A few weeks ago I attended a small business conference centered on the idea of “lean startups”. Since that meeting, I find myself using terminology such as “lean startup”, “iterate” and “A/B testing” when discussing the mobile food industry. It’s true that Eric Ries’ Lean Startup has become a must-read for early-stage technology entrepreneurs, but that’s no reason restaurant or food truck owners can’t tap into these concepts.
Let’s face it; a lean startup in the food service industry is the food truck.
Food Trucks: The Lean StartUp Model Of Foodservice
While Ries’ concepts may seem like they fit best in Silicon Valley, they’re actually grounded in good old fashioned business sense. Below are a few ways restaurants and food truck vendors are already benefiting from Lean Startup lessons on risk management.
Ries describes shipping minimum viable product (MVP) as a way to test customer demand and avoid unnecessary waste. The idea here is to show early prototypes to trusted and potential customers before actually spending all your capital on developing a full-fledged product line. While Ries’ technique is applied primarily to web-based businesses, the principles are the same for those dealing in food. For example, a food truck owner might do a private new menu tasting before deciding to spend the bulk of their monthly budget on new ingredients and inventory.
A/B Testing refers to when companies create 2 different messages on a single product or service. The idea is that the responses to each message are tallied and the winning message is then developed into a more permanent effort. If you’re a food truck, this might mean that you send slightly different emails to two different groups of customers. The message with the higher open rate might then be considered in your food truck’s website copy.
The idea of the “quick pivot” is to avoid throwing good money after a poorly executed or even bad idea. In Lean Startups, Ries might say a company “pivoted” to better optimize for profit. In a food truck business, we’d simply say they figured out their business model. For example, the owner of a truck might find that their catering sales make more money than their daily stops. By pivoting away from day to day parking stops and moving to private catering, the food truck owner is able to avoid costly overhead while still maintaining a growing profit.
Restaurant owners can greatly reduce their startup and operation expenses by starting off as a food truck. I imagine that by using a truck, the business owner would save a load of cash savings from a lack of electricity (heating and cooling, lighting), service (less area to maintain, fewer cooking and wait staff necessary), and rent.
The food truck also provides the vendor a concept and menu proving ground. For those who find the truck works for them, they are free to keep operating it, or they can move the developed concept into a brick and mortar location close to the spots the truck made its best sales.