Create a Business Plan Early On
We get a lot of inquiries from people kicking the tires so to speak, interested in opening their own food truck. For a lot of these individuals, owning a restaurant or a food truck has been a lifelong dream. They can imagine every detail, and its lines are filled with happy customers who will return again and again. For a lot of these people, they have a certain idea of what it is going to be like to own their own mobile food business. But oftentimes, when the preparation isn’t there, the reality is nothing like the dream.
Running a food truck can be a hard business to operate successfully. To convince the banks and yourself that you can make it in the mobile food industry, you must first do your homework.
Start with a business plan, including in-depth research on the market. The statistics prove it, but you still might be shocked at the number of food truck owners who have never created a business plan.
To ensure your success, a business plan is essential. Include details such as what makes your concept unique, your planned menu and type of service, your price points, a detailed evaluation of the market and your target demographics, your marketing plan, your financial plan, your operational plan, including your key players from industry experts and management to key suppliers and your CPA and attorney.
The financial plan, the most important part, must show on paper that you can make the concept work. Lenders of all types look for these key financial indicators to predict your success:
- For every dollar you borrow, you plan on bringing in $1.25 in first-year revenue
- Your overall debt stays between 8–12 percent
- Your biggest expense, prime cost (total labor cost plus total cost of goods sold) stays under 55 to 60 percent (aim for 55 percent to be safe).
You’ve got a real shot of not only getting the funds to open, but a real shot at success if you do your research and create a strong business plan with smart financials.
If you’re reading this and you’re a food truck owner without a business plan, remember that it’s never too late to plan. You can still develop a business plan that will guide your business into the future. You might be surprised by what you find and what your restaurant’s potential is. For more information business plan creation, check out this food truck business plan article.