Tags Posts tagged with "Food Truck Business"

Food Truck Business

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10 commandments of starting a food truck business

From my years of covering the mobile food industry and speaking with some of the most successful food truck vendors, I have created this list of 10 factors that most often contribute to the ultimate success or failure of any new food truck.

  1. Thou Shall Work In Foodservice Industry First. Cook, clean and manage some personnel. Hands-on experience working with staff and serving the public will tell you if you are a fit for the mobile food industry. If this isn’t a possibility, speak with folks who can explain the hours and tasks a food truck owner needs to be able to deal with to succeed.
  2. Thou Shall Define Your Concept. Don’t try to do too much. You can add and modify a little as you go to stay fresh, but don’t confuse the customer with too much at your grand opening.
  3. Thou Shall Research Local Food Truck Legislation. Not understanding how your local municipality regulates the mobile food industry can quickly lead to improper food truck builds, wasted time and money. This research will also inform you what it will take and how much it will cost to get fully permitted and licensed.
  4. Thou Shall Plan Ahead. Building a successful food truck business requires a lot of planning. This must include creating a fully executed business plan. This tool will help you (and possible investors) understand your concept and what you will need in order to operate and thrive.
  5. Thou Shall Lead & Supervise. Be involved in everything from the layout and construction of your food truck kitchen to the hiring of employees. Opening a food truck requires an owner who is present and leads their mobile food business.
  6. Thou Shall Preform Site Selection. You don’t have to be an expert in market analysis, but before you start, select a few local spots where your truck will operate. Once again, speak with food truck owners in your area, almost all of them will tell you their experiences with certain parking locations.
  7. Thou Shall Develop A Budget. Don’t forget the little things when budgeting for your first year of business. Build in contingency and operating capital for at least your first six months of operation.
  8. Thou Shall Select Your Suppliers. Visit and compare your bakery, produce, meat and grocery suppliers. Team up with businesses based on service and quality, not just price.
  9. Thou Shall Conduct Training. You only get one chance to open. Allow employees enough time to learn your systems and hold two or three dry -run tests before your grand opening.
  10. Thou Shall Never Fear Failure. In order for you to succeed you need to face risks. Believe in what you are doing.

What say you? While there are plenty of other issues new food truck owners will face, I felt that these 10 commandments are the top factors someone planning to start a food truck business needs to understand.

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If you have big ambitions for your mobile food business, eventually (perhaps even at start up) you’re going to have so much to do that you can’t do it all yourself. When that day comes, it’s time to hire your first employee.

hiring employees

Here are three tips to help you manage hiring the first of what will one day hopefully become many new employees in your mobile food empire:

Knowledge First

You can’t just hire people, pay them with a wad of cash every two weeks and then lather, rinse, repeat. Start by learning everything you need to know about becoming an employer. The Small Business Administration outlines the steps you need to take and everything you need to consider, like getting an employer identification number (EIN), tax withholding, wage and tax reporting, employee eligibility verification, workers’ compensation insurance, quarterly federal taxes and record keeping requirements. There’s a lot to think about, but it’s manageable.

Now that you have the government’s blessing, it’s time to work on a hiring strategy.

Define Roles

When making your first official hires, it’s better to go with clearly defined roles. That means taking stock of the tasks that you need a hand with and creating a position in support of those needs. Are you going to be working in the kitchen or working directly with your customers? The answer to this question will help you to determine what type of skill set you are looking for in your first employee(s).

Mind you, a little flexibility doesn’t hurt and helping employees spread their wings can help you nurture your food truck talent.

Food Truck Business Culture

Another important factor to consider before making your first hire is your food truck’s culture.

What values, traditions and practices do you want to shape your company? Once you’ve figured out what kind of workplace and culture you want, the better your chances of finding someone who shares that vision.

Once you’ve determined what defines you as a workplace, look for hires that fit the bill. If your employees share your vision, they’re likelier to excel in their jobs and all stick around long enough to help you succeed.

