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What You Need to Know About Starting a Food Truck Business

What You Need to Know About Starting a Food Truck Business

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Food trucks and the culture associated with them has become a uniquely American obsession, spawning some of the best and most unique food in our great nation. Starting your food truck business may seem easy, but there are a number of things to consider. Here is what you need to get a food truck business started.

The Business Model

The secret to the food truck business is to choose a straightforward concept and sell as much food as you can in as little time as possible. Do not, under any circumstances, complicate this model.

A “straightforward” concept is one that is easily understood by the customer and specializes in doing one thing incredibly well. An example of this would be a waffle truck like New York’s “Waffles & Dinges.” They don’t sell eggs, pancakes, French toast, and cupcakes. They only sell waffles with sweet and savory toppings.

Food trucks are a volume business. For the most part the food sold on food trucks is not high profit. Items will generally cost between five and ten dollars per order, and you’ll make one or two dollars profit on each order. You need to sell at least a couple of hundred orders per day to make a substantial profit. That means you have to be able to cook it, serve it, and sell it, quickly.

Why is it important to sell in as little time as possible? In the truck business, the longer you are out on the street the more it costs you. Labor is hourly, gas runs out, and food goes bad. Additionally, lunch only lasts for an hour or two. When lunchtime is over there are fewer customers, and that means less revenue. Find a high traffic zone and sell as much as possible while the customers are on the street.

The Right Truck

There are a couple different types of trucks, but in the interest of saving you time and money I recommend you purchase a used Chevy or Grumman-Olson step van. The majority of food trucks are step van postal trucks formerly used by DHL, FedEx, and other large commercial companies. These trucks are large enough for an average-size adult to stand upright and to house all the necessary equipment. Look for a non-diesel model that is approximately 14 feet long and 9 feet wide with less than 100,000 miles. The main sources for purchasing a step van are eBay, Craigslist, truck dealers, truck auctions, and customizers. Make sure you check them all out to get the best bang for your buck.

Once you’ve purchased your truck you need to make it a food truck. The first step in doing this will be finding a customizer in your area. In most major cities you’ll find professional food truck customizers, but all you really need is a quality sheet metal shop. I recommend finding someone who has experience working on trucks and is aware of local health codes.

Determining Cost

Starting a food truck in today’s climate will cost you around $100,000. The step van will cost you between $10,000 and $15,000 through a truck dealer, auction, or sites like eBay or Craigslist. Once you have purchased the truck the costs of customizing it should break down as follows:

That leaves you an additional $15,000–20,000 in operating capital to fund your operations and marketing.

The Long Arm of the Law

Wherever you are located, there are laws that apply to every aspect of your food truck operation. You will have to comply with laws that apply to all retail operations as well as ordinances specific to food trucks. You’ll need to deal with taxes, licenses, labor laws, and many other standard hospitality business regulations, as well as the rules of the road, parking, how much propane you can carry, and other components of operating that are very specific to your truck.

Most of these laws are governed by local and state agencies; you’ll rarely, if ever, be involved with federal authorities. Your local health department is the governing body that oversees the specific codes of serving food in your area. The department of transportation will decide where and when you can park your truck. There are even regulations for street food businesses concerning how far away from the curb you should be located or how close to the entrance of a building you can park. To find information about your local regulations visit the website of your local department of transportation, health, and commerce.

Location, Location, Location

Once you figure out where you are allowed to park, it is time to decide where you want to park. Generally you’re looking for high-traffic and under-serviced locations. The main target for food trucks are office buildings and clusters with a large volume of workers searching for lunch options. Secondary options include residential buildings, events like concerts, seasonal locations like beaches, and areas with a high concentration of nightlife establishments. Recently, food truck lots have become prevalent due to increased competition and regulation. These outdoor food courts host multiple trucks for a fee and advertise to attract groups of customers.

Attracting Customers

When it comes to marketing your food truck it is important to be creative, authentic, and aggressive. Make sure your brand is a genuine extension of your personality and passion. Then give that brand a voice and image through your name, logo, and business description. An engaging yet simple website and truck design will be your two most important sources of advertising.

Once these items are complete, it is your job to engage your customers in person and online. In person, get to know them, offer free samples, say thank you, and gather their contact information. Online, you should announce your truck’s location daily on Facebook and Twitter, send email blasts with special promotions, and post something daily that’s completely unrelated to selling. Food trucks are lifestyle brands as well as food purveyors. By talking about your recipes, employees, or new baby—rather than trying to sell—your truck will become more than a business and customers will be emotionally invested in your truck.

Congratulations! You have graduated from Food Truck University. Your diploma guarantees you the ability to work hard following your passion and living your dream. Work hard, and enjoy every minute of this journey.

by Alan Philips, author of The Complete Idiot’s Guide to Starting a Food Truck Business

Photo courtesy of Scratch Truck