Consulting.com
Consulting.com
 

How To Start A Food Truck Business

Food trucks have been around for decades, but it wasn't until 2008 when food trucks as we know them now began to pop up in major cities across the United States.

And if you're reading this, chances are you've taken notice and want in on the success.

In 2015, the food truck industry was valued at 856.7 million USD, and is expected to increase by another 140 million USD by 2020. There are food trucks in over 300 cities across America, and the food truck craze is not slowing down.

In this guide, we'll break down exactly how you can make your dream of owning and running a food truck business a reality.

Food Trucks Vs. Traditional Restaurants

Food trucks are an appealing option to many people who have a culinary flair and are looking for a new business venture. They aren't as costly as a brick-and-mortar restaurants, and they allow for more control over where and when you want to run your business.

They are much cheaper to open, require much less overhead to run, and can pull in great margins.

Of course, they aren't without their downsides. As quickly as they can be started, food trucks can fail just as quickly. The following reasons are often behind these failures:

  • Failed concepts
  • Poor operations and planning
  • Mismanaged funds
  • Inadequate marketing
  • Restrictions to protect brick-and-mortar restaurants

Opening up a food truck instead of a traditional sit-down restaurant doesn't mean you're taking the easy way out. It's quite the opposite; you have an entirely different stack of things to account for when developing your business.

Despite this, there are many benefits to opening up a food truck:

  • Opportunity to reach a variety of customers
  • Mobility and flexibility
  • Room for creativity
  • Ability to scale costs compared to most sit-down restaurants

But don't just take our word for it.

Crystal De Luna-Bogan, a Le Cordon Bleu-trained chef, opened up a successful gourmet grilled cheese food truck in Nashville in 2010. Now, the wildly successful food truck has a brick-and-mortar location. But that didn't happen overnight—it took hard work and dedication to her concept and customers.

Las Vegas-based food truck, Fukuburger, has reached the same caliber of success. This California-Japanese burger mashup has brought opportunities for the creator and owner, Colin Fukunaga, to cook for the Washington Redskins.

Those may be the bright-and-shiny food truck success stories, but the sentiment rings true: There is plenty of room for creativity and opportunity in the industry.

What Do You Need to Start a Food Truck Business?

As we mentioned, there's more that goes into starting a food truck business than obtaining a truck and serving food from it.

For starters, you'll need to:

  • Identify a gap in the food truck market in your region
  • Conduct market research and explore different niches to see if your idea is viable
  • Develop your food truck concept
  • Calculate your startup costs
  • Choose your marketing channels

Let's take a look at each of these steps, and more, in detail.

1. Develop Your Food Truck Concept

There's no better way to figure out if your food truck idea will be successful than with market research to support and guide you. Sure, a mobile vegan bakery for dogs is a pretty unique—and specific—idea, but is there actually a need for one in your city?

Market research can help you refine your idea and guide the development process. Also, it'll help you figure out your target niche if you aren't sure of the direction you want to take.

You can approach market research in a number of ways. Surveys and focus groups are great methods for collecting information about the demand for your concept or to gauge if it would be well received by your ideal customer. Analyzing historical data, trend reports, and failed food truck concepts help identify any gaps in the market you could fill as well as what you should and should not do when it comes to your concept. Finally, testing several concepts will help you narrow down what will likely yield the most success—whether it's a menu item or a concept as a whole.

Based on your findings, see if there's a specific audience or niche that you want to appeal to. Perhaps your market research confirms that your community does indeed have a need for a mobile vegan bakery for dogs.

Once you know there is an opportunity for your food truck idea, then you can get to work on building out your concept and making it the best it can be.

Let's say you decide to sell waffles. A few questions you'll want to address include:

  • Will you sell only waffles?
  • What kinds of waffles will you make?
  • What is unique about your waffles opposed to your competition?

This will help you set the baseline for the kinds of food you'll serve, but can you take your idea one step further?

For example, let's say you want to have an environmentally conscious tie-in to your waffle concept. Perhaps instead of serving food in traditional to-go boxes, you use containers that patrons can compost or plant.

