Listen, I know exactly why you’re here. You were sitting around the table one night, smoking a blunt with your friends, and you had what you thought was a killer idea for a food truck business. Now you’re all mad plotting, talking about dropping out of college and cashing out those bar mitzvah checks you got a few years back.
Or, you’ve graduated college, you’ve done the whole nine-to-five office slave thing, and you’re like, “Man, I hate this stuff. I’m tired of making somebody else money.” Or, worse, you’re just unemployed, but you know you’re bomb in the kitchen and you have that can-do attitude you keep hearing about.
Either way you cut it, you’re looking to open up a food truck, and you’re conducting your due diligence before diving in head first.
You’ve likely already heard that the food truck business is booming. As of 2015, food trucks account for over $1.2 billion in revenue, have increased in revenue 12.4 percent in the past five years and the average food truck brings in an average of $290k per year. That’s some bread.
What you may or may not have considered, though, is that starting a business — even one that rolls around to places — is difficult. Just because your truck is nomadic and free doesn’t mean you can be, sucker! It takes a lot of time, patience and faith, as well as this stuff called money.
Here’s how to start and run a successful food truck business:
Scared Money Don’t Make Money
Before I spend the rest of this article probably shitting on the hopes and dreams of a good many of you out there, I want to take a brief moment to give some advice from the heart: never forget that scared money don’t make money. In every new business venture, there are inherent risks we take in order to see our dreams through – and that’s equally true in the food truck business.
Sometimes business ideas work magnificently, and other times they fail miserably and we wind up broke, laying down in the middle of the sidewalk at three in the morning after inhaling a fifth of Jim Beam and wondering where it all went wrong… not that I know from experience, or anything.
The point is, if you decide you’re going to embark on a food truck business, don’t be afraid to take calculated risks. And if you’re going to do it, do it right: skimp on nothing, and cut no corners.
Understand The Ballpark Figures
A lot of people opt into the food truck business because they think that it’s going to be less money than a brick and mortar storefront-type of setup. Generally speaking, they’re right. But that’s not at all to say that starting a food truck business is cheap.
When all is said and done, starting your business is going to mean a lot more than just acquiring a food truck; you’re going to have to look at purchasing an inventory, paying your workers, obtaining the proper permits and licenses, building up a website and social presence, purchasing utensils, purchasing uniforms and taking care of other business related expenses.
I’ve seen people roll out on opening day for between $30k and $40k, but a much more reasonable number is between $70k and $90k.
If you think you and a couple buds are just going to grab a six-thousand-dollar short bus off Craigslist and throw some shelves together with some old plywood, you’re horribly, horribly mistaken.
Your Truck is the Lifeblood of Your Business — Choose Wisely
When people sit down and start talking about starting a food truck, one of the first questions that’s always asked is: “Where can we get a truck?”
Like most things in life, there’s a right way and a wrong way to do this. In short, you can either lease or own a truck. Like leasing or buying a car, there are a lot of pros and cons for both.
Leasing a truck is going to reduce your monthly expenses, as well as reduce potential startup fees. If you were trying to purchase a truck outright, you’d be trying to put up as much of a down payment on it as you could, in order to keep your monthly payments as low as possible – that is, if you didn’t go to a bank to secure a small business loan to buy the truck outright.
If you’re leasing, you’re simply renting a food truck. It doesn’t matter what the MSRP on the truck is, because all you need to focus on is scooping up enough cash to put down, as well as keeping up with the monthly payments.
If you have no proof of concept for your idea and aren’t sure about whether or not the it’s going to take off, leasing a truck will ensure minimal financial burden on your end and is what most people in the business would advise.
But if you’re looking to go all in on it and purchase a truck, do not skimp. Like most automobile purchases, you’re usually going to get what you pay for.
Be Unique in Your Angle, But Realistic in Your Approach
If you live in downtown LA and you want to start a taco truck, I have some bad news for you, player: unless you’re truly and legitimately serving up some of the best tacos in the world (and I’m not saying you won’t), prepare for a very long and tough journey.
There’s a mathematical equation to explain how a successful food truck works, but I don’t know any of that shit, so you’ll just have to settle for the layman’s explanation.
When you finally sit down to think about what kind of food you want to offer, consider your audience, and also your competition.
