Should Your Food Truck Be a Partnership or a Solo Business?
As you begin planning your mobile food business, you will have a lot of decisions to make. One of the most important decisions is centered around its business structure and whether or not you should take on any partners and if so, how many. These partners will be others who invest, assume the risks, and take profit in the business together with you. It is a decision that you must make early on as funding your food truck is one of the first steps to getting started.
You will find that there are many advantages to taking on partners. You will have to endure a much lower upfront cost than if you would open on your own. Even if you take out some loans, you will not have the bulk of the debt on your shoulders. You can establish how much each person contributes and what their ownership stake will be. You will also not have to make all the decisions on your own or take all the risks by yourself. Your partners will assume part of those roles as well.
Even though there are advantages to taking on partners, there will be disadvantages as well. Though you may have dreamed of opening a food truck for some time, you will not have full control over it. The partners will have a say in the operations that have to get done and decisions that have to be made. It will be necessary to work together even though everyone has different personalities and preferences. It is important that all partners should be kept happy. Of course you also will not see the full profits. They will be split according to the initial agreement.
Only you can determine if having partners is the right decision for your food truck business. If you opt to form a partnership it is important that you find the right partners. Just remember that not everyone will make a good business partner, even friends and family may not work out. This is a business arrangement and the people you choose to work with should be those that you can rely on in business. There are a few things you want to consider as you choose your partners.
- Take the time to choose carefully. Do not let close friends or family ties make you select someone that would not work well in mobile business. The people you select should understand business, be willing to work as you establish yourselves and have the ability to help with funding.
- Only select people that you fully trust. You will be placing a lot of personal and professional risks on the line when you open your business. You do not want to do that if you cannot fully trust the people you choose to work with. You should make sure that they will be honest, fair and trustworthy.
- To assure that everyone understands the agreement, set up a contract stating how everyone will contribute and what their ownership rights will be. This is something that should be established early on. You certainly don’t want to be surprised later on with having to dish out more money than you expected.
- Ensure that your goals are the same. You may have different ideas about how to reach the goals so you want to work them out first. However, you should all have the same goals and visions in mind for business matters.