How to Start a Food Truck Business [a Practical Guide]

The food truck industry is booming. It’s predicted to expand by 20% in 2019.

It’s a space where a growing interest in satisfying food and diverse cuisine is combining with innovative entrepreneurs starting up food trucks as a low-investment, dynamic and often experimental way to make their mark in the foodservice industry.

But if you are thinking about starting a food truck business, you probably know all this already.

What you really need is a comprehensive guide to starting your very own food truck business. So let’s get cooking!

How to start a food truck

First, you need to decide what your food truck is all about.

Gone are the days when running a food truck meant flipping burgers on the highway.

There are so many different types of mobile food truck out there.

Let’s get a taste of what’s on the menu…

BBQ – this is a low-cost food concept that also happens to be incredibly tasty and desirable. It also has the added plus that the smells of your delicacies are a form of advertising all of their own!

Ethnic fusion – interest in ethnic foods is going from strength to strength, from Korean barbecue to Vietnamese cuisine and Mexican street food.

Paninis – these fancy sandwiches are a classic choice; they have the simplicity of sandwich preparation with the added interest of delicious crusty bread and the intertwining of meat and cheese… mmm…sorry I got a bit carried away!

Waffles – this is another simple but exciting food idea, that can be served with infinite variety and innovation.

Cupcakes, ice cream, and other sweets – food trucks aren’t just about savory food, oh no! Simple items like cupcakes and ice creams are classics and attract sweet tooth’s the world over.

What you need to know before you start a food truck business

Before you go and buy your food truck, here are some important things you need to know…

• How many people you will serve in an average day

• How much storage and preparation equipment you need to serve your chosen produce

• How much standard equipment you will need

• How many staff members will manage your truck each day

As you can see, all these factors will affect the size and type of food truck you will need.

Owning a food truck: the basics

Food trucks can be as varied as the food they serve.

Some typical food truck sizes are…

Small food truck: around 8 x 6ft – 8 x 10ft

Medium food truck: 8.6 x 22ft

Large food truck: 8.6 x 26ft – 8.6 x 32ft

Extra large food truck: 8.6ft x 34+ft

How many customers will your food truck service?

You need to do your research to properly understand how many people your food truck is likely to serve.

Do research into what successful food trucks serve.

For example, one Thai food truck serves around 200 people during a busy 3 hour lunch period. In the evening they will serve probably half that many people again.

Another food truck owner estimates he serves around 300-350 customers over a 5 hour working day (including the lunch period). There’s tons of data available on owning a food truck business, most of it a few Google searches away, so there’s no excuse to not do your homework.

How to make your food truck profitable

The food truck business runs on very narrow margins, and before you have build up a reputation as a quality food vendor you should aim to at least break even, and treat any profit as a bonus.

A successful food truck business can bring in anywhere from 200,000 to 500,000 per year, with profit margins of upwards of 20%. Of course, these costs can vary greatly, which is why you need to roll up your sleeves and write a food truck business plan.

How to write a food truck business plan

You can’t start a food truck business by guesswork, it’s important to reduce the uncertainties as much as possible.

The only way to do this is to create a solid business plan.

Here’s how to create one…

Executive summary

This is the introduction to your ideal reader; this will be the person or institution you are trying to convince to give you money or support for your business.

It needs to make an excellent first impression. Don’t go into all the nitty-gritty details here, this is the broad overview and it needs to be both compelling and plausible.

Things to include in your executive summary:

• What type of food truck is it?
• Where will you sell your food from?
• How will you develop your business over time?
• What is the projected cost and profit of your truck?
• What will make your food truck successful in your target area?

Company description

It’s vital that you explain why and how your business will make a valuable addition to the existing food truck market.

If you are in an area where there is lots of food truck competition you’ll need to demonstrate how you will be different.

If you are in an area where there isn’t much of a food truck scene, explain why that is and how you will be able to tap into this potential market. You’ll need to spend extra time examining the potential untapped audience that you will be selling to.

You should also explain why you are going the food truck route, rather than starting a brick and mortar restaurant or cafe (don’t just say “because it’s cheaper”!).

And you also need to answer key questions like…

Where will you prepare your food: off-site, like at a commissary kitchen, or in your truck?

How will your food offerings compete with the menus of rival trucks?

What’s your competitive advantage/secret weapon? WIll it be a unique approach to cuisine? A new twist on an old classic? Or will it be your approach to sustainability? Or the use of new technology like booking apps? Or perhaps it will be your approach to marketing or PR or your existing reputation as a food purveyor? Of course, the more USPs you have the stronger your business plan will be, and the more likely it is that your food truck will succeed.

Research the food truck market in your area

It’s essential that you make the case about how you will enter the food truck market and how you will operate in it.

You need to be completely on top of your business and know the industry inside out.

Describe the current state of the food market, outlining any current trends, key consumer groups, the rate of growth and how much competition there is in the market. What niches have you identified that you can target?

