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Food Truck

food truck tax return

It’s tax day again and as many of you know, completing and filing a small business tax return for your food truck business is different than completing and filing your personal tax return.

The primary difference is the number of forms that must be completed and the difference of your business’ write offs and deductions.

While business tax returns are not overly complicated, ensure that you use the proper form and research any questions you have. The Internal Revenue Service (IRS) website is relatively easy to navigate and provides answers to most questions. If you don’t feel comfortable filing your business taxes yourself, reach out to your accountant for help.

Here are three tips to filing your food truck tax return:

Keep Your Recipes

Hopefully, you’ve collected all of the receipts related to your businesses expenses. Any expense for which you can provide a receipt if requested you can comfortably deduct, but if you lack a receipt, think twice about whether the deduction is worthwhile.

Small costs unsupported by a receipt can turn into a huge headache if the IRS decides to audit you and your return. Take a walk around your office to identify possible deductions. Miles driven on personal vehicles when doing business related driving, the mileage your drive your truck throughout the year, computer equipment and other expenses are deductible.

Don’t Forget Your Start-up Costs

The IRS allows all new businesses to deduct up to $5,000 in start-up costs. These costs can include attorney or accountant fees, training materials, employee training and other business expenses. Any personal training or education you completed for business purposes is also deductible (think culinary school).

Complete All the Forms

Unlike a personal tax return, a food truck tax return consists of several different forms. One form lists profit and losses, while another calculates the self-employment taxes. Determine which forms you must complete through the IRS website. Completing each one and submitting them together makes it less likely that you’ll be audited.

While you may have already (let’s hope you did) submitted your food truck tax return for 2015, do you have any additional tax tips for prospective food truck owners? We’d love to hear your thoughts.

You can share your ideas in the comment section below, Tweet us or share them on our Facebook page.

menu pricing

Setting prices for the products you sell from your food truck is one of the most crucial components to running it, because the prices you set directly affect your ability to sell, cover costs, and generate your desired level of profit.

Good Dog Houston Menu
Image from Good Dog Houston

Food cooked on food trucks is normally priced on a per item basis. Typically, prices of menu items vary according to food costs (the actual amount it costs you to make dishes) and sometimes according to demand. For example, if your truck is famous for serving a unique dish, you may be able to use a higher markup to your costs of preparing it.

Most food service establishments target food-cost percentages between 20 and 40 percent. In other words, if a menu item’s total food costs are $2, its sale price should be between $5 (40 percent) and $10 (20 percent). You can adjust the actual percentage you use as you deem necessary. For items that require more time and labor to prepare, you may have to increase the percentage to keep your pricing competitive.

New restaurant and food truck owners alike typically use one of the following methods to determine menu pricing:

  • Food-cost percentage pricing
  • Factor pricing

These methods are merely guidelines for your use and aren’t absolute rules. If your market will bear menu item pricing that exceeds what you come up with by using these methods, do it!

Food-cost percentage menu pricing for your food truck business

The food-cost percentage pricing method is the most widely used method for menu pricing. To determine prices with this method, you need to know the target food-cost percentage and the actual food cost for the item, which you plug into this formula:

Food cost ÷ target food-cost percentage = menu price

For example, suppose you have a cheeseburger on your menu with a food cost of $1.50 (meaning that the ingredients used to make one cheeseburger costs you $1.50), and your target food-cost percentage is 35 percent. The calculation to price this item is as follows:

$1.50 ÷ 0.35 = $4.30

To get an idea of how various cost percentage affects your prices, take a look at these numbers:

Percentage Food Cost Menu Price (min)
20 $1.50 $7.50
25 $1.50 $6.00
30 $1.50 $5.00
35 $1.50 $4.30
40 $1.50 $3.75

Food cost is only one part of the equation here. This formula doesn’t take labor or other operational costs into consideration. So the lower you can get your food costs, the better off you’ll be, and the more you’ll have left over for labor and overhead.

