Food Truck Business 101

October 2, 2012

Right now, there are about 3 million food trucks on US streets and more than 5 million food carts. These numbers are growing, daily. It’s a good time to be an entrepreneur in the food industry – that is, if you’re in the food truck industry. In general, this business has significantly lower start-up fees than creating a restaurant. It requires lower overhead, fewer employees, and cheaper rent and licensing fees.

But, all in all, that doesn’t mean this business comes with fewer decisions than opening a restaurant. Below, we’ve listed some of the more important choices you will have to make regarding your business, prior to opening

  1. Pick your target market. The first decision that you should tackle in the food truck business is assessing who your target customers are. Are they locals, tourists, shoppers, workers, adults, children, seniors, gamers, health-conscious individuals, etc? Once you decide on whom you’re going to serve, you’ll have an easier time (2) tailoring your menu, (3) deciding on the way you want to deliver your food items, (4) picking your location(s) and (5) getting your financials in order.

    Choose the market(s) that you can serve the best. The moment a customer approaches your mobile stand and makes a purchase, he is hiring you for a job he needs done. Does he need energy? Is he bored? Is he looking for an indulgent snack? Customers may approach you to solve several different problems, but knowing what these problems are will help you mold your solutions to meet your customers’ needs.

  2. Tailor your menu. Create a menu that addresses your customers’ desires. Ask yourself, “Why are customers coming to my truck rather than to a sit-down restaurant?” Most likely, it boils down to time and cost – at least, for the first visit. It is only after a customer has tried your food or heard about your stand through word-of-mouth that he will know the quality and diversity of your menu items.

    Therefore, ensure that you address the customers’ key concerns first. When drawing up your menu, make sure that the offerings are possible in lieu of time and space constraints.

  3. Decide on a vehicle. How much space do you absolutely need? Do you want a food cart, a ‘bustaurant’ (a refurbished double-decker bus where patrons can dine on the top level), a food truck, or a school bus? Here are a few things to consider when looking at vehicles:
    • The size of the kitchen
    • Gas mileage
    • The types of fuel each vehicle takes
    • A state’s licensing fees for the chosen vehicle
    • The cost of the vehicle (new or refurbished)
    • The type of food you’re going to prepare
    • How you’re going to design the outside of the vehicle
  4. Establish a location or locations. Pick locations that are as close to your target market(s) as possible. If you plan on moving to different locations throughout the day/week/month, update a social media site with this information so that you can readily be found.
  5. Make a financial plan to support your business. Budget out all of your start-up costs, including: a vehicle, permits, licenses, ingredients, marketing and promotion, parking and vehicle maintenance, packaging, a commercial kitchen rental, and kitchen supplies. Totaled, on average, these costs range from $50,000 to $80,000.