Are you interested in starting a food truck business from scratch? Do you want to learn what it takes to run a food truck successfully? If YES, here is a complete checklist for starting a food truck business with NO money and no experience.
Okay, so we have provided you an in-depth sample food truck business plan template. We also took it further by analyzing and drafting a sample food truck marketing plan backed up by actionable guerrilla marketing ideas for food truck businesses. In this article, we will be considering all the requirements for starting a food truck business. So put on your entrepreneurial hat and let’s proceed.
Table of Content
- Industry Overview
- Market Research and Feasibility
- Food Truck Name ideas
- Licenses and Permits
- Cost of Starting a Food Truck
- Food Truck Marketing ideas
If you live in the United States of America, Canada, and Australia and in Europe, you would have come by food trucks. That is trucks that sell stuff ranging from ice cream to fast foods. As a matter of fact, U.S. and Canadian cities including Toronto, Montreal, Hamilton, Vancouver, Washington, D.C., New York, Austin, Houston, Los Angeles, San Francisco, Seattle, St. Louis, Calgary, Portland and Tampa, are key places where food truck business thrives the most.
Simply put, a food truck is a large truck or means of transportation that is equipped to cook and to sell food and also to sell ice cream and snacks. It is common to see food trucks engage in the sale of French fries, sandwiches, hamburgers, and fast food et al.
Why Start a Food Truck Business?
The food truck business concept is gaining more grounds in the United States. In recent years, food trucks are known to sell gourmet cuisine and a variety of specialties and ethnic menus. Little wonder food trucks, and other portable food kiosks and food carts, are on the front line of the street food industry and they serves an estimated 2.5 billion people daily.
Food trucks are no longer limited to the sale of ice creams, hot dogs, snow cones and tacos; they now sell any type of food as long as there is a market for such food. Food trucks now sell foods like sushi rolls that are freshly prepared on the truck. Interestingly, people now find it convenient and time saving to patronize food trucks because they are likely going to get the kind of food and drinks that they want to eat.
Food truck business is designed to service areas where it might be difficult to quickly construct the conventional restaurant; areas such as carnival sites, construction sites, sporting event centers, camp grounds, and beach et al. Food truck also takes advantage of places like campuses, office complexes, military bases, mechanical village, industrial parks, farmer’s markets, cinemas, and religious centers to sell their foods, snacks and drinks. They know that they are likely going to get enough customers that will patronize their services.
As the industry grows, food truck owners are becoming more creative on how they run their business. It is now normal for food trucks to be found at wedding receptions and special events. With the partnership of event managers, food trucks can be hired to service special events, such as wedding parties, crusades, community events, school events, birthday parties, picnics, retirement parties, and any other event as deemed fit by the event manager.
Starting a Food Truck Business With NO Money – A Complete Guide
- Industry Overview
For the last seven years; from 2008 to 2015 to be exact, the truck food industry has experienced consistent growth. Despite the fact that the food truck business may not be new in the food service and restaurant industry, it is a known fact that the food truck industry is still growing in leaps and in bounds and there is still more rooms for growth within the industry. Notwithstanding the introduction of some unfavorable laws and regulations by many cities across the United States and Canada, food truck business is still flourishing trade.
- Interesting Statistics About the Food Truck Industry
The annual food truck revenue in the United States is about $1,200,000,000 and the Industry revenue increase by 12.4% over the past five years. The total number of food trucks in U.S. is put at 4,130. Food truck Industry revenue increased over the past five years at the rate of 12.4 %.
The average revenue generated per food truck in the United States is about $290,556 and the average spending per order at a food truck is $12.40. The average amount required to own a food truck is about $85,000.
In the United States, Canada, Australia and even Europe, the percent of sales generated by food trucks based on market segments are; Street locations or street corners accounts for 55%, construction work sites and industrial sites accounts for 15%, shopping malls accounts for 12% and other locations, venues and event centers accounts for 18%.
