Food trucks are becoming more and more popular, and it isn’t difficult to understand why. There is an unparalleled convenience of getting tasty snacks and meals wherever you are, and many people enjoy the great taste and aromas of street food.
It can bring people together, and even allow them to try something new which they have never experienced before. Food trucks are an exciting addition to the industry, and it isn’t hard to understand why.
Their tasty and aromatic contributions to the culinary world are certainly intriguing.
Being able to stop wherever feels right can allow you so much flexibility in terms of your target market and how you are making sales. As a result, there is a unique level of independence that individuals with their own food truck business can enjoy.
If you are looking to start your own business, and you have a passion for food, then why not start your own food truck business? Here is everything that you need to know on opening your own business, and the potential benefits and risks to be aware of.
How To Open A Food Truck
Table of Content
- Choose Your Concept
- Research Your Location
- Create A Business Plan
- Plan Your Costings
- Approval From Health Board
- Funding
- Licenses And Permits
- Register Your Business
- Purchase Your Food Truck
- Purchase Your Equipment
- Invest In A POS System
- Invest In Advertising
- Ownership
- Freedom
- Mobility
- Explore Catering Opportunities
- Low Costs
- You Can Create Your Own Menu
- Competition
- Long Hours
- Working In A Confined Space
- Zoning Laws
Choose Your Concept
Since food trucks are rising in popularity, it is important to find a way that you can stand out from the rest. This is especially important when you are trying to generate an income using your food truck business.
If you want to stand out, you could take a little time to decide on your concept. Certain concepts appeal more to certain types of customers than others, so it is worth researching how effective particular themes and styles can be.
Similarly, it is important to think about the different types of marketing strategies along with concept art and how this can impact the success of your business as a whole.
It is also worth considering how your chosen concept reflects your personal interests and beliefs. This is because there is no point in starting a business that doesn’t reach out to like-minded people who share similar interests.
Consider the name of your truck, the artwork, and logo. These should be memorable and leave an impact on anybody who passes by. You could also look into the concerns of the local community and ensure that your food truck has something useful to offer.
Research Your Location
Another factor that can impact the success of your food truck business is location. This should be considered when you are planning your business so that you can determine whether you want to have a truck that travels or one that is based locally.
Even though the concept behind most food trucks is that they can move anywhere based on the business and demand, you can set up a business that is based within the community or decide that you want to travel further afield with it.
Some people appreciate the freedom that comes with being completely mobile, while others prefer to help out their local area.
If you are concerned about travel distance from your home, then it could be worth planning spots for your truck within a twenty-mile radius, for example. This can allow you to budget for fuel costs and vehicle maintenance as a whole.
Create A Business Plan
When it comes to starting your own business, there can be significant costs which come from setting everything up and ensuring that you are able to generate an income from this.
As a result, most people apply for business loans from banks or other companies who can help them get their food truck up and running.
In order to be approved for a loan of this kind, you will need to have a business plan. This is a detailed explanation of your food truck’s predicted growth, the types of products you will be offering, necessary funding, and your management plan.
Individuals are more likely to be approved for business loans when they can demonstrate how they have thought about every detail possible.
This includes a company description, executive summary, analysis of the market, service line description, marketing and sales strategies, financial projections, and an appendix.
Because this is a highly comprehensive plan which is needed, it is important not to rush this process.
Make sure you have researched each area thoroughly, and that you are able to support the numbers provided with actual facts or existing information about similar businesses.
Plan Your Costings
You should also consider the costings for your food truck business. This is because it can be expensive to keep the business running if certain things have not been sufficiently budgeted ahead of time. Make sure you think about the cost of employees’ food vendor badge so that they can legally work for you.
Similarly, you should consider the costs of making certain foods, packaging such as take-out containers, insurance, ingredients, and energy costs for maintaining your food truck. This should be thought about during the planning process, with careful consideration being made for the off season when food trucks aren’t in high demand, as well as the busier seasons such as the summer.
Approval From Health Board
Because your business will be selling food and drinks to members of the public, you will need to gain approval from the Board of Health before operating.
Make sure you research the regulations which you need to follow, and that you have accounted for certain areas of concern before an inspection.
