How to Start A Mobile Food Truck Business – The popularity and trend of food trucks have increased rapidly over the course of a few years and today a lot of cities have well-known and established food truck business ideas. If you wish to start a food truck business of your own and are wondering how to jumpstart it then this comprehensive guide will help you know all the steps and even tips to start and grow your business.
Now, what was once thought as ugly food trucks have now turned into colorful and most looked for food and eateries in the big cities. If you want to start your own small business and also don’t want to join the 10-5 office, then it’s recommended that you switch to the food truck.
If you have the objective to start a food truck and you like the modus operandi of it, then you can think of the following 10 step plan for getting a successful food cart. Plus, donating used toys can also get you some deductions in tax.
Highlights of this Post
What is food Trucking Business ?
Food trucking is a business where food is sold on a small scale from a truck. The cuisine that you serve can be anything from pizza to tacos. There are many different types of food trucks, but the most common type is the delivery truck.
There are two main types of food trucking: catered and uncatered. Catered food trucks offer specific meals or dishes that the driver will be serving up in their vehicle. Uncatered food trucks do not have a catering partner, and therefore, they may offer any kind of cuisine you could dream of.
How Much Does It Cost To Start A Mobile Food Truck Business?
The cost to start a food truck business on average ranges between $70,000 to $130,000. The cost depends largely on the legal fees, state policy, customization, and the niche you’re choosing as a food truck owner. You may also incur as little as $10,000 for your business or as much as $250,000 depending on these factors.
A lot of factors decide the startup cost for the food truck business. The cost may vary depending on the location as well. The one-time startup cost for your food truck business includes expenses like buying a food truck, POS system, website design, truck wrap, advertising, public relation, office supplies, legal, professional consulting fees, and so on.
There are also recurring costs included as payroll, generator power for electricity, ingredient sourcing, fuel, equipment rental, credit card processing etcetera. The size of the truck, the art of operation, and several people operating the truck add to the cost of starting a food truck business.
Following are the additional startup costs that you may expect in the initial stages:
- Insurance costs ranging between $1000 to $4000 annually,
- Monthly product inventory ranging between $1000 to $2500,
- Payment processing fees ranging between $200.00 to $1000 per month
- Commissary fees of $200 to $1200
- Permit and license fees range between $100 to $7500.
What Are The Advantages Of Starting A Food Truck Business?
Following is the list of advantages that you can reap if you start a food truck business of your own
Food truck business owners have the freedom to choose their menu items, some of the vendors from whom they want to purchase items, employees, upcoming events that they want to attend, and so on. You have control over your social media accounts marketing and schedule
Business ownership offers numerous tax benefits to entrepreneurs. It is challenging to own and run a business however there is a little bit of relief that you can get in the form of a tax front. Food truck entrepreneurs can deduct different expenses on their tax which is not possible with standard restaurant business
Starting a food truck business will provide more ability as you can bring your business to various locations throughout the United States of America based on demand for different periods of day, week, and month.
What Are The Challenges Of Starting A Food Truck Business?
As the food truck market is booming with each passing day it is challenging for newcomers to break through and stand out from the others.
A food truck business requires long hours of maintenance, cleaning, location scouting and event booking.
It can be challenging for food truck entrepreneurs to stay current with local audiences and zoning restrictions about where they can park their vehicles and how long they can stay at one particular location.
Starting a food truck business can be challenging however with the right approach and steps you can turn it into a successful business.
How to Start a Successful Food Truck Business
1. Research About Food Truck Concept
Before starting a mobile food truck business you need to ensure your business will stand out in the existing market. To get a better idea you can start the research for the following
- What are the existing food truck concepts and businesses in the market?
- What are the existing restaurant concepts?
- What is the average demographic of the population in your city?
- What is the busy street time when commuters can become customers?
- Space where your food truck can stop and sell the product.
It is important to ensure there is a demand for food truck concepts in your city so that your business is a profitable one.
2. Design Of Food Truck Business Plan
Food truck owners should design and maintain a robust financial plan. It is a concrete step that would help you to start a food truck mobile business. A business plan is an important document that attracts investors, helps to get your business running, and gains more funding. You can also refer to basic tips for the U.S. Small Business Administration if this is your first time in making a plan.
