Food trucks have exploded in popularity in recent years. According to an industry report from MobileCuisine.com, the food truck industry has gone from $803.8 million in revenue in 2014 to $1.2 billion in 2015. That’s a major jump.
We’re no longer limited to the taco truck on the corner and the ice cream truck that slowly rolls around the neighborhood in summer months. Now, it’s possible to get cuisine from all over the world right outside your office doors.
Today, there are more than 4,000 food trucks operating in the U.S. Why the popularity? Starting a food truck business is less risky and intimidating than a brick-and-mortar restaurant, and offers more flexibility, especially in terms of location, cuisine, and operating hours. Plus, the total startup cost is roughly $50,000 to $100,000 — just a drop in the bucket compared to a restaurant.
We chatted with the passionate Brett Lindenberg of FoodTruckEmpire.com on the ins and outs of starting a meals-on-wheels business. Lindenberg runs a blog and podcast, and offers courses and resources for aspiring and established food truck owners. He shares his expert advice on how to start a food truck business.
Start with a Business Plan
The building block for any business is a business plan. “Some people think a business plan is only something a really big business would do,” Lindenberg says. But it’s actually an essential step for even the smallest food truck venture.
While it may sound intimidating for a new entrepreneur, there are plenty of resources available. We have an ultimate guide for anyone who wants to learn how to write a business plan, and Lindenerg runs a course for those who want to learn how to start a food truck business. One component of the course tackles creating a business plan.
“Going through that process first, you’re going to understand what type of food to serve and what type of menu to have,” he says. “Once you know that, you’re going to figure out how much it will cost to buy all the food and what profits are going to look like.”
This process will help you grasp how much money you’re going to spend before you ever have the chance to invest in it.
A business plan also serves as a metaphorical North Star for your food truck business.
Refer back to it throughout the entire process to make sure you’re staying on track to success.
Need a template to help you get started? Here are some resources you can lean on:
- SBA Create Your Business Plan: The Small Business Administration has created a comprehensive walkthrough that assists prospective business owners create a personalized plan. The guide walks you through each section of your business plan and includes all the details you’ll need to include.
- SCORE Business Plan & Financial Statements Templates: Detailed templates for a variety of business types, including startups, previously established businesses, and not-for-profits.
- Sample Business Plans: Over 500 sample business plans for various industries including restaurants, retail, medical, health, services, fitness, pet services, and many more.
Figure Out the Food
Lindenberg typically sees two approaches to menu development: a personal approach and a business approach.
For some food truck owners, the menu comes from a personal experience. It could be a family recipe that’s been passed on for generations, something you’ve always dreamed of making, a type of cuisine you learned on a trip, or simply the type of food that makes you happy.
Whatever the personal investment, it lends itself to your brand. “That’s what you know how to make and what you love to make,” Lindenberg says. “You’ve got a great story behind it. You’re really passionate about it, and you go from there. You’ll differentiate yourself and be unique with your own story. Customers are attracted to that.”
On the other hand, you can look at it from a business standpoint. “There are certain types of food trucks that work well and have been proven in just about any market,” says Lindenberg. Tacos, hot dogs, and shaved ice are just a few examples.
The challenge with this approach is the differentiation. “If you’re a taco truck with no specific angle and don’t do anything unique, it’s going to be tough to build a following. You’re just fulfilling an existing demand,” says Lindenberg.
Knowing the menu is important to more than just the opportunity in the market and for building a brand. It also helps you identify the type of truck and how much space you’ll need. The ideal size for a food truck is typically 24-26 feet, according to NorthWest Mobile Kitchens, which provides interior kitchen space that’s about 14-18 feet long and 84-93 inches wide, with a ceiling height around 78-90 inches.
When thinking about how much space you need, your needs go beyond prepping, cooking, and serving. Will you have a commissary (some cities require food trucks use commissaries)? If so, then you don’t need too much room for food storage and prep.
Some food trucks will need grills, others need only a deep fryer, and some may not need anything to cook (for example, The Juice Truck stocks cold-pressed juices, so no grills needed there).
Also consider extraneous equipment, like the onboard generator used to power all your kitchen equipment. Depending on your power needs, you’ll likely need a high-quality generator that provides a consistent power source — which is a serious investment in the range of $3,500-$12,000, according to metal fabricating firm Silver Star. Some of this equipment might even be tax deductible via the section 179 tax deduction.
If you don’t want to invest in an onboard generator, you can rely on an external power source (electrical plugin only is an option, but limits your parking locales as you'll always need to be near an outlet and sufficient power source).
Research the Laws
After your business plan is complete and the menu is drafted up, you need to research how to start a food truck business from a legal standpoint.
As a food truck business owner, it’s necessary to know the health codes, regulations, required permits, zoning guidelines — all the nitty gritty details that aren’t fun, but absolutely essential to making sure you’re operating a legal business.
