Know Your Food Cost Percentage. Know Your Restaurant Profits.
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The food truck industry has shown remarkable growth, with an average annual increase of 9.9% from 2018 to 2023. Unlike other restaurant models with high overhead costs associated with rent, utilities, and renovations, food trucks have a lower financial barrier to entering the market. With lower overhead costs and the flexibility to chase customers, it's no surprise this industry is touching heights!
But that’s not it. The overall cost of starting a food truck is far less than that of a QSR or a typical restaurant. Starting a food truck business in the US costs around 0.05 million to 0.06 million USD. Comparatively, the average revenue stream from a food truck business may be around USD 0.29 million. Lower startup costs and strong revenue potential make food trucks attractive to aspiring entrepreneurs.
If you’re one of those aspiring people, this article is for you! This guide on how to start a food truck in 2024 will walk you through everything from developing your concept to branding to creating a business plan and the legal requirements!
The initial step is to settle on a concept for your food truck business. Now, there are three critical things that you should do to make your idea succeed.
Think of a signature dish or cuisine. Are you passionate about baking, coffee, or a unique cooking style? Acknowledging and counting on your interests and expertise will help you choose the right niche. Now, someone somewhere must have a similar idea or concept to you. So, once you figure out your niche, you need to think about how you can add a touch of uniqueness to it. Also, you could think of opening a franchise.
Market research is a must when you plan to start a food truck in 2024. Analyze the location, the people, the environment, and the competitors, and explore the locality in which you want to open your food truck. Figure out what restaurants, diners, or food trucks already exist there.
Get an idea of the people's dietary habits, popular cuisines or recipes, and how many people you’d be able to serve at a time. What are the peak timings and the rush days? This will help you decide where to open your food truck business and how to position it well.
By the time you get to this step, you’ll have a fair idea of what kind of names other food trucks or small businesses in the industry have. Now, all you need to do is think outside the box and decide on a name that’s distinct but fits well in the market.
After the name comes the logo and the tagline, ensure the logo is unique, easy, and memorable. At the same time, the tagline should be self-explanatory and support your brand’s story, its values, and what it’s all about.
Your business plan should include everything from business strategies to goals and financial projections. Here’s a list to help you create one for your food truck business.
Jot down your food truck concept, the story, the mission statement, the vision, and the most critical focus points.
Decide upon the legal structure for your food truck business. Do you want it to be an LLC or a sole proprietorship? Also, decide on the ownership, partnership (if any), management, and company location.
When you research, ensure you analyze the market you want to target and who your competitors are in that particular market. You must also research market trends like local or traditional cuisines, popular cuisines, seasonal ingredients or recipes, social media, and offline marketing trends.
Noting that you already have a niche, a concept, and company structure in place, deciding your food truck's menu and pricing strategy will be breezy! But, before you lock the prices, make sure you study the competitor prices and the budget of your target audience.
To run a successful food truck business, you must be present online. Therefore, decide on the marketing channels, promotion ideas, and loyalty program strategies.
Hire staff if required, plan your daily operations, and select and build relationships with the vendors.
Lay down all your initial costs, from investing in the truck to operating and utility expenses to the estimated revenue and profit.
Decide where you would arrange the funds from. It could be personal investment, loan, making a partner, seeking funding, or looking for potential investors.
With business comes risk! Stay prepared by identifying the potential risks and plan risk mitigation.
Identifying all the crucial costs of starting a food truck business is critical for budgeting and landing adequate funding. By taking note of each expense, you can make better, more informed decisions regarding personal investment, loans, or finding the right investors.
Whether you want it to be an LLC, a partnership, or a sole proprietorship? Discussing this with a legal attorney before settling on the structure is best. Once decided, ensure you get it registered with the appropriate government agencies.
Almost all businesses need a license, and food trucks are no different. Therefore, it is best to search for the required permits based on your locality, city, state, and country to get the licensing right.
It may cost you approximately $28,276 on permits and ongoing legal compliance during the first year of operation. Here’s a list of some standard licenses or permits you may need to start your food truck business in 2024:
Remember to check with your local government agencies, health care departments, municipalities, and business licensing departments for up-to-date information about licenses.
Acquiring a food truck may seem tricky at first, but if you go step by step you’ll nail it in time!
Arranging a food truck is the most important and expensive part of the process. So, instead of diving straight into leasing just any car, it’s best to outline your requirements, truck size, budget, and equipment.