Food trucks have been around for years, they are popular when it comes to serving construction sites, camp grounds, factories, and other blue-collar work locations. The industry is meeting a need in the society; people who don’t have the time to search for restaurants or travel a distance to eat in a restaurant find it time saving and cheaper to patronize food trucks. Food trucks are not only patronized for their affordability, but also because it saves time and it brings back memories; the business has been around as far back as 1800s.
Are the Opportunities in the Food Truck Industry Increasing or Declining?
In the early days of food truck business, it is common to see food truck serve foods like dried beans, greasy cloth – wrapped bacon, cornmeal, salt pork, beef, smoked fish, and other food that are easy to preserve. They also serve coffee and tea.
Recently, there has been appreciable increase in the numbers of food truck business owners in the United States. This increase can attributed to creativity, the change in lifestyle of the average Americans and of course post – recession and economic factors. In essence the food industry is growing and the future is still bright for the industry.
As a matter of fact, the popularity of food trucks led to the formation of associations that protect and support the interest of the industry. Association such as the Philadelphia Mobile Food Association and Off the Grid Food Organization et al.
Conventional restaurant owners are venturing into food truck business because it is easier for them to attract sales when they are mobile as against being positioned in one location. For example, a food truck can visit more than two event venues in a day to sell their foods and drinks.
Starting a Food Truck Business With NO Money – Market feasibility and Research
- Demographics and Psychographics
Although food truck business is a business concept that is designed for everybody – especially the average person on the street or on a construction site, but statistics has it that the biggest buyers of foods from food trucks are young adults and parents with children at home. As a matter of fact, people that falls within the age range of 25 to 34 are the largest consumers of snacks and fast foods from food trucks. They spend an average of $44 per month.
List of Niche Ideas in the Food Truck Industry
- Hot dog cart
- Hot dog stand
- Mobile catering
- Gourmet Cuisine Truck
- Freshly Prepared Sushi Rolls and Organic Food Vans
- Veg Food Truck
- Fast Food
- Street food
- Ice cream van
- Sausage wagon
- Snacks and Drinks
Competition in the Food Truck Industry
The Food Trucks industry has experienced a remarkable growth over the past five years and loads of people are beginning to follow in love with food trucks because it saves them time and money. As a result of the increase in the patronage of food trucks, many entrepreneurs who are interested in the business or those who are already running their own conventional restaurants are coming into the industry.
With this development, the competition level in the industry is becoming stiffer; the more the competitors, the stiffer the competition. Despite the fact that there are strong performance in the industry, high competition rate and unfavorable regulatory conditions in some cities have negatively impacted the growth in the industry; it has limited the growth of mobile food vendors.
Aside from the fact that food trucks compete with themselves, they are also compete with regular bricks and mortars restaurants and fast food joints; which is why food trucks are required to park 200 feet away from any restaurant restricting the positions they are to station their food truck.
No doubt, the fact that the competition has stiffened, does not hamper the performance of some food truck businesses. Most of them know how to recreate and re – strategize to reach out or attract more customers. Creativity and many food and drinks options is key to surviving the competition in the food truck industry.
List of Well Known Food Truck Brands in the United States and the State and city that they can be found
- Don Chow Tacos food truck
- A Kogi Korean BBQ food truck
- Big Gay Ice Cream Truck – New York City
- Chef Jeremiah – Miami, Florida
- Chi’Lantro BBQ – Texas (Austin, Fort Hood, Houston)
- Clover Food Lab – Boston, Massachusetts
- Coolhaus – Southern California, New York City, Austin, and Dallas
- Template: Jersey Dogs – Los Angeles and Ventura county California
- Don Chow Tacos – Los Angeles, California
- Grease Trucks – Rutgers University in New Brunswick, New Jersey.
- The Halal Guys – New York City
- Honeysuckle Gelato – Atlanta, Georgia
- Kelvin Natural Slush Co. – New York, New York
- KIND Movement – tours the United States
- Kogi Korean BBQ – Los Angeles, California
- Korilla BBQ – New York City
- Maximus/Minimus – Seattle, Washington
- Pincho Man – Miami, Florida
- Taco Bus – Tampa, Florida
- The Grilled Cheese Truck – Southwest United States
Food truck business is subject to the same range of economic concerns as other food related businesses such as restaurants and fast food eateries et al. For example, despite the fact that food trucks are mobile restaurants, they generally require a fixed address to accept delivery of supplies like normal restaurants.
