Setting a budget for your food truck business is about more than just covering operating expenses and payroll. Planning in advance is the key to expanding your food truck empire. Every vendor tends to have a slightly different budget planning process. However, there are some parameters found in nearly every budget that you can easily employ.
For example, some food truck owners have rent or mortgage payments. They also have utility bills, payroll expenses, cost of goods sold expenses, interest and tax payments. The point is that every food truck owner should consider these items and any other costs specifically associated with their food truck when starting out or when taking over an existing mobile food business.
5 Things To Consider When Food Truck Budget Planning:
- Emergency savings: The first of our budget planning tips centers on emergency savings. You might anticipate hiring new employees or purchasing updated kitchen equipment in the coming year, but what about emergencies? Even if you’re food truck is already running on a tight budget, it’s wise to reserve funds for the unexpected.
- Growth plans: Your food truck budget might be influenced by growth goals, such as expanding operations or hiring new employees. Build up the cash you’ll need ahead of time, and instead of allocating this money without understanding what it’s planned for, understand how setting aside funds for expansion will impact the rest of your day-to-day mobile food business.
- Profit and loss reviews: According to the U.S. Small Business Administration, business budgets should be updated every month. Profits and losses should be reviewed monthly as well, so you can adjust plans on the fly to assure you’re on track to meet your goals.
- Irregular expenses: The SBA suggests dividing expenses into two categories: fixed and variable. However, it can be difficult to incorporate irregular or seasonal spending into your budget. Carefully review your actual expenses from previous years to look for one-time, annual or seasonal expenses you should plan for this and future years.
- Repairs and improvements: Set aside some profits each year to keep your tools and technology up to date. Some of these expenses can result in boosted profits, such as equipment that expands your capabilities or improves productivity in your truck. Make sure you plan for these improvements so they don’t catch you off guard and eat into your emergency savings.
The Bottom Line
The key to budget planning and having a budget that actually works is more important than ever. But how do you plan a budget that you’ll actually stick to? The key is to understand these budget planning tips and figure out which one is the best fit. It is important to understand that budget planning isn’t easy, but you can never give up.