One of the most common mistakes made by first time food truck owners is to confusing the ideas of ringing up sales with making food truck profits. Some of the new mobile food vendors we’ve spoken with appear to believe that the number of tickets they ring up in a service is the key to success.
Unfortunately these vendors fail to take into account that while ticket count is important, the more important factor is to earn enough to cover their costs including paying themselves. Without making this their focus, they might as well be back in a job where they are working for someone else.
Everyone who starts a food truck understands the importance of making a profit, but somehow some vendors follow through with making this happen.
4 Tactics To Maximize Your Food Truck Profits
The first step in maximizing your food truck profits is to take profitability into account on every sale you make. Another big one is to keep the mobile food business’ operating costs as low as possible.
Once you can nail those two points, follow these rules to generate maximum food truck profits from each and every sale:
Make The Price Right
Many first timers think they need to undercut the competition to draw customers to their service window. This is certainly the quickest way to failure. If what makes your truck unique is that you offer the lowest prices, what happens when another trucks drops their prices below yours?
To develop proper pricing, dig into all of your costs (food, labor and overhead). Now take a look at what other trucks or restaurants price similar products. Don’t be afraid of being the most expensive as long as you offer items on your menu that justify your rates.
RELATED: Food Truck Menu Pricing Methods
Push High Margin Menu Items
Understanding the differences in margin for each of the items on your menu is critical for shaping your profit plan. Many of the most successful food truck vendors boost their bottom line by pushing items that have lower prices but maintain larger margins. While the total sale maybe smaller, with each one, they put more money in their pocket.
Cross Sell With Higher Margin Items
Last month I spoke with a food truck owner that keeps track of the typical add-on menu items (think apps, sides, beverages and desserts) that are purchased when someone buys his most popular entrée (it’s also hold the highest margin for that menu segment).
These items help him increase the profitability entrée sales because they have even higher margins. So he instructs all of his service staff to push the idea of adding those items when customers only purchase an entrée. Since training his staff this technique he has seen his profits skyrocket.
Put Your Menu On A Diet
Food trucks don’t offer a lot of storage space, so why are you tying up this valuable real-estate with ingredients that might only be used in low selling, low profit dishes? By getting rid of your slow moving menu items, you can save space, prep time and money and put it into menu items with the highest margins?
RELATED: Keeping A Simple Food Truck Concept
The Bottom Line
There are plenty of other tactics food truck owners can use, but the key is always to keep your eye on maximizing your profit. Remember, it’s not how tickets you ring up, but how much you earn on each sale. Otherwise, when you run out of your working capital (if you have any at all), you’re truck will be out of business until you can come up with more money.