Even though new food truck vendors focus on the creative work within their kitchens, they cannot avoid one thing: financial management. Starting a food truck business requires a well-planned food truck budget. Without a startup food truck budget your truck has a great chance of failure. Not only does your food truck budget play a crucial role in keeping your food truck afloat once you launch, but it’s also important to future investors.
Before planning your food truck budget and handing it over to those that might be interested in financing your concept, you need to take a moment and rethink your financial strategy in order to use your prospective funds as efficiently as possible. Today we’ll discuss some of the most common mistakes vendors make when planning their food truck budget.
5 Common Mistakes To Avoid With Your Food Truck Budgets
Not Having A Food Truck Budget
I know, this sounds crazy, but it still happens. Chefs who have great food truck concepts and look for ways to implement them, sometimes find it hard to discuss their food truck projects from a financial angle. When talking with prospective investors, startup food truckers simply must know how much money they will need and how they need to spend it. Without this knowledge a vendor can certainly expect problems in the future.
Underestimating Food Truck Costs
When planning a budget, some costs may get underestimated, others are completely forgotten. This type of mistake can jeopardize the future of a truck. When planning the food truck budget, a vendor must take even cost into account. If you are going to be hiring staff members, your estimated costs must include not only their salary, but also all the equipment they’ll be required to do their job: a uniform, cooking tools, etc…
Understanding all of your revenue is an important part of every food truck budget plan, even though it rarely corresponds to the reality of a business. The most common mistakes newbie vendors make in this area are: forgetting about the seasonality of a food truck business, overlooking the possibility of changes to customer tastes (if you have a very niche concept) and assuming your food truck is going to have exponential growth at the beginning.
No Food Truck Marketing Budget
No marketing means fewer no customers at all. The digital era might convince new vendors that a marketing budget is an unnecessary cost. I mean we can manage our own social media at no cost. But the reality of running a food truck business will soon verify this belief. The rule of thumb for creating a marketing budget is 3 to 6 percent of projected annual revenues.
Related: How To Develop Your Food Truck Marketing Budget
This is always a tough one. New food truck owners might believe that their ownership should guarantee them a high salary. Unfortunately that’s just not the case. If you’re a startup food trucker and you’re planning to enjoy every bit of an extremely high salary, think twice. Consider this from the perspective of possible investors. So you are going to get paid immediately, while they will need to wait until the food truck brings in profits. How quickly do you think they’ll see that and run away?
The Bottom Line
Have you run into any other food truck budget mistakes we may have missed? We’d love to hear your thoughts. Share them privately via email, or publicly through the comment section, our food truck forum or social media. Facebook | Twitter