Tags Posts tagged with "Start Up"

Start Up

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

Is Opening a Food Truck Right For You?

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 owning 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.

Starting a new mobile food business venture can be scary. The best way to move past this fear is to gain knowledge about 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 becoming a mobile food vendor is what you feel you were meant to do, then the next step will be to explore the ways to make it a reality.

To Existing Food Truck Owners: Do you have a story about when you began your food truck? Let us know what you went through to make it happen in the comment section below.

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Startup food truck owners often worry that someone else will steal their best ideas before they get on the road. That’s understandable, but it’s the wrong thing to be afraid of.

Questions and Answers signpost

The bigger danger is that these culinary entrepreneurs won’t share what they’re doing behind the scenes with enough people, especially early on in their food truck menu development.

You’ll likely need to examine many promising menu ideas before you find one that you will be able to covert into a successful new food truck business. So your goal should be to examine and discard the bad ideas quickly in favor of the good.

So how do you obtain the information you need to make these decisions? Here are five strategies to pursue:

Interview your market

Find potential customers and ask them about the local food truck industry. Find out what they think is missing from your area and how important it is that this void is in need of filling. And please remember; I said, customers, not just friends or family who might answer your questions in a way that will make you feel great about your concept.

Find experts

Find people who have or are working in the industry, or who have tried similar ideas in the past. Unless you’re going to be their direct competitors (which most food truck owners won’t see), you’ll be surprised at how many knowledgeable people are willing to give you their time.

Conduct focus groups

These don’t need to be formal events with everyone seated around a table and you behind a one-way mirror, although there’s nothing wrong with that except for the potential expense. By asking several potential customers or others and getting them to interact with one another, you can often learn more than just by asking directly.

Private tastings

If you really want to find out if your recipes are spot on, or fall on their faces…find out. Look for local foodies who will sit down for an informal tasting party. Roll out your menu ideas and watch for the reactions of your guests. At the very least, you can gauge people’s interest in your menu and find out where you may want to tweak things. In a best-case scenario, you might wind up with customers offering you catering gigs before you’ve even invested in your food truck. This is some of the best information you can possibly get.

Ask for investors

Even if you aren’t ready or even planning to take other people’s money to build your food truck empire, people who may invest their money in your concept are almost always going to ask hard questions. Better to force yourself to examine the answers early, before you get started.

Remember, you’re looking for feedback but more than that, you’re looking for feedback that demonstrates that customers in your target market will be excited for your launch.

If they aren’t it is a pretty good indication your best ideas will need to be found elsewhere. This can be discouraging but isn’t better to learn this very early and very cheaply?

 

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When opening a new food truck, you are going to have to make assumptions about all your expenses and your head counts regardless of whether or not you price by gross profit.

gross profitSince you will already have those assumptions, it only makes sense that you set prices so that you will collect enough markup (gross profit) from each of those assumed customers to cover all the expenses you are assuming.

Since you won’t have “real numbers” to work with in your culinary start up, it will be important that you create your budgets conservatively. Set realistic expectations for traffic and for expenses, based on your own or your advisor’s experience and averages in your area. You’ll need to be doing all this regardless of whether or not you price by gross profit. Pricing by gross profit simply guarantees that if you bring in the customers you assumed, and you keep your expenses down to where you assumed, that you will at least make the profit you budgeted for.

Without pricing by gross profit, you are simply guessing at whether or not there will be enough markup to cover your expenses. Pricing by a budgeted cost percentage doesn’t take into account the other expenses of the mobile food business.

In short, budget conservatively and use your assumptions on customer counts and expenses, along with accurate recipe costs to price by gross profit in your food truck  start up.

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Start a Food Truck Business

You are thinking you want to start a food truck business but you aren’t sure if you should. Perhaps, the very fact that most people today are willing to experiment and try food outside their homes is reason enough for you to venture into the mobile food industry. Here are some useful steps to start a food truck should you choose to enter the mobile food industry.

The first and most important thing you need to do before you even think about investing money in a truck, is to research in-depth to find out if your local area even allows food trucks to operate. Now if you do, you need to find out what types of trucks or carts are permissible. You don’t want to sink a load of cash into a truck you can’t get an operators permit for.

The next step should be to think about the type of cuisine that you are interested in serving in your rolling restaurant. This will help you figure out what type of equipment you will need as well as the methods in which you will cook and serve your tasty dishes.

Apart from researching for your own truck, you need to research about the restaurants and  other food truck vendors in your area too. This will give you a good idea about the kind of competition you are likely to face in the future.

From being a menu planner to an efficient accountant, a responsible manager to a culinary expert, you need to play myriad roles. There is a lot of hard work and dedicated efforts that you need to put in before you see your food truck set up and earning enough to sustain and then making profits over a long time to come.

