5 Steps to Take BEFORE Starting Your Food Truck Business
So you want to open a food truck business but don’t know where to start? There is a lot to consider when it comes to starting any business but there are some really important ducks to have in a row before pulling the trigger on your food truck investment:
Step 1: Define your concept, concept, concept
In real estate (and in brick and mortar restaurants), the mantra is location, location, location. Location is going to play a vital role in the success of your food truck business but first, it’s all about the concept. What is it that will make your food truck different from everyone else’s? What can someone get from you that won’t be able to get from any other food truck in the area?
The most successful food trucks are the ones that have a clearly defined concept and deliver on their promise to be the best or the least expensive at whatever it is they are serving.
You wouldn’t want to develop an all vegan concept in a town where the vegan population is less than 1% of your potential customers. Likewise, you wouldn’t want to be the third or fourth Korean BBQ food truck in a small or mid-sized market.
Give an extraordinary amount of thought to your concept. What will you specialize in and what will you stand for?
Step 2: Test your concept
If you plan to go all out on your food truck, you're looking at an investment of at upwards of $80,000. Wouldn't it be a shame if you spent that money only to find out that no one wants to pay for your food?
I know that it's hard to believe that no one would like your food but there's a harsh reality that is best to learn before you invest a ton of your hard-earned cash. Right after you develop your concept, develop your menu and start making some of the food you plan to offer.
Gather a group of friends and family together and let them try the food. If you don't want to make them pay for the test meal, give them "fake cash" to use at your place so they have to make a decision on what to try. Not only will you get feedback on the flavor of the food but you'll also see which menu items your potential customers are drawn to.
Another good tip is playing with descriptions and names of your items. Sometimes, knowing that an item is sourced locally or is going to be crispy makes all the difference when making a decision on what to eat.
Step 3: Run the numbers (ALL the numbers)
We all hate when we get nailed with what we would call "hidden costs". It happens on our cell phone bills, cable bills...heck, I think it happens on every utility that we pay for. But take time to consider all the costs associated with running a food truck business.
In addition to the purchase of your truck, you need to consider things like truck insurance, liability insurance, gas, electric, routine maintenance & repairs, licenses, ingredients, pots, pans, fire extinguishers, employees and more!
The list of things necessary to run a food truck can quickly add up so take the time to sit down and think through it.
Here's a helpful list of purchases & bills we had to make to get you started
Step 4: Make a road map
Every successful business has a road map. It's no different for a food truck owner. Road maps let you know where you are and where you plan to go. A good road map will provide the distance that it's going to take you to get where you're going. How much do you need in sales to cover all of your costs?
Can the locations that you plan to park give you the traffic that you need? Do you plan to eventually have more food trucks or open a restaurant? Or maybe one truck is enough for you?
This road map can also take the form of a business plan. A solid business plan is going to be necessary if you plan to get investors to fund your vision.
Step 5: Research the rules and regulations
When I started trying to find out about the rules and regulations for opening a food truck in my area, I was overwhelmed by information and most of it was not what I needed to know.
This task is daunting but most cities and states are starting to build relevant regulation content for food truck owners.
There's more to it than just knowing where you can and can't park (although that's a big one!). Check with your local townships and cities about where you can park and what permissions are necessary. Check with your state's department of agriculture on the health code and if they are the ones enforcing it in your proposed place of business. The code may also dictate some of the things that will be necessary for your truck to be equipped with (think air curtains, grease traps, etc).
Here's a helpful thing to remember: not everyone will be as excited as you are about your new venture, especially other restaurant owners in your market. But if you've done your homework, the only thing can stop you from making your food truck dreams come true is you.