Factor menu pricing for food truck items

The factor pricing method uses a factor, such as 30 percent, that represents food-cost percentage. To determine prices with this method, you multiply the food cost by your pricing factor. To calculate the pricing factor and the menu price, you need the target food-cost percentage and the actual food cost for the item, which you plug into this formula:

100 ÷ target food-cost percentage = pricing factor

Food cost x pricing factor = menu price

For example, suppose your target food-cost percentage is 30 percent. Divide 30 into 100, and you get 3.33 as your pricing factor. If the food cost is $1.50 and the factor is 3.33, you end up with the following:

$1.50 x 3.33 = $5.00

WARNING: This method doesn’t take into consideration that some foods have a higher cost than others. Factoring has the potential to overprice high-cost food items and under price low-cost items.

Do you have tips you’ve learned from menu pricing in your food truck business? We’d love to hear your thoughts. You can share them in the comment section below, Tweet us or share them on our Facebook page.

social media sites

With new social media sites popping up all over the internet, it can be overwhelming to food truck owners to figure out which to focus their time and energy on.

Based off a recent survey we conducted from our readers, the top four social media sites that food truck customers use are: Facebook, Twitter, Pinterest, and Instagram.

4 Social Media Sites For Your Food Truck
Facebook

After Myspace, Facebook took control of social media and has not let go. 67% of internet users visit Facebook regularly so you’ll want to start here.

Beneficial Features:

About section. Publish a full biography including contact information about your food truck.

Large images. Facebook’s platform is great for posting pictures. Take a snapshot of your daily special or fun events your truck has taken part in.

Advertise. Facebook Ads allow you to target your specific demographic while also setting a specific budget.

Twitter

Next in line is Twitter. Quick and to the point. Reach out and communicate with others in real time. While Facebook may be used for many of the same purposes, Twitter is much quicker.

Beneficial Features:

Break the news. Let your followers know where you are heading when it happens. Twitter is instantaneous and will reach your followers faster than any other social networks.

Get feedback. Twitter is also a great place to get feedback and learn about your customers.

Utilize hashtags. Hashtags (commonly known as the pound sign) on Twitter are a great system to take advantage of. Using hashtags will increase the reach of your tweet and also increase the chances of your tweet being seen.

Pinterest

Like it? Then pin it! Pinterest is a great way to tell your story using pictures. Pinterest allows you to collect, organize and pin pictures to boards.

Beneficial Features:

Organize. Pinterest allows you to organize your photos into similar groups called “boards.” This allows you to “build” a message, theme or group similar photos together.

Get customer’s mouths watering. Food trucks using Pinterest can organize a page by posting enticing photos with brief descriptions about menu items. This can also include recipes to popular items.

Go beyond food. Your food truck should be about more than just food. Feature boards that tell your brand story, values and mission.

Instagram

Pictures speak a thousand words – and Instagram is the poor man’s photography studio. Instagram gives users the ability to apply different filters to photos. There are no groups or “boards” like with Pinterest, however, Instagram is easily integrated into Facebook and Twitter, giving pictures extra exposure on the different social networks.

Beneficial Features:

Customers. Featuring customers enjoying their meals, or sharing images that customers have taken of your truck are a great way to draw attention to your mobile food business.

Show your atmosphere. Show pictures of the atmosphere around your truck. You can show actual customers enjoying a dining experience or even the fun they are having while waiting to order. The filters provided by Instagram will allow you to spruce it up a bit.

Aesthetics. You don’t necessarily have to show pictures related to your food. What’s the atmosphere like around your truck? What about the scenery of the areas you park in?

Remember social media is a great way advertise. Follow some of these tips and utilize them to increase followers and customers. But don’t be afraid to be creative and innovative. Also, remember most social media sites can be synced together and it’s alright if some of your pages overlap.

Which social media sites are you using that aren’t listed here? We’d love to hear your thoughts. You can share them in the comment section below, Tweet us or share them on our Facebook page.

word of mouth

Word of mouth marketing will always be the best form of promotion any mobile food industry operator can expect to achieve. For this reason, the staff at Mobile Cuisine Magazine has decided that we needed to look at the two most commonly used forms of word of mouth marketing; on and offline word of mouth.

Today, in part 1 of this series will look at the oldest and most reliable form of word of mouth marketing that almost everyone is accustomed to, we will be referring to this as “offline” word of mouth.

To start things off let’s ask you some questions to get you started thinking about creating word of mouth recommendations for your mobile business.

Why should anyone talk about your food truck or cart in a positive way?

Do customers talk about your mobile eatery if your food was good?

Do they talk about your business if your service was good?

