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Food Truck Business Plan

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Food Truck Business Plan

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.

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So you’ve decided you want to start a food truck but you don’t have the start up capital to do it on your own. A business plan for your mobile food business is going to be an important first step, but if you’ve never written one, you may wonder what you have to do to complete this task.

how to start your food truck business plan

How does one get started on a business plan? There is no absolute route to follow, it depends on who you are, what you do well and how you think. The people who own food trucks (or those who want to) are all different.

An easy way to look at business plans is to see it as a collection of components or modules, that can be started wherever you feel most comfortable.

Here are five areas of a business plan you can start with depending on which one is best for you?

SWOT Analysis

This is a collection of thoughts organized into four categories: strengths, weaknesses, opportunities and threats. Ideally you gather a small group of people together for just an hour or two, you have somewhere to write out thoughts into bullet points. The SWOT almost always leads to simple, practical strategy.

It’s really hard to do a SWOT without thinking about how to focus on strengths, work around weaknesses, seize opportunities and avoid threats.

More information on creating a SWOT Analysis

Simple Sales Forecast

Your sales forecast is a snapshot of what you think your food truck revenues will be for a few months at the very least, ideally 12 months by month and two more years just annually. Break your forecast into tickets, average revenue per ticket, number of sales, average cost per ticket. From here, the math is simple. Sales is the number of tickets times revenue. Costs are tickets times average cost per ticket.

What happens to most people is that thinking through the details of the sales forecast gets you into business planning. You can’t help thinking about prices, costs, target markets, strategy and focus.

Mission Statement, Vision Statement and Mantra

The mission statement is about what your food truck business does for the customer, the employee, and the owner. The vision statement is a view of what you want your mobile food  business to be three years from now. And a mantra is a simple sentence summary.

Try to avoid simple hype. Test it yourself by asking these questions:

  • Does this describe my food truck in a way that it differentiates it from my competitors?
  • Would a customer read this and identify my business with it?
  • Is this what one customer would tell another about your food truck?

Develop your core market story.

Invent an ideal customer and tell yourself the story of how they identify a problem, or something he or she wants, searches for it, and finds your food truck. Make the story an explanation of what the problem was and how your mobile food business solved it.

Talk to 10 Prospective Customers

I’m always amazed at how much business thinking comes out of the simple process of talking to real people about your real business. Do it right: Find people willing to talk to you and take some time with them. Start by making sure they don’t think they are supposed to tell you what you want to hear, but rather, the truth.

Any one of these five first steps might be right for you. All of them can help you get going, and they are all good steps to take regardless of what follows.

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food truck business plan

If you don’t have a food truck business plan yet, we explain the importance of it and why you need to start one today.

Have you ever thought that starting a food truck business or other variation of a mobile food eatery? Whether you are already culinary trained or a home based foodie who is interested in taking their show on the road, there are a few things to consider before taking the time, money or effort to begin your adventure. A common question we receive is how to attain capital for starting a food truck business.

In today’s economy, many have drained their savings accounts, and maxed out their personal credit lines. Because of this they need to reach out to others to get this money. The solution lies in coming up with a well thought out and professional food truck business plan that can be submitted when they apply for loans. Unfortunately, many people have never learned how to write a proper business plan and immediately look to the Internet to search for a food truck business plan sample or template they can purchase. In our opinion, this is the wrong solution.

Don’t buy a food truck business plan sample

When purchasing a food truck business plan sample, people often force their concept into the boilerplate template rather and creating a plan that highlights it. A friend of MCM had recently made this type of purchase, filled in the blanks and gave it to us to review. Our first question was how he had determined that within his first five years he would have 15% growth annually. His sheepish answer, “it was in the food truck business plan sample.”

There are certain points that financiers will look at when reviewing you loan application which will include a food truck business plan. Too many of the available templates just don’t cover them.

When you sit down to start writing your plan, you must remember that it is your argument to show your idea is worth backing. Those that use the excuse that they cannot write a food truck business plan are the same people who have never thought out all of the aspects of starting a food truck business. In other cases they may have thought out the business aspects, but have not taken the time to understand what holes exist in them.

Questions a food truck business plan should answer:

  • What problem or problems exist that your business is trying to solve?
  • What is the potential consumer’s pain?
  • How deep and compelling is this pain?
  • What solutions does your business have to resolve the problem(s)?
  • How much will it cost to solve these problems now?
  • What will the customer pay you to solve this problem?
  • How will solving this problem make your company a lot of money?
  • What alliances or relationships can you leverage with other companies to help yours?
  • How big can your business growth if given the requested capital?
  • How much cash do you need to find a path to profitability?
  • How will the skills of your business team, their business knowledge, and track record of execution make this happen?
  • What will be the investors’ exit strategy?

food truck business planOne additional word of advice; once you have written your food truck business plan but before you pass it on to a lender, do as our earlier example did, have it reviewed and read by a friend or relative. After they have read it, have them give you a verbal explanation as to how they think your new business will work, based on your plan. If they do not understand the plan or cannot explain the business concept from what you have provided, there is a very good chance that a financier will not understand the business concepts either.