In some cases or cities, they are required to prepare their food in a commercial kitchen that can be inspected and not on the truck. These factors contributes to increase in the running cost of the business.
In addition, there are a number of permits that is required to run a food truck business, and of course there are also public health codes to observe. Other cost that should be considered during planning and budgeting are overhead cost; labor cost, supply of raw ingredients and foods, and fuel and maintenance costs.
It is important to try as much as possible to cut down on overhead costs when making plans to start a food truck business and also to operate in cities where you can be allowed to cook and prepare your food inside your truck. Well for now it is only in Chicago that food trucks aren’t allowed to cook their food inside their truck.
- Starting a Food Truck Business from Scratch or Buying a Food Truck Franchise
Good enough food truck business is one of those businesses that sells franchise. Any entrepreneur, who is considering starting a food truck business, has the option of either starting from the scratch or buying an existing franchise.
There are loads of factors that should be considered before choosing the option to follow. Some of the factors to consider are the cost of starting from the scratch or buying a franchise, your financial capacity, your vision, and your business skills and experience.
If your intention of starting a food truck business is to grow beyond one city, if you want to have presence in key cities in the United States and Canada, then starting your food truck business from the scratch is your best option. But, if you just want to start a business with the aim of just making profits and you don’t have the required finance and experience to build a business from the scratch, then it will pay you to buy the franchise of a successful food truck business.
Threats and Challenges of Starting a Food Truck Business
If you decide to start your own food truck business in the United States, Canada, and Australia or in Europe, you are sure going to face some challenges and threats that is peculiar to food truck business. Some of the challenges that you are going to confront is finding your way around government regulations.
There are several laws out there that you are expected to follow if you want to run your own food truck business; some of the laws are unique to each states in the U.S. For example; if you want to start your food truck business in Chicago, then you must be ready to also secure a commercial kitchen. Food trucks are not allowed to cook their food inside their truck, they are expected to cook and package the food in a commercial kitchen.
Another challenge is the fact that food trucks are not allowed to operate or park less than 200 yards from a regular canteen. The threat that food truck business is likely to face might just be economic downturn; usually economic downturn affect the purchasing power of the average man or women of the street. Of course the arrival of another food truck in same location where you usually operate will pose a threat to your sales. Other challenges to expect are:
- Unfavorable government policies (fiscal and economic policies)
- Finding a good place to site your truck
- Maintaining high quality
- Lack of startup or operating capital
Writing a Business Plan for your Food Truck Business
Writing a business plan can come across as cumbersome. However, truth is that it something that you can surmount- whether you choose to write it on your own, or if you want an expert to help you out. To successfully run a food truck business, you would need to have a good business plan in place.
A Business plan is the blue print that is needed to successfully run a business; with a workable business plan in place, you will reduce the trial and error approach of doing business. You will be able to approach your business with purpose and perhaps precisions.
So, if you want to start your own food truck business, you are required to write a detailed business plan that can pass reality test when subjected to it. The whole idea of writing a business plan is not just for the sake of having a business document in place; but a detailed guide on how to effectively run your business. Your business plan should outline and cover strategies on how you intend to manage your food truck business.
The rule of thumb in writing a business plan is to try as much as possible to be realistic and never to over project when putting figures on income and profits et al. As a matter of fact, it is safer to underestimate when writing a business plan so that you won’t be so disappointed when reality sets in. These are the key areas that should be covered in your business plan;
Executive summary and Company’s descriptions; here, you are expected to write about the concept of your business, descriptions of your company, your company’s vision statement, mission statement and where your company will be located.
Other key components that should not be missing in your food truck business plan are product offering, SWOT analysis, competitive analysis, marketing and sales analysis / strategies, pricing, costing and financial projection, publicity and advertising strategy, budget and start – up capital generation et al.