The majority of food truck inspections that are conducted by the Health Board involve checking the licensing for your truck, seeing that food is being safely stored in the right conditions, and that all the health and fire codes are met.
Failure to pass an inspection can significantly impact the legalities of your food truck business as a whole, so it is worth researching this and making sure that you are operating in accordance with the Health Board’s standards.
Funding
In addition to the running costs of your food truck, you will also need to obtain the necessary funding. This process can take some time, so it could be worth applying for funding during the early stages of your food truck business plan.
The business plan itself is instrumental in getting funding for your food truck, so it’s important to check every small detail on that before applying for funding.
Getting a personal and business card can also increase your chances of being approved, as it shows that you are already building up credit.
While most people speak with their banks or other financial institutions for funding, there are some alternative routes that you can choose to take.
These include speaking with somebody who already owns a food truck, and negotiating a rent or lease agreement.
Another option is to purchase a small, affordable trailer or used cart. You could also start conversations with local restaurants and farmers’ markets to represent these businesses for a small fee.
Obtaining sponsors from the local community can also be good if your food truck benefits the area in some way, such as donating to local food banks or helping to raise money for charities.
Licenses And Permits
Of course, you will need to get the necessary permits and licensing in order to operate your business legally.
Make sure you are researching which permits you will need based on the location of your food truck, and the type of requirements that need to be met.
Just like a restaurant, food trucks need to meet the food safety standards from the local health board. Some states also need businesses to have seller’s permits, so it is worth researching this ahead of time.
Vehicle licensing should also be checked beforehand, as there may be additional requirements placed on your driver’s license. Depending on the size of your truck, you could need to take another test or apply for a commercial driver’s license.
There may also be limitations placed on areas that you can park and operate within. For example, some places have zones that are specifically for non-commercial use.
Check out your city’s motor vehicle department for assistance with this, so that you are fully aware of the restrictions and time limits that come from certain areas.
Register Your Business
The next thing that you will need to do is register your business with all the necessary places.
This is usually done once you have figured out the legal structure of your business, so that you can register your business name for federal, local, and state taxes. Make sure you also get an employee identification number (EIN) from the IRS.
Purchase Your Food Truck
Of course, it is important to find the right sized food truck for your business. Because of this, it is worth researching and checking trucks for sale in the local area.
Consider the different facilities that are needed for preparing your dishes, and whether you can afford a new truck or something that is second-hand.
You can search on local or national online classifieds, search for online new custom trucks. While these are more expensive, it can be the most effective way to meet the standards and customize the layout.
On the other hand, you could lease and finance a truck for a more affordable upfront cost. The main disadvantage of franchising a truck from an established company is that there is much less control over the marketing, the menu, or the product.
Purchase Your Equipment
Another key thing to consider is purchasing your equipment for your food truck. This will include anything from a mixer to a fryer, and it is important to find things that can make the preparation process as smooth and efficient as possible.
Consider items such as grills, microwaves, and toasters, as well as warming and holding equipment like soup kettles. Other things that need to be considered during this stage include work tables, cutting boards, knives, and other kitchen utensils.
Likewise, you will need to think about serving equipment, methods of keeping food cool, and janitorial equipment like hand sinks and recycling bins.
Invest In A POS System
You will also need to plan ahead in terms of your point of sale system (POS) for your food truck business.
A cash-based business system requires a cash register, a paper-based order system as well as a cash drawer. However, you can make the system more efficient by automating it.
This is where POS comes into play, as you can use it to manage orders, accept online payments, and even create a loyalty program. Thanks to the rising popularity of food trucks in general, you can explore the range of POS systems on the market.
It makes it much easier to manage inventory and track many systems in one, and it can allow you to serve more customers at any time.
If you are anticipating rushes of customers at certain times of the day or the year, then a pre-order system which is enabled by a POS can help manage the crowds and ensure that everybody gets what they need when they visit your food truck.
Invest In Advertising
Make sure you look into how existing food truck businesses are marketing their products within the local community. This can help you to understand and appreciate the role of advertising, and the importance of it within the community.
You could set up a ‘grand opening’ that is advertised through social media, and hand out flyers as well. This could be a great way to draw attention to your business and generate interest.
