No matter where you live, you’ve likely seen or eaten at a food truck. There are some great reasons why savvy entrepreneurs are opening restaurants on wheels: the overhead is low, and they can go where their customers are. Operating a food truck is also a great way to test out a restaurant concept or menu to see how diners respond before investing what can be millions in a brick-and-mortar restaurant that you’re not sure will succeed.
If you’re considering launching a food truck business, there are a few things you should do first to ensure success.
Find Out What’s Required
It’s not small thing to feed people on the street. Just like with a standard restaurant, you’ll need a business licenses and a parking permit to operate your food truck business. You will likely need a separate license for preparing and selling food as well, so check with city, county, and state to ensure that you know what is required. And just like any other restaurant, you’ll have a health inspection, so make cleanliness a priority.
Keep in mind: you may move around to find the right location your food truck, so map out a few locations that are easy to get to where the locals will support your presence, not fight it (maybe parking in front of another restaurant isn’t the wisest idea).
Talk to Food Truck Owners
Food trucks are not a new business concept, they’re on every corner in NYC There’s lots of different options, and that might make it hard to attract customers. Big cities are filled with food trucks catering to every taste. You need to do shoe leather research first.
Talk to food truck business owners to get a sense of the competition and what the market is like. Would they do it all over again? Do they make a living at it? Getting insight into what it is to run a food truck business in your city is invaluable, because it might keep you from making a bad business decision.
Build A One Year Budget
Once you get some data on running food truck business, build a one year budget. You’re not guaranteed to turn a profit within the first few months, so it’s important that you have enough cash in the bank to cover both business and personal expenses.
Make sure to include in your budget:
- Startup expenses (truck, graphic design, equipment)
- Business insurance
- Labor
- Food and supplies
- Gas
- Your own salary
Determine Your Niche
What is going to be your food niche?. I live in Philadelphia, PA where Insomniacookies started on college campuses around town. Their niche was warm fresh chocolate chip cookies until 3am. They had a two-prong target audience, they focused on late night sugar addicts, and they always located their trucks on college campuses. These days they have retail stores and home delivery, but they knew their audience, and no one had that niche when they started. Will your niche be tacos, sushi, cupcakes, or cheesesteaks? Look at your competitive landscape and pick a niche food focus and consider the location as well.
Purchase a Truck
If you’re going to run a food truck business, you need to purchase a food truck! You can go two ways, you may be able to find a recently-used truck that’s been outfitted with a kitchen that will pass health inspection for under $40,000. Or you can buy a new truck and customizing yourself, but be prepared to invest $100,000+.
What Insurance Will Your Need
You will be required by local government offices to carry certain types of business insurance. It can cost between $500 and $3,000 a year, but should anything negative happen, you won’t lose everything you own. “Your city government may require you to have specific types of business insurance, such as general liability and commercial auto insurance, says Ted Devine, CEO of Insureon. You may even need additional coverage if you plan to sell food at events like street festivals or football games.
“Most event organizers and venues will require food trucks have $1 million in general liability coverage. Even if you don’t have any upcoming events, research ones you may want to attend and take note of their insurance requirements. Carrying those types of coverage will give your food truck the opportunity to land more venues in the future, while also giving it the freedom and mobility to grow.”
Leverage Social Media
Because yours is a business on the go, you use social media to tell your hungry followers where to find you, especially if you are not going to be in the same location all the time. Before you launch your business, building your brand online, be sure to share pictures to get people hungry. As you build a following set a schedule for your business, and keep your followers updated, so you can get them to line up early.
The more time to spend prepping up front to launch your food truck business the more likely you’ll be running out of food due to the high demand..
This article was originally published as How to Run a Successful Food Truck Business on www.Succeedasyourownboss.com