When the idea of starting a food truck business envelopes your thoughts for weeks, one of the first things you must do to convert your dream into a rolling restaurant is to draft up a business plan. Whatever you do, don’t think that a mobile food business is too small to have one. Even for the vendor selling hot dogs out of a small cart, it’s a good idea to get clear on where you are today, where you plan to go, and how you plan to get there.
First, let’s take a look at why prospective food truck owners need to create a business plan:
- It provides you with a detailed road map so you can take your idea from a dream, into something real.
- It is a great sales tool you can present to potential investors, loan officers, friends, and family if or when you seek financial support.
When crafting your food truck business plan, remember that it should be designed for three potential audiences: You, Angels and Venture Capitalists.
The document may be for personal purposes only, to help you spot potential problems, to plan for future concept development, restructure your finances, and review your successes.
Or you may be using the plan to secure funding, in which case your audience will be angels. There are several different types of angels, including parents, siblings, friends, or anyone that you have a personal connection. Angels typically believe in you and your ideas and don’t mind providing a few dollars.
Then there are those angels who are investors looking for a higher return on their dollar than they may get in traditional investments. These folks are usually successful entrepreneurs who want to help other entrepreneurs get their ideas off the ground, and will lend their expertise as well as their money.
Venture capitalists, or VCs, are investors who will fund your food truck enterprise if they think it will be profitable for them.
These are usually strangers or friends of friends, and 99% of the time, you won’t be meeting with them first to sell your business idea. So your business plan needs to do all the talking and make a great first impression. Please note that a start up food truck business will rarely have VC’s knocking down their door since the ROI a food truck provides is usually not within the range of interest of these investors.
Here are a few common issues to avoid when writing your food truck business plan:
Not having a business plan ready
Potential investors are all around you. They’re sitting next to you on the plane or at your neighbor’s party and you truly never know when this type of opportunity drops right in to your lap. So, all you can do is be prepared!
You want to give yourself enough time to give your food truck business plan the thought, attention, and care that it needs. Otherwise, it will be full of half-baked research, typos, and a less than convincing case for not only your future food truck business, but also your credibility. So, don’t drag your feet or wait until someone asks you for one. Get it ready now.
Not making a convincing case
The entire point of your business plan is to convince the reader to believe in your mobile food business idea. So, you want to present a well-defined problem in the market, and how you and your food truck will solve the problem. Usually, you will do this by providing evidence, aka…market research, which could come in the form of statistics, trends, or expert analysis. The more you build a case that there is a real need in the market for your menu, the more viable your food truck will appear to be.
Not getting to the point
If your readers get bored while reading your plan you’ll never get their monetary support. Keep your business plan concise, exciting, and to-the-point. For starters, it should only be between 20-30 pages long. Add a few formatting tricks to make it easier on the eye.
Break up your points with headers and subheads that pop out to the reader. Use bullet points instead of big blocky paragraphs. Add a few colorful charts, tables, and graphs when you know that your point will be better communicated visually. Don’t go overboard, but do be sensitive to your readers’ attention spans.
Not mentioning your team
Investors know that an unoriginal concept executed by a great team often has a better chance of succeeding compared to a fantastic new concept in the hands of a weak and inexperienced team. No matter how big or small your food truck business, make sure you include a description of all of your key team members. Spend some time presenting all the credits and experiences, so you can assure your readers that the company is in good hands and on its way to success.
Now that we’ve provided you some information about why and what to avoid when developing your food truck business plan…get out there and get it written.