Thanks to the changing business landscape, food truck businesses have grown in popularity over the past few years. For example, research shows that the food truck industry had a value of $4.11 billion in 2021. Besides, the forecast is that it’ll grow at a compound annual growth rate of 6.8% annually by 2028.
Here’s your guide if you’d like to know how to open a food truck business. It’ll give you insights into the costs, marketing strategy, and other practical tips to implement your business idea.
1. Determine the Start-Up Costs
Opening a food truck business is less expensive than putting up a brick-and-mortar restaurant. The start-up costs range from as little as $10,000 to $250,000, depending on many factors. To explain, variables like the costs of purchasing a truck, legal consultation, permits and licenses, and marketing determine how much you spend. However, the average expenditure of starting a food truck business is approximately $55,000.
2. Research the Food Truck Business Landscape
Before committing your money to a food truck business, you want to gauge if you can stand against the competition. As such, start your research to establish the following:
- Existing food truck businesses and concepts
- Average demographics of the population
- Peak business times in different locations when your food truck can stop and sell
Most importantly, ensure you establish whether there’s demand for the food truck concept in the area.
3. Create a Food Truck Business Plan
We can’t fully answer how to open a food truck without mentioning a business plan. Undoubtedly, a business plan is a roadmap that paints a business’s direction for an entrepreneur. Also, a business plan acts as your pitch to potential investors, especially if your financial projections are attractive.
4. Choose a Location for Your Food Truck Business
One thing you want to avoid when opening your own food truck is going to a place with too many food truck owners. Instead, you want a location that will quickly make your food truck stand out and attract many customers.
5. Seek Funding for Your Food Truck Business
Funding sources you can consider for your food truck business include:
- Financing programs and equipment loans
- Small Business Administration microloans
- Crowdfunding such as Kickstarter
- Contributions from friends and family
- Community lenders
6. Apply for the Required Licenses and Permits
You must apply for the necessary permits and licenses for your food truck start-up. However, the requirements vary from state to state. So, check with the local Health Department, Chamber of Commerce, and the Department of Motor Vehicles (DMV).
Generally, you’ll need:
- Food Service License
- Employer Identification Number from the IRS
- Business License
- Employee Health Permit
The DMV will help you establish parking permits, zoning laws, local ordinances, and registration.
7. Register Your Food Truck Business
You must create a business entity and register it in your state. Decide if you want a sole proprietorship, partnership, limited liability company (LLC), or a corporation. They all have different registration requirements, but an LLC makes the most sense for food truck operations.
8. Buy Your Food Truck and Equipment
Purchase the right truck or commercial vehicle for the business. The cost of a new food truck can be anything between $50,000 and $175,000. Fortunately, you can lower the costs by acquiring a second hand truck from previous small business owners.
You’ll also need to acquire commercial kitchen equipment and supplies for the efficiency of your business. These include:
- Food prep equipment
- Cooking equipment
- Warming and holding equipment
- Serving tools
- Refrigeration
- Cleaning and sanitation equipment for food safety
8. Create a Digital Menu Board
Having a digital menu board for your food truck is a more convenient way to inform your new customers about the kind of food you offer. With digital signage, you can most effectively create, change, control, and manage your menu items.
9. Choose a POS System
While you may want a cash-only payment method, not all customers will have cash on them. As such, you should consider providing your customers with a POS system that accepts cash, mobile, and credit card payments. Correspondingly, choose a reliable and fast point-of-sale system with good security features to protect your customers’ data. Markedly, 79% of small businesses have POS systems.
10. Invest in Marketing Your Business
No customer will come to you if they don’t know your business exists. Therefore, create a marketing plan that attracts a crowd wherever you park your truck. Consider designing the vehicle with vehicle wraps that feature your business logo and menu.
Additionally, invest in:
- A digital signage strategy
- Social media marketing
- Website marketing
- Influencer marketing
- Street vending advocacy groups
- Participating in community events
Go Out and Thrive in Your Food Truck Business
Nothing can stop you now that you know how to open a food truck. Nonetheless, ensure that you delve into the deeper details of each step to get everything right. Once you get started on your new business, enjoy the benefits. However, you also must develop a thick skin for the unavoidable challenges, like working long hours.
All Around Austin’s Food Truck Breakdown was provided by Roaming Hunger, your source for all things about Austin food trucks