 

 

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tip of the day

Opening a food truck requires a lot of work and preparation. As a part of the preparation, you must become familiar with and adhere to the local laws that govern the mobile food industry. Failure to do so could result in your mobile business failing inspection and potentially being shut down. Since this is never a small business owners desired goal, you will want to make sure you understand the laws and ensure that your food truck follows them.

If you are opting to build your truck business from scratch rather than purchase an existing truck, you will first have to familiarize yourself with parking and zoning laws. In each city and town there are specific zones set up that separate where a particular business can operate. Before you purchase your truck, it is important that you contact the city parking and zoning departments to ensure that the area you are interested in operating in will allow your vehicle to set up shop. You will be best served to make sure you know any vehicle size limitations as well as the amount of time a food truck can remain parked in one location before being required to move.

The most important laws that you will need to understand for your food truck are those that center on the Food Code. The Food Code was established by the FDA as a guideline for local and state governments as a way to regulate the mobile food industry and protect the health and safety of consumers, residents and employees.

Though it is used as a guideline, the Food Code is not a requirement of the state and local government. Each will have their own version specific to that area. In most areas, the Department of Health will be in charge of establishing and enforcing the local Food and Health Codes. It is important that you contact the Department of Health in the beginning of your planning stages of your business to ensure that everything is done according to the local laws.

Given its name and the fact that it was established by the FDA, the Food Code can often be mistaken for regulations that only govern food. This is not accurate as the Department of Health in your local area will have laws and regulations set up that cover virtually anything related to health, food and safety in a food service business. Some things that these laws will cover include:

  • Preparation, handling, storage and display of any food products that your mobile business plans to offer.
  • The health, cleanliness and hygiene of the personnel that work in your business.
  • All aspects of the equipment and utensils that are being used including what material they are manufactered of, the installation, and even how they are stored.
  • Every facet of the utilities and services that you will need including the generators, propane and waste water, how you dispose of waste, and the way you handle pests.
  • How the truck is constructed and whether it holds the proper features such as ventilation and lighting.
  • Whether or not inspections are carried out, passed and any enforcement is needed.

The best way to ensure the success of your food truck business from the start is to contact the proper agencies and know your local laws before you begin planning. This allows you to ensure that everything from your equipment to your food meets the criteria in the codes so that you can pass inspection and have a successful opening day.

 

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branding

Every food truck operation is a brand, whether it’s a single taco truck parked on the side of the highway or part of a huge national brand.

The brand is essential for your food truck to survive, it defines everything your truck stands for; it differentiates it and allows all advertising and marketing messages to revolve around it.

Why is it important to have a strong brand?

If you don’t have a brand [your food truck is] an empty shell. You haven’t positioned yourself in the consumer’s mind. If you don’t activate a brand in the correct way you have an empty and meaningless promise sitting out there.

What are the key elements to developing a brand?

Your brand is about every aspect of your mobile business. You have to look at the experience your customers receive when they visit your truck, food, messaging, etc.

When you are branding, or redefining your brand, you have to understand who your primary and secondary audiences are and what the needs and wants of those audiences are.

What you have to find is differentiation.

How does a food truck differentiate itself?

It starts in your tagline. Does your tagline resonate with your market? If you are a pizza truck who promotes fresh products, your tagline must explain that. Does it say you don’t make your sauce from paste that has to be rehydrated in the store but from real tomatoes that have been picked.

What are some big mistakes made when branding?

The big one is a lack of a differentiating position. Sometimes mobile business owners go with the big campaign but haven’t really looked under the hood and looked at whether their campaign really connects with the primary and secondary market with which they want to resonate and don’t ask whether [their brand] is really showing what they want to stand for. They also don’t judge themselves critically.

How do you find out whether your brand and your messaging connect with your primary and secondary markets?

