6 Reasons to Start a Food Truck Before Opening a Restaurant
Taking the work food truck owners have put into their mobile businesses and leveraging it into brick and mortar restaurants is a trend that started a few years ago in the mobile food industry. From New York to Texas to Portland, food truck and food cart owners are expanding their empires with very few if any having to close within the first year. This lesson is something hopeful restaurant start ups should consider before opening the doors to a new restaurant of their own.
With only a forty percent chance of success in the first year, starting a restaurant (as with most small businesses) is a high-risk venture. There have been many articles, guides and books that have been written to assist in improving the odds of success. The majority of reasons restaurant fail are avoidable. Lack of experience, lack of capital, poor locations, inventory mismanagement are common mistakes found in floundering restaurant businesses. Often would be owners have a great restaurant idea and lots of motivation but little knowledge or experience of the restaurant industry.
Many factors go into running a successful business and many owners do not realize the skills and knowledge needed to start and keep their restaurant successful. Turning a profit is crucial undoubtedly; however, a profitable restaurant can be shut down for repeated health or safety codes.
The food service industry and economy are constantly changing. Restaurant owners must stay abreast of trends, regulations, consumer wants and a number of other dynamics. One way to obtain these skills is to start small, and why we feel that in most cases starting a food truck before plunging into opening a full restaurant is the best ways to help improve your odds at opening and maintain a successful restaurant.
Here are 6 reasons many prospective restaurant owners should consider opening a food truck first:
Less Skin in the Game
The costs involved in opening a restaurant vary based on the concept you develop. Opening a high end dining establishment can start at 500K and can run into the millions. Opening a food truck using the same style (only smaller) of menu can cost as little as $50,000. By starting small, you will learn many of the same lessons in a truck as you would in a restaurant. Operating any food service business is risky, but if your idea fails, would you rather have a smaller investment to lose than a much larger one?
Build Your Brand
Building a successful brand for a restaurant can take years. If you take the wrong path in developing your restaurant brand, it will take much longer since you will have to re-brand until you get it right. Operating a food truck allows a culinary entrepreneur to make modifications to their brand as easily as it is to find a new location to park in. Once finding a brand that works, you will be able to build up a base of customers that will in all likelihood follow you into your new restaurant.
Work Out the Kinks
Operations in a restaurant is what will make the business run smoothly. From your customer service to the way you order and prepare the food you plan to serve your customers. Operating a food truck requires that most owners learn every job within a truck. This will give you incite in how to improve your operational systems that will eventually translate into your restaurant.
Understanding Your Local Legal System
Unless you have an attorney that has extensive experience in the process of opening a restaurant, it can take a lot of time and effort to navigate through most community legal systems. Permitting for and construction and operations can be a daunting task, but it can be even more difficult to walk through for food truck owners. Getting to know your local municipal permitting organizations will be a valuable tool once you determine it’s time to plan for your restaurant. You will get to know the individuals in the permitting office as well as the health department. Building a rapport with them as a truck own will easily translate once you begin your restaurant permitting.
Get to Know Your Customers
So who is your target market? Will it be the over 40 crowd looking for a fine sit down meal with linen napkins or the new generation of millennials who are looking for locally produced meals with a gourmet flair? Until a food business opens their doors and customers start showing up, it can be difficult to understand who they are. By creating a food truck menu, you will be able to find out what types of food will be a success with your targeted customers and which will bomb. You will be able to test various menu options without needing to revamp your entire kitchen as most trucks have the exact same types of kitchen equipment a restaurant has. What are your customers willing to pay for particular items? While food trucks typically have lower price points than their brick and mortar competitors, you can easily scale your truck’s menu to a full service restaurant menu with a little basic math.
Location Location Location
Finding the best location for a restaurant is one of the key ingredients to operating a successful restaurant. At times it can seem like a crap shoot in finding the best location to plant your roots. By operating a food truck in your local area, you will gain the understanding of where your customers are coming from, and how to bring a storefront into their neighborhood. Once again, by running a food truck, you are able to speak with your customers and get to know them and where they live or work. This is invaluable research data that can only be tested if your concept is mobile.
By opening a food truck or food cart first, you have helped yourself in beating the odds that the typical start up restaurateur has to deal with.