Opening a restaurant can be very risky. A food truck can be your test idea with little investment and more incoming. It is a good way to test your ideas. With customers ready to sample more novel items, food trucks can then serve as a sort of test kitchen that could eventually result in a full-fledged menu item at a restaurant.
The food truck business can be profitable and give almost 1.5-4 times its investment. This is why this article will guide you on how to start a food truck business.
Preliminary Food Truck Business Plan
Before starting a food truck business, you may need to understand some pre-planning.
Now, prepare a business plan before you start your food truck business. Preparing a business plan can give you clarity. Now let us go through the checklists of a business plan:
- Note your business plan: Prepare a long-term plan to get going in the long run. Even though you may want your food truck business at the earliest, well-planned financial projections are a must. You will have a self-made business plan to follow later.
- Work on legal structure: Before you work on the business structure, food, parking permits, and taste. Whether you are a sole proprietor or have a partnership? You may require help from a business attorney or online legal in the discussion. You must check the local motor vehicle department regulations.
- Register your business: Once your legal structure is done, register for federal, state, and local taxes. It must be according to the state sales tax permit. You may need an employee identification number, or EIN, from the IRS and other business permits.
- Opening a business account: First crucial step of being a business owner is opening a business bank account. This account helps in managing and organizing your funding request. This process will help to start a food truck business. Get Business credit cards.
After having a business plan, you will be ready to start your business venture.
Tips on How to Start a Food Truck Business
1. Figure Out Food Truck Startup Costs and Expenses
To start a food truck, you must understand the startup costs. The startup costs are called basic expenses. They can be startups, pre-opening, or preliminary expenses in the mobile business.
These startup costs include expenses such as
- Truck maintenance, rent, and other payments
- Kitchen space development
- Utensils and other appliances
- Business licenses and additional legal fees
- Ingredient product
- Getting the business permits
- Promotions and Marketing strategies
- Insurance and security
- Food truck starting can cost up to $40,000 to $200,000
2. Getting Health Department Approval
It would be best if you had a food handler permit regardless of your dishes or cuisine. Health Officials will be inspecting, reviewing, and approving food trucks. You might have to submit the details and documentation of the food truck, such as a vehicle, menu, and details of the food truck equipment used, where you purchase food, as documented methods for handling food, cleaning surfaces, cleaning cooking equipment, and sanitizing implements.
You must work with an expert food truck. You can safely make, store, and distribute high-quality meals in your truck thanks to the regulated environment that has been established there. Check the local regulations and have all the food truck permits and other necessary permits. When you finally acquire an actual truck, the local health department can also help you with a business license.
3. Prepare your Food Recipe
Once your business operations are laid out, you can work on the product. You can work on the food truck concept, taste, and recipes.
As you start a food truck business, one of the most important steps is understanding what food you will sell, the recipe, your point of sale, your menu, and your theme.
Decide whether your business needs fresh food or food that must be prepared earlier. While preparing your recipe, ensure that you will be preparing this recipe in a small business area. Your ingredients should be easily available for food suppliers, easy to serve food, and cost accessible for the customer base.
You will be preparing this food in large quantities; make sure you listen to food truck customers and make necessary changes according to the review. Your food must taste consistent and be easy to carry and serve while travelling.
4. Hire Employees
Now you may need employees to help you with food truck operations. You might need a few employees as you have a small place to operate. You can consider hiring according to the demand and difficulty you may face.
When you start, you can ask for help from friends and family to help you in the food truck. After some time you can ask for a part-time or full-time employee. For further food and health permit, your employee must have a mobile vendor badge.
When hiring, look for individuals that share your vision, are rooted in the neighborhood and are up for a challenging job with long hours.
5. Finding Parking Locations for Your Food Truck
Starting a food truck business has advantages (as well as disadvantages), one of which is the movable aspect. Although you can (to an extent) go where your consumers are, you’ll also need to determine where the greatest locations are to draw in customers. Knowing where you can and cannot park your truck is also crucial.
The rules governing parking for your food truck will be unique to your city, just as those governing licenses and permits; as a result, you should check your neighborhood laws to see your possibilities.
Check your mobile food facility’s parking permits, rules, and regulations. Next, pay them well and offer perks, so they feel valued, are motivated, and continue to work with you for a long time.
6. Try Market Branding and Social Media Marketing
Branding and marketing your food truck business is a crucial part of the business plan. Many food truck owners also suggest that nothing is more effective for the growth of a food truck on social media accounts for a successful business. Make sure you undergo a market analysis before branding.
There are methods used by many business owners, such as working on a website, Having a food truck logo, theme, and color scheme. You can also promote through Emails and SMS to your target market.
You can promote the truck business by making your customer aware. Make a weekly schedule to interact with your potential investors and customers, and remind them of your new recipe through social media, truck wrap, websites, Email, or SMS. You can easily reach out to your existing market and the local community.
7. Try Point of Sale (POS)
Even though you can run a business on a paper order system and cash drawer, you can invest in POS and automate the entire process. With this process, You can easily manage your orders and take payments. You can track inventory and create loyalty programs.
There are systems designed for POS specifically for the food truck business in the market.
You will find a variety of POS systems on the market crafted specifically for food truck businesses.
You will need to choose one that will serve your concept the best. In return, it will help you manage everything in one place, speed up and simplify your processes.
POS is mostly important for food truck systems, as this business often experiences a rush of customers for a few short hours a day. In this case, you might consider using a pre-order system to help your food truck handle this kind of rush in business. And, at the end of the day, it will serve your customers for the better.