You must look at the following steps to open a food truck if you are aiming to turn your mobile food service business into a profit making enterprise within a few years of being set up.

A good business plan is a must to start a food truck business. This plan must include everything from use of funds, estimates of expenditure, the truck’s unique selling points, and the profits that you expect to make out of the business and why you think this business plan reiterates the fact that you are a good businessman.

The next thing to do is to find the right location for your truck to park. Everything about these locations must be right to get your truck rolling. The wrong locations or irregularities in the legal documents of the truck could lead to problems that will keep you busy for years to come. On the other hand, good locations can ensure a steady flow of customers and a good reputation as well.

You must also plan the concept of the food truck after you identify the target market. A great deal of thinking is necessary in planning the menu and type of cuisine for your customers. All the efforts that you put into your food truck will go a long way in bringing customers to your service window for a long time to come.

The next important thing in the steps to open a food truck is to maintain perfect accounts. Maintaining accurate bookkeeping will help you understand how much you are spending and how much you need to monitor your funds. A good accounting system with the use of computers and professional accountants will ensure you are always in control of your finances and know exactly your financial position at any point of time.

Here is a basic breakdown of the steps to start a food truck business you will need to cover:

  • identify a market to target
  • research market
  • create a concept to address the market that is unique and appealing
  • plan your menu
  • write your business plan
  • create your financial projections
  • recruit experienced food truck advisers
  • raise the capital (money) required to open
  • secure locations to operate
  • install a truck wrap
  • install necessary equipment
  • get required permits
  • secure a commissary, commercial or shared use kitchen
  • sign up with vendors
  • get your food truck website
  • begin pre-opening marketing
  • get business insurance
  • set up business bank account
  • set up credit card account
  • install point of sale equipment
  • hire and begin training food truck staff
  • buy initial inventory
  • have a soft opening
  • have grand opening
  • become the next food truck success story!

For a complete rundown on what it takes to start your own mobile food business and the order to do things, check out Running a Food Truck for Dummies where I give you the nitty gritty details you will need to cover to open your own food truck.

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tip of the dayIt takes a lot of bravery to open up your own food truck and finally pursue your big idea. There are plenty of risks in becoming a mobile food vendor, but for those who are successful, the benefits are plentiful. Here are three questions to ask yourself before hitting the streets in your own food truck:

  • Do you have a concept? It can’t just be any concept. Your food truck concept has to be something you feel deeply passionate about and no one can talk you out of (because they will try).
  • Do you have a trusted partner? Starting a mobile food business can be lonely. Doing it with someone else, especially if they has complementary skills, can make the road smoother and more fun.
  • Do you do best without structure? For many food truck owners, this is the biggest challenge. If you thrive when there is no clear path and lots of uncertainty, it may be time to foster your inner culinary entrepreneur.

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How To Start A Food Truck

If you are one of the thousands of people that are currently researching how to start a food truck that will sell gourmet burgers, tacos or grilled cheese sandwiches by the truck load, the first thing to seriously consider is not your budget, not the mobile kitchen and not the hours you will be working. The first thing you must consider is the type and style of food you will be selling.

Everything else will flow from the food, so make sure you understand the food you plan on selling from your menu before making business or emotional decisions on everything else.

How To Start A Food TruckYour first major investment will obviously be in the purchase of the food truck itself; however the type of food you will be preparing and selling will govern the type of kitchen you are going to need.

The first thing to do is to research which types of kitchens are most used for selling the food you will be basing your business on; this will serve to narrow down the list of mobile kitchen equipment and components to something that is more manageable for you to realistically research in depth and contrast and compare.

RELATED: Food Trucks For Sale

The type of food you will be offering will also lead you to consider your storage and refrigeration requirements. If you are selling ice cream or frozen yogurts, you are going to need a lot of refrigeration capacity, but a lot less will be needed if you are going to be cooking burgers all day.

How much actual cooking will be required?

If you are going to be grilling chicken and pork then you may want extra grill space, but if you are making up subs or other cold sandwiches, do you really need any grilling space at all? You may want to maximize the food prep space instead.

How the food will be served?

It’s simple to hand over a bahn-mi in a bun, take the money, give change and smile at the next customer in the line, but do you want to offer something more for your customers, such as a place to sit down and take some time while they eat (if this is something your local municipality allows)?

Just because this is a mobile operation does not mean you have to ditch adding value for customers, or employing strategies to help differentiate you from the rest of the competition.

How high is your projected sales volume?

This will affect how many people you are going to need inside the food truck to assist with food prep and sales, and this in turn will affect the actual total storage, prep and selling space you are going to need in the truck itself. If it is too small, you may lose sales and valuable business; too large and you waste valuable investment capital.

Consider how you will prepare the food and the time involved between acquiring the basic ingredients for your dish and time to sell it.

