If you're passionate about food and want a lower-cost alternative to starting a restaurant, opening a food truck can be a great option. The food truck industry has experienced a boom over the last five years, with an average industry revenue growth of 10.9%. Here are the steps you'll need to take to start and market your food truck business.
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6 steps to opening a food truck
If you're wondering how to open a food truck, here are six steps you can take.
1. Come up with a food truck concept
The concept you choose for your food truck will play a big role in your success. Choose a concept that has a strong consumer demand and aligns with your experience.
Fortunately, there are tons of unique options you can choose from. You can focus on providing healthier options like gluten-free and vegan meals. Other food trucks specialize in offering fresh seafood or gourmet mac and cheese.
2. Figure out the startup costs
Opening a food truck is more affordable than starting a restaurant, but the startup costs can still be high. On average, it costs about $55,000 to open a food truck in the U.S.
These costs include purchasing the truck, paying for permits and licenses, investing in a point-of-sale (POS) system, and receiving legal advice. Plus, you'll have to consider ongoing expenses you'll incur, like payroll, insurance, and advertising expenses.
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3. Identify sources of funding
Once you understand how much you can expect to pay for your business, you need to think about how you'll fund it. You'll likely need to apply for financing from multiple sources, especially if this is your first business.
One option is to apply for a secured vehicle loan, which is similar to a car loan. These loans can be easier to get, and they typically have a lower interest rate because the truck is used as collateral. You can also apply for an unsecured loan or line of credit.
The licenses and permits you need to operate your food truck will largely depend on the state you live in.
4. Create a business plan
If you plan to apply for financing, the bank will want to see your business plan. A business plan gives you clarity when starting your business and can attract potential investors.
According to the U.S. Small Business Administration (SBA), your business plan should include the following nine elements:
- Executive summary: Explain what your business does, your company mission statement, and basic information about your team.
- Company description: Provide more detailed information about your business and any unique advantages that sets it apart.
- Market analysis: Outline your competitive research and what differentiates your business from your competitors.
- Organization and management: Explain your business's legal structure and how you plan to run it.
- Product description: Talk more about your product and the types of customers you plan to serve.
- Marketing and sales: Outline the marketing strategies you plan to use to build and maintain a customer base.
- Funding request: Explain how much funding you need and what you plan to use the money for.
- Financial projections: This data includes forecasted statements and quarterly projections.
- Appendix: Include any supporting documents such as your credit history, licenses, permits, or legal documents.
5. Apply for the necessary permits
The licenses and permits you need to operate your food truck will largely depend on the state you live in. But at the very least, you'll need a business license and food service permit. Your best bet is to reach out to your local health department and find out exactly what you'll need.
And food trucks can't park just anywhere, so you want to research any possible parking restrictions. You can contact the local motor vehicle department to learn about regulations in your area.
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6. Purchase your truck
Now it's time to purchase your food truck. The cost of a food truck can vary greatly, and you can expect to pay anywhere between $50,000 and $200,000. To keep these costs lower, you can look into purchasing a secondhand truck.
The most important thing is to make sure the truck you buy is up to code. For instance, you'll want to ensure that the equipment works correctly, the truck has adequate water pressure, and there's proper storage space.
You can buy a used truck from a seller on eBay or Craigslist. You can also purchase a truck directly from the manufacturer.
Best locations to park your food truck for success
Your food truck's location has a direct impact on your sales. The best locations tend to be high-traffic areas where a large number of people are looking for quick and convenient meals. For example, you could park in a downtown business district or college campus during the lunch hour.
On the weekends, you might frequent parks, children's sporting events, and recreation areas where families will be spending time. Just make sure to check the local regulations first since some cities require permits in these areas.
Events like concerts and festivals can be another profitable option since there are large crowds of people looking for food options. However, the vendor fees can be quite pricey, so you want to assess the potential sales before committing to these events.
Regardless of the location you choose, make sure you check the zoning laws in that area and purchase any required permits first. You also want to understand logistical factors like access to waste disposal and parking limits.
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How to market your food truck business
It's recommended that you include a combination of online and in-person marketing strategies when you're promoting your food truck business. For example, social media allows you to connect with potential customers and showcase your menu. This strategy also lets customers reach you directly and book your food truck for private events.
Regularly showing up in your community is another marketing strategy you can use. Showing up at your city's weekly farmer's market can not only bring in immediate sales but also build brand awareness for your business. You can also create mutually beneficial partnerships with local businesses like breweries and coffee shops that don't normally serve food.
Investing in SMS marketing is a great way to keep customers up to date on new promotions or upcoming locations. And creating a loyalty program can encourage repeat business from customers.
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