Food trucks can be a lucrative business idea to many business owners. Learn How to Start a Food Truck Business in just six steps.
The food truck business has seen an increase in the last five years, with an average increase of 7.5 percent. If you’re thinking of how to start the first food cart, we’ve got the six steps to follow.
How to Start a Food Truck Business
Develop The Idea Of A Food Truck
The theme you select for the food truck’s concept will substantially impact your success. Pick a theme based on an enticing consumer response that matches your expectations.
There are plenty of options to pick from. It is possible to offer healthy options like vegan or gluten-free dishes. Food trucks are also specialized in offering fresh seafood as well as delicious mac and cheese.
Determine The Costs Of Starting
The idea of opening a food truck is cheaper than opening an establishment; however, the initial costs are costly. It takes around $55,000 to start a food cart across the U.S.
The costs for these include:
- Buying the truck.
- Getting licenses and permits.
- Putting money into the point-of-sale (POS) system.
- Receiving any legal guidance.
Additionally, you’ll need to consider the ongoing costs you could have to pay, like payroll, insurance, and advertising costs.
Find Sources Of Funding
Once you’ve figured out what you’ll have to be able to shell out for your venture, it’s time to begin planning how you’ll finance it. You’ll likely need to search for funding from various sources, mainly when this is your first venture.
Another option is getting secured loans for vehicles, like an auto loan. These loans are more affordable and have lower interest rates because the truck serves as collateral. Applying for an unsecured loan or a line of credit is also possible.
Make A Business Plan
If you intend to seek funding, banks will need to review an outline of your business plan. A business plan will provide a clear path to starting your company and can be one of the most effective ways to get investors interested.
In accordance with the Small Business Administration (SBA), your business plan must include the following elements:
- Executive Summary: Explain what your business does, your mission statement, and the basics about your staff.
- Description of your company: Provide more detailed details about your company and any unique benefits that set your business apart.
- Analyzing market conditions: Outline your competitive research and the strategies you have in mind to be ahead of your competitors.
- Management and Organization: Explain your business’s legal structure and how you intend to manage it.
- Description of the product: Talk more about your product and the types of customers you’ll serve.
- Sales and marketing: Outline the marketing strategies you plan to develop and keep an existing customer base.
- Funding request: Explain how much funds you’ll need and the purpose you intend to apply the money to.
- Forecasts of financial performance: These include forecasted financial statements and quarterly projections.
- Appendix: Include all supporting documentation like credit histories licenses, permits, or legal documents.
Get The Permits You Need
The permits and licenses required for operating your food trucks will mostly be contingent on which state you reside in. However, you’ll require a business license and a food service permit at a minimum. The best option is to call the health department in your area and learn what you’ll need.
Food trucks cannot park anyplace, so you must investigate potential parking restrictions. You can contact the regional motor vehicle office to find out about local regulations.
Get Your Vehicle
It’s time to buy the food truck you’ve been dreaming of. The price associated with a food van may be quite different, and it could cost anywhere between $50,000 to $175,000. To keep costs down, it is possible to consider buying a used truck.
The most important thing to do is to ensure that the truck you purchase complies with the latest standards. For instance, you’ll need to be sure that the equipment functions properly, that the truck is running at sufficient water pressure, and that there’s enough storage space.
You can purchase a used truck through eBay and Craig’s List sellers. You could also think about purchasing an entirely fresh truck from the maker directly.
The Final Line
Ultimately, learning how to begin the food truck will require significant time, effort, and money.
Although competition has become more complex, if you’re able to find a niche, you stand the best chance of success without the cost of opening an establishment.
If your goals are to open a restaurant eventually, then a food truck could be an excellent place to start. For example, Laura O’Neill and her co-founders, Ben and Pete Van Leeuwen began their Van Leeuwen Artisan Ice Cream truck in the spring of 2008. Since then, the trio has enjoyed great success, and the business now has more than 20 locations, including stores and trucks in New York and LA.
According to O’Neill, food trucks let the co-founders visit various locations to discover who their customers were and what type of food they would like to take in. Thus, in a way, it lets you test your food-related ideas before signing an expensive lease or other high expenses.
As you decide how to begin an eatery and establish your business, you may decide that the mobility-based business life is the best way. In the meantime, you can build different trucks in your state or city; the possibilities are endless.