If they have questions, incorporate the answers into the plan or clarify an answer so that the question is automatically resolved when the financier reads it. In most cases, this is a business that you know about. This becomes another stumbling block people will run into. They write their business plan so that it is self-explanatory, but leave it at that. The business plan you write for your future food truck, cart of catering venture must make sense to those who are reading it, and most of them, know nothing about our industry.

We hope this article was helpful for those of you who maybe thing about starting a food truck business.

Still have questions about writing a food truck business plan?

You can find a full breakdown of each food truck business plan section in my book, Running a Food Truck for Dummies. If you’ve read the book and still have questions please feel free to submit a question in the comment section below or to admin@mobile-cuisine.com, we promise to get back to you as soon as we possibly can about your food truck business plan.

 

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One of the most popular articles to date at Mobile Cuisine is Writing a Food Truck Business Plan where we covered the aspects of writing a business plan for your future food truck business. Due to its popularity, we are in the process of putting together a through example of a plan that will be downloadable for our readers use. Until that project is finished, we have decided to add another article for those currently working on a plan and are having a tough time finishing it.

jump-start

The most common question we receive on this topic is how long it should take to put a complete project together. Unfortunately, it’s not something that you should be able to develop overnight unless you have quite a bit of experience in putting business plans together. Because of this, we felt we would give you some tips to help in your business plan creation.

Rome Wasn’t Planned, Funded, and Built in One Day

The process of putting together a coherent business plan will probably take longer that you estimate. Along the way you will probably stop and think, “you know, we haven’t really thought our strategies out very well, have we?” or “we don’t really know our competition as well as we thought we did,” and you will take the time to hone your strategies and get up to speed on the competition before you finish the plan and present it to prospective lenders.

Start Small

Start your business plan as an outline. By breaking the large task down into smaller components, the task won’t seem as scary. Your business plan should be looked at as simply as the answers to a series of questions.

Change Things Up

The visual aspects of the document should not be overlooked. Color charts, tables of data to break up the text, paragraph headings and varying the typestyles all contribute to making a plan easier to read and to clearly explain your thoughts.

Study

People who write novels are generally those who have read many, many, stories. They learn their craft by studying the works of their favorite authors. You need to do the same thing. Look at examples of business plans to get in your mind the writing style, the sequence in which the ideas are presented, and the parts to a plan. Sample plans are available on the Internet at sites devoted to assisting entrepreneurs in just about every business. I would suggest looking at plans structured on a restaurant, bar or if you can find one, another food truck.

Pick An Easy Section

If you have never written a business plan before, you may have difficulty getting the project started. It will seem as though you have an awful lot of blank pages staring back at you. To get the plan moving, start with the section that is easiest for you, or of most interest.

Quality Time

People often underestimate the effort and energy it takes to write a business plan. They try to write it at night or when everything else at work is finished, in other words, when they are mentally and sometimes physically exhausted. A better approach is to write the plan when you have energy available to put into it: go in early and think and write for an hour before the phones start ringing.

The First Draft

The first draft of your plan will undoubtedly resemble incoherent ramblings or a jumbled stream of ideas that look nothing like what you had hoped it would. Don’t let this get you frustrated.

Take A Break

Put the draft away for a few days, come back to it fresh, and begin revising and rewriting. Magically, after several more revisions, the ideas will all come together and the language of the plan will flow.

Your Plan Needs To Look And Sound Like You

Your business plan should reflect the personality of your management team, and the type of mobile business you want to create. As the reader (aka lender) goes through it, they should get to know the people involved in the company, their vision, their objectives, and their enthusiasm for the company and the mobile food industry. Tell the story of your food truck in your own voice.

Not Everyone Is A Professional Writer

Business plans are essentially works of fiction. They are documents that discuss what you imagine, plan and hope may occur in the future of your food truck business, not what has already occurred. This type of writing is difficult for everyone. You’ve heard of “writer’s block”. The problems you are having keeping the words flowing are precisely the ones faced by professional writers, except many of them have to keep going because the publisher has given them a unreachable deadline and they’ve already spent their advance, but you of course, having read tip #1 Rome Wasn’t Planned, Funded, and Built in One Day have allowed plenty of time to finish the business plan; so there’s no reason to feel pressured. Right?

 

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