While food trucks aren’t as capital intensive as restaurants, it isn’t cheap to open a mobile food business. Truck build out and equipment costs, starting inventory, licenses, fees and working capital can easily add up to tens of thousands of dollars. To make matters worse, banks hesitate to lend to new food businesses. So where can prospective food truck vendors turn for capital to fuel their dreams? Over the years, we’ve learn about crowdfunding. Today we’ll share some essential tips for crowdfunding your food truck.
Essential Tips For Crowdfunding Your Food Truck
Crowdfunding is a financing tool popularized by Kickstarter, Indiegogo and Foodstart. Culinary entrepreneurs start campaigns to pitch their concepts and receive pledges from backers in exchange for rewards and gifts. Crowdfunding isn’t easy money. Use these tips for crowdfunding your food truck project provided by those who have run both successful and unsuccessful food truck campaigns in the past.
Just like running a successful lunch shift, prepping is 90% of the battle. Once you launch your food truck campaign you won’t have much time for anything else. Prior to you launch you need to prepare, so your campaign doesn’t stall out. Good campaigns take at least upwards of three to four months of lead time.
For a successful campaign, you’ll need a variety of skill sets within your team. The first person must act as project manager. It’s crucial to have someone who is on top off all the elements. Successful campaigns tell their story and showcase their brand. Make sure you have a good photographer/videographer and a designer to tell your story. The final person needs to have a copy writing background to develop your tagline, social media posts and press releases.
Setting Your Goals
Just because you want a hundred thousand dollars does not mean you should set your goal at a hundred thousand dollars. The best way to establish your goal is by first determining what you need the money for.
Do you need the money for additional equipment like a deep fryer or a pizza oven? If so, your goal should be set to that amount. Why hold back? Kickstarter campaigns are all or nothing. This means if you don’t hit your goal of $100,000, you don’t get to keep the $99,999 you raised.
The next step in crowdfunding your food truck is to analyze previous food truck campaigns in your area. This will give you a realistic idea to compare your planned goals to. This will tell you that you shouldn’t set your goal to $100,000 when your research shows you that most campaigns in your region have only raised $50,000.
The final step is to calculate the cost of your rewards and factor that into your goal. Nobody wants to raise $100,000 only to find out that you’ve only got $90,000 left to hit the road.
Set Proper Rewards Tiers
Getting people to back your food truck means giving back. Think of rewards as your menu offerings. You want to maximize your average check by appealing to a host of tastes, from sweet to savory. In crowdfunding, this means you want to have a selection of rewards that appeal to different price points. For example, you want offer rewards at the $20, $50, $100+ range.
Take some time to research other food truck crowdfunding projects to see which reward tiers worked best. Typically, reward tiers for a food truck will be dinner for two or tickets to your launch party.
Throw A Launch Party
Momentum is essential in crowdfunding your food truck. If you reach 20% of your goal in the first few days, you are 80% more likely to hit your goal. A successful launch party can help jumpstart your campaign. This will turn the attendees into food truck evangelists.
Let people experience the awesomeness of your menu, and use it as an opportunity to build excitement around your campaign. Invite friends and family, and people in media (local food bloggers as well). Offer free tastings from your menu and a step-and-repeat photo wall to encourage your guests to spread the word on social media.
Promoting Your Campaign
Just because you build a crowdfunding page doesn’t mean you will get tons of support to fund your food truck project. You need to have a promotional strategy in place before launching. Tell your story using professional imagery of your menu (and food truck if you are an existing vendor) and then spread it over social media.
Local press and bloggers will also play big part in promoting your food truck campaign. Identify writers that would speak to your target market and then research their past articles to find patterns about the stories they cover. The final step is to develop several press angles tailored specifically to the media members you’ve identified.
Like most recipes, you’ll need to adjust your food truck campaign from time to time. Use Google Analytics to track key metrics to know if your campaign is performing. You need to know how much traffic is coming to your campaign site, where it is coming from, and what your average pledge is. With this data you’ll be able to calculate your conversion rate.
If you have a 10% conversion rate and you average 100 visitors to your campaign each day, you are getting 10 backers a day. To double the number of backers, you can increase your conversion rate by making your page more appealing or double the amount of traffic that shows up. Knowing these key metrics and how they relate is important to your campaigns success.
RELATED: Food Truck Crowdfunding 101
The Bottom Line
Although crowdfunding your food truck is time intensive, it will provide more than just financial rewards. For one, it helps you from having to give away part of your new mobile food business to investors.
Building a base of food truck fans is another intangible result of crowdfunding. A successful campaign will create a base of early supporters because they are invested in your project. We’ve seen this time and time again, where a successful crowdfunded food truck has a huge grand opening.