Want to Start a Food Truck Business? Here’s How.
You know you’re capable of creating lip-smacking lunches and drool-inducing dinners, but how do you turn your food prep prowess into the sweet smell of success? – You start a food truck business. Is it feasible? Let’s find out.
For keen kitchen fiends looking to run their own eatery empire, the logistics of starting a food truck are far cheaper and simpler than opening a restaurant. You’ll also have the scope to develop your own menu, create your own brand, and get your name out there.
That being said, the food truck circuit is more popular than ever. In fact, a report written by IBISWorld states the food truck industry has seen an average annual growth rate of almost 8% over the last six years.
With the food truck market expanding at such pace, grabbing your slice isn’t easy. This year, there were no fewer than 18 official food truck festivals in the US alone. Over 25 food trucks attended each event – that’s a lot of competition.
Therefore, achieving a decent return on investment (ROI) means hitting up every opportunity to sell your menu; whether that’s crashing a pop-up city center market or pitching up at one of the most well-known music festivals in the US.
To master that crowd-drawing combination of delicious food, tasteful branding and speedy service, you will need healthy dollops of knowledge, commitment and imagination. Luckily, Expert Market is here to provide you with the top tips for starting a food truck business.
Step 1 - Consider The Local Food Truck Laws
Let's start with perhaps the most essential thing to consider – the law. There's plenty of state specific paperwork out there, and it's dry enough to make even the freshest of food truck ideas turn stale. Getting to grips with these laws is like trying to get to grips with your grandmother’s famous lemon meringue pie recipe – miss one step and you’re in trouble.
To give you an insight, there are over 45 government-mandated procedures a year to consider.
These take the form of:
And it’s not just about setting aside a substantial amount of time to complete the paperwork; you’ll also need to put by a casual $28,000 to cover the associated costs.
The map below shows the easiest and most challenging cities to launch a food truck based on the difficulty of obtaining permits and licenses, according to data collected by the U.S. Chamber of Commerce Foundation.
According to the map, Boston, Washington DC, San Francisco and Seattle are some of the most challenging areas to launch a food truck. On the upside, Denver, Indianapolis, Philadelphia, Minneapolis, Orlando, Austin, Phoenix and Portland are some of the easiest places to start a food truck business.
Step 2 - Develop your Food Truck Menu
Your menu is the star of the show, and arguably the most important foodie attraction factor when it comes to starting a food truck business. You need to have confidence in it, and so do your potential customers.
The key is to make it simple and make it snappy – just like these menu themes taken from the The Daily Meal’s top six food trucks of 2018.
If you’re struggling to come up with a solid food truck menu, make sure you consider these top tips:
Let’s have a look at these in more detail:
1. Firstly, do your market research. You need to be aware of who you’re competing with: after all, there’s no point opening a burrito food truck in your area when there are already five food trucks offering up exactly the same menu.
2. Secondly, think – how can you make your food truck menu original? For example, if you’re so set on setting up a Mexican-inspired food truck, what could you do with your menu that makes it different to others? A unique factor could be that you source all of your ingredients locally or organically.
3. Thirdly, sell the food that you love to cook. It comes through in your cooking – trust us. As the much-loved Julia Child once said:
4. Lastly, think about your timings. People come to food trucks because they want something quick. So it’s no use if your menu items require you slaving over the stove for half an hour.
Step 3 - Where to Purchase a Food Truck
So you’ve checked that it’s feasible to start your food truck in your location and you’ve come up with some drool-worthy menu ideas; now it’s time to part with your cash.
The cost of purchasing your food truck can range from $50,000 to $200,000, depending on the size of your vehicle and the extent to which you need it kitted out. There are sites dedicated to selling food trucks, Roaming Hunger being the most popular.
You’ll find a range of ready-to-go food trucks on there, in addition to vehicles that have the potential to become a food truck with some work. Just don’t forget to check that the condition of the truck adheres to your state laws, and make sure you know exactly how much work you need to carry out to make it so.
Of course, $50,000-$200,000 is a lot of money, so if you’re apprehensive about parting with that much cash, there are a few options you can look into. Firstly, you could purchase your truck privately on eBay, where prices can be a little lower.
Or, you could look at buying a food truck trailer. These can cost as little as $10,000 depending on size, leaving you with more cash for brand design and kitting it out.
Step 4 - What Food Truck POS (point of sale) System Should I Buy?
Now you’ve thought about the state laws, your menu and where to buy a food truck, it’s time to think about the meat and potatoes of your business – how you’re going to process your sales and make your money.
This figure proves that it’s essential for you to invest in a POS system that enables you to take card payment options, even if it is just a simple tap-and-go card reader. Luckily, there are plenty of POS systems out there that are ideal for taking card payments on the go.
These can consist of chip and pin readers or handy gadgets that plug into the headphone jack of your iPad or phone, transforming it into a payment taking device.