If you plan on being more mobile with your food truck, then you could invest in a regular advertising campaign which tracks your movements and the next intended location for your truck.
Make sure that you are carrying out necessary market research in order to decide which methods of advertising and marketing would work best for your business.
Advantages Of A Food Truck Business
Because there are so many things to consider, and many preparations to be made, you could be wondering why you should start your own food truck business.
It is incredibly rewarding to start your own business, and it can be exciting to share your passion with the world. Here are some of the main advantages of a food truck business.
Ownership
For many, there is an incredible sense of accomplishment that comes with building their own food truck business. This is because they get to see everything grow from the ground up, based on their own beliefs and ethics.
Not only that, but there are a number of advantages when it comes to tax if you own a business. Over time, the ownership of your business is likely to gain you significant rewards in the future.
Small wins such as tax advantages can make it all worthwhile, and it is certainly worth making sacrifices at the start of your food truck journey.
For some, owning their truck is just as important as it is to own the business. This can be enabled with a loan, or by purchasing a used truck. There are many ways that you can approach the process so that the entire business belongs to you.
Freedom
Similarly, owning your own business that has been made to reflect your own beliefs, preferences, and personal values means that you have much more freedom to experiment with new and exciting ideas.
You will also have the freedom to test out new vendors, and ensure that your food truck is getting the highest quality ingredients and other necessities on a regular basis.
Not only that, but you can choose which events you want to participate in, as well as the type of employees you recruit to work in your food truck.
Because this involves working in relatively close proximity, it is important that you carefully choose the individuals that you are hiring. The schedule and social media presence of your business is also within your control.
This means that you are able to decide how frequently you are posting online on behalf of your food truck, and the type of advertising you want to do.
Mobility
Of course, one of the biggest advantages of food trucks is the flexibility and mobility. Because they are based from mobile vehicles, food trucks can get set up wherever there is business.
This could be at a community event, a music festival, or simply in the busier areas of the city.
You can use your food truck to explore new cities and even countries, while making some money along the way.
Some people sell the products of a local restaurant while they are traveling on the road in their food truck, while others prefer to use it as a vehicle during a quieter time of the year. Consider the demand and the times when it is busiest within a certain area.
You can use this to decide where you want to set up your food truck, and places that you can use as regular stops. Most restaurants do not have this advantage, because they are fixed to a specific place.
Use this to its fullest potential by researching the best spots for each time of day.
Explore Catering Opportunities
Being mobile can also allow you to explore more opportunities for catering. This can involve being a part of more charity events, being available to cater weddings, and private events.
Make sure you are open about catering events and opportunities, so that local businesses and residents can contact you for potential jobs or events that are coming up.
The ability to move to a particular location is a huge advantage in this context, because you will be able to function from anywhere without the need for a chef’s kitchen or additional supplies.
The food truck will be compact and have everything you need to keep everybody happy at any event.
Low Costs
Another huge advantage that food truck businesses have is the value for money. The trucks are relatively cheap on average to keep running, and it will not take much to maintain.
While older trucks and vehicles can take a little extra care and attention, most food trucks tend not to face expensive bills relating to the upkeep.
In comparison with starting your own restaurant, food truck businesses are much more affordable upfront and in the long run.
This is because your business is completely mobile, and there is a limited amount of food and other supplies that are needed.
As the preparation space is restricted in a truck, there is less food that you will need to purchase from vendors in comparison to larger restaurants. Similarly, the menu for most food trucks is limited to one or two items rather than many.
This is common among food trucks, but it can be beneficial as there will be fewer supplies that are needed on a regular basis. There will be a limited number of ingredients which can save considerable amounts in comparison to most restaurants.
Did you know that food trucks have the freedom to experiment with their menu? While this is not an option for most restaurants, the limited menu can be used to your advantage.
You can easily change the options that are available on a given day, based on the available ingredients and any changes to the preparation process as a whole.
You can also change the menu based on personal preferences, or the types of meals that are preferred within a particular location. Play around with different options, and change the flavor of a meal easily.
Consider the type of customers you are trying to appeal to, and ensure that you are adjusting your menu frequently.