8. Prepare the Supply Chain for Food and Ingredients
The more you can buy for a single occasion when buying food for food trucks, the better. The food truck business is adaptable and necessitates some degree of quick thinking.
Build trusting connections with your food suppliers and always communicate openly and honestly. Develop a relationship with your supplier and maintain honesty and transparency in all communication.
9. Do a Test Run
Once have your supply chain ready, make sure to do a test run. You can test it on your friends and family. Test all your food truck equipment. Make sure you document all the cooking ratios. You should post it all on social media before making a test run.
10. Test the Food Truck Location
Try the restaurant location at different times. Understand the crowd pattern, and as a food truck owner, the biggest advantage is beings able to cater to all kinds of people. Understand the taste of different people and apply that to your food truck.
11. Increase Your Food Truck Fleet
The final step is increasing your fleet of local food trucks. Boost your food truck startup by expanding as a business entity of your small business. Try new concepts and try to spend money wisely in your financial projections.
You can expand to other food trucks with different or similar food. You will also face competition from other food trucks, but you can overcome that by staying in touch with your local community.
12. Do Daily Planning
It would be best to plan your routine and how you will work with your employee.
You can work with a licensed commercial kitchen. If you plan, you can maximize time and manage your finances.
Things to Remember While Starting a Food Truck Industry
- Design the colorful go-to food truck concept: Most food truck owners design colorful decorations that can bring more and more audience in adults and kids. Read the food truck scene in the area.
- Research food truck laws: Many food truck owners have trouble changing health, zoning, or mobile food facility laws. It’s either not permitted in a certain area or overnights. Ask questions to authorities such as:
- What licenses and permissions do I require for a new food truck, and how much do they cost?
- Is a single food manager’s safety license sufficient, or do I need separate food-safe certificates for each employee?
- According to the health department, what cooking, refrigeration, and sanitation equipment is needed on trucks?
- Does every piece of equipment require professional installation?
- Do I have to use a commissary kitchen with a license?
- Do I require individual vending permits for each employee or just for the company as a whole?
- Is there a maximum vehicle size?
- Complete your Food truck licenses. You can get help getting all the paperwork from the authorities. You also may have to ask for permission from the Department of Motor vehicles and obtain a commercial driver’s license.
- The biggest challenge you may face will be gathering all the funding for starting a food truck business.
- Be prepared for unexpected expenses: Starting a small business requires a lot of funds, and sometimes unexpected situations can come up over preparation or a truck breaking down. Make sure your growth is lean, and be ready for extra expenses.
- Like any other business venture, the food truck business may also require a lot before taking to the road.
- Listen to your customer base: You cannot ignore the suggestions and advice you get from the regular customer base you already have. And when you serve customers, make sure they leave you a review or feedback to build a brand of your food truck business.
Funding your Food Truck
Your company’s financing will be a crucial first step. Most people don’t immediately have access to the funding needed to launch a food truck. Before giving a loan, most lenders want a business plan, so make sure you have one prepared, along with the amount you require and your credit history.
Those who want to own a food truck can choose from the following funding options:
FINANCING PROGRAM OR EQUIPMENT LOAN: Some truck dealers or financiers of equipment may lend you money so you can buy the truck.
ROLLOVER BUSINESS STARTUP: If you have more than $50,000 in a retirement account, you can set up a rollover for business beginnings (ROBS), which will enable you to use the money in your retirement account to finance your firm without having to pay early withdrawal penalties.
COMMERCIAL CREDIT: A personal loan is an excellent option if you require less than $50,000 and have a strong credit score.
SMALL BUSINESS ADMINISTRATOR (SBA) MICROLOAN: Microloans are far smaller than traditional company loans, yet they can be enough to cover the initial expenditures for a food truck. SBA’s Microloan Program is a good resource for loans under $50,000.
FIND YOUR INVESTOR: Finding investors for your food truck business involves planning, whether it’s a friend or a family member. Create a strong business plan and concept to persuade financiers to support your firm.
Banks and large investors do not always provide money. Crowdfunding may be able to cover all or part of your startup costs if you have a devoted group of friends and family members that support your food truck concept.
Ideas for Food Truck Business
# Truck Serving Vegan Food
The food sector is seeing the popularity of vegan cuisine. These food trucks ought to offer primarily plant-based fare. They might appeal to trendy lunch crowds because of their health benefits.
# Food Truck on the Road
Typically, a street food vendor provides items meant to be consumed immediately. Arepas, sliders, Bahn mi, and pierogi are a few of the most well-known foods in this category.
# Mobile Food Unit
Similar to a drive-through but located in a constrained area where people can approach this kind of truck.
# An Ice Cream Van
The most traditional type of food truck is an ice cream truck. Some of them are set up at designated locations but frequently drive-through communities.
# Fresh Fish Food Truck
These food trucks are frequently seen in coastal areas. They can offer almost any seafood item in a physical restaurant, including regional specialties like lobster rolls in the Northeast.
# Gourmet Burgers Mobile Food Van
These food trucks are known for their freshly made hamburgers. Many include unusual ingredients like onion rings, jalapenos, and fried eggs.
# Taco Truck
Put the steak, cheese, and sour cream in traditional dishes. Or use special substances purchased from nearby suppliers.
# Waffle van
For easy mobility, serve this dish on a stick or paper tray and provide toppings like sprinkles, whipped cream, or cream cheese.
# Chicken Fried Truck
Offer a variety of sauces with tenders, legs, or other portable options.
# The Dog Food Truck
Start a business where you sell goodies at well-known locations for pet owners, such as dog parks, if you love animals.