Cash skimming is not a popular or discussed topic in the mobile food industry. With that said, the fact still remains that there are some food truck vendors who do it. These vendors seem to have no issue with pocketing a few bucks and not reporting it to Uncle Sam.
5 Reasons Why Not To Get Involved In Cash Skimming
Whether you skim yourself, or know others who do it, here are my thoughts on why it makes absolutely no sense for a food truck vendor to start cash skimming from their mobile food business.
It’s against the law
The number one reason not to get involved in cash skimming? Because it’s against the law!
It’s your money, right? Sure it is. However, by cash skimming you are keeping money off the books and thus keeping it away from various governmental agencies who want their legitimate piece of the pie.
On top of that, should you ever get caught cash skimming, the penalties are extremely severe. The local, state and federal agencies get extremely upset when it comes to the topic of tax evasion. If you think getting charged and/or convicted of a felony in addition to the severe penalties (including jail time) is worth pocketing ten or twenty bucks is worth it, think again.
Your cost controls go out the window
If you are skimming cash from your food truck till, all of your food truck’s financial data becomes worthless. Your operating percentages and cost ratios won’t mean a thing.
How can you tell if you’re food truck is on a path for success if you have no means to accurately monitor your progress? Unless you keep two sets of books (again, against the law), it’s nearly impossible to run your food truck when your sales numbers are false.
Tough to borrow money
By cash skimming from your food truck, you will have to present false financial statements to any lender you approach for financing any expansion of you mobile food empire. Don’t get caught up in having to say something like, “I know the numbers don’t look that good but my food truck business is doing much better than these numbers show.”
Loss of employee trust
No matter how large your staff is, some of them will figure out that you are skimming. If it’s ok for you to do it, why not them? It’ll makes it easier for them to justify taking home a couple twenties out of the cash drawer. I’ve even heard of some employees blackmailing a vendor when they find out the boss is cash skimming.
Even if your staff would never steal or black mail you, you still need to worry about their loss of trust in you. Integrity is an important trait held by successful food truck businesses. If your employees don’t trust or respect you, how will you maintain a great staff?
Hard to sell without accurate data
Cash skimming off the top will drop the value of your mobile food business. A food truck’s business valuation is based on accurate financial information. When your books show fewer sales than actually exist, you’ll have nothing to prove how high the sales volume is and how much money your food truck has actually made.
RELATED: Why Do Food Truck Businesses Fail?
The Bottom Line
In the end, cash skimming is and never will be a good solution for food truck vendors. Not only is it against the law, but I’ve provided a few more reasons how cash skimming is a way to cheat yourself and your chances for success in the mobile food industry.