Starting a mobile food truck business is a lot of fun and, if you do it right, financially rewarding too. With the current increases in rent prices and more and more people enjoying “experimental” food spots, setting up a food truck may well be a worthwhile entrepreneurial pursuit in the present economic climate.
According to IBISWorld, an industry research firm, there were roughly 26,200 active food truck businesses in the US in 2021. Between 2016 and 2021, the number of food trucks rose by around 7.5% per year, four times faster than the fast-food industry as a whole. Predictions about the expansion of the American food truck industry until 2027 follow the same trend.
Many food truck owners are business owners who just want to do what they love – preparing delicious cuisine for hungry customers. However, as simple as this motivation is, translating a dream of cooking for the community into a real, physical mobile eatery is no easy feat.
To out-hustle the competition, the best food truck owners come up with menus that either boast innovative dishes or are filled with common favorites. One thing’s for sure – consistent, high-quality cuisine is always important. And this can mean working long hours, frequently late into the evening.
Prospective food trucks set the groundwork for success months before they serve their first meal, investing in hundreds of hours of behind-the-scenes effort to get a head start.
When it comes to setting up your own food truck business, there are several steps you should take to get things up and running. We recommend that you take your time and follow the steps below thoroughly.
According to the Restaurant MBA, 60% of food truck enterprises fail within three years. The difference between a successful food truck and one that flops largely boils down to preparation. Accordingly, when starting up a food truck business, you must ensure that you are filling a gap in the market, meeting demand, and operating legally.
When conducting your preliminary research, consider the local food truck scene as well as any rules and regulations that may apply. This information will assist you in determining whether or not a food truck is a viable business venture for you. Speaking with other food truck entrepreneurs is also sure to provide you with much-needed industry knowledge.
If you’ve decided that starting a food truck is for you, then you can go ahead and start planning!
Finding your culinary specialization is the first step. Naturally, you’ll feel most at ease sticking to the cuisines and techniques you’re most familiar with. However, the true trick is to identify a niche within that comfort zone that no other local food truck appears to tackle. You want your mobile diner to stand out, perhaps with customers linking your eatery to a specific menu item over time.
Unlike traditional restaurants, food trucks cannot rely so heavily on an atmosphere or a feeling of place to attract customers. In other words, you can’t capitalize on the excitement of watching the “big game” like you can in a beer-soaked sports bar. This makes the quality and innovation of the food even more important.
Once you’ve decided on your niche, you can start preparing the menu. Designing a simple menu full of high-quality items can be an easy way to make sure all your dishes are available most of the time – using complex, hard-to-source ingredients isn’t necessarily a good idea when working in a mobile environment.
Basics such as sandwiches, burritos and burgers can, for instance, be paired with a variety of fillings to suit each individual’s taste. Desserts and snacks should follow the same principle. Come up with excellent concepts that you can improve over time as they gain traction.
It’s important to make detailed financial estimates for your first three years of operation. To do this, you should look at your projected set-up costs and ongoing expenses. Most, if not all, of the following topics should be considered in your business plan:
Download this business plan template, which includes a fully customizable financial model, and start your business plan.
Completing your business plan will allow you to have a good estimate of your food truck costs and, in turn, your pre-revenue financing needs.
Though it’s possible that a bank or credit union may fund your entire startup phase based on your business plan, it’s more probable that you’ll need to juggle funding from numerous sources, especially if this is your first food business.
Update your business plan after you have a decent idea of how much money you’ll need and how much your business will cost in interest and fees each year.
Actively promoting your company will set you apart from your competitors. Proper marketing methods will ensure that you reach clients and potential buyers as soon as possible.
Here are some excellent food truck marketing strategies to consider:
Food truck businesses are primarily regulated by the Department of State Health Services (DSHS) and the Texas Commission on Environmental Quality (TCEQ). However, it’s very important to contact local authorities before starting a food truck business, in order to find out local ordinances that apply to the food truck industry. Many cities, including Houston, Dallas, Austin, San Antonio, El Paso and Lubbock, have websites to help you comply with local requirements.
A complete list of compliance tools for food trucks in Texas can be obtained from the TCEQ’s website. (Note that these resources are not intended for single-service food concessions that only sell prepackaged food.)
What’s more, before a food truck can begin operations, entrepreneurs should consider incorporating the company. The following are some of the most common legal structures for this type of mobile business:
Following the incorporation of your food truck business, you should begin the process of making your food truck legal and compliant with state and federal standards.
Any food truck owner’s first stop should be at their local health department, where they will need to complete the following checklist:
After dealing with the health department, you’ll need to go to the local business administration office and apply for an employer identification number. This number will need to be included on all of your business documents. This is critical, as failing to do so could result in significant fines that jeopardize your company’s success.
After receiving your business license and setting up your food truck, you’re expected to return to the health department to have your food truck inspected.
A food truck has the advantage of being able to move around according to where your customers are. While the likelihood of a standard brick-and-mortar restaurant failing remains high, the movable aspect of a food truck helps to improve your business’ chances of succeeding. You need to determine the best place to park that allows you to draw in a large number of customers. It’s also important to find out where you cannot park. Making a list of possible parking locations for your food truck will help things run more smoothly.
Food truck insurance is substantially more expensive than passenger vehicle insurance. You’ll need to cover not only the vehicle but also the cooking and food storage equipment onboard, most likely with a commercial auto policy. Workers’ compensation insurance is also required if you have employees.
Running a food truck, like any small business, requires a significant amount of effort. Food truck owners who succeed work extremely hard, especially during the early stages when they lack brand recognition. Whether you’re launching your mobile diner in a huge city or a quieter rural location, following these steps will help you to set up a successful food truck and smash your business goals.