Based on that, explore classified ads in newspapers and magazines and check online food truck websites for rent and purchase. You can buy a second-hand truck with a budget crunch and then revamp it.
Once you find the right pick for your business, verify your ownership by gathering all the necessary documents, such as registration papers. Once verified, consider customizing or upgrading its exteriors and interiors as your brand or concept demands.
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Now that you have a truck, list the essential equipment you may need to run your food truck! You must arrange everything from all the cooking appliances to refrigeration and storage management.
Don’t forget to set up the POS (Point-Of-Sale) system for order-taking, payment processing, inventory management and employee scheduling. The latest technology can help you start faster and be more efficient in setting up the entire system for your food truck business.
You can’t manage everything by yourself. You may need helping hands. That is where the staff comes in. Analyze what tasks you need to hire staff for and start with the hiring process. Lay out all the job roles and their responsibilities to post on relevant online job listing platforms.
When you finalize the suitable candidates for various roles, ensure they’re aware and aligned with all the food safety and hygiene parameters. Moreover, check for customer service skills in them. If you have the resources, you may also provide them with short-term training programs.
Oh, and don’t forget to have a structure for competitive wages and occasional rewards for your staff. Depending on your budget and business model, you can also provide them with free meals during their shifts or reimbursements.
Ensure the suppliers you choose are the ones you can rely on, negotiate with, and build a long-term relationship with. This will always help you in the long run.
Once you have shortlisted your suppliers and fixed your ingredients and utilities, record what supplies you stock and when. Always keep an eye on the inventory and restock on time! Restaurant inventory management software like OneHubPOS automates stock alerts and eases the inventory management process.
Today, taking your business to new heights will be tricky if you don't have an online presence. Set up a Google business account, a professional website, and social media pages for your food truck brand. Keep updating your social media with relevant information about your food truck, the locations you’ll be at, what you’re bringing to the table, offers, follow trends, and stay active! Post teasers of your food truck, behind the scenes of the making of your food truck, and reveal soon content. The more you engage with people on social media, the more people will become curious about visiting your truck.
Have a plan for paid media once you have an excellent online presence with a good number of followers. Also, explore online and offline advertising options. Partner with local businesses to spread awareness and increase your customer base. You may also host small events from time to time, engage people, and also take up opportunities for catering and delivery!
Just one trick in your pocket won’t necessarily work the best for your food truck business. You have an excellent opportunity to hit and try different ways to gather people around and increase your sales. For example, host an evening for family and friends, happy Wednesdays with special offers, or partner with local artists for live music, a dance show, or simply screen an iconic movie!
Trying different things will help you understand what’s working the best for you! What events or offers make you the most sales? What activities are people most interested in? Answering these will help you adjust and improve the existing plan and operations.
It’s time to hit the streets! From word of mouth to social media to local collaboration, spread the word of your opening. Generate buzz and organize a grand opening event! You can also keep special offers, promotions, or even free samples for some of your signature dishes. Don’t forget to invite potential local partners, sponsors, and investors.
If you see the potential to scale the business, you may plan to expand your menu or even buy more food trucks to expand in different locations!
Your food truck business is on the run! Now, you need to focus on additional responsibilities like food waste management. You could keep your portions limited but adequate size so the food isn't wasted. Also, everyone around you is embracing sustainability. You could start, too, by providing sustainable or reusable cutlery! Keep your surroundings hygienic. Have a bin attached somewhere to the side of your food truck for easy disposal.
Another essential thing to note is the parking permits. Check with your local county clerk or lawyer about where you want to sell the food. Some locations could be off-limits to food trucks, but you can get confirmation and plan accordingly.
Having the article, you may have a clear idea of how to start your food truck in 2024. It can be exhilarating, but the rest of the process will be smooth if you get the initial steps right.
Combine your culinary expertise with a quirky business strategy, and rest assured, your food truck business will boom! As for the operations, OneHubPOS can always come to your rescue. You get everything from a restaurant POS, self-ordering kiosks, a display system, or order and pay system. So, if and when you start your food truck business, you can improve your profit margins with OneHubPOS, an all-in-one Android POS solution. Book a call with us and learn how you can get started at $1.
Sahana is a seasoned GTM leader with a passion for building startups. She excels in crafting GTM strategies for tech products, driving revenue growth.