A food truck business plan is no different than a plan for any other new venture. Following are the elements that you must add to your food truck business plan.
- Executive Summary
An introduction to your business plan is known as the executive summary which must contain an overview of the business plan. This section of the document must be conscientious and clear as further details will be discussed in other sections of the business plan.
- Company Description
In this section you need to describe your company and what exactly defines your food truck business. You have to describe your niche and why customers will prefer you over your competitors.
- Market Analysis
The market analysis section must explain your target customers, their needs, their location, and your way of attracting them into your food truck business. This part explains how your food truck business will create an impact on the existing market and demonstrate your skills and knowledge about the existing food market.
- Organization And Management Plan
You need to lay out your internal structure and employ ranks in this section of the business plan to showcase a clear business organization and management system.
- Service Or Product Line
The primary product for your food truck business is the type of food you’re serving to your target customers. You need to describe the menu items and how you are attracting your customers in this section. Address the market needs and plan for seasonality as well.
- Marketing And Sales Strategies
For your future business, you need to provide an advertising plan and use different marketing tactics and strategies to let others know about your business. This section must include details about your sales strategy, minimum sales requirements, menu prices, seasonal trends that affect the sales, how to get an edge over your competition, using social media or paid advertisement, and so on.
- Funding Request
In this section, you need to identify the source of funding for your business and how you are planning to use the funds to get your food truck business started.
- Financial Projection
In this section, you need to show your lender investors about the projected growth as well as the financial plan for your future business in the upcoming five years.
This section contains additional information that would help to convey your business to investors or lenders. The appendix contains what is not included in the plan such as logo design, blueprints and photos.
3. Request Funding For Your Food Truck Business
Making a business plan is the first and foremost step toward getting funding for your mobile food truck business. You can get Federal Grants to start a truck company from various sources. Other sources include community sponsors, personal investors like family members and friends, Crowdfunding like Kickstarter, Small Business Administration microloans, opening business credit cards, equipment loans as well as financing programs. You’re likely to get a food truck loan from a bank or other financial institution to start your business.You can also search for someone who can easily finance your business or a person who will finance your truck or you may go to places for capital to finance your small business
4. Get The Necessary Food Truck License And Permit
Once you know your source of funding for your business you need to explore the food truck licenses and permits required to start your business.
The permits and licenses of food truck businesses may vary from one state to another and even from one city to another. Therefore it is necessary to check with the local jurisdiction, for instance, the office of the Health Department, the Chamber of Commerce, and the Commerce Department of Motor Vehicles to become aware of the requirements.
Food truck entrepreneurs generally have to encounter similar permits and licenses as required for opening restaurant businesses like.
- Business License
Like any other business, you need to have a license for operating a food truck including a DBA or Doing Business As and a state sales tax permit.
- Food Service License
You need to comply with the food safety requirements like any other restaurant or staff. Contact the local health department to find additional information about this.
- Employer Identification Number And Employee Health Permit
If you’re hiring employees you need to apply for an employee identification number which will be a federal tax ID issued by the IRS for identifying a business entity.
- Fire Certificate
In case you are using equipment to cook food you have to undergo fire department inspection that will vary depending on your state of residence.
- Vehicle License
As your business operates on the vehicle you need to be properly licensed as well as trained to operate the vehicle. Based on your state of residence and your vehicle size you have to obtain a commercial driver’s license for operating the food truck legally.
- Zoning and Parking Limits
There can be restrictions on the location where you have to park your truck there can be noncommercial versus commercial zoning restrictions, distance restrictions, and parking time limits. Your local and city motor vehicle department will help you know the zoning and parking limits.
- Seller’s Permit
Few states require food truck entrepreneurs to have seller permits that enable them to purchase food as well as equipment at wholesale prices without entering any sales tax.
5. Purchase A Food Truck
It is significant to note that a huge portion of your startup budget will be spent on getting a food truck vehicle. Therefore it is important to make a well-informed and careful decision and select the one that can serve your business rightly.
Following are the few aspects that you need to consider while choosing a vehicle for your food truck business.