In most cases the vast majority of people do not spread good things about a food establishment if the customer receives the type of food and service they expect.

Do customers talk about tell others if your food or your service was bad?

When customers receive poor quality food or bad service, this is when many people make sure to let others know about the issues that they have had with a particular food truck or other variation of street food vendor.

Now that we have established that a business owner is unlikely to get positive word of mouth with good service and food, yet very likely to get negative word of mouth for poor service or food, we can conclude that positive word of mouth is much harder to achieve and negative word of mouth is almost an absolute given.

The big question many will have is, why the difference? It is rather simple if you spend any time thinking about it. It is in our human nature to hold onto anger longer than pleasure. We tend to discuss the reasons we are upset far more than why we might be happy about something. Being frustrated or upset by a situation will burn deeply into our memory and we will tend to overreact.

In these cases, the food truck business the primary loser. Yes, the customer may have felt slighted, but ultimately, the business will take the brunt of their frustration in the long run. It often doesn’t take more than a small incident to create bad feelings, particularly when your customer has had a bad day already. You and your customer service staff must be aware of what our customers are seeking. Be understanding and alert as awareness and intuitiveness are key ingredients in customer service. Great customer service comes from paying attention and sensing the moods of everyone that steps up to your truck.

Turning around a situation is well within the bounds of well trained and understanding staff, so all is not lost.

How to create powerful word of mouth is a whole study in itself, but the basics are common sense and logical.

Very often just providing good service or food is not enough to encourage word of mouth recommendations; after all, these things are expected. There needs to be additional reasons for wanting to bring up the subject of where you ate last night and how good it was. Obvious examples are special occasions, such as Valentine’s Day. This could trigger conversations like, “What did you do last night?”…”Oh, we went to <insert your food truck name here>, wonderful food, really fast and friendly, you should definitely try it sometime.”

Although a nice comment, even this type of statement may not attract someone to follow their friend or acquaintance’s recommendation. For word of mouth to be effective it has to have some passion and excitement in it. That means your customer has to have been excited by what they experienced. This, in turn, means that your customer will want to instigate a conversation, rather than just respond to a question they may never be asked.

Hopefully this will make sense to you. Try to remember the last time you were wowed enough by a product or service to start a conversation about it. Very often these situations are few and far between.

How are you going to create sufficient excitement so that your customers want to tell the world? If your customer service is full of passion, that carries over to your customers and can be infectious. Without the passion in your service, how do you expect your customers to get excited? So that’s your starting point, customer service that is full of passion and fire.

Next, ignite the fires of passion in your customer, get them involved and encourage them to join the party. It is much easier to get parties of four or more people to get into the mood. Couples are different, they may well be in their own world. Individuals need more personal attention. Therefore it makes more sense and it is much easier to encourage parties of four or more to become your advocates.

With a little encouragement you should be able to create some word of mouth activity from at least 1 or 2 of the party. Ask if you can take some photos of them in the party spirit. Tell them you would like to place the photos on your customer wall board as well as your blog. (You will need their permission to do this) Offer to email copies of the photos to each of them, so that they can share them with their friends.

For individuals and couples, give them a couple of your business cards each and ask them to pass the cards to a friend or colleague who would appreciate your kind of hospitality, food and service.  Incidentally, we recommend a specially printed card for this purpose. It is very rare for a restaurateur to do this and they really are missing an out on an opportunity.

Manage and meet customer expectations all the time. How do you do this? Back up your brand’s claim or promise each time. A good example is:

  • Maintain your price range within the level your buyers expect, if you need to increase prices make sure you communicate this to them with a little justification of why you need to do so.

Customer service is the framework where loyalty and trust is built on. This is where your company can really stand out in a different way from your competition. Quality customer service is simply going out of your way to please the customer. It is that extra effort, one sincere action, the personal touch that ultimately affects buyers choice to keep remembering you and recommending you.

In part 2 we will be discussing how to utilize the power of word of mouth online; we call this word of mouse.

Keep an eye out for part 2 to be published within the next week. In the meantime if you would like to share how you encourage word of mouth, go ahead and let us know via the comments button below.

Part 2

swot analysis

A SWOT analysis (strengths, weaknesses, opportunities, and threats); much like that of a competitive analysis, is an important part of planning your food truck’s future.

