We get a lot of inquiries from people kicking the tires so to speak. They are interested in opening their own food truck. Owning a restaurant or a food truck has been a lifelong dream for a lot of these individuals. They can imagine every detail. Including picturing its lines that 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 food truck. But often, when the business planning and preparation isn’t there, the reality is nothing like the dream.
Running a food truck can be a hard business to operate successfully. Convince the banks and yourself that you can make it in the mobile food industry, by doing your homework.
Start Business Planning For Your Food Truck Early On
To start your mobile food business planning, start with a formal business plan. This must include 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 accountant and attorney.
Business Planning: Financial Plan
The financial plan, the most important part, must show on paper that you can make your food truck concept work. Lenders of all types look for these key financial indicators to predict your success:
- Know the cost of borrowing. For every dollar you borrow, you plan on bringing in $1.25 in first-year revenue
- Understand debt ratio. Your overall debt stays between 8–12 percent
- Keep Prime Costs in check. Your biggest expense, prime cost (total labor cost plus total cost of goods sold) stays under 55 to 65 percent (aim for 55 percent to be safe).
The Bottom Line
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 start business planning and develop a business plan that will guide your business into the future. You might be surprised by what you find and what your food truck’s potential is.
For more information business plan creation, check out this food truck business plan article.