Research & Refine your Business Idea
Starting a food truck business provides numerous opportunities but you’ll also have to overcome challenges. A more or less serious competition is one of the biggest challenges for many beginners.
It is up to you to establish your brand right from the start and differentiate yourself from other service providers.
Niche specialization is one of the easiest options for accomplishing the task.
The term “food truck” is pretty general and you can take the business concept in many directions.
In the past, food trucks were synonymous with fast food and street food. They offered hearty meals and convenience at a low price. Luckily, the concept has expanded massively since those early days. Today, food trucks can offer a range of interesting meals that will appeal to different customer groups.
Readily accessible gourmet foods, desserts, juices and smoothies, BBQ food, sushi, organic foods and even vegan options are just some of the already existing food truck concepts out there.
Each of these food truck businesses has a very specific clientele. Some reach a much broader group of people. Others appeal to a smaller group that’s characterized by a higher level of loyalty. You will have to determine which of the two concepts appeals to you the most.
These considerations will play a crucial role in the business model you’re going to adopt. Hence, you need to narrow down the food truck concept right from the start. It will be determining for the equipment, staff, funding sources and long-term business sustainability strategy.
Creating your Business Website
A successful food truck business has to be advertised online.
A quality website is the heart and soul of all digital marketing and reputation establishment efforts.
Your website will establish the brand, build your authority in the field, help you do local marketing and it will also enable you to connect with prospects in a more or less informal environment.
Investing in a quality website makes sense because it can be used to accomplish the following:
- Present a new concept and help it reach a larger audience
- Enable a newcomer to quickly grow their popularity, especially when a website has proper SEO
- Do local marketing to enable people to find the location of a food truck easily
- Present the menu and the concept and show the world how it differs from other food truck meals
- Feature an ecommerce section (for example – to order deliveries to offices or parties)
- Get feedback from customers and prospects about the quality of the food and the service
Setting up a website isn’t as hard as it may sound, in-fact, many hosting providers have tailored their service around small businesses who may not be tech savvy. We suggest going with BlueHost to host your website, they’re service is simple and easy to use/setup and they’re currently offering 60% off hosting, including free domain registration.
Additionally, creating a blog on your website is also a great way to attract organic traffic and expand your business. Checkout our full guide on the best and easiest way to setup a WordPress blog here.
Marketing Your Business
Food truck business marketing can be carried out in so many creative and inexpensive ways.
Even if you have a limited budget to allocate to the enhancement of your popularity, you can still achieve an excellent reach.
Online marketing is a great choice for all startups, regardless of the field and the specifics of the business. There are several reasons why. The cost per acquisition (CPA) is low and the prospects of reaching a targeted audience interested in the product or service are high.
Some of the greatest online marketing opportunities for food truck businesses include:
- Building a website that’s properly optimized for search engines
- Creating social media profiles (Facebook, Twitter and Instagram are all excellent choices)
- Doing paid social media campaigns to reach more people quickly (organic efforts take time to start delivering results)
- Creating entries in local directories like Yelp, Foursquare and Facebook Places
- Partnering up with food bloggers and influencers who can create honest reviews and get others to try the food
While online promotion is easy and inexpensive, it’s not the only choice you have to grow your popularity.
Local media are a wonderful source of views. Contact a local newspaper or a specialized foodie magazine. Organize an event that the media may want to cover so that your brand recognition can grow.
Offering free samples of your food or periodical discounts will also help you grow your customer count. Many people have to try a new food in order to adopt the service in the future. Hence, investing in such an event could win you a big number of new customers (especially if the quality of your food is high enough).
Setting Goals and KPI’s
Growing your business requires ongoing efforts.
You have to track your food truck’s performance in order to adjust the aspects of operations that aren’t working well enough.
Performance can be assessed through the examination of key performance indicators (KPIs). Some of the most crucial food truck KPIs include:
- Weekly sales: this one is an obvious that doesn’t need an explanation. The number should be consistent and with a tendency to grow.