You need to really pin down the details of your target audience demographic. What age range are your potential customers, where do they live, how much disposable income do they have, what are their food purchasing habits?

What needs does your target market have? Will they need a delivery option if the weather’s bad? Will they be popping out of the office on their lunch break to grab a burrito or will they be families visiting a food truck market on a weekend?

What size is your potential market and what prospects for growth does it have? If you’re tapping into a new trend, you need evidence that this new food craze is here to stay and isn’t just a passing fad (Jello Salads, anyone?).

Jello Salads: A food trend that never really caught on:

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Maybe your food truck only targets large events like festivals, public holidays (the annual fireworks display, or winter market and so on) or private events.

The more specific you are the more likely you’ll be able to convince stakeholders and investors in the viability of your food truck business. But more than this, it will make it much more likely that your business is successful and you are prepared for pretty much anything.

Money talk

Now comes the really brass tacks kind of detail. You need to be able to explain your pricing structure, gross margins, and projected income over the first 5 years. Make sure you have identified your main competition and have a realistic income structure compared to theirs. Beware of simply aiming to undercharge your competitors, there may be a reason they don’t sell their paninis cheaper than yours, it might not be sustainable. And at the end of the day your food truck needs to make money if it is to survive, so avoid getting into pricing wars, especially if it means engaging in a race to the bottom.

Food codes and regulation

It’s important that you are up to date with the relevant food codes in your area. These vary from country to country and region to region, so make sure you’ve done your research. Cite the necessary regulations you will have to comply with your business plan.

You also need to research the necessary insurance cover you will need if accidents happen.

Organisational and management structure

When you are starting a food truck business you will be working with other people, so it’s important to plan your organisational and management structure in advance.

This helps you maintain an efficient and productive division of labour and ensures everyone involved has clear expectations of what their roles involve and how they fit in with everyone else’s.

It’s helpful to think your organisational and management structure through in a hierarchical way, like this…

Owners

Who owns your food truck business and what kind of a business is it? Are you the sole proprietor or is it owned as a partnership (these are the typical food truck business types)? What percentage of the company does each owner hold?

Management

Who are the management team (include brief resume style summaries)?

Staff

How many people will staff your food truck? Most food trucks can hold around 2-6 staff members at any time. Detail how many staff you will start out with and if you intend to hire more people over time.

Product line

You need to think carefully about how your food products will be received by your audience because they’re at the heart of your food truck business.

• What unique delights do you have to serve your customers?
• Are you rediscovering forgotten menus or innovating bold new flavors?
• Will you be playing to existing food favourites or hitting your audience with new and enticing options?
• Do you have a new concept that will hit the food truck world by storm? Are any patents or trade secrets involved to give you a cutting edge?
• Do you intend to evolve your recipes over time or do you have a well-established menu?
• Why will people want to buy your food? Will they be getting a taste experience they can’t easily get elsewhere?
• Have you already established interest in your products elsewhere?

All these considerations will help strengthen your food truck business plan… and they’ll also help you understand if you have the recipe for success (pun intended) or if you need to work more on your value proposition.

Food truck marketing and sales process

Your ability to deliver effective marketing and sales will be make or break for your food truck business. You’ll need to define your food truck marketing strategies. Here are some things to consider:

Detail what your food truck marketing plan will entail.

• Are you going to be advertising in traditional print and broadcast media?
• How will you use social media? Will you be building an organic presence on key platforms, taking out paid social media ads, or a mixture of all these things?

• What angle will you take with your marketing? What target audience are you aiming your ads at, and where are they to be found both online and offline?

• Will you be tempting people with special offers or free samples?

• Will you organise an opening party or be inviting food critics for a preview of your offerings?

• Will your campaign include things like a customer app with maps of your locations and an easy to use booking portal? Really think outside of the box here.

To answer these questions you need to do your research into your target audience and the best way to reach them. Look at case studies of how other food truck businesses have done it before you because there’s no point reinventing the wheel. That said, you should try and make sure your food truck marketing campaign has an edge and is creative and innovative… and proactive. To find out more about this check out our comprehensive guide to marketing your food truck.

Wages

Your business plan needs to detail how much you will be spending on your food truck staff and management.

In the US food truck managers can get paid anything from around $13-18 per hour.

In the UK a food truck supervisor role comes in at around £24,000 per year, and various food truck roles like kitchen assistant and food truck driver and supervisor roles (in London) pay around £9-13 per hour.

When writing your food truck business plan you’ll need to have a strong idea of what staff you will require, how many members will be part time and full time and how many weeks they will be working each year.

How much does it cost to buy a food truck?

Food trucks vary widely in size and model. In the UK you would be able to pick up a small second hand food truck for under £5,000, but for new small trucks you’re looking at more like £10-20,000 and a large vehicle will cost between £20-50,000.