The flexibility of a limited menu can allow you to adjust your food preparation time according to the demands of the crowd.
For example, you can change your menu to something that is easier and faster to serve and prepare when there is a larger group of people by your food truck waiting to be served.
Challenges Of A Food Truck Business
Of course, no business is easy to set up, and there are bound to be challenges faced along the way. Every stage of the process when it comes to setting up a food truck business can be a learning moment.
Because of this, it is important to be aware of the limitations ahead of time. Here are some of the main challenges that can be anticipated when you are starting your food truck business.
Competition
The food truck industry is growing fast, which means that you can anticipate a considerable amount of competition. Portland alone has more than 500 food trucks competing for business.
Because of this, it is essential that you have a concept or theme that makes your food truck stand out from the competition.
In order to maximize your business’ chances of success, you will need to carefully research and consider the types of food trucks which are currently operating in your chosen district.
If you stand out, then it is far more likely that customers will be drawn towards your food truck rather than others.
This could be through providing a more complex menu, with interesting artwork on your truck, or simply by engaging with every customer and promoting a positive experience.
Long Hours
Something that is frequently overlooked with most food truck businesses is that they typically involve long hours and working days.
This is due to the significant amount of paperwork that is needed, truck maintenance, cleaning, event booking, shopping for ingredients, marketing, preparation, and so much more.
There is a reason why many people have said that running a business is far more than a full-time job. You will need to be committed in order to succeed, and that relates to the hours in which you are willing to work.
This can be highly challenging for somebody who is unaware of how much hard work it can be. Because of this, it is important to go in with open eyes so that you are fully aware of the pros and cons of starting a food truck business.
Working In A Confined Space
Because food trucks are compact areas where food is prepared and served, there is a very limited amount of space to work in. The confined space can become overcrowded easily, especially once all of the kitchen equipment and POS systems are installed.
It is worth being aware of this when you are recruiting additional employees to work within your food truck on a regular basis, because it may feel like you are sharing a very small space with a stranger if you do not know the other person very well.
In some cases, working within close proximity of another person can lead to disputes. This is partially because of the limited area which can be used for employees to have breaks, and the lack of personal space in general.
Make sure you know what you are signing up to beforehand, so that you are 100% certain that you could make a food truck business work.
Most state laws place restrictions on the maximum size of a food truck. Because of this, you will be required to work in a relatively compact space. This is less of an issue with restaurants, but it can add to the appeal for many who do not get claustrophobic.
Zoning Laws
There is also a considerable amount of preparation which needs to be done before heading out in your food truck. This includes looking into the details relating to zoning laws.
Remember that you cannot park anywhere that you like when you are setting up business, and that there are limitations for parking in any city.
As a result, the majority of food truck business owners will aim to plan their locations for parking and operating business months in advance.
This can allow them to obtain the necessary permits and parking fees. Make sure you do the same, and that you are looking into the commercial and non-commercial zones of a city.
You should also make sure that your city allows food trucks to operate from the same location for several days straight. This is a law in some areas, so it is worth preparing for this ahead of time if possible.
Even when the necessary permits have been obtained, and you have spent a great deal of time researching the restrictions, you may still be charged the regular parking fee.
When you choose to operate your food truck, it is not uncommon to face parking fees as regular cars would. Because of this, it is recommended that you set aside some money specifically for parking within the budget of your food truck business.
Summary
When it comes to setting up any business, it is important to remember that the process can take time. Many people start their business and are surprised when it is not immediately successful.
Try to be aware that the overall success of your business will depend on a number of things. These include the weather, chosen parking areas, the time of year and day, and more.
It is difficult to predict how well your food truck business will do. That is why you will need to keep track of certain variables which can impact the success of your food truck as a whole.
Once these have been accounted for, there is no reason why you should not begin to earn a living in this method. This is a learning opportunity, and there is a great deal of learning which is done through making mistakes. Because of this, it is important to be compassionate and forgiving with yourself.
Ensure that you do not lose the enthusiasm that drives you, because there can be many challenges faced along the way.
Food trucks are an exciting industry which is growing every day. It can be fun to purchase a used truck and turn it into a tiny restaurant. Consider working with the local community and ensure that you are seen at local events now and then.