Are you looking to start a mobile food truck business? Want to know how to invest smartly in a food truck business? Here’s a complete guide on how to start a mobile food truck business on a budget without any experience.
The mobile food truck industry in the United States is showing steady growth in recent times. In 2015 the value of the U.S. food truck industry accounted for 856.7 million U.S. dollars. The industry is estimated to increase by another 150 million U.S. dollars by 2021.
A mobile food truck business involves a lengthy legalization process and marketing research. Here’s a complete tried and tested plan on how you can start a successful mobile truck business on a budget without much hassle.
Mobile Food Truck Business Plan Guide
Follow the steps below to start a profitable mobile food truck business with little money.
Step 1. Create A Business Plan
Starting a food truck may seem easy, but it also involves a whole process. You need a proper setup with the right things in place. Being a food business, there’s a complete legalization process involved with all the necessary permits and licenses.
Start with a plan. Note down all the important details, what you will need, and how you wish to finance it.
Having a business plan will help you to stay on track with a complete guide on what you should do and what not. Mention your business goals and what you wish to achieve with your mobile food truck business.
Step 2. Market Research
The food truck is a popular business. Several competitors are out there, so market research is really important. You just can’t put a truck on a street where already many are selling food for years and complain why your business is not raking up well.
Do your market research thoroughly. Start with competitor analysis. See what others are selling.
Up next, check out how others have priced their items and what special they serve. If customers are loving it, you know what’s popular in the area. Research to build your own menu.
Step 3. Financing A Mobile Food Truck Business
While a food truck may come at a lesser cost than a restaurant or cafe, there’s a considerable investment involved. From acquiring a truck to designing to licenses to the essentials, the cost may go up to some hundred thousand dollars in some states.
You may look up some financing options with lower interest rates.
If you already own a truck and want to turn it into a mobile kitchen, the overall investment may come down substantially.
Step 4. Legalization Of A Mobile Food Truck Business
For a legally compliant food truck business, it is most essential to register your venture. Every country provides different kinds of business structures according to scale operation. For example, if you are from the United States, forming an LLC is a good option as it protects personal assets and makes annual tax filing easy.
It’s a food business, so you will be needing different licenses and permits from the government and local municipality. While this will vary from country to country, the general permits include food security licenses, health department certificates, fire licenses, truck permits, and parking licenses.
Make sure to go through all the city and zoning regulations with all the required permissions from the local government.
Getting all the licenses and permits is going to be a long task. So start early. Apply for the licenses well before you plan to start your business. You also need special permission to sell food trucks in a public space.
Step 5. Turning The Truck Into A Kitchen (Or Cart)
You don’t necessarily need a truck only to start a mobile food business. If budget is an issue, start with a small food cart. It’s affordable and you won’t need as many licenses as a truck. If you choose to go with the truck, it should comply with all the necessary requirements by health departments.
The rules are the same here for food trucks and restaurants. So your vehicle has to have all the necessary specialty equipment.
You can choose to buy a used food truck to save on other additional costs. If you want to cook on your truck, you need to have a proper setup. Or else you can prepare food in advance and use a micro-oven to sell them later like hot dogs or burgers.
Step 6. Choosing What To Sell
This should be in line with your market research. Supposedly if you want to sell pancakes in an area where no one else is selling them, you get the first-mover advantage. And if you want to sell something someone else already is, either try to come up with something better in it or sell it at a cheaper price.
Don’t go overboard with the menu. Keep it simple.
Adding a ton of items will trouble you. More items mean more inventory and space. So, keep it simple with a few items.
Step 7. Finding Parking Places
The biggest advantage in a mobile food truck business is its flexible nature. You can choose to move to anywhere you want. Take up a few parking permissions, and you set to operate at multiple places on different days of the week.
It’s not necessary to switch places.
You can operate at a single location for the whole week even. Make sure you have proper timing and customers don’t have to wait.
Step 8. Business Insurance
Unlike other food businesses, you being on the go, you have to sign up for a few insurances. As you are on wheels, make sure you have coverage shielding all your important assets. This may include standard car insurance, other risks and liabilities, and more.
It’s better to consult with an agent. Explain your business and get customized insurance according to it.
Step 9. Marketing & Promotions
Start with soft marketing before launch. Use Facebook and Instagram to target users with ads that are specific to your location. This would help to generate buzz among the people in that area. Even keep posting about your upcoming food truck with daily updates.
This will help you to attract new customers from social media.
Even you can ask your followers to vote on the menu items you plan to include or send them special launch offers. You should also focus on catering to special events and corporate functions. List yourself as a caterer and join local associations and organizations so that others can find you easily.
Step 10. Expansion
As your business grows, you need to shape a shopping plan accordingly. As a food business, you have numerous opportunities to grow and expand beyond a food truck business. You can opt to multiply your carts or trucks as your sales grow.
You can even choose to partner with delivery aggregators to boost up sales.
Even add packaged products to your truck to diversify your offerings. You have a lot to experiment with. Just execute each opportunity minutely and never compromise on customer experience.
How Profitable Is A Food Truck Business?
The mobile food business is worth a few billion dollars now. While it’s comparatively easy to set up, and the return on investment is quite high at the same time. The biggest advantage is your option to move anywhere you want.
You don’t have a fixed place, unlike a restaurant or cafe.
Why Go For A Food Truck Business Rather Than A Restaurant?
Because a mobile food business offers you the flexibility to work the way you want. You have the opportunity to go anywhere and take your business literally anywhere you want, a concert, match, parks, and whatnot.
Also, you don’t have to shut it down if sales go down.
You can even sell it to anyone at a great price if you wish to switch businesses. If a cafe or restaurant doesn’t work, you have no option other than to shut it down.
How About Starting With A Cart Instead Of A Truck?
You necessarily don’t need a truck in particular to start a mobile food business. If you sell what you want on a food cart, spending a huge sum on a truck may not any business sense. Instead, invest in a few more food carts to expand your presence around the city.
If you make your food in advance at a commercial kitchen, it’s better to go for a food cart rather than an expensive truck.
But in case you have food to cook right there and it may require a larger space, like Pizza, then you should probably choose a truck over a cart. This will vary from product to product.
The Mobile Food truck business currently is among one of the most sought-after businesses with exceedingly high returns. Just make sure you plan up correctly and tactfully to establish your own super successful mobile truck business.
About the Author: 99businessideas.com led by Rupak Chakrabarty is committed to helping beginners, entrepreneurs, and small business owners in starting, managing, and growing their business. Our aim is to educate the entrepreneur on the various stages of entrepreneurship.