you use, how much money will you spend on them, who will look after the marketing and sales aspect, and so on.
#7 Financial analysis – You will have to lay out your food truck operating costs here and set reasonable goals to break even. You should also include your budget and cash flow forecasts.
#8 Funding request – If you’re planning to get a loan or funding for running your food truck, you can do that here. You can talk about how you will be spending that money towards the business and its growth, and how you will generate returns here.
#4 Determine Your Local Board Of Health Requirements
Just like for restaurants, the Board of Health has food safety requirements for food trucks and their kitchen equipment as well. Although the exact ones might vary from one state or city to another, here are a few basic requirements that are usually there:
- Proof of ownership and license of the vehicle
- Proof of Food Manager Identification Card
- Food is stored properly at the correct temperature
- Records of food/ingredients purchase
- Health and fire code compliance
- Submission of the food truck layout drawing with all the equipment
- Licensing fees
- Plan review fees
- Pre-operational inspection by a Health Inspector
- Eating and Drinking license
- Planning and Zoning license
- Submission of food served and planned schedule
- Storage location restrictions
- Preparation location restrictions
- Cleaning location restrictions
#5 Apply for Necessary Permits And Licenses
All businesses are required to get permits and licenses to run, and since a food truck business involves a vehicle and food, there are a few other specific requirements for it as well.
#1 Business License – Here are the different kinds of business licenses that are required:
- A DBA or “Doing Business As” license is required if your business is under a different name. It will also help you in opening a business bank account and conducting transactions on the business name.
- A General Business Operation License allows the business to function in its state.
- A Sales Tax License is required if a business is selling taxable products. So unless fast food is tax-free in your state, you would need this too.
#2 EIN or Employer Identification Number – Authorities use this to identify your business and collect taxes.
#3 Food Service License – Since you would be selling food, you would need this and can apply for it online as well.
#4 Vehicle License – Since your business would be running out of a vehicle, it’s obvious that all the drivers would need a vehicle license.
#5 Employee Health Permit – It requires you to pass a health and safety course so that you are fit for food preparation in a commercial setting. It would also cover food storage, cleaning practices, cooking temperatures, and so on.
#6 Mobile Food Facility Permit – This is required specifically for running a mobile business, and since a food cart business is one, you would need it too.
#7 Zoning and Parking Permit – You would need this to make sure that you are allowed to run your food truck business in a particular location, and even park there.
#6 Get Yourself A Food Truck
Now that everything is in place, you need the most important thing for running a food truck business, a food truck. While a brand new truck would cost you between $60,000 to $150,000, you can also get a used one for $4,500 to $75,000, or you can just lease it for around $1,600 per month.
You need to ensure that it meets all your business requirements. You will also need to equip it with all the necessary appliances for your business like:
- Generators – to power your cooking, heating, cooling, and lighting.
- First aid kit and fire extinguishers – in the event of personal injury and accidental fires.
- Food storage – to refrigerate your ingredients and store food supplies.
- Running water – preferably hot and cold.
And most importantly, it should adhere to all industry standards.
#7 Secure Your Business
To mitigate the potential risks involved with a food truck business, you will need to get your food truck and employees insured. Here are a few policies that might come in handy:
- Business owner’s policy – It’s an insurance policy that normally comprises general liability insurance and commercial property insurance.
- Commercial auto insurance – This will provide you coverage for any accidents, medical treatments, and collision-related liability claims in the future.
- Product liability insurance – This will help you in dealing with the unlikely yet possible event of a customer feeling harmed by your food and suing you for it.
- Worker’s compensation insurance – This will cover the medical fees of your employees if they ever get injured during work.
These insurance plans might raise your budget a little, but you will be better off spending this amount instead of the damages, if they arise, later.
#8 Market It
Now that your food truck business is ready, you need to bring customers to sell your food. There are a lot of ways to market your food truck business, but here are a few basic things to cover:
- Website – Like any other business, it’s necessary for you to have a website for your food truck business as well. It will help in showing internet users and search engines that you are a legitimate business, and you can give your potential customers a reason to visit your food truck from there.
- Email – You will need an official email ID, where your customers can contact you for any concerns, or other businesses or individuals can reach out to you for business inquiries.
- Social Media Marketing – Not only do you need to have accounts on popular social media platforms like Instagram, Facebook, Twitter, TikTok, etc. but also need to work towards marketing your business on social media. Because it’s there that you will get the maximum of your customers from. When someone from your city or locality looks at your truck and the food you serve on their social media platform, they would be intrigued to visit and try it out. You can also collaborate with social media influencers to promote your food cart business.
- Google Business Profile – You can also get your food truck business listed on Google Business, to showcase your authenticity. This will also help people in finding you on Google search and Google Maps, and they can even write reviews, read your menu, location and timing details, and so much more.
If you want to put your cooking skills to good use but don’t want to open a restaurant, starting a food truck business would be a great idea. The best part is that the average cost to start a food truck is much less than that of a restaurant, and you can break even and start earning profits much sooner.
It’s not going to be a cakewalk, but that’s what this “start food truck guide” is for. This will help you in starting a food truck with no experience, and once you do, don’t forget to invite us to fill our bellies with some of your ‘specials’.