food truck standing near street 1

Fast times require convenience, people are always on the lookout for easier food choices. A food truck is a swanky mobile food store shelling out mostly snacks in busy urban and semi urban area.

These are comparatively cheaper alternatives to fast food chains such as Subway, Starbucks etc.

Food truck business are on the rise as they are modular, customised mini trucks with a variety of cuisines to discover.

Moving where there is an abundance of crowd’s makes business much easier with high return of investment. With a boom in customers trying out new delicious cuisines, the competition is cutting edge.

While stationary stalls and restaurants were great in initial stages of urban development, now there is a typical saturation in customer satisfaction requiring huge investments with low probability of breaking even. Soaring real estate prices demand higher rents which doesn’t work out if there is no consistent volume of sales.

Necessity is also the mother of innovation, so came the concept of food trucks, resulting in much diversity in restaurant business. Younger generations love trying out foods that aren’t burning a hole in their pockets. Yet the market size by revenue is big in numbers with $1.0 billion in 2019, with estimated growth of 0.2% in 2019.

Here is Profitable Business Plan Sample for Starting a Food Truck Business

Where to start?

Have a crystal clear view with research and investment ideas. That goes to say, there is hours of research, on field, and potential competitor analysis to do before you dive into investing. There are innumerable cuisines to choose from, market niches and undiscovered markets to exploit when there is a deep understanding if various aspects of the given business.

Combined online, literature and field research gives the in/out of the food truck industry. Field research has the highest potential exposure as there is learning from mentors that guide all the way from scratch. A much better alternative is a professional expert that performs feasibility analysis tests and detailed reports specific to your needs such geographical location, competitors and other queries.

Business Plan – A solid foundation

Once you have clear concept in mind, define it with a comprehensive business plan which assists you ahead with materialising your business. A business plan serves as a guiding foundation that leads to growing your business with investments, loans, and business partners.

Steps to start a food truck business

1. Naming your Business

Is one of the most vital parts that defines your brand. As you are brand that is mobile that caters to a diverse population it has to be catchy and small is on a similar ground as the cuisine you serve. Also when your brand identifies itself with the local/regional culture it is highly favorable.

2. Location

That you serve, places with high customer traffic all through the day makes it quite significant for business. A quite and spacious street still visible a few blocks away from a busy intersection works out great, as you are on wheels there is always a scope for trying out newer places.

3. Registration and Licensing

Here comes the paper work that builds your business from the ground up. Permits/licenses are always lengthy but are one time investment that defines your conviction in your idea.

4. Decided on Types of Legal Entity

you identify as a business, the most preferred type for a food truck business is a Limited Liability Company (LLC). An LLC requires fewer startup costs than other variations and quite advantageous in terms of finance as it keeps the business owners personal assets separate from liabilities/debts of the business. You can read about all the legal business entities in the USA here.

5. Get Business License

Every business that is taxable requires a business license to operate. Based on city, state and scope of services, your business may be charged either a percentage of your gross profits or a flat yearly fee along with a license fee.

Joining the local restaurant/ food truck association for updates on laws, permits that effect your business.

Here are the licenses required for food truck business in the USA

  • Employer Identification Number: From procurement to serving food, you will require a number of employees as you grow but you have to go through the hassle of acquiring a EIN just once as the IRS uses it to identify your taxable business and your employees. It is free but only one is issued by the IRS every day.
  • Vehicle License: A unique combination of business and wheels, still you will require a licensed vehicle and driver(s). The type of license may vary depending on size of the vehicle, the state your business is in.
  • Seller’s Permit: Many states require food truck proprietors to have a sellers permit so you can purchase goods at wholesale rates without the sales tax.
  • Food Handler’s Permit: When it comes to food, it is essential that your employees that handle the food go through a basic food safety course/classes that materialises to such a permit useful for your business.(typically $100 per employee)
  • Health Department Permit: Such a permit certifies your business by the local/county health department as it is with generic restaurants, they are reviewed and approved initially and periodically for consistency in hygiene and quality.
  • Fire Certificates: Any business that deals with cooking equipment is inspected by the fire department, they also assist in following fire department regulation’s, and routine inspections of your food truck equipment.

Securing all the above permits/licenses is quite important, you may avoid huge fines and possible business closure. The applications, licensing process may vary from each city/county and state depending requirements. These can be applied for in person, phone call, fax and online.