So what else do you need? Here’s an example of a standard POS system sold by Shopify, a popular POS supplier:
This system consists of a card reader, an iPad, a cash drawer and a receipt printer.
You can pay for a system like this in monthly installments. Or you can choose to pay for the hardware upfront, which can cost upwards of around $600.
Modern POS systems also allow you to use your own iPad as a cash register, which means you can start cutting down on costs almost immediately.
A POS system isn’t just for taking payments. Food truck POS software apps will enable you to carry out all sorts of business admin, including:
- Checking up on your inventory
- Setting rotas for your employees
- Checking sales data
- Marketing campaigns
And wait for this – some software apps are completely free. For example, Square is one of the best free POS systems for food trucks, as it gives you access to so many handy software features that won’t cost you a dime.
However, if you’re looking to get the most out of your POS software, you may be better off investing in a tailored software package specifically designed for hospitality or food truck businesses. Read our article on the best POS systems for hospitality to learn more about the different options available to you.
Last but not least, you’ll need to watch out for the credit card transaction fee. This is where your POS supplier takes a small percentage of each credit card transaction you take. Don’t worry – this is normal across all credit card suppliers. However, it does differ from provider to provider.
Step 5 - Think of the Environment
As someone looking to start a food truck business, you have the power to be forward thinking in changing industry attitudes towards global issues.
There’s no doubt that you’ll receive brownie points if you can make your food truck more eco-friendly. In fact, this article from foodtruckoperator.com does a great job of showcasing how much investment companies are interested in developing eco-friendly food truck technology.
Granted, tampering with your engine so it runs off the dirty oil you used to cook your fries is going to be expensive. So the easiest thing you can do is commit to using environmentally friendly packaging.
How? By avoiding polystyrene.
Yep! That’s a lot. And just think about the effect this kind of figure must be having on the environment. Instead, you can use these other materials.
- Kraft paper
- PET plastic
Kraft paper is a sturdy, reliable polystyrene alternative. It’s 100% biodegradable, recyclable and compostable, and it’s available in a range of sizes – perfect for burgers, wraps, pizzas and fries.
PET plastic is also a great eco-friendly option. It’s completely biodegradable, yet offers a solid solution for cold options, such as salads, sushi, sandwiches and smoothies.
Step 6 - How Can I Market My Food Truck?
So you’ve kitted out your food truck and it’s ready to hit the road. Now it’s all about building your customer base. And how are you going to do this? By investing in these four things:
- Social media
- CRM (customer relationship management)
Let’s start with branding. Make sure your truck is loud, proud, and embraces the message that you want to convey to your audience; whether it’s the origin of your ingredients, the style of your cooking, or what it is that makes your food unique.
If you’re stuck for inspiration, pop onto Pinterest. It’s flooded with boards that showcase the very best of food truck branding. Like this wacky masterpiece from renowned food truck, Curry Up Now:
Secondly, engage with your customers. How? By using the powers of social media. Set up Facebook, Twitter and Instagram accounts so your audience can interact with you, and you them.
Follow industry pages, follow your customers back, post photos of your food, and photos of you. Tag local events you’re planning to attend and tap into their communities to help grow yours.
The possibilities really are endless. And it all helps you to build your brand awareness, grow your customer base, and maximize your profits.
Then, once all your accounts are up and running, invest in social media monitoring tools. Hootsuite and Buffer are completely free, yet they give you a complete insight into how the social media space is behaving at a precise moment.
Find out what’s trending. Find out which of your posts is drawing the most interaction, and use that information to create posts that people will engage with.
It’s important to create a platform where your audience can find out information about your food truck. Your website is the perfect place to tell people your story; what’s the history of the brand, and what are the reasons behind your menu choices?
You could even choose to add an e-commerce section to your website. Why not sell your spice mixes and your homemade sauces? You could even sell branded merchandise – a great way to get your name out on the streets.
Best of all, you don’t need to pay an arm and a leg for a website. A website builder is a tool that enables you to build a website from a selection of templates. It literally is a case of entering the text that you want your audience to see. All you need to consider is the monthly fee for hosting your site, which is usually between $4 and $25.
Customer Relationship Management
What is customer relationship management (CRM)? It does exactly what it says on the tin. It enables you to manage all of your customer interactions in one place. We’re talking about interactions from:
- Your social media sites
- Your website
- Your email inbox
- Face to face sales
With all of your customer information in one place, you can keep a keen eye on how your customers interact with your business across the board. Best of all, you may not need to buy any additional software, as most point of sale software comes with CRM already integrated – and you already have that essential!
Now you should have a good idea of all the different things you need to think about when you’re looking to start a food truck business. As you’ve probably gathered from this article, launching a food truck isn’t easy – there’s heaps to think about, and an awful lot of money involved.
However, once you’re all set up, you’ll find that you’re in a super-rewarding industry! You only have to read these food truck success stories to see that the proof really is in the pudding.