How to get into the food truck business
The food truck industry has changed considerably in the last 20 years, moving away from the Mr. Whippy ice cream trucks and hot dog vans to a more gourmet form of street food. Operating a food truck is more like a mobile restaurant which showcases some of the food industry’s top talent. While food vans are a popular small business, there is still room for new players in the market.
If you have always dreamed of running a food truck, we have put together this guide to help you bring your food truck ideas to life.
How to make it in the food truck business
The key to running a food van is finding a gap in the market that hasn’t been captured yet. The startup costs can be high, so it is important to plan your approach and plan. Here are the main steps we recommend you take to start a food truck.
Market Research
It is important to research your local market to understand:
- who the main players are in your local market, is there a gap in a certain cuisine or space that is not being utilized
- what your competitors are selling – where and what times are they operating,
- what is the main demographic of diners in the area,
- where are food trucks allowed to sell and what are the best times to sell based on customer behaviour
Understanding where and when to sell can be just as important as what you are selling, just like a restaurant, location is everything. Research will help you to answer these questions and work out if you are onto something.
Truck concept
Once you understand your local market, it is time to come up with the detailed concept for your business. Picking the concept for your truck can be challenging This will require you to:
- determine the type of cuisine you want to sell – fusion, vegan, pizza or it could be something unique to your background
- name your truck – you want something memorable that is easy to pronounce and also a name that hasn’t already been used, you can check here for any registered trade marks
- come up with a logo that will go on your truck and help customers to know what you are about, something that you can use on all your menus and advertising and will help customers to recognize you
Business Plan
There is a significant investment of capital required to get a food truck up and running. Writing a detailed business plan can help you to clarify your concept to others and help in securing financing. The key elements of a business plan will cover:
- Outline the business
- Analyse the market and the strategy to attract customers
- Discuss your business goals and objectives
- Outline your plans for financing including your estimated upfront costs and operating expenses
- Source of funding and how much will be required
- Organisational chart which includes key responsibilities of management and employee
- Marketing strategy to attract new customers and retain existing customers
Secure Funding
There are several options for financing your business to cover the initial start-up cost of purchasing the truck and getting it up and running. You can choose to get a business loan, personal loan, find investors or use crowdfunding.
If you are wondering how much money to start a food truck business it can cost anywhere from $20,000 for a 2nd hand truck up to $200,000 if purchasing a custom fitted new truck. Expenses will vary depending on the truck design, however, typical costs incurred include:
- Purchasing a truck
- Truck inspection
- Fitting out your truck
- POS system
- Generator to power your vehicle
- Exterior decal or paint work
- Permits and licences
- Professional fees – legal, accounting
- Payroll
- Fuel
- Insurance
- Food & utensils for serving.
Purchase your truck
Buying your truck will likely take a large amount of your budget so when choosing a vehicle, you should consider:
- If your budget will require a new or used truck,
- Whether to lease or own the vehicle,
- If you are buying from a reputable seller,
- What customisation, if any, will be required.
- What it will cost to insure the truck
Fit out your food truck
Your food truck design will depend on the space limitation of your vehicle and also the equipment you need to prepare your menu. Generally speaking to fit out your truck you will need:
- Cooking equipment – grill, fryer, range hood, toaster ovens
- Warming equipment – food warmers, fry basket holders
- Food preparation areas – benchtops, cookware, utensils
- Serving Equipment – utensils, serving supplies such as napkins and trays
- Refrigeration – under counter fridges
- Cleaning – sinks, waste disposal, cleaning product storage
- Generator – a source of power for running your kitchen
Permits & Registration.
A food truck is required to adhere to the same strict food standards as a restaurant, so you will be required to have food safety handling permits and licenses. You can find information regarding your local state or territory requirements here.
You will need to hire staff who have attended nationally accredited food safety courses. Certain states In Australia also require you to have a Food Safety Supervisor on staff which requires a certified course, be sure to check with your local authority or health department to ensure you adhere to the local requirements.
Point of Sale System
In order to accept credit card payments when selling your food, you will need some kind of POS system. Unfortunately, most POS will require you to have an internet connection, so for those operating in an area with no signal you may need to opt for cash only. Ideally you would find a POS system which accepts both cash and cards.
In Summary
There are so many things to love about the food truck business, once you have overcome the initial setup costs you have the freedom to move location as often as you like, and you are not limited to seating capacity like a restaurant so you can sell as much food as you can make. We hope this blog has inspired you to bring your food truck dreams to life.
Thank you and I hope this all helps on your journey into Hospitality
Reign In Design Pty Lt