Don’t open up shop as a taco joint in a place with 10 taco trucks in a one-mile radius. Maybe try grilled cheese, or even pizza. Or if you want to stick with the Tex-Mex theme, maybe work exclusively with nacho platters, or try kicking up some crazy enchiladas, or even hit the Spanish road and try empanadas.
The point is, you might have the most solid idea on the planet, but your food truck can’t just be about you — you have to know your audience and your market, and do everything you can to stand out and truly be unique.
Time is Money, So Consider Prep Time and Volume When Organizing Your menu
Another thing to consider is ease of “manufacturing.” For instance, a grilled cheese shop is going to see great margins because they cost pennies on the dollar to make, and are super easy to whip up and get out the door when a line of customers starts coming in. Soups are also budget-friendly and yield excellent profit margins.
Hell, even something like lobster rolls are excellent because they’re super simple to make quickly, and vendors can easily justify a higher price.
But if you’re trying to start a mobile foie gras and crème brulee truck (which would be disgusting, by the way), then not only is your menu going to be obscenely expensive, but it’ll also take a lot of time to prep and cook, and might wind up being an inefficient mess.
Every second — and dollar — counts. Act accordingly.
Keep the Menu Small and Priced Fairly — At First
No matter whose account you read about opening up a food truck, they’ll tell you one of the most difficult aspects of running the business is putting together a solid menu and then pricing it accordingly.
But when it comes down to it, you’ve probably (hopefully) eaten at food trucks yourself over the years. When considering a food truck, we all look for the same thing: real, good, authentic food that’s priced right and made easy.
When just starting out, keep your menu offerings small, but make sure the things you do offer are absolutely incredible. And for the time being, focus less on trying to turn a profit, and more on trying to provide people with the best product possible.
If people see a solid menu that’s priced fairly (or even low), they will come back, and they will tell their friends.
Profit margins in the food truck business are paper thin, especially for trucks with no clout. For the time being, that’s you.
As things progress and you start seeing more traffic, if you want to slowly increase menu offerings (and prices), by all means, go for it. Just don’t put the cart in front of the horse.
Do Not Rely Solely on Word of Mouth
If you’re going to open a food truck in a spot worth opening a food truck in, don’t be the people who are too cool to advertise. Trying to rely strictly on word-of-mouth advertising is going to do no good. I know, I know — if it worked in Field of Dreams, it should work for you, too.
Only, that’s not the case, not even close.
Outside the kitchen, you should be treating your food truck like it was any other business. Which means you should invest time and money into creating websites, building a social following, being active in your local community spaces, trying to create local buzz and conversation about your spot, etc.
Advertising and promotion aren’t just made up concepts. They work, and they’re vital to your business.
Events and Lunch Rushes Will Be Your Bread and Butter
For some absurd reason, a massive majority of people think that having a food truck means rolling out to a random spot of your choice, opening your service window and letting money fall into your hands like a leaf from a tree.
Much like a regular brick and mortar business, so much of your truck’s success will depend on the ambition and effort of its owner/s. Much unlike a regular brick and mortar business, your food truck can go anywhere you want it to, which puts you at a huge advantage.
Food truck owners will tell you that they spend more time developing business relationships and pursuing avenues of distribution than they do in the kitchen serving up meals.
You’re going to have to look up every event, every concert and every business in your area, and do your damnedest to convince those people why their corporate catered event, luncheon, festival, etc., simply wouldn’t be the same without your business.
Know The Laws in Your City
This should be higher up in the list, but my job here wasn’t to completely deter anyone from trying to get involved in the food truck business, but simply to give you a reasonable, practical guide to getting started.
That said, the laws in your city can either make or break your food truck, and different cities have different protocol.
Some of the more liberal cities out there will allow food trucks to set up shop anywhere and everywhere. Other cities, however, won’t allow a truck within a certain amount of feet from a brick and mortar restaurant, or won’t allow food trucks on public property at all.
The point is, local laws vary greatly from state to state. Know your local game and learn how to play it well.
Know When to Cut and Run
Finally, and I say this with sobering love: know when to cut and run if things aren’t working out.
No one is going to drag you out of the hole except you, and part of being willing to start a business in the first place is also having the brains and courage to know when it’s time to call it quits.
While calculated risks are always welcome in business, don’t treat it like a compulsive gambling addiction. Get out while you still can, and re-evaluate your plan.
Now check out how to make money on YouTube.
- Lead image: splithire.com