Dies - How to Start a Food Truck

How To Start a Food Truck

By J.H. Dies

A Newbiz Playbook Publication

J. Hilton Dies retains the exclusive rights to any use and training applications of How to Start a Food Truck Business. Copyright 2017 by J.H.Dies All rights reserved. Printed in the United States of America. No part of this book may be used or reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles and reviews. For information address Newbiz Playbook Publishers at

FIRST EDITION

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Chapter 1. Is The Food Truck Business for You?

Introduction

So youre thinking of starting a food truck? Congratulations! The food truck business is booming, and it is providing incredible opportunities for young entrepreneurs to test concepts, and expand brands beyond for wheels to mini restaurant empires. If this is what you have in mind, welcome aboard. We are here to help!

The food truck business isnt exactly new in the market, but the number of food trucks has increased from the year 2007 to 2012 as many street food lovers prefer to eat their food outdoors and on the go. In fact, a market research report made by the IBISWorld showed that from 2011-2016, there was another remarkable rise in the industry as a whole with a total generated revenue of $870m and also an annual growth of 7.9% in each of those 5 years.

Where you make your money in the food truck business may also surprise some new business owners. The IBISWorld study also showed that 55% of total sales were found in street corners while 18% were from events. About 15% were from construction sites, with the other 12% coming from shopping malls.

As you can see, the industry is a vastly growing one and is still continuing to grow steadily.

What exactly makes a food truck very appealing to the public? For one, most people, especially those working in dynamic fast paced urban environments dont have time to sit down and enjoy a meal. In a fast paced society like ours it isnt surprising to see people rushing to work, then rushing to lunch, and then rushing back to work again.

With this kind of lifestyle, its hard to sit down and enjoy a steak. Hence, many people turn to food trucks because aside from the good food they serve, the variety of delicious offerings, and because they don't need to wait long to get their food. All of these reasons for the attraction to food trucks should factor into how you design and plan your food truck business. For example, if your proposed offerings are the sort that take long lead times, or will have customers waiting for their food, you should look to how to reduce the time from order, to service with advanced prep etcetera. Otherwise, your business will suffer, because its offerings are directly counter to what draws clients to your truck in the first place.

Secondly, food trucks traditionally serve food cheaper than most establishments because of the relatively low overhead. This is a major advantage you will have with your truck. However, you will want to find the sweet spot between being less expensive than a brick and mortar restaurant, and getting to margins that will help your business grow.

As compared to an actual establishment, food trucks demand less overhead (well go into the details of the expenses later) and no waiter or server charges. In a slowing economy, people tend to try to save as much money as they can to get by. With food trucks driving around, you can bet that people will opt for the cheaper choice instead of dining at an actual restaurant. Again this should play a role in your decision to include high cost items in your offerings. While you may have a great recipe with steak or lobster, you will want to be strategic with the options you offer on your menu, for folks who may not want to spend at that level.

For these reasons and more, we believe starting a food truck could be an excellent business opportunity. Later on in the book, well be discussing how to get started in a food truck business and what to do to keep it running.

Without further adieu, lets get started...

Chapter 1. Pros and Cons of the Food Truck Lifestyle

The food trucker lifestyle isnt exactly for everyone. If youre going to venture into this kind of business, then you have to be prepared to be very hands on, since food businesses, in general, need complete supervision, especially for startups. To further determine whether a food truck business is for you, lets go through the pros and the cons so that you can weigh each aspect and make a decision as to whether youd want to pursue the venture or not.

Pros of Opening a Food Truck Business

1. Low Overhead Investments

As mentioned earlier, opening a food truck business requires relatively low overhead costs to start up as compared to a restaurant. All you need is a truck, a kitchen, equipment, inventory, and extra money for maintenance and gas. The rest can be spent on marketing and advertising. For the truck, you can actually rent food trucks for a fixed rate and add your own design as long as your decorations and art can be taken off. In fact, that is what you should do to test your concept, and a truck you are considering buying, before shelling out big cash. More about that later.

It is cheaper in the long run to buy your own truck, but for those who are low on budget, renting can be a good startup option. You also need a kitchen, sometimes called a commissary where food is prepared, prior to the business day. These are available for rent, but in the beginning, unless there is a need for commercial equipment, it is best to use your own kitchen. Why a kitchen? Newbies to the food truck business sometimes believe that food prep can easily be handled in the truck, or on a cook to order basis.

First, operation of food truck kitchen equipment is much more expensive than your own kitchen, whether it be propane for gas, or an electric generator fueled by gasoline on the truck. Second, a key to your success will be the speed at which you can serve each item on your menu. Thoughtful prep, should be used to in every possible way to reduce cooking and serving times. Long lines of people waiting on food will drive away customers.

Very successful food truck businesses evolve to a point, where there is a prep team, and sometimes even a runner who is constantly delivering pre-cut veggies, or extra supplies of sliced meat etc.

You will need kitchen equipment and supplies for preparing the food (e.g. stove, pots, pans etc.).

1. Easy to Get Customers

As compared to the regular food establishments, food trucks will usually go to their customers and not the other way around. For a typical restaurant, the establishment will wait for the customers to come. In the food business, there are peak hours and dead hours, with peak hours being the time with the most customers (usually during lunch and dinner time) and dead hours wherein there are little to no customers (usually after lunch or late afternoon when everyone is in the office).

The great thing about food trucks is that during dead hours, they can go around and look for business because theyre mobile anyway, or they can use this time to prep for the next busy time, using a reduced staff. Your business wont have waiters sitting around waiting for a single late diner, and a manager overseeing them.