The best thing about the food service industry is that it will always be a viable way to make money. After all, no amount of technological disruption can eliminate the need to eat. Operating a food truck is a great way to get into the business without the expense of running a full-fledged restaurant. Though a food truck can be quite profitable, it’s not the easiest side business to get off of the ground. To achieve sustainable food truck success, you’ll first need to address the following start-up challenges.
Selecting a Niche
The most important decision you can make during the initial stages of your food truck business’s formation is what niche to specialize in. Whether you’re partial to falafel, pizza, Thai food, Italian ice or grinders, it’s likely that there’s an unexploited gap in the local street food scene. Obviously, it’s best to go with what you know. If you can deliver a unique style of food to the masses in your area, you’ll greatly increase your chances of success. Do a little market research first to see what will fly in your area.
Financing the Operation
Though starting a food truck business is generally cheaper than launching many other types of businesses, you’ll probably need more than a shoestring budget to succeed. For starters, there’s the vehicle itself that must be purchased and outfitted to suit the needs of your cuisine. Then there’s the many licenses you’ll need to operate legally. Financing can come in many forms including bank loans, SBA assistance or private investors. Family-and-friends money or a Kickstarter campaign are both great routes to take since they’ll help you to avoid hefty interest payments.
Getting Your Gear in Order
Once you’ve fleshed out a business plan and gotten the necessary funding in order, you’ll need to source equipment and supplies in bulk. The actual food truck itself will be the biggest expense since even a pre-owned model can cost upwards of $100,000. You’ll need to customize your truck with the right combination of cooking appliances and refrigerators. As far as actual foodstuffs go, you’ll need to look around a bit to secure the right suppliers for ingredients. In addition, you’ll need to sort out odds and ends like containers and utensils.
Licensing & Legal Issues
The biggest pain related to starting a food truck business is the bureaucratic obligations that come with the territory. More so than most businesses, mobile food service is fraught with onerous licensing requirements. You’ll obviously need a business license for any jurisdiction in which you’ll be operating. Furthermore, you’ll need to pass health and food safety inspections. Finally, your food truck will be held to a higher standard of vehicular safety than your average sedan. Contact your local Chamber of Commerce, Department of Health and state DMV for further details.
Protecting Yourself from Liabilities
Besides getting your ducks in a row as far as licensing is concerned, you’ll need to make sure that your business is protected with adequate insurance coverage. A lot can happen to any business throughout the course of the day. Taking the show on the road only increases the likelihood of something going awry. As such, it’s important to get your insurance squared away. Determining the appropriate level of coverage can be tricky so consult a qualified attorney or an insurance specialist to make wise insurance decisions.
Pinning Down Locations
Finding the right locations for your food truck will greatly affect long-term profitability. Almost every municipality has a different policy regarding where they’ll allow food trucks to operate. Some will require you to rent a designated space to sell from while others may limit the number of licensed trucks allowed within a specific area. Obviously, locking down a spot near a major business park, university or marketplace that boasts plenty of foot traffic would be ideal. You’ll need to experiment a bit with locations to find the best fit for your particular business.
Hitting the Ground Running
The first few months of operation will be a critical time in your business’s development. If you have a unique take on a particular food or are peddling something that’s fairly novel for your area, a bit of pre-promotion before you open for business would be advised. Whatever you plan on selling, you’ll need to play around with your budget a bit to find the profitability sweet spot. Paying close attention to revenue, net income, operating budget and so on will be clutch. Being especially handy with spreadsheets will make the number crunching easier.
Marketing & General Promotion
While the actual food truck itself is arguably the most potent promotional tool, there are other ways to stimulate consumer interest. Be sure to list your food truck on major social media outlets like Facebook, Twitter, Google+ Local and Yelp to increase awareness and garner positive customer reviews. Try offering creative coupons or special deals for certain days of the week. Once you’ve attracted a decent number of regular customers, word-of-mouth advertising should take over and make your truck a local institution without much additional effort or expense.
Staying Alive and Thriving
Like any food service business, a food truck can be a difficult way to make a living. Starting out as an entry-level side business is a smart way to break into the game. Focus on festivals or sporting events to pad your income. Be sure to network with local food providers to secure better deals. Make as many government and local business contacts as possible to increase the likelihood of landing lucrative gigs in the future. While a food truck side business can be a handful, the potential profits make it a worthwhile gamble.