Or maybe you want to put a unique spin on your waffle idea, like the owners of Bacon Bacon and King of Pop. Both food trucks take something we've all seen—and probably eaten—before, in this case bacon and popsicles, and added pizzazz to it.

Bacon Bacon puts (you guessed it) bacon in the spotlight by featuring it in every menu item. They even serve bacon-flavored desserts like the candied bacon cookie to wash it all down with.

King of Pop makes uniquely flavored popsicles that range from the familiar to the strange. They have two categories of popsicles, creamy and fruit, and offer flavors like pear vanilla, white chocolate peppermint, and blueberry lemonade.

The novelty of food trucks has watered down a bit due to the popularity of these businesses, so it's imperative to go that extra mile and let your uniqueness shine through. Even if it means taking something normal and transforming it into something novel.

2. How To Calculate The Startup Costs For a Food Truck Business

Depending on your concept and where you plan to operate your business, your startup costs may vary from other food trucks.

A few essential costs to account for include:

  • The truck and all associated costs like gas, power, licenses/permits, renovations, etc.
  • Insurance
  • Inventory and supplies
  • Software to help with accounting and inventory management
  • Hardware like a credit card reader and tablets to run your register software
  • Marketing budget

It's also a good idea to leave room in your budget to serve as a buffer in case of an emergency or if you need to purchase something you weren't anticipating.

If the costs of setting up your food truck seem overwhelming, it's worth looking into outside funding to help offset some of these costs.

If you don't want to deal with the stress or pressure of an outside loan, figure out what you can operate without for the time being. Invest only in the items you absolutely need in order to run your business at first, and purchase the rest down the road. For example, it may make the most sense to lease your food truck initially before buying one outright, or you may roll out a limited menu that requires fewer items in your inventory.

3. How to Efficiently Staff Your Food Truck

The size of your truck will help determine the number of people you'll need to hire. Often times, food trucks are staffed by just a few people who wear multiple hats within the business.

The key to running a successful food truck operation is to make sure you've filled the positions for every essential role. These roles fall into one of two categories:

  • Front of House: These are employees who have customer-facing roles, including taking orders and payments, delivering food, and answering customer questions.
  • Back of House: Employees who are considered to be in this category oversee other operational tasks like food prep and cooking, cleaning, and bookkeeping or other administrative tasks.

Let's take a closer look at the positions within these two role categories.

Window attendants

These employees have the most customer facetime of everyone on your team. They are responsible for placing orders, cashing out customers, and serving customers. Your window attendants need to know the menu well and be able to answer any questions about the ingredients in case a customer has an allergy or dietary restriction. They also must be personable and friendly, as they will be the "face" of your business.

Manager(s)

The manager is responsible for everything from opening and closing the truck and hiring employees to making sure inventory is stocked. Managers also have to deal with taks like obtaining the right permits (and making sure they're current), driving the marketing strategy, and keep everything running smoothly. Unless you plan on hiring someone additional to cover these tasks, you, the owner, will likely assume the role as manager.

Chef

If you choose to hire someone for this role instead of doing the cooking yourself, it's imperative to hire the right chef for this job. The chef is responsible for things like menu development, ordering ingredients, and of course, making mouth-watering food. It's important that the chef maintain proper food safety guidelines and have experience working in a fast-paced kitchen. Depending on the size of your food truck, you may need to hire additional kitchen workers to help with prep.

4. Staying Compliant With Food Truck Licensing

It's important to obtain the necessary licenses and permits to avoid any fines or issues down the road. A hefty fee for not having an essential license is not the way to start your business.

Depending on where you live will determine what permits and licenses you'll need, as well as how much each will cost you.

