Food trucks have long captured the attention of hungry lunch breakers — they first appeared in the States in 1961, when street vendors sold food from carts to workers in New York City. Nowadays, these vibrantly hued vehicles roam streets far and wide, serving everything from tacos to cupcakes, jambalaya and gussied up grilled cheese.
Thinking of starting a food truck business yourself? You’re not alone. As of 2022, 35,512 food truck businesses exist in the U.S., up 13.7% from 2021. It’s no wonder given the low startup costs — a permanent, 5,000-square-foot restaurant averages $750,500 to open, while it costs $100,000 to $175,000 on average for a brand-new mobile truck and kitchen. Of course, startup costs — which vary by state — can be as low as $30,000 to $40,000.
And if your food truck takes off? Expansion is much less costly, too.
Conduct market research
It’s important to know what you’re getting into if you’re considering opening a food truck. Some of the questions to ask yourself are:
- What kinds of food trucks already exist in the area where I plan to operate?
- Is there an emerging food trend where I plan to open my business?
- How saturated is the market where I plan to operate?
- Where do my ideal customers hang out?
- Where is there a lot of foot traffic?
Opting for a popular cuisine with less competition and setting up in a visible locale can help you corner the market.
Know your budget — and expenses
Naturally, you want that business to succeed. Having a solid understanding of the food truck industry — and the cost and expenses of running a food truck business — is key.
Let’s start with the costs. The highest expense when running a food truck business is purchases (43.2%), followed by wages (27.4%) and rent and utilities (5.7%). Add in opening expenses — like hiring and training staff, staff uniforms and inventory — which can run anywhere from $20,000 to $120,000 all in.
Also, don’t forget to budget for things like licenses and permits, as well as insurance and utilities deposits, which can run between $2,500 to $200,000 depending on what you’re serving and where you’re serving it.
Not surprisingly, it’s also important to have a financial cushion — especially since it’ll take awhile to break even and become profitable. So, add in another $20,000 to $250,000 in cash, depending on the anticipated amount of operating expenses.
Once you decide what type of food truck you want to buy or lease, the next step is to secure funding by taking out a small business loan and connecting with a reputable truck dealer, such as Cruising Kitchens, Prestige Food Trucks or FoodTrucks.net.
Decide on your name — and incorporate
Theoretically, you could start your food truck business as a sole proprietorship and incorporate your business later. However, that’s not advisable since you’ll be selling food products and there’s always the risk someone could get sick. An LLC limits your liability and separates your personal assets in the event of a lawsuit.
Each state has its own requirements when incorporating a business so be sure you understand and comply.
- Select your business address
- Name your LLC
- Register your business in your state
- Get a federal employer identification number (EIN) for your LLC
- Select a registered agent
- Decide if you’ll file or hire an expert
- Obtain and file your articles of organization
- Create an operating agreement
Use the right technology
The importance of choosing the right technology for your food truck can’t be overstated. It all starts choosing the right POS system — one that provides reliable connectivity and real-time capabilities that keep your business on track.
Odds are, you want your POS to not only take payments, but also to manage your operations, enable easy, real-time menu management and support digital menus and ordering so be sure to choose wisely.
Your POS should have everything synced and running like a fine-tuned machine, complete with a QR code menu for taking orders and a card reader out front to easily accept payments and tips. That leaves you to focus on what got you into the food truck industry in the first place — the food.
Marketing your food truck
Once you’re fully up and running, you need to market your business. The fact that it’s mobile, with baked-in signage, gives you a leg up on advertising. However, you need to be sure to cater not just to a lunch rush of office workers in business districts, but also to appear at festivals, community sporting events and food truck parks — anywhere and everywhere high-volume so you get exposure that helps spread the word.
These days, it goes without saying you also need to leverage social media. Consider it an opportunity to showcase your hottest items, as well as drum up FOMO for limited and seasonal offerings; offer special deals; provide giveaways; and inform customers where you’ll be parked, and when.
At the same time, closely monitor your online reviews, as these can make or break your business, and incentivize customers to post reviews, perhaps by offering a discount. Get a few bad reviews? Always respond — to the bad ones included — since prospective customers who search for your business online will see you value your customers, take customer experiences to heart and are striving to improve.
Want some insight and advice to help your food truck business operate at its best? And how to keep its connectivity? The comprehensive POS from Table Needs is built for independent, local businesses like yours and our industry experts are here to help your food truck business be the best it can be.
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