Documents required for business registration

  • Green card – As a sole form of document that accredits your US citizenship, the Green card is of paramount importance to start and register a business.
  • Social Security Number – The SSN is as vital as the Green card as it specifies your Name and Address, it greatly helps in performing prior financial, educational and criminal (if any) background checks that assist in future growth of your business.
  • Licenses/Permits – As in above listed licenses, each license structurally forms your business, any lacunae may lead to lapses in company formation. As it also depends on the type of corporation you register as.

Total investment requirement’s for a food truck business

While it may sound all hank dory easy to start up a food truck with cheap vehicle, there are significant monthly investments that you may not be aware of. There are advantageous as there is no location rent/lease and you can go ahead with a few employees if you are a driving force on field still there are overheads.

You can start with an initial six figure cost to be set aside for going all in, commonly $10,000.

The general pattern of break down is $20,000 each for the truck and truck permit, $45,000 for customization and equipment, $10,000 liquid capital to survive for a minimum of 03 months and at least $5000 annual insurance based on coverage levels and percentage used for operations.

Every city regulations require you to use a commissary that may cost in the range of $1,000-$1,500 every month based on the location and service you provide. Then at last you have the maintenance of the truck(s) itself, after spending $15,000-$100,000 on the purchase of the truck.

A commercial kitchen space goes onto cost $500-$1,500 a month, these can be done for an entire space ($1,500) or only a time slot of 8 hours ($200-$300) of everyday schedule. Cooking gas and vehicle fuel costs about $300 each.

Some busy streets such as in NYC may bring you down with parking tickets on a bad day from $65-$100, depending on how nice you are with meter attendants in that area, monthly ticket costs may go upto a few hundred to a few thousand dollars.

Some miscellaneous costs such as a POS(Point of Sale) register system some are free and some charge monthly, portable wife goes to $30 per month, accounting costs $250 dollars per month and the key supplies such as $200 per month to replace, batteries, towels, hairnets, gloves, kitchen timers, and utensils.
All this excludes the permits/licenses to be acquired.

Who do I hire?

So you are up and running, have all the permits and licenses. Maybe you have ventured into food trucking with a few friends or family but eventually you will need more hands on deck.

Typically as it is a small venture, few people handle multiple activities. The space you have on your food truck says how much staff you require to work fast and hard. Employees are mostly divided between work on the truck as servers, cooks and another two sets at the office or commercial kitchen. A food truck can hold only 2-6 employees comfortably.

Front of the House(FoH)

This in the food service industry refers to customer service including serving, interacting, billing in totality from the moment their approach your service window till the moment they leave. These individuals are the faces that represent your brand.

Service window attendants take the food orders, serve customers with F&B, are though at billing and tally the register. They have to have through knowledge of the menu, how is the food made, their taste, are there special orders. Keep updated with daily specials, if any. It is vital they are polite, professional and reliable.

Back of the House(BoH)

The part of the staff that runs majority of the show, including daily operational tasks including cooking, cleaning, and bookkeeping.

  • Food truck kitchen workers – From measuring and weighing ingredients to straining soups and sauces. The clean, peel, slice the meat, fish and veggies prepping for cooking.Moving items from the kitchen to truck, unloading every day, truck washing regularly.Commonly employees are cooks and kitchen workers too.
  • Chef & Cooks – The cooks are responsible for the truck & commercial kitchen, lead and hired by the Chef. The chef is responsible for buying supplies, equipment and daily menus. A chef has culinary certification while a cook doesn’t.
  • Food truck Driver – Based on your truck size and driving requirements, you will need a driver holding a commercial license. Checking weather one of your employees requires a commercial licenses depending on the food trucks size is a good idea.
  • Mobile Food Business managers – Manager or shift manager runs the whole show. They hold the responsibilities such as overseeing the truck ops and commercial kitchen to filling in for a last minute absence of employers. The managers open and closes business everyday, tracking inventory, purchasing raw materials through suppliers and advertising too. Based on your business the manager is the administrator, the chef, cook and a kitchen worker too sometimes.

There are no customers! what do I do?

Making the local populous aware of your business may or may not be easy.
Based on cuisine you have chosen and where you choose to be stationary at certain time during the day/night makes a lot of difference.

Starting with paper leaflets, free samples, radio advertisements to online social media campaigns with a highly active social media page on Facebook, twitter and Instagram will surely make you a hit in no time.

Business is booming, where to now?

So you have broken even, hired more people and customers just can’t get enough of you.The next logical step is to diversify and grow. Once you gather enough capital to expand to a 2nd or 3rd truck, you will closely resemble a small franchise serving multiple locations.

Hold onto those finances and leak proof any cash flows and you might just expand much more.

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