The strengths (S) and weaknesses (W) sections provide a look at your truck’s current market position.

The opportunities (O) and threats (T) sections help you project possible goals and challenges that may affect business down the road.

  • Strengths: In a SWOT analysis, you look at the strengths of your business first. Strengths include those things that you do better than others and what makes you stand out from your competition.For example, you may have a permit to operate your truck on weekends in a prime location near a bar that doesn’t serve any food past 10 p.m. Whatever your strengths are, use them as a base for future decisions.
  • Weaknesses: Weaknesses in a SWOT analysis refer to those areas in which you can improve that would help better the product or services you provide. That you’d see advantages in assessing your weaknesses may seem counterintuitive, but understanding your weaknesses makes them easier to deal with.For example, a weakness can be a lack of expertise in preparing popular desserts that are common in the type of cuisine your concept follows.
  • Opportunities: The opportunities section is critical to your mobile food business’s development by helping you discover ways to improve. You use the strengths and weakness you’ve already listed to identify your opportunities.Opportunities may be internal, such as pointing out that by hiring a pastry chef that has formal training in creating desserts, you’d be able to eliminate one of your weaknesses. Opportunities form the basis of the future goals you adopt.
  • Threats: Lastly, SWOT analysis looks at threats or possible issues your truck could run into. Examples of threats your food truck business may face include the addition of competition in the market, increased gas prices, and changing consumer trends.Threats may also come from changes in legislation or licensing requirements. Identifying threats can help you prepare and plan for issues that may come up that could throw your goals off course.
Here’s a sample SWOT analysis:

SWOT analysis chart

  • Strengths:
    • Strong, experienced food truck staff
    • High brand recognition
    • Prices are cheaper than competitors’
    • Pride in putting forth innovative food with the freshest ingredients
  • Weaknesses:
    • Limited funds available
    • Costs rising due to increases in food costs
  • Opportunities:
    • In a new, emerging food truck market
    • A main brick-and-mortar competitor has closed
    • Collaboration with a local bar to start a dinner and a drink package
  • Threats:
    • A main competitor has lowered its prices
    • Municipality reexamining current legislation and may add further restrictions on food trucks

Have you conducted a SWOT analysis for you food truck? What were the results or issues you ran into? We’d love to hear your thoughts on this issue. Please feel free to share your thoughts in the comment section below, Tweet us or share them on our Facebook page.

opening a food truck

Opening a food truck has become a dream for many people. The popularity of food trucks and mobile food has never been higher nor has it ever been as well publicized.

Whether it’s seeing a food truck parked near your office at lunch or seeing a television program or commercial that includes food trucks, the mobile food industry is booming. More and more people asking themselves if opening a food truck is the route they want their professional career to head.

If you are one of these interested parties, you must to do some soul-searching before you run out and purchase a food truck. Explore your thoughts surrounding the possibility of becoming a food truck owner. The more you question your personal motives and figure out what’s holding you back the easier the final answer will come.

Answers these questions to help you determine if a opening a food truck is really right for you:
  • When did I first come up the idea that I would like to own my own food truck?
  • What was happening in my life at that time that may give me clues about why this thought came about?
  • Am I willing to work on most holidays?
  • Am I willing to work long hours?
  • When I picture myself working in my food truck does it seem realistic, and am I happy even when I envision the chaos or problems that will happen?
  • Have I had dreams of myself owning a food truck?
  • When I visit food trucks do I find myself mentally running the place, or do I have ideas about how to make improvements?
  • Do I truly envision myself enjoying working with the public, and people that would be my employees, even when conflicts arise?
  • Would I be happy if I had to multitask as well as delegate jobs to others?
  • Would my spouse, significant other, or family be accepting of this career change?
  • Is there a part of me that wants to do this to please someone else? If I take away that person and or the feeling of importance would I still want to proceed?
  • Who may be holding me back in my own mind? Make a list of all the people in your life and how they would react? If the reaction is negative or unsupportive what are the reasons? Is it really theirr own fear, or is it a concern the person legitimately has for you? If valid explore that thought and whether or not you believe it.

Opening a food truck business can be scary. The best way to move past this fear is to gain knowledge about the industry. In exploring the idea you may learn that food truck ownership is not really for you, but rather it was the idea of independence that really appealed to you. If this turns out to be the case then by running through this exercise nothing was lost.

