Whether you’re looking for a new career path or are a seasoned veteran in the restaurant business, starting your food truck is a massive emotional, financial, and physical undertaking that you should not approach lightly.
In some respects, food trucks follow the same formula for success as any other business: a savvy plan, a unique angle, great customer service, and some old-fashioned elbow grease.
To ensure you’re fully prepared for the responsibilities that come with owning your food truck, here are the 7 most important questions you should ask yourself before you get behind the wheel.
Do I Have a Business Plan?
Before you invest too much time and money into any part of your food truck business, you need to ask yourself: do I have a strategy for sustaining this business in the long term? And what is my plan to get there?
Business planning provides the perfect opportunity to step away from the day-to-day grind and see the larger, encompassing strategy you’ll need to turn your food truck into an entire fleet.
The plan and model by which you run your food truck will include the objectives that you believe will drive the most future value and potential. Include your ideal consumer, partnerships, efficiency, and attempts to build your brand in the areas you serve.
To make these objectives effective, however, each bullet point in your plan must be linked to a meaningful goal.
What Does It Take to Run a Food Truck?
The ability to run a successful food truck is so much more than manning the grill on a busy weekend. Even the best chefs and restaurateurs are doomed to fail if they aren’t ready to grapple with the administrative demands of food trucking.
One approach to explaining how a food truck is working is to look at two things: costs and revenue.
The successful food truck owner should know where all the major costs will be. Any food service on wheels is paying for gas, generators, and parking spots, which are all costs that your brick-and-mortar competitors won’t have to consider.
Once you know the costs, it’s important for food trucks to factor in their unique variables to the standard menu price point equation. Be sure that your meals, whatever they may be, give you wiggle room to support you in the long term.
The day-to-day grind on the streets is essential to building brand visibility within your local communities, but private events and bookings—such as food festivals, graduation parties, and even weddings—are other lucrative opportunities to diversify your revenue streams. And don’t forget about having a solution for order ahead, pick-up, and delivery.
Depending on what you utilize your food truck, the capacity to relocate your business physically shows to be the biggest advantage or its worst disadvantage.
No matter how many times you move around, make sure your consumers know where you plan to put up a shop for the day.
Am I Prepared for the Upfront Costs of Starting a Food Truck?
No matter what kind of business you want to start, there are going to be financial risks involved (although the magnitude of these risks might vary).
The most obvious, and essential, upfront expense is the cost of the food truck itself, in addition to the kitchen equipment it carries. But food truck operators need to be aware of the following as well:
- Insurance, including everything from auto insurance to general liability.
- Permits, especially those required to park and vend on city streets. Regulations will vary depending on the areas you serve, so be sure to research before you set up shop for the day.
- Funds for repairs and other roadblocks in the event of any breakdowns as you travel from one location to the next.
How Can I Fund My Food Truck?
If you’ve determined that you don’t have the cash-on-hand to juggle your baseline expenses, the next question to ask yourself is: what’s the best way for me to build up my capital?
You have to think strategically to answer this question. In addition to preparing for the initial costs, you also need to budget some money to maintain yourself without seeing any earnings in the immediate future.
However, as with most aspects of new business, there is no one formula for success when it comes to financing. Here are a few ideas and common ways to fund your business:
For individuals who have a dependable professional network, convincing family and friends to back a new business idea might be enough to get their feet off the ground. Others have gone through Kickstarter and other fundraising websites.
Small Business Loans
Whether it’s from a bank, getting a loan is one of the best options if your credit score is great.
Borrowing against assets
Entrepreneurs who already have wealth built up in their homes have found borrowing against their home equity a worthy option to further investigate.