Lindenberg says that the difficult part about that is it’s different depending on where you are. “If you live in a big city, you can probably find information pretty easily online. If you’re in a smaller town, you might have to call the city and local government entities.”
No matter how you’re getting your information, make sure it’s from a reputable source and that you’re thorough in researching the legalities.
Get Your Truck Rolling
When you think about how to start a food truck business, perhaps the most exciting part is the truck. But here are a few different ways to go about getting your food truck:
- Start from scratch and get a brand-new, customized food truck
- Refurbish a previously used food truck
- Breathe new life into an older vehicle (think converted school buses, FedEx trucks, etc.)
As far as cost goes, Lindenberg gives this advice: “Ask yourself if you want to spend a little more on the front end and not have to worry about breakdowns, or if you want an older vehicle and have to repair it more frequently. Look at what you can do, what your skills are and where you want to spend your time.”
Regardless of the route you go, the truck’s going to need standard vehicle maintenance. Make sure you’re ready to invest that time and care into it, or you could find yourself operating a money pit. On average, insurance, repairs, maintenances, licenses and fuel cost almost as much as the food and beverages.
Ask around and get quotes from different builders to establish a median cost. And when you’re ready to choose your builder, make sure you enlist a credible professional. Lindenberg stresses the importance of doing your due diligence.
“If you have someone who builds trucks in your area, ask for some references. Builders should have food trucks online where you can look at examples of their previous builds. Then give those people a call to see what the experience was like, if they still operate, and if it broke down a bunch of times.”
At the end of the day, you want to be confident in your builder and find someone people stand behind.
Your builder should ask what type of food you plan to serve, so they can accommodate all of the kitchen equipment you’re going to need. Consider how many employees will be manning the truck at a given time, where food should be stored, where you’ll prep and cook, and how you want your point-of-sale system to work with everything else. So, be sure to research the right POS for your business.
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Consider contacting several builders or used truck dealers, like:
- Caged Crow Fabrication
- Prestige Food Trucks
- Venture Food Trucks
- Apollo Food Trucks
- Roaming Hunger
- Used Vending
Weigh your options carefully and decide to go new or used based on your business needs.
Hire Your Staff
Lindenberg draws comparisons between food truck staff and restaurant staff. Your crew will likely be a few part-time employees. “Anticipate pretty high turnover,” Lindendberg says.
However, there are things you can do as an employer to counteract that trend. Lindenberg suggests employers offer incentives. Let your employees take the tips home, offer a fun working environment, and show your employees you trust them.
Get the Word Out
You’ve got a plan, a menu, and a truck. Now you need hungry mouths to feed.
“That’s one of the most scary things. You do all this work and research, and now you have to figure out how to get people to buy your product,” Lindenberg says.
But if you have a thorough business plan, you’ve already thought about the marketing aspect. Lindenberg suggests that while you’re in the beginning stages of developing a menu, think about how you’re actually going to earn revenue.
“A lot of food trucks make well over 50% of their profit through catering gigs,” he says. Don’t expect to make the big bucks off the lunchtime crowd.
Lindenberg recalls advice he once received from a food truck owner: “Break even on expenses during the week. Get your big revenue hits on the weekends.” When you’re planning how to start a food truck business, approach it like you would a catering business.
Trust in the power of word-of-mouth marketing. Find places where food trucks congregate for lunch, or look at large businesses or events to go to 3-4 times per week to cover your expenses and generate recurring revenue. These are also relationship-building opportunities. Talk to your customers and get your name out there for catering opportunities: birthday parties, weddings, corporate events, 5K races, etc.
Here are some other ideas to market your catering services:
- Note your catering services on all of your menus and other marketing materials
- Include information about your catering services on your website, perhaps as its own tab
- If you’re using social media, share photos from events, and let your audience know that they can hire you for their events as well
- Consider a referral program and offer a discount on catering services in exchange
- To target weddings, reserve booths at bridal fairs
What Not to Do
“Be patient,” Lindenberg says when asked to give his No. 1 piece of advice. “Profits don’t come overnight.” Aside from neglecting the business plan, this is where many aspiring food truck owners go wrong.
“Don’t get too pumped about anything,” Lindenberg suggests. A spot you may have thought would be a home run could actually be a dud, and vice a versa. Always have a back-up plan and never let yourself become discouraged.
Research is also extremely important. Lindenberg recalls a food truck owner who bought a truck online because it looked like a good deal. But they couldn’t meet their area’s codes due to the way it was built — which led to the purchase of a second truck.
A food truck business can be a flexible and fun entrepreneurial venture. But it’s not as simple as purchasing a truck and firing up the grill. If you plan strategically from the start, you could be on your way to local food truck fame.