A food truck must look at who is the audience and who is the direct competitive set. Then you do some research—you could do it internally or with an outside consulting firm. These consultants will tell you who has the most propensity to eat with you, break the sub groups down, men/women, young/old/middle aged, with kids/without kids, etc.

Then you define your audience. This is absolutely an art and a skill in the world of marketing and advertising. With this information every brand can maximize its reach.

How can you reinforce your brand without overdoing it?

I don’t think you can overdo it ever. If you look at consumers today they are overwhelmed with messaging so if you’re not out there messaging often to your primary and secondary audiences, you’re not resonating with them and your brand will not thrive.

Why is consistency important within a brand?

If you fracture the message you confuse consumers because they don’t know what you stand for.

Become a recognizable fixture in the local mobile food community with careful branding design. Remember to keep your messaging succinct and on point with your food truck’s personality. Use your branding to put a positive face on your mobile business and advertise a taste of what customers can expect to enjoy.

 

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food truck start up cost

A common question we are asked by our readers relates to food truck start up cost. Due to varied factors that can be used to determine this answer, we typically provide a broad range of $40,000 – $250,000. While it technically answers the question, it’s still a bit broad for someone trying to determine if opening a food truck business is something they can afford, or something they need to get a loan for. Because of this, we have generated this chart to help those interested in joining the mobile food industry.

In the chart, you’ll find three areas; one time start up costs, re-occurring start up costs and costs that vary from area to area. Each of these sections is subdivided by three price ranges; $ = low, $$ = average and $$$ = high for each area.

While this guide should be used as a general group of ranges, it is helpful for those interested in finding how much starting up a food truck business can cost.

Food Truck Business Start Up Costs

$$$$$$
One time start-up costs
Purchasing your food truck500025000125000
Vehicle inspection100300500
Retrofitting and/or bring the truck up to code250004000050000
Generator1500500010000
Register/POS System15012502500
Paint100020003000
Truck wrap250035005000
Initial food purchases50012502000
Utensils and paper goods50010003500
Website design50035007500
Initial office equipment and supplies2005001000
Initial advertising and PR5007501000
Professional, legal and consulting fees50020005000
Reoccurring start-up costs
Payroll150025003500
Commercial kitchen/Commissary rent50015003000
Credit card processing equipment50150500
Fuel250300400
Start-up costs which vary by location
Permits and licensing 50 500 10000
Insurance 300500 1000

Please note:

  • Prices shown are not set in stone, and can change without notice.
  • Prices shown in the reoccurring categories are for 1 week.
  • Prices shown which vary by location are for 1 month.

So what do you think about the cost to start a food truck?

cost to start a food truck

While is may seem like a steep price to start a food truck business, try to compare these costs to that of a brick and mortar restaurant. The high end prices in this chart don’t come close to comparing to starting a small quick service restaurant.

Be sure to keep an eye open for contests. In season three of The Great Food Truck Race, they gave away a food truck to the eventual winners. Talk about a great way to cut your food truck start up cost.

So how much were your food truck start up costs? Let us know in the comment section or drop us a line via our contact page if you would prefer to keep your food truck business start up cost a little more private.

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tip of the day

Just as you track your the sales your truck makes on a daily basis to keep track of your expenses and to see if you are on target for your budget projection, you should be doing the same thing with labor. That way if the line at your service window is trending higher than you have predicted, you can increase the number of hours used, and if you did a poor job cutting staffing levels early in the week, you can cut more aggressively to make your budget.

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tip of the day

You have to plan for your food truck to be profitable. Without a budget in place, it’s tempting to spend, or even overspend what you earn. Your budget is a key component to operating a successful mobile food business, one that operates profitably and with systems. Having a budget gives you a guide for covering your expenses and as a tool for setting goals. Goals can range from something as big as opening a new truck to something more immediate such as hiring an additional staff member. A budget will serve as your roadmap to meeting your goals; make sure you use one to plan for your profitability.

 

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