- Determining whether to own a truck or get it on lease
- Deciding whether to choose a used or a new vehicle
- Choosing a reliable food truck dealer
- Choosing customizations required for your truck.
Besides, it is necessary to buy insurance for your truck as well as a business to cover any liability or physical damages that may occur in the future. After getting a food truck vehicle you can finalize your permits and inspections to become street-legal.
6. Purchase Food Truck Supplies And Equipment
Now that you have a truck in your position you need to furnish the space with the right supplies and food truck equipment. You need to pack your food truck with essential items and products to make sure your business is operating efficiently.
Following are the necessary food truck equipment and supplies that food truck entrepreneurs are required to have.
- Cooking equipment and supplies like rangers, grills, fryers, toasters and microwaves
- Food preparation equipment like work tables, cutting boards, chef knives, kitchen utensils, cookware, serving and portion spoons, kitchen thermometers, etc.
- Warming and holding equipment like countertop food warmers, fry dump stations, and soup kettles
- Serving equipment like food trays, disposable takeout supplies, plastic cutlery, cups, and napkins
- Registration equipment and supplies like under-counter refrigeration, prep tables, and ice machines
- Janitorial equipment like compartment sinks, hand sinks, sanitizing chemicals, floor mats, recycling bins, trash cans, and floor care products.
7. Decide On Point Of Sale POS System
While operating a food truck business you may require a mobile Point of Sale POS system. The POS system will enable you to take the credit card payment from your truck directly with the use of Internet access. A lot of food truck entrepreneurs opt for a cash-only route to avoid dependency on Internet access however some customers are less likely to carry cash with them and this may limit your customer base.
Leading food truck entrepreneurs opt for a POS system that enables them to accept both credit cards and cash from customers. Customers can order food and pay for it using their phone and this will help you to save time on preparing the orders. There is no receipt, paper, or pen required in this type of system.
8. Food Truck Advertising And Marketing Tactics
As your food truck business will not have a permanent physical address, marketing and advertising for your food truck plays an essential role in its long-term success. There are several food truck marketing and advertising tactics that you can use to create brand awareness.
Following are some popular food truck marketing ideas that will help your business grow
- Opt for an eye-catching logo so that it is highly visible and place it on flyers, on the truck, and online
- Make a bold and eye-catching menu board that is legible, clearly shows your menu items, and is quite an appealing one
- Design a website that features your photos and locations and details about your business
- Create your social media accounts so that customers can see the pictures, interact with your food truck business, and get notified about upcoming events
- Explore unique locations in various neighborhoods so that your food truck business can benefit the best. To get an excellent location visit them regularly so that your business becomes recognized and gets a huge customer base.
- Feature your business at community events like local food truck festivals and cater parties so that customers can be familiar with your food truck business.
Where Can You Find Food Trucks For Sale?
In case you are looking for resources to get a food truck to start a business of your own take a look at the below-mentioned sources.
National Online Classifieds
A lot of inventory will be open to you if you are opting for national online classifieds. Try to get more pertinent information and details about the truck from its seller as you may not get to see it in person before the delivery or pick-up.
Local Online Classifieds
If you are going for used trucks or vehicles for your business then you can go for local online classifieds. Used vehicles or trucks are cheaper unlike new ones and if they are local it becomes easier for you to inspect and make well-informed decisions.
New Custom Trucks
Getting a new truck for your business can be an expensive option however it is one of the best ways to make sure your truck is up to the standard and this will also enable you to customize it as per your specifications and preferences.
Leasing Or Franchising
If you fail to find a truck to lease from a local or national truck leasing company you can franchise a vehicle from an established and reputable company. The only drawback is that you do not have control over the marketing, menu, or product in such cases.
Food lovers having an entrepreneurial spirit may not be financially capable of starting their brick-and-mortar restaurant. However, it is possible to start a food truck business with minimal investment. Foot truck is a type of mobile vending unit having a kitchen for making and serving food to customers. It is a popular trend in the United States and a lot of entrepreneurs are opting for this business as the cost to secure restaurants are expensive while food trucks and affordable choice. The aforementioned ways will help you to start a food truck business of your own.