In general, here is what you need to operate your food truck:

  • Business license: All food trucks need a business license to operate legally, no matter the city or state. You may have to pay a percentage of your total sales or a yearly fee in addition to a license fee.
  • Employer Identification Number (EIN): You'll need an EIN to hire employees and for tax purposes. It's easy to apply for this directly on the IRS website.
  • Vehicle license: Once you get your truck, you can't just drive around slinging food to any paying customer. You must have a license to operate your truck—that means both the truck itself and those who are going to be driving it need to have the right licenses. Some states may require you to get a commercial vehicle license depending on the size of your truck.
  • Food handler's permit: Like any restaurant, you need to have a permit that verifies your ability to safely handle food per your state's laws. You'll probably need to take a food safety course per your state's laws.
  • Health Department permit: Your food truck will need to be inspected by the health department to ensure safe food handling protocol and that you uphold their standard of cleanliness. Check with your local health department to make sure you have the right information.
  • Fire safety certificate: If you plan on doing any cooking on the truck, you'll need to have your truck inspected by the fire department. They will educate you on fire safety and how to make sure your operation is not only adhering to safe practices, but also up to code.
  • Zoning and parking permits: Unfortunately, you can't just park your truck anywhere you want and start selling. Contact your local DMV to see where you can legally operate and what permits are required by your city/state.

To stay current with the latest food truck licenses and operating information, it's smart to join your city's food and beverage association.

5. What Marketing Channels Are Ideal For Food Trucks?

Creating a marketing plan for a food truck requires out-of-the-box thinking and trial and error to figure out the best way to reach your customers.

There are two major categories these tactics fall under, and together, they can help you cover more ground and generate a buzz around your business.

Digital marketing opportunities

Digital marketing is an excellent way to stay in front of your audience, because you're a mobile restaurant and won't be able to rely simply on foot traffic. A few of the best digital marketing channels for food trucks include:

Facebook

Facebook is a powerful marketing tool that can help you stay in your customers' minds. With Facebook you can create a business page that serves as a hub where customers can find information on where your truck will be next, check your operating hours, and view your menu. Denver's Mac ‘N Noodles Facebook page includes essential information that would be useful to any customer, including a prominent map to show where they've parked for the day.

Facebook Ads also make it easy to reach your ideal customers thanks to audience targeting and location-based ads. By targeting a very specific location (like a one-mile radius of your truck) is a great way to grab the attention of hungry people scrolling through their Facebook feed.

Instagram

What better way to create a buzz around your food than by posting high-quality pictures for all to see? With Instagram, you can showcase your culinary creations and use features like location tags to help your customers find you. Yeastie Boys Bagels uses Instagram Stories to post updates on their food truck schedule, so their customers always know where to find them. Not to mention, they post photos that would make anyone instantly hungry.

Website or landing page

Having a website or a landing page that serves as a central location for all information regarding your food truck—like your menu, hours of operation, and where you'll be parked next—is a great way for people to find what they're looking for. It's also necessary for you to rank on Google. King of Pops has an interactive map where customers can pick their state to find the location closest to them.

Search engine marketing

This tactic goes hand-in-hand with your other efforts. The goal with search engine marketing is to rank higher on the results page of search engines like Google and Bing, whether it be through paid or organic methods. This will help you get discovered by customers as they search for food trucks in your area.

Email marketing

Email marketing is a great way to stay in touch with your customers and continually engage with them lon. You can notify them of events you'll be at, new menu items, and other relevant updates.

Grassroots marketing opportunities

In addition to digital marketing, participating in local events is a great way to spread the word about your business and get people to actually try your food. There are a few ways to approach this:

  • Sign up for a vendor spot at a local food or music festival
  • Sponsor in charity events or youth initiatives
  • Host pop-ups with other food trucks
  • Post fliers around town in shops and on community bulletin boards

Find creative ways to integrate your brand into your community; that's a surefire way to grow your brand and presence in your city. Before you know it, you'll be the go-to food truck for every local event.

Scaling To Six Figures & Beyond

The hard work doesn't stop after you open your food truck.

Running a successful food truck will be different for everyone, and the future of your business should be determined by your overall goals. Do you want to add more trucks to your fleet? Create off-shoot brands? Maybe you're ideal of scaling means creating a line of merch for your super-loyal fans.

If you'd like to learn how you can scale your business to six figures and beyond, click below to try out our premium business course, 100% free. This is the same course over 3,000 of our students have used to launch successful businesses, allowing them to quit their jobs and live life on their own terms.

Check out the course that got them to their goals by clicking below. It's completely free