To run a successful food truck, you need a well-crafted food truck business plan. Here are three tips to help shape your idea.
Ready to take your restaurant on the road? A food truck expansion can be a great way to drum up new customers and expand your offerings without the cost of a new location. But you need a solid food truck business plan to turn your dream into a success. There are many moving parts to a thriving food truck (literally), from startup costs to appliances, staffing, marketing, vendors, and more. Here are three food truck business plan tips to help you serve up good eats on the road!
So you’re planning on expanding your restaurant to include a food truck? Great idea—but where do you begin?
Constructing a solid food truck business plan will set the foundation for success. In the last several years, food trucks have become increasingly popular. They’re on the rise everywhere, and the competition is fierce. A detailed food truck business plan that helps set your overall budget, costs, brand, and short-term/long-term goals will separate you from other restaurateurs.
IBIS World reports that the food truck industry in the U.S. makes about $1 billion in total annual revenue. With mobile restaurants at the height of popularity, your food truck business plan will help you find success amongst the others.
If you’re building off an already successful restaurant, you already have a heads up on the competition. Incorporate what’s working in your establishment—the most popular dishes, food that travels easily—and use a food truck to expand your profile. Not only will you draw in new customers who might be attending festivals and events, but it’s a great “half-step” to expansion. You won’t accrue the typical overhead cost from a brick-and-mortar building, and you can use your food truck to measure interest in other areas before you open a permanent location.
Think you’re ready to grow? Don’t run out and buy your truck just yet! First, sit down and write out your plan. Take a peek at these tips for drafting a helpful food truck business plan and start your growth on the right foot.
3 Top Tips for a Great Food Truck Business Plan
1. Make a Budget and Figure out Funding
Launching a food truck is a little different than launching a typical restaurant. In many ways, it’s far less expensive and risky, but there are certainly a few considerations before you take the plunge. If you’re starting a food truck, be sure you consider the following common mobile food startup expenses:
- Insurance for both your food business and the vehicle itself.
- Food ingredients, beverages, vendor costs.
- Cooking appliances and cleaning supplies beyond what you have in your base kitchen.
- The right technology options to process and receive payment on the go, such as an iPad Square Reader.
- Truck wrap, décor, lighting, accents, and branding that complements your restaurant design.
- Routine vehicle maintenance costs, including gas, tire rotations, oil changes, and cleanings.
- Disposable eating utensils and service ware.
- Local food service regulations, licensure, and coding costs.
- Staffing costs, including driving and operation of your food truck.
- Marketing costs to promote your new food truck.
The above list might seem like a lot at first, but that’s where your food truck business plan is crucial. The purpose of putting together your food truck business plan is to ensure no detail (no matter how small) is forgotten. Outlining a list of what costs to expect will help give you a better idea of the total investment you’re looking at and what type of funding you need to secure.
Like most restaurant owners, you’re probably running on a shoestring already. The good news about a food truck is that it allows you to expand without the overhead costs of another location. In addition, it lets you get a feel for traffic in certain areas, tests out your expansion model, and tests the business performance before you commit.
2. Check out Competitors and Think Outside the Box
What better way to see the competition you’re up against than to sample their food? In addition, gaining a solid understanding of the other types of food trucks in your area will help you curate a mobile business that’s unique from the rest.
You’ll likely base your menu primarily around your current offerings. So, for example, if you run an Italian restaurant, you may offer Italian beef and sausages. Or, if you run a Mexican restaurant, you might expand to include a taco truck with your more popular options.
One of the biggest appeals of food trucks is their ability to create crazy, out-of-the-box flavors, menus, and new experiences. But, keep in mind, sometimes finding a niche and focusing all your efforts on just that is worth it. Food Truck Empire says it best:
“With a food truck, you can really focus and perfect a few unique menu items. Some food trucks can cut their offerings down to literally only 2–3 menu items and continue to be extremely profitable.”
So, take a risk and try something one of a kind. Odds are, when customers come across your kiwi desserts-only food truck, they’ll find themselves majorly intrigued. So, take what’s working in your current business and share that success with the masses on the go.
Remember, developing your establishment’s brand, menu focus, style, tone, personality, and exclusive character in the early stages of your food truck business plan will help you better plan ahead for the future. In addition, a clear understanding of how your food truck is different and innovative will come through in your marketing efforts to get people in the door successfully, or rather, at your window.
It’s also important to understand your market. For example, businesspeople might be looking for a light lunch at noon, whereas festival-goers and pub-crawlers might want deep-fried offerings. You’ll need to look at the popular dishes in your area and then decide what’s appropriate for your market.
Outside of the actual eating element, observing how the most successful food trucks in your area communicate with customers, handle payment, set their daily hours, and other tasks will help you get some good ideas for outlining your own logistics in your food truck business plan. You might be a seasoned restaurant professional, but learning from your competition is a smart way to create a solid food truck business plan if you’re new to running a food truck.
3. Set Clear and Measurable Goals for Yourself and Your Food Truck Business
Yes, it’s true; unfortunately, food truck businesses fail. According to Mobile Cuisine, zero marketing strategy, not developing a detailed budget, and lack of planning are just a few significant reasons these trendy mobile establishments fail. Lucky for you, a food truck business plan is meant to cover all those bases for you! The most important one to never forget is setting goals for yourself and, of course, the business.
The other piece of good news is that if you’re already running a successful restaurant, then you’ve likely learned a few things about keeping yourself afloat. A food truck business might be a little different from a brick-and-mortar storefront, but many concepts are the same. So build on the places that you’re finding the most success already.
Long-term and short-term goals will help keep you accountable as the owner and your business on the right track towards success. Consider asking yourself some of the following questions:
- How profitable do I want my food truck to be within the first three years?
- What is my timeline goal for paying my investors back?
- How often will I work at the food truck weekly and check-in?
- Do I see myself opening more food trucks in the future? If so, when?
- How much of a salary will I take home, and how much will I put back into the business?
Take time to really think about the above questions, get the creative juices flowing, and get you thinking about the future of your business. Ask others on your team too. Get the input of your chef, your front-of-the-house manager, and others. They may point out blind spots and help you shore up any gaps in your plan.
As you move forward, share goals with your team. Whether you’re extending your current team to cover the food truck, or you plan to hire more staff, they may have valuable insights to help your business become a success. In addition, you and your team can have something tangible to work towards by setting goals that align with your food truck business plan.
According to Bigger Pockets, it’s also essential to make sure that annual goals spelled out in your food truck business plan are specific enough to motivate everyone on the team. For example, instead of, “We will increase our revenue steadily,” try, “We will increase our revenue by .5% each month.” Setting specific goals (SMART goals) within your food truck business plan will help you stay on track and measure success as you go.
Interestingly, only about 5% of small businesses reach their annual goals. In the cutthroat food business, goals and growth monitoring are incredibly crucial. Margins run the industry, so even small successes can differentiate between survival and shutdown. Continuously monitor the performance of your new food truck endeavor and see how it compares with your restaurant performance.
A wonderful aspect of food trucks is that they’re mobile and allow for a lot of flexibility. If you see that your truck is underperforming in a particular area or situation, you can experiment and change up your path before you’re too far in. A food truck is different from a restaurant, with no front-of-the-house to manage, minimal staff, and a condensed menu—BUT when successful, it can also be an excellent moneymaker for your restaurant (and a great promotor of your establishment).
If you’re ready to grow your reputation and reach, consider a food truck as the next step of your journey. With so many creative ideas out there, chances are you’ll find a niche that’s right for you. Set up your food truck business plan, set goals, and plan ahead. Your food truck business will be booming before you know it.
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