If you do find opening a food truck is what you feel you were meant to do, then the next step will be to explore the ways to make it a reality.

Existing Food Truck Owners:

Do you have a story about when you began opening a food truck? Let us know what you went through to make it happen in the comment section below, Tweet us or share your impressions on our Facebook page.

naming your food truck

What is in a food truck name? Some will say it can mean the difference between success and failure. As a culinary entrepreneur, naming your food truck is an important, critical step and sorting through potential names can be a long and tedious process.

When trying to come up with just the right name for your mobile food business, the options can be overwhelming.

The following tips are designed to help narrow the potential field and make your choice a little easier:

THE DO’s OF NAMING YOUR FOOD TRUCK

DO consider making the name descriptive, so that potential customers are immediately informed of the menu items on your truck. Research has shown that businesses with names that identify their products or services are more successful than non-descriptively named businesses.

DO keep the description general enough so that you can, if desired, expand your menu in the future.

DO make it memorable. Tell ten people the name you are considering. A week later, connect with them again and ask them to recall that name. How many people were able to accurately remember it? If it was less than seven, you may want to consider other more memorable alternatives that truly grab people’s attention.

DO make it phonetic. Crazy food truck names and quirky misspellings have become quite a trend, but it’s frustrating for consumers. No one wants to have to spell out the name of a business every time they talk about it. Make your mobile food business name phonetic so that people will be able to Google it from hearing it out loud

DO consider the oral impact of the name. How it will sound when spoken? Try writing down a list of words that could describe your food truck business, then mixing them up into different combinations and saying them out loud to see how they sound.

DO consider the visual impact of the name. How it will look on the truck itself, the internet (your website, social media sites), advertisements, business cards, etc. As with the sound of the words, try playing around with various looks by writing them down on paper or typing them into your computer.

DO choose a name that is easy to understand, pronounce, and remember.

DO make the name unique enough to distinguish your food truck from others on the street.

DO choose a name that will not be easily imitated by competitors.

DO consider how the business name could be shortened by the public. Just as a child’s initials can spell out an embarrassing word, so could the abbreviation for a business.

DO come up with a list of several potential names, and then try them out on close friends and family members to get their reactions.

DO live with your ideas for a while, to see how they sound and feel with the passage of time.

DO keep alternatives in mind, in the event that further research reveals that the name you would like to use is not available.

THE DON’Ts OF NAMING YOUR FOOD TRUCK

DON’T name your roaming bistro too soon. It’s exciting to name your food truck, but it’s more important to get it right. Take your time.

DON’T select a name that is too long or confusing.

DON’T choose a trendy name, since trends and fads pass quickly, and you don’t want your business to appear outdated.

DON’T include unacceptable terms in the name, like profanity or obscenities.

DON’T use initials. JWT could be grain and feed store, or it could be a famous advertising agency. It has no meaning. Business names that use initials are less memorable.

DON’T get sued over sloppy seconds. In the naming stage, you do not want to select a name for your food truck that you may have to change later or, even worse, get sued for, because someone else has a registered trademark on the word or phrase. This can be easily be avoided by visiting the federal patent and trademark office’s site, USPTO.gov, and doing a search on any potential names.

Still having a tough time coming up with a name, check our our free Food truck Name Generator to see if it can give you some suggestions. <here>

Do you have any additional tips for naming your food truck? We’d love to hear them. You can share your thoughts in the comment section below, Tweet us or share them on our Facebook page.

employee performance reviews

As a food truck vendor you have to wear many hats. Being the boss is one of them. While wearing your boss hat, I’ll ask you this: Which is worse: receiving a performance review, or giving one to one of your food truck staff members? At least with the latter as the owner, you have some control.

When you’re the one conducting an employee performance reviews for one of your food truck employees, try doing these three things to make it a productive experience.

3 Simple Steps To Improve Employee Performance Reviews:
  • Set expectations early. Make employee-evaluation practices clear at the beginning of the year with individual performance planning sessions.
  • Set the right tone. Everyone hates the “feedback sandwich”: compliments, criticism, then more niceties. Deliver a positive message to your good performers by mainly concentrating on their strengths and achievements. Confront poor performers and demand improvement.
  • Avoid money talk. If possible, don’t mention compensation during the review; but if you must, take care of it at the start of the conversation.