Choosing a Suitable Location for a Food Truck Business
There are key factors that influence where food trucks can be positioned, at least there should be a large numbers of people in a location and perhaps there shouldn’t be any restaurant around the location where you intend to position your food truck.
Food truck business thrives in heavily concentrated vicinities in urban areas-particularly in the central parts of large cities. If you are considering starting your food truck business in the U.S., then you should look towards operating in cities such as L.A, Portland, New York, Austin and San Francisco. From recent survey, it was observed that food truck business thrives in those cities mentioned.
The idea of starting a food truck business is to sell food and drinks on a mobile truck in areas where people find it difficult to access a restaurant, areas such as carnival sites, construction sites, sporting event centers, camp grounds, and beach et al. Food truck also takes advantage of places like campuses, office complexes, military bases, mechanical village, industrial parks, farmer’s markets, cinemas, and religious centers. This should guide you in choosing a location for your food truck business.
Starting a Food Truck Business With No Money – Technical & Manpower Details
Starting a food truck business means that you will have to acquire a truck that is suitable for the nature if the business; a truck that has the required facility. In other words, the key equipment that you need to start your food truck business is a standard truck that has a kitchen, cooling facility and space for storage and dispensing food.
You can acquire a new food truck if you have the financial capacity. If you intend cutting down your start – up cost, then you should consider purchasing a fairly used food trucks; it will still serve the same purpose. Purchasing a food truck is the major expenditure you will make.
You are also expected to purchase pots, pans and other cooking utensils. You are expected to micro wave ovens, fridge or freezers et al. When it comes to hiring workers, it is important to note that most food truck business owners try as much as possible to cut down on the numbers of employees they can hire per time.
Basically food truck businesses hire Manager, Cook, Cashier, Truck Driver and Assistant Truck Driver. Everybody on board the food truck is expected to handle additional job description. For example; the assistant truck driver can be assigned to assist in packaging foods, moving stuffs, washing and cleaning dishes et al.
On the average, a food truck business is expected to employ about 5 full – time staff per time. Except larger food truck companies that has fleets of food trucks and also run their own commercial kitchen.
- The production process involved in Food Truck Business
There are several processes involved in different business. Just like it is with others, so it is with the food trucking business. Food truck business is all about making foods, snacks and drinks available to people in areas where they may find it difficult accessing restaurants. In essence food trucks are mobile canteen the normal production process for food trucks is similar to that of bricks and mortals restaurants. The productions process is as follows;
List of foods and drinks to be sold on the truck are listed, the raw materials are bought and different food and snacks are prepared and packaged. The foods and drinks are loaded in the truck (especially when they are prepared in a commercial kitchen and not on the truck) and then sold to customers.
After the day’s job, the truck is cleaned, plates, pots and pans are washed and cleaned and positioned for the next day’s business. Accounts are balanced and lodged in the bank. The process continues the following day. In summary, the process to follow are:
- Preparing and serving food from a mobile truck
- Preparing and serving beverages from a mobile truck
- Preparing and serving dessert from a mobile truck
- Serving prepackaged food and beverages from a mobile truck
Tips for Running your Food Truck Business Successfully
The day to day running of a food truck business is slightly different from the day to day running of the conventional bricks and mortars restaurants. Running a food truck business involves itemizing the menus and drinks you want to sell for the day, purchase raw food and food ingredients, prepare the foods, package the foods and snacks, load your truck and then drive to the location where you intend selling your foods and drinks.
After the day’s sales, the books will be balanced, the truck will be cleaned, plates, pots, and pans get washed and kept safely and lastly the truck will be packed appropriately.
The food truck business is a fantastic trade to delve into, provided you and your team have what it takes to whip up great meals; much more than the zeal and enthusiasm to start and run a successful food truck business. There should also be a place for acquiring the skill; the skill of knowing how and what meals to whip up is a major determiner, as far as this business is concerned. This is because it takes one who knows what obtains in the trade to run it successfully build it to an enviable state.