From 1691, when New Amsterdam (now New York) began regulating street vendors with push carts, ready-made food being sold from a cart or truck has been part of the history of American cuisine.
Whether empanadas and steamed tamales, hamburgers, peanut butter and jelly or grilled cheese sandwiches, halal food or falafel, “street meat” and other vendors have become ubiquitous on college campuses, construction sites, neighborhood celebrations and urban streets. And they are fast gaining popularity outside any locations where a crowd attends an event and is likely to get hungry.
But if you think operating a food truck is easier than running a restaurant, think again: it has its own unique set of difficulties, including a greater pressure to make food fast if you’re lucky enough to be popular enough to have a line. A trick to running a successful food truck is being able to take and make orders fast, and let people pay with everything from cash to debit or charge cards, to phone apps.
That being said, it is considered a good way for a “start-up” restaurant to consider test-marketing and finding a viable location before sinking money into a permanent home.
If running a food truck is your dream, here’s what you need to know:
How to Start a Food Truck Business in 10 Steps
Step 1. Decide on a Concept
Before sinking any money into actually starting any business, deciding on a concept — an idea what you want your business to do or look like — is usually the best place to start. You know you want a food truck. What kind of food do you envision making and serving? What do you think you’ll need in terms of interior design, logistics, supply?
One concept tried successfully in Amsterdam, the Netherlands, calls itself the “Kitchen of the Unwanted Animal,” serving animals such as wild geese that once were protected and have now become so plentiful to be considered pests. And remember, your menu offerings don’t have to be limited to fickle human tastes. Another successful concept is the Seattle Barkery, which caters to a specific clientele: dogs.
Step 2. Research Your Target Market
This could come first in your planning if you don’t really care what product you serve or make, you just want to make and serve something from your food truck. But if you want your food truck to be successful, the U.S. government’s Small Business Administration recommends you research your target market.
Step 3. Come Up With a Name
After you’ve settled on a concept, and researched your target market, you should have a pretty good idea what you want your business to be to attract customers. Next, after deciding what you want to prepare and serve, fast, where, and why, you’ll need to come up with an attractive name that also conveys to potential customers what you are selling them.
One of my favorites, and a classic, in New York City is the Biriyani Cart — Biriyani is a type of cuisine from the predominantly Muslim northern Indian state of Kashmir, so anyone wanting or curious about that sort of food will be attracted. Of course, it serves other dishes as well. But its name is what draws people to it — that, and its reputation, and the fact it is located in Midtown, where a number of South Asians are employed in businesses in the area.
Step 4. Decide on Your Offerings Menu, and How to Display It
The most common means of displaying your menu on a food truck is on a board on the side of the truck near where the food will be ordered. It will have to be in keeping with the concept of your food truck, the type of food, and perhaps appear unique enough to have people associate it with your truck.
Remember, you may decide to change either the offerings, or the prices, or both, at some point in your development, so you don’t want it to be so permanent you have to get a new board every time.
Chalk boards work well for this.
- The text should “pop” out from the background and your truck, so make sure it is easy to read, understand, and in a color or font style that helps.
- Highlight your most popular items, specials, and new items, and make sure your food descriptions are simple and to-the-point.
- If your menu board is large enough, often photos of what you serve helps customers make a decision.
Step 5. Now, You Need a Business Plan
According to the SBA, a business plan doesn’t have to be overly formalized. But the process of building and constantly refining your plan will help you “match the strengths of your business to the opportunities” your market presents, and can help you deal with threats as they occur. A business plan is also essential for communicating with customers, partners, and potential investors, if you want their support. A business plan helps convince such stakeholders you know what you’re talking about with your business, and your research, and your goals.
Step 6. Figure Out How to Pay for It
According to the food truck website mobilecuisine.com, the average cost of starting a food truck business is in the broad range of $40,000-$250,000, because of all sorts of variables.
If you have that sort of money to start your venture, great. But the SBA notes while not all businesses need investors to get started, if you start small, options range from micro loans to more comprehensive small business loans like the SBA 7(a) and 504 loan programs.
Before seeking investment, plan it out. Use your business plan and knowledge you’ve gained from research and even test-marketing as the basis for a loan proposal or investment plan.
And figure out realistically how much money you’ll need – buying local produce and surplus equipment can often save on costs.
Step 7. Buy or Lease Your Truck, Insure It and Set Up and Test Its Design
Food trucks cost between $5,000 to $150,000, on average, making the purchase or lease, between $2,000 and $3,000 a month for more than six months, likely your single greatest expense. And that doesn’t include commissary costs between $1,000 and $1,200 a month.
While investing in a new truck at the beginning minimizes the likelihood of other expenses and loss due to repairs, experts in an interview at FoodTruckEmpire.com recommended leasing a truck for 2 to 3 years before actually buying one, for the experience and to gauge the likelihood of it paying off as a business model.
Either way, all experts recommend making sure your truck has refrigerators and ovens that are working properly, hot and cold water are available with adequate pressure for cleaning and speed, fire extinguishers and first aid kits are available on board, and cleaning materials and food items have proper storage, separate from each other.
You also need to make sure it has the type of equipment you need, whether it’s ovens, fryers, grills, or refrigerators, pots and pans, storage containers, knives, serving and other utensils, a generator, and a point-of-sale system for accepting payment.
You can lease appliances to help you build up capital to reinvest in the food truck once you have a chance to see what you really need.
In addition to having your truck outfitted, or custom built, depending on whether you are leasing or buying, and buying new or used, you will need to insure it. Basic food truck insurance costs about $2,000 to $2,500 a year, but the costs often vary depending on the insurance needs of each business.
Food truck insurance covers various liabilities including employee injuries, damage to the food truck or business property from vandalism, accident, or theft, and various other liabilities from business operations. Food trucks fall into the high-risk category of restaurants and food preparations, where fire and food-borne illnesses are a concern, and they are on the road – increasing the chance of a vehicle accident.
Step 8. Obtain Licenses, Registrations and Permits
According to the U.S. Chamber of Commerce’s Food Truck Index, an entrepreneur spends an average of $28,276 on permits, licenses, and legal compliance, to operate a food truck for a year. The types of permits and licenses needed fall under six categories:
- Health/Menu/Food Safety
- Vehicle Requirements
- Safety/Hazard Prevention
As with a restaurant, location is everything. If you’re trying to figure out where to locate your food truck, consider if the location’s permit and licensing fees are cost prohibitive.
Step 9. Design Advertising, Logo, and Wrap Your Truck
Now that you have your concept and truck, you need a logo and food truck advertising wrap to promote it. Make sure your design is memorable in a positive way, because it is the first contact you’ll have with potential customers.
Hire a professional designer, or consider visiting a freelance design site.
Then, once you’ve decided on the logo and wrap, consider the type of wrap: vinyl wraps are the most popular because it is easiest for detailed designs. But if you’re saving costs, consider a coat of paint and vinyl stickers.
And, since you want people to remember the truck when they see it, even on the road, make sure the font of your logo is big enough and everything contrasts enough to be clearly identifiable from a distance.
Step 10. Market Your Business Online
As with most businesses dependent on sales, marketing is important. These days, the quickest, least expensive and most direct way to reach potential customers is by using social media. Social media reaches people who might otherwise not know or care you exist, and lets them know more about you and where to find you.
With social media, you can invite followers to make suggestions, and to receive coupons, eGift cards, and other discounts or specials, and to immediately pass on their experiences with your food truck to their followers.
Be sure to participate in food truck festivals and don’t forget to create a website so customers and their friends can find you more easily or even order from your cart online.
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