Opening Your Food Truck Business

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Opening Your Food Truck Business

A very popular trend in the food industry is owning a food truck. The food truck scene has been an ongoing trend in big cities for decades, but it has grown to become a worldwide foodie trend. If you are looking into starting your own food truck business, here are three great tips to consider so your business can be successful.

Do Your Research

It is important to research the area you plan to serve food. What food options are already around? What has or has not been successful already? How much competition is in the area? These questions are important to crafting your business strategy and menu.

Creating your own niche is important to standing out from the competition. Maybe you will have a unique twist on a traditional style of food, or you will just create better food than your competitor. Either way, research can help make important business decisions from the beginning.

Some other important things to research include:

  • Demographics to the populations you plan to serve
  • Where food trucks can park
  • Sporting events, fairs, concerts, and other places food trucks can go

This helps you start off on the right foot with the surest plan for success. The more you know and plan, the better you can prepare and market your business.

Calculate the Costs

Opening a food truck is a much more affordable option when compared to opening a brick-and-mortar restaurant location. Food trucks use a generator to power up their stoves, meaning the electric bill is different. While there might be costs associated with parking a food truck in some areas, there is not a recurring rent or mortgage payment each month.

Buying a food truck can cost anywhere between $70,000 to $130,000, depending on the age of the truck and the amount of customization required to get it to your liking. Buying equipment and getting it properly installed in the truck is another significant cost. You can plan to pay these all up front or get a small business loan that requires monthly payments.

There are also legal fees to consider for starting the business, like getting a business license, an employer identification number, food service licensing, employee health permits, and zoning and parking permits. Some areas may require mobile food facility permits too.

There are also operating costs to consider, such as:

  • Fuel costs for both transportation and operations
  • Paying and training employees
  • Ingredients and packaging
  • Costs to park the truck or participate in an event

Two other major considerations are marketing and insurance. For marketing, it is important to create advertisements with social media, banners, signs, and even physical prints. Each will have its own costs and depend on the area and target demographic. Catering to a digital media crowd will involve posting your daily location and sponsoring targeted ads. Others may prefer sending out coupons and parking in the same spot each day.

Food truck insurance is another important cost of doing business. It is important to find a food truck insurance policy that covers situations such as:

  • Truck damage from car crashes, vandalism, weather events, etc.
  • Automotive liability
  • Equipment coverage for damage or failure to fridges, freezers, grills, fryers, etc.
  • Employee accidents
  • Customer accidents
  • Foodborne illnesses

Any of these situations can financially overwhelm a business. Having food truck insurance can be the difference between staying in business or closing the doors forever. Since you cannot plan for every risk, having food truck insurance can fill in the cracks.

Once you have a full list of your expected costs, calculate them out to know about how much money you will need to bring in each week and month to cover these expenses. Do not forget to calculate in the amount of money you would need to pay yourself too.

Creating a Great Strategy

Using your research and expected expenses, create a business plan. This will help you get investors or funding to do your food truck. In your plan, you should include the following:

  • The company identity, goals, and reasoning for how it is different.
  • A market analysis including information about your target audience and your sales strategy.
  • A menu including seasonal considerations and future alterations.
  • Financial projections showing expected costs and revenue.

This type of business plan is great for guiding your path to starting your food truck. The more information you can gather before starting your business, the better you can prepare before you ever start the engine.

Let Us Help

While we cannot help you cook the food or create a killer marketing strategy, we can help with your food truck insurance needs. Working as your safety net, we can help cover your emergencies and give you peace of mind. Contact us for a quote today and see how we can your food truck succeed.