Starting a food truck business sounds exciting and also seems to be less daunting than running a restaurant. There are, however, many aspects involved that need to be taken care of to start off a food truck business. A lot of factors need to be considered, and some foresight regarding the business will also come in handy.
To start a food truck business in 2021, you would need to begin with the following:
The Standard Startup Costs
With any new business, there are certain startup costs that need to be taken into account. Depending upon your vision, the startup costs can vary. The recurring costs might show little variation. One-time costs can vary based on the location of your business.
These include payroll, the payment reserved for fuel, the rent for any equipment you are renting, ingredients, as well as credit card processing. Recurring costs might also include the money you will set aside for repairs as and when the need arises.
Every startup has one-time startup costs to get the business started. For a food truck, this would include the cost of the food truck, a truck wrap, office supplies, advertising and marketing, legal fees, registration permit costs, website and logo design fees, and a register. These expenses would need to be looked at to see if there can be an effective way to make these purchases cost-effective. For example, you can invest in storage by finding creative solutions. For spices, you can get candle jars with lids wholesale. Candle jars are cheaper and also have large storage space which is a great way to save your money. You would also need to make the truck up to date as per the health code regulations, which might also take up some of the money from your startup fund.
Going by these costs, the standard startup costs can fall anywhere within the range of $28,000 to $114,000.
A business plan which takes into consideration the market fluctuations and the customer demands needs to be made. Your goals should be to find investors and obtain funding. Think of the end goal and work towards it through your business plan. While creating a business plan, make sure to add the following elements to it:
- Add an executive summary as it introduces your business and also your business plan. The summary should be short and crisp, made to spark interest in the business.
- Describe your company next. Include how you define your company and what purpose your company will serve through its services. Also, include why you are different from your competitors by mentioning factors like quality management.
- Add your market analysis. Include your research statistics and your customer demographic, and how they will aid your business. Add projections to emphasise the impact your business aims to have on the market.
- Include in the plan the details about the ownership of the business. List the owners and explain how your business operates as a legal entity. Include the names of your management team and their experience in the related field.
- Now you have to introduce the key part of your business which is the food you will be serving. Describe your men and also include how this new set of dishes can help with profitability in the market.
- Marketing strategies are a must for any new business to have. To make sure you create a buzz before you open, you need targeted advertising and a dedicated marketing team working for exposure. Include all the marketing possibilities, including social media platforms, establishing a website, and advertising through other means. Add your sales strategy and how it will tackle the changing trends in the market.
- Now comes the funding request. Give a specific request to the potential investors and also explain in explicit detail how you plan to spend said money to grow the business.
- Include projections in terms of profitability based on expected business and profits. Add projections for the coming three to five years.
- An appendix is the final aspect of your business plan. If you have any additional information you want the investors to glance at, you can include them here. Only add information that directly benefits your cause.
Look into Funding Options
Funding Options can help your new business get on its feet in the initial days.
Personal and business credit scores should also be good. You might not be looking into a business loan but having a credit score helps nevertheless. Some of the ways you can fund your food truck business are:
- Look for a second-hand truck or trailer.
- If you are looking to also provide social service, try to obtain sponsors based on the community service.
- Begin with a farmer’s market to attract customers.
- Lease a food truck by negotiating.
Buying and Registering your Food Truck
Finding food trucks for sale is not difficult if you know where to look and what to look for. Consider local classifieds offering used trucks as they are less expensive and are easy to inspect before purchasing. National classifieds have more variety, but this would require you to be more cautious as you are unlikely to see the food truck in person before making the purchase.
You can also opt for new trucks that are customised as per the customer’s needs and are best suited for installments and new fixtures. They are expensive, but these trucks are most likely to follow all the regulations. You can also lease a truck either from an individual owner or through a truck leasing company.
For putting your business on the map, begin by getting an Employer Identification Number and a business license to operate in the city where you would be doing your business. The vehicle License should be updated so that there are no hassles once you begin. Having a seller’s permit will help you save sales tax when you buy produce. Also, remember to have a Fire Department Certificate, Health Department Permit, and the Food Handler’s Permit.
Putting your food truck business on wheels would require diligence and commitment to your vision. With research and preparation, starting and registering a food truck business in 2021 will not only be possible but also will prove to be easy.