In the US new food truck costs range from $15-100,000+.

A note of warning here: it can be very tempting to reduce the largest bulk costs to your business by getting the cheapest/smallest food truck possible, and buying it second hand.

If you go that route make sure you personally inspect the truck first and check all its paperwork is in place.

Your food truck IS your business after all. It needs to have all the functionality you need to run your food truck business profitably and it needs to be appealing to customers. Speaking of which…

Food truck design

The design of your food truck is super important. It’s an advertising medium in itself.

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Some, like this Korean dumpling box food truck, look like real life cartoons…

This toastie food truck gives itself the fancy name of “sandwich pressery” which is a very nice touch…

Your design can also be very minimalistic like the vibe of the Pancake Moderne food truck…

When designing your food truck, ask yourself, how does the design connect to our food truck concept? Does the design match the aesthetic of our name? For example, the Pancake Moderne truck looks very modern and stylish (like its name), whereas the toastie van has a more lighthearted feel.

Get to know the food truck scene in your area

Location is an essential consideration for your food truck startup. It’s likely there will be an existing food truck scene in your area.

It’s important that you make connections with that scene to get a sense of the lay of the land.

You will be competing with other food trucks so it’s a good idea to try and avoid making enemies when you suddenly enter the food truck market.

Do research into food truck sites near you and see what comes up.

In the UK you can use sites like AppearHere.com to find spaces for your food truck to operate.

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Check out consumer resources like Roaming Hunger which has an interactive map to help you check out the food trucks in your area.

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Get in touch with the sites where food trucks operate and enquire if they have space for hire.

Rental prices can vary a lot. Here’s a quick breakdown of stats from the US.

Food truck rental parks = $500 – $1,000 per month

Farmers markets and festivals = upwards of $75 per day or a percentage of takings (around 10%)

Small events = small fetes or school carnivals may be free as they want food trucks to help draw a crowd. In fact, it’s possible to ask for a minimum sales guarantee where they pay you if you don’t get enough customers!

Catering events = these are events where food trucks are requested and usually you will be paid a one-off fee rather than by individual customers. There are obviously no fees your end for this because you’re providing a service.

How to equip your food truck

When it comes to starting up a food truck business, as with any business, here’s an invaluable tip: make lots of lists.

Lots, and LOTS of lists…

They help you chunk down a large endeavor into small, manageable steps.

You’ll need to make a list of all the equipment your food truck will need. Like this one:

Essential food handling equipment:

• Foil wrap
• Cling wrap
• Plastic food bags
• Disposable gloves
• Containers for hot, saucy foods
• Cooking and/or serving utensils
• Takeaway containers, plates, trays etc.
• Napkins, bags, cups, and lids
• Straws, portion cups and lids (and caddies to hold them)
• Disposable cutlery and utensils
• Essential herbs and spices
• Condiments
• Cooking oil spray
• Cleaning supplies
• Inc. rubbish/trash bins and bags
• Dish towels, rags, sponges, scrubbers, etc.
• Surface disinfectant, grill and ice machine cleaners, degreasers and descalers etc.
• Wet surface floor mats, mop, bucket, brooms, dustpan, and brush, etc.
• Safety supplies:
• Fire extinguishers
• Sprinkler system
• First aid kit
• Cash register
• Plenty of change for customers!!!

Essential apps for your food truck startup

The mobile experience is crucial in terms of how customers find and interact with your food truck startup.

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Apps like Food Truck Fiesta in Washington, DC collate the social media feeds of food trucks in the DC area and display them on a map for easy discovery.

And the Roaming Hunger map has international food truck listings.

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Food Trucks In is considered to have the most comprehensive listing of US food trucks, with over 8,500 trucks listed.

In the UK the British St. Food app is dedicated to making street food fun and accessible to consumers. It has a user-generated ranking system and runs a Top 10 vendors league table.

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Make sure you do your research and get listed in as many food truck apps and directories as possible.

Build your own food truck app

You should also strongly consider creating your own food truck app. These days it can easily be done without any coding and tools like AppInstitute can help you quickly build your food truck app for free.

Ideally, you should build your food truck app before you launch your business. You can use it as a way to add value to your pre-launch campaigns and it will help streamline your sales process and build customer loyalty as soon as you serve your first customer.

Having a food truck app will also help you easily update your location and let people know about offers of the day/week and generally what you’re up to. This is especially handy for the lunchtime office crowd who will be checking out food options on their mobile devices.

Building a food truck app also means you can process paperless transactions and have a food booking system in place for streamlined delivery and maximum customer service.

A food truck app will also help you understand more about your customer base and stay in touch with them using push notifications and direct messaging. Powerful stuff.

As you can see, there are lots of things to consider before opening a food truck. But the more research you do and the more preparation you engage in, the greater the chances that you will be able to successfully realise your dream of serving your exciting food offerings in a rapidly growing food truck market.