Why Do Food Truck Businesses Fail?

Why Do Food Truck Businesses Fail?

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Food Truck Businesses Fail

Although the mobile food industry has been growing exponentially over the past few years, some food truck businesses fail. Owning a restaurant on wheels in a good economy can be a challenge, but owning one in a down economy can be even more difficult.

We have put together the top 10 reasons why vendors in the mobile food industry have failed (outside of local legislation which in many cases is out of your hands). Take a look at your gourmet food truck or cart business and make sure you avoid these mistakes, to maintain a flourishing business.

Why Food Truck Businesses Fail

1. Constrained by Your Vision.

A savvy owner knows it’s all about the customer, not his or her personal tastes and opinions. Don’t be self-possessed. Be open to opinions other than your own.

2. No Identity.

Lack of identity is the opposite of being constrained by your vision. A food truck’s success depends on its ability to establish a brand and stick to it, so develop an identity and focus on perfecting it.

3. A Bad Opening.

“You never get a second chance to make a good first impression” was never truer than in the mobile food industry business. There’s a reason actors rehearse before opening night—you should too.

4. Hiring & Training.

Just like a bad opening, bad service will kill your business quickly. If your vision isn’t executed properly, the damage to your current and future customers is unavoidable.

Most food truck owners lack formalized training, procedural and operational processes. Learn from an experienced owner or hire a consultant for expert advice.

5. No Formal Recipes.

How can your kitchen staff maintain consistency without formal recipes? This step is critical to controlling costs, curtailing waste, and providing effective staff training.

6. Poor Inventory Management.

Outside of the initial capital required to purchase your truck or cart, the cost of food is a mobile bistro’s single biggest expense and, unless the financial control systems are in place, you are vulnerable to a drain on your cash.

Reducing inventory means a reduction in food cost, so manage your resources carefully.

7. Undercapitalization.

Unexpected and unforeseen events happen all the time, especially in a food truck business. In many instances, incorrect budgeting is the culprit.

Don’t get caught up in the dream of being profitable from Day 1 – make sure you’ve got money left in the bank to help you ride out the difficult days when your truck needs a new generator, or even a new engine or transmission.

8. Poor Ownership.

Don’t be an absentee owner. If you want to own a food truck or cart, expect to work. Otherwise, don’t expect to get paid.

But, and this is a big but, if you haven’t put the systems, tools, and people in place that allow you to step away from the day-to-day operations, then you haven’t bought yourself a business; you’ve bought yourself a job with a misleading title.

9. Insufficient Market Analysis.

A thorough examination of locations you plan to sell your fare is vital to know if it is to be successful and, once it is successful, staying on top of business trends will keep it that way.

This is another area where an experienced owner, marketer or consultant can help.

10. Lack of a Business Plan.

The previous nine points MUST be addressed in your business plan, and the plan MUST be right the first time. The business plan is what everything your mobile restaurant will do is based on.

It will force you to plan ahead, think about the competition, formulate a marketing strategy, define your management structure, and plan your financing, among other things. It is your roadmap to success. Do not proceed without a solid business plan.

This link will take you to an article we published about writing a business plan for a food truck business.

The old adage “failing to plan is planning to fail” is never more critical than in the mobile food industry. Avoid these top 10 mistakes and enjoy the fruits of your labor.

If you have any additional reasons food truck businesses fail and would like to share with our readers, please feel free to add them to the comments section below, Tweet us or share them on our Facebook page.

8 COMMENTS

  1. Hello Mr. Richard Myrick,
    I’ve read you post online titled, “Why Do Food Truck Business Fail?” Out sheer of respect for any author, and a spite for plagiarism, I would like to ask your permission to include your article in my business plan to answer how I plan to deal these 10 mistakes, and possibly encounter and correct many more to come:>). I thank you for the article and for your reply. Have a great day!
    Sincerely,
    Kathy Channing

  2. […] production increases, additional fees and licensing for new locations to sell your gourmet fare in. One of the top reasons many new businesses fail is because they don’t get enough start-up capital. (The other reason is poor management.) […]

    • Hi. I was wondering if you were a food truck owner? && Of soo how u started and is it a good business. Im young, and a Cosmetology Student, but my true passion is cooking. I would love to save money as a cosmo and eventually own a truck to start. sounds crazy but, im just wondering..

  3. […] We have previously written the primary reasons that food trucks have failed, in this article we wanted to extend the number of reasons and show how to avoid them. Owning a food truck requires the owners to wear many hats, and without the knowledge of some of the common shortfalls they can face, they can easily fall into these problem areas without even realizing it. […]

  4. Not having any food handling experience ( formal recipes ) as well as over complicating the menu. People don’t want to wait, keep your menu small and expand to a bigger menu later. ( specialize in doing a few dishes well )

    Secondly, You cant control the weather

  5. Great article!! Would like to add its crucial to establish ground rules with significant others on the time you’ll need to put in to be successful. Are they prepared… Also success at the cost of family, faith, and or health is actually failure.

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