Growing a food truck’s sales is an essential goal of all mobile food businesses, however it is NOT the surest way to make a major impact on your short term profitability. Reducing the truck’s non-essential expenses is. To double your food truck profits, a vendor with a net income of 5% of sales would need a minimum sales increase of 10% and likely as much as 15% or more.
Besides food, beverage and other variable costs, generating more sales would likely require additional marketing expenses as well as the use of some type of promotional discounting or coupons.
For virtually all food service industry businesses (including food truck and carts), the most effective way to boost profitability quickly and permanently is not by putting a hard push on sales but by limiting the amount of your unneeded expenses.
Two Ways To Double Your Food Truck Profits
Two of the most important functions of any mobile food business are:
- Retaining current customers
- Attracting new customers
Based on these assumptions, how much of your monthly costs and expenses are being directed toward supporting these two areas? Every mobile food vendor who can’t say, all of it , is likely not maximizing their food truck’s profitability.
We’ve spoken with many food truck vendors and 99% of them were easily wasting 5% to 10% of sales on things that had absolutely no impact on their existing or potential customers.
If you are serious about doubling or significantly enhancing your profit, take this next step. Ask your accountant or bookkeeper for your year-to-date detailed general ledger. Then, account by account, line by line, invoice by invoice, check by check, examine each and every expenditure in your mobile food business.
On every item ask yourself, is this a necessary cost for retaining or attracting customers? It may help to look at your spending in terms of whether each purchase satisfies a need or a want. All food trucks need certain products and services to provide for their customers.
Conversely, wants often reflect the desires of management and staff. These costs are incurred primarily for the comfort and convenience of the management and staff, not the customer. Be objective and cut out what you don’t really “need” to be spending money on.
The Bottom Line
This simple, yet highly effective way to evaluate your costs and expenses is the easiest and surest way to double your profit in the future.
Do you have any additional advice to our readers on how to double your food truck profits? We’d love to hear from you. Feel free to share your experience in the comment section, our food truck forum or social media. Twitter | Facebook