- Repeat customers: if people are buying food once and they’re not coming back, you have a problem. A good percentage of repeat customers is indicative of a good product and a good service.
- Food cost percentage: the cost of food should be calculated as a percentage of the total expenses. The figure should be compared to weekly sales in order to establish an upward or a downward trend.
- Number of menu items sold: which meals are most popular? These are the ones you should focus on promoting more aggressively. In comparison, the least popular items could be eliminated from the menu.
- Number of customers at each food truck: if you have multiple food trucks, you can use this KPI to determine the attractiveness of each location.
Plan your Finances
Starting a food truck business is less expensive than opening a restaurant or a fast food joint.
Still, you’ll need to have a realistic budget estimate before getting started. Based on this information, you’ll pursue startup funding to get the business going.
A standard business loan is one of the opportunities that many entrepreneurs try. Banks and financial institutions, however, have strict criteria for the provision of business financing.
You can also look into something a bit more innovative. Crowdfunding makes a lot of sense but you need a strong concept in order to win the crowd over. Peer-to-peer lending is another potentially great choice when other sources of funding are limited.
Obviously, an angel investor pitch makes a lot of sense, as well. Investors, however, aren’t going to support every idea out there. You have to convince them that the business concept is profitable. In addition, you may have to sacrifice some aspects of the original concept or give control over.
Adopt an Entrepreneurial Mindset
Every single startup necessitates entrepreneurial thought and strategic planning to be successful.
You have to adopt the entrepreneurial mindset, even if you’re getting started with a single truck and you’re making the food on your own.
Having a long-term goal and a viable horizon for achieving the expansion will help you grow your food truck business. Eventually, you will earn enough revenue to hire staff and to increase the number of food trucks you’re utilizing.
Educating yourself all the time is of paramount importance.
Luckily, startup owners today have access to dozens of wonderful resources.
When it comes to food truck businesses specifically, there are educational materials worth purchasing and studying in depth.
The Food Truck Handbook by David Weber is a popular choice. It highlights profitable niches, how to create a business plan, what the best industry practices are and which tools will be required to manage every single aspect of the operation.
Running a Food Truck for Dummies is a choice for absolute beginners who want to commence from the very basic concepts. This is the first one to begin with before moving on to more complex business and entrepreneurial guides.
Other things to consider when starting your food truck business
The legal requirements for starting a food truck business vary from country to country. Since the preparation of food is involved, however, there will be strict criteria that all businesses will have to meet in order to get licensed and certified.
In the US, for example, food truck businesses need a whole host of licenses and permits. These include a vehicle license, a food handler’s permit, a Health Department Permit, fire certificates, employer identification number, business license, etc.
In the UK, you will need to register with the Food Standards Agency and with a local authority at the place where the actual food truck will be operating. The process has to be completed at least 28 days before business operations commence.
As you can see, you will need to do a lot more than register a corporate entity.
If you’re clueless about the specifics, talk to an experienced corporate law attorney. While legal advice can be costly, it can save you a lot of time and it can also save you money in the form of fines in the future.
Accounting & Bookkeeping:
If you’re going to be working in the food truck, you’ll probably lack time to manage accounting and bookkeeping.
Maintaining financial documents in perfect order, however, is of paramount importance for ensuring regulatory compliance.
Anyone who is serious about a business idea should hire an accountant. Even if you don’t have the funds to outsource the process to an accounting firm, you can still find a reputable freelance accountant to manage your financials.
Getting a good financial software product is also important.
Xero has been ranked as one of the best accounting options in the food industry.it is ideal for companies that have one to 10 employees , it enables payroll processing, POS integration, inventory management and the creation of detailed financial reports.
Sooner or later, you’ll need experienced employees to keep the business growing.
Look for people who have experience in the field of food truck service provision. Those who have been employed in the restaurant field could also give your business access to valuable know-how.
If you’re just a business manager and entrepreneur, you’ll need to partner up with an experienced chef who will create the meal items. Even if these are simple to prepare, somebody will have to train your food truck staff how to make each meal from scratch (quickly!) and how to communicate with customers.