Particularly, do you have to prep and store food off-site, or do you need to do this in the on the truck? The more reliance you place on your mobile kitchen, the greater your need for a good layout, more storage, more prep space and more refrigeration.

We hope this article will help those who are trying to find out how to start a food truck. If you are a current food truck owner and think we may have missed something, please feel free to leave us a comment in the section below, Tweet us or leave your comment on our Facebook page.

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Taking the work food truck owners have put into their mobile businesses and leveraging it into brick and mortar restaurants is a  trend that started a few years ago in the mobile food industry. From New York to Texas to Portland, food truck and food cart owners are expanding their empires with very few if any having to close within the first year. This lesson is something hopeful restaurant start ups should consider before opening the doors to a new restaurant of their own.

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Portland’s Brunch Box recently announced the opening a brick and mortar restaurant.

With only a forty percent chance of success in the first year, starting a restaurant (as with most small businesses) is a high-risk venture. There have been many articles, guides and books that have been written to assist in improving the odds of success. The majority of reasons restaurant fail are avoidable. Lack of experience, lack of capital, poor locations, inventory mismanagement are common mistakes found in floundering restaurant businesses. Often would be owners have a great restaurant idea and lots of motivation but little knowledge or experience of the restaurant industry.

Many factors go into running a successful business and many owners do not realize the skills and knowledge needed to start and keep their restaurant successful. Turning a profit is crucial undoubtedly; however, a profitable restaurant can be shut down for repeated health or safety codes.

The food service industry and economy are constantly changing. Restaurant owners must stay abreast of trends, regulations, consumer wants and a number of other dynamics. One way to obtain these skills is to start small, and why we feel that in most cases starting a food truck before plunging into opening a full restaurant is the best ways to help improve your odds at opening and maintain a successful restaurant.

Here are 6 reasons many prospective restaurant owners should consider opening a food truck first:

Less Skin in the Game

The costs involved in opening a restaurant vary based on the concept you develop. Opening a high end dining establishment can start at 500K and can run into the millions. Opening a food truck using the same style (only smaller) of menu can cost as little as $50,000. By starting small, you will learn many of the same lessons in a truck as you would in a restaurant. Operating any food service business is risky, but if your idea fails, would you rather have a smaller investment to lose than a much larger one?

Build Your Brand

Building a successful brand for a restaurant can take years. If you take the wrong path in developing your restaurant brand, it will take much longer since you will have to re-brand until you get it right. Operating a food truck allows a culinary entrepreneur to make modifications to their brand as easily as it is to find a new location to park in. Once finding a brand that works, you will be able to build up a base of customers that will in all likelihood follow you into your new restaurant.

Work Out the Kinks

Operations in a restaurant is what will make the business run smoothly. From your customer service to the way you order and prepare the food you plan to serve your customers. Operating a food truck requires that most owners learn every job within a truck. This will give you incite in how to improve your operational systems that will eventually translate into your restaurant.

Understanding Your Local Legal System

Unless you have an attorney that has extensive experience in the process of opening a restaurant, it can take a lot of time and effort to navigate through most community legal systems. Permitting for and construction and operations can be a daunting task, but it can be even more difficult to walk through for food truck owners. Getting to know your local municipal permitting organizations will be a valuable tool once you determine it’s time to plan for your restaurant. You will get to know the individuals in the permitting office as well as the health department. Building a rapport with them as a truck own will easily translate once you begin your restaurant permitting.

Get to Know Your Customers

So who is your target market? Will it be the over 40 crowd looking for a fine sit down meal with linen napkins or the new generation of millennials who are looking for locally produced meals with a gourmet flair? Until a food business opens their doors and customers start showing up, it can be difficult to understand who they are. By creating a food truck menu, you will be able to find out what types of food will be a success with your targeted customers and which will bomb. You will be able to test various menu options without needing to revamp your entire kitchen as most trucks have the exact same types of kitchen equipment a restaurant has. What are your customers willing to pay for particular items? While food trucks typically have lower price points than their brick and mortar competitors, you can easily scale your truck’s menu to a full service restaurant menu with a little basic math.

Location Location Location

Finding the best location for a restaurant is one of the key ingredients to operating a successful restaurant. At times it can seem like a crap shoot in finding the best location to plant your roots. By operating a food truck in your local area, you will gain the understanding of where your customers are coming from, and how to bring a storefront into their neighborhood. Once again, by running a food truck, you are able to speak with your customers and get to know them and where they live or work. This is invaluable research data that can only be tested if your concept is mobile.

food truck to restaurant
Roy Choi was able to expand his work from Kogi BBQ into his A Frame restaurant in LA.

By opening a food truck or food cart first, you have helped yourself in beating the odds that the typical start up restaurateur has to deal with.

 

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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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jump-start

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.

 

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 type styles 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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