Do you have any additional tips for food truck vendors to use when giving employee performance reviews? We’d love to hear how you handle them with your employees. You can share your thoughts in the comment section below, Tweet us or share them on our Facebook page.

twitter lists

tip of the dayTwitter is an important way for food truck owners to learn about the mobile food industry, build relationships, and extend the impact of their work.

Even Twitter enthusiasts can be overwhelmed by the sheer volume of tweets and the velocity of conversations, but Twitter lists—groups of individual Twitter accounts—can help focus your attention.

You can quickly focus in on updates from the people you really want to hear from industry experts, well-networked colleagues, and customers simply by looking at your two or three most crucial Twitter lists.

Separate your incoming stream into Twitter lists by thinking about:
  • Development: Who do you want to learn from? Section out the smartest people you know or want to know.
  • Interactions: Which relationships do you want to initiate or strengthen? Engage with the people who will have the greatest impact on your effectiveness by mentioning and retweeting them.
  • Goals: What do you want to accomplish? Tune into the people and conversations that support your food truck business aspirations.

Please note: You can either create your own list or subscribe to a list created by someone else. Creating or subscribing to a list allows you to see only Tweets from users on that list. Lists are not a way to send Tweets to a select group, just to read them.

Do you have any additional advice for those interested in creating Twitter lists for their food truck Twitter account? We’d love to hear your thoughts. You can share them in the comment section below, Tweet us or share them on our Facebook page.

food truck sales

So you think that now that you bought a bright and shiny food truck all you have to do is park it in your local downtown and wait for the money to come rolling in. What could be easier…right?

food truck sales

The thing many don’t understand is that a mobile food business, like every other business on the planet, is a sales business. This article will show you how to make the food truck sales process run itself so you can concentrate on the fun part of operating a food truck…interacting with your customers and making great food.

The Food Truck Sales Process

It doesn’t matter what you sell; every business must follow the same six steps in order to sell anything at all.

Every dollar that your food truck generates is a result of these steps, sometimes referred to as the sales funnel. If you aren’t making as much money as you think you should, odds are that you’ve got a hole in your funnel because one or more steps in your sales process is broken or missing.

Here are 6 steps to better food truck sales:

Find customers

In our business we do this by attracting attention to ourselves. The first step is getting yourself noticed. Remember – if they don’t notice you, you don’t exist.

Qualify the customer

Qualifying means that you are sure that they are capable of completing the transaction. A qualified lead is one that has enough money to buy your food, and one that is hungry for what you serve. You will get qualified customers by being in the right place at the right time.

Make your presentation

Don’t just sell your food truck food, sell an experience. Have a theme, a gimmic, a hook. Your customer should be captivated by the experience, totally immersed in your world while they are at your truck.

Address the customer’s objections

Overcome a price objection by overwhelming them with quality, stocking unique condiments, offering them daily specials, and provide a totally unique dining experience.

One of the biggest objections food truck owners get is the cleanliness issue. Overcome it by keeping an immaculate truck. Wipe it down between every order. Even if it’s not dirty, the customer needs to see you cleaning. Display your business license and health department certificates to show that you are legal and that you comply with the food codes.

Another common objection is slow lines. Do what you can to move them through quickly without compromising the experience. This may mean spending more time prepping items in your commercial kitchen so it doesn’t take as much time in the truck to assemble an order…do what you can to keep your line moving.

Close the sale

That means putting the money in your cash box. In the mobile food business, once you have the first four steps working for you, closing the sale comes easily and naturally. This is a huge advantage over other types of business where the close is actually the hardest part of all.

Get repeat and referral business

It takes ten times more effort to get a new customer than it does to sell to an existing customer so you have to get ‘em to come back again and again. You might accomplish this with repeat customer incentive programs such as punch cards. The more they buy, the more invested they become.

Referrals are another way of leveraging your existing hard-won customers. Referral business is just a fancy way of saying, “word of mouth”. The experience that you give your customer will determine how much they talk about it to their friends.

Do you have any additional advise to help individuals make the most out of the food truck sales process? We’d love to hear your thoughts. Feel free to share them in the comment section below, Tweet us, or share them on our Facebook page.

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