Tag: street festivals

Before You Start a Food Truck Business

Before You Start a Food Truck Business

For those seeking to start a home-based business, it seems that food trucks are all the rage. You’ve seen budding entrepreneurs pitching their food truck businesses to investors on popular shows like “Shark Tank”, and you’ve seen long lines of customers waiting to grab a quick meal during street fairs. Everyone has to eat, and selling meals from the side of a food truck is a far less expensive pursuit than opening a restaurant. Running a food truck may actually serve as a great learning experience for someone who would like to open a restaurant down the road. But what are some of the key things you should know before you start a food truck business? Well, I briefly ran a food truck operation myself, so I have some insight. Here are some key pieces of knowledge to consider before you start a food truck business:

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  1. Do some market research. I’ve always been a fan of street festivals and county fairs: live music, cold beers, people enjoying warm weather, and…festival food! When attending any outdoor festival, we business-oriented types can’t help but notice the staggering numbers of transactions taking place where food is being sold. How can someone avoid making tons of money by selling fair food? It almost seems too easy. You’re right – it seems too easy…because it isn’t. Selling food at any fair or festival involves working around ovens in the heat (summer is prime time for outdoor events). In addition, the most popular events will charge food vendors hefty sums to participate. However, you can learn quite a bit by observing the vendors at a street festival. You can see which vendors are getting the longest lines, how much they charge, the types of people working the stands, and the most popular food items. Standard food items like hot dogs and ice cream will always sell, but there may be tight profit margins for such standbys and your local community probably has too many hot dog vendors already. It’s better to specialize in a less-saturated niche, and it appears that the most successful food truck operators do just that. I’ve seen food trucks selling lobster bisque, carne asada tacos, exotic Asian noodle dishes, or grilled veggie kabobs with sriracha sauce. Hot dogs? Boring. At any rate…
  2. Pick your food truck niche, before you spend big bucks on equipment. Try selling scaled-down versions of your targeted food items from a rented tent or trailer at smaller festivals that aren’t charging exorbitant entry fees. My first food vending experience: sometime in the mid-1990’s, just before the coffee craze really took off in a big way, I thought I might start a tiny pushcart-based coffee/espresso business. I mistakenly dropped over $2,000 (that amount would be much larger today) on a custom-made pushcart before discovering that a not-so-well-known chain of coffeehouses going by the name “Starbuck’s” (heard of them?) were about to take over the world. So, find an underserved niche for your future food truck pursuit. There may be plenty of food truck businesses in your area, but how many of them specialize in Greek food? Cajun jambalaya? Indian or Moroccan cuisine? You get the idea. Be original!
  3. It’s not necessarily “location, location, location”; it’s “be legal”. One advantage you’ll gain if you start a food truck business is knowing that you aren’t fixed to one location. Your place of business changes every weekend (or evening, or lunch hour). Unlike “brick and mortar” restaurants, selecting a fixed location for your food truck won’t be a concern. However, most municipalities have stringent codes that apply to any business (including food trucks) that deal with offering food or beverages to the public. Obviously, adhering to these rules will keep your customers healthy and you out of trouble. These codes can also give your new business some very significant credibility. I generally don’t feel that anyone starting a new business should spend too much time or money on things like expensive signage, business plans, registering a DBA name, etc.; because (sorry!) your business may not succeed. You could wind up with a lot of debt and time wasted on something that was never meant to play out. However, before you start a food truck business, follow your town’s codes, get the necessary licenses; and then start finding customers.
  4. Will you need help? Employees can be expensive for any business, including food trucks. Like it or not, you’re probably going to need some help at some point. You won’t be able to handle the food prep, cook your exotic menu items, work the point-of-sale terminal (they used to called “cash registers”), and clean the grill all by yourself. Perhaps you can rely on family and friends to help you out during your first street fair weekend – if you feed them for free and give them pocket money for a couple of beers. Beyond that, you might need to place ads on Craigslist to enlist college kids or retirees to work on board your food truck. Offering a higher hourly rate than local fast-food restaurants do might offset the fewer hours or odd work schedules that are common in the food truck world.
  5. Plan ahead. There is always some planning and paperwork involved in advance before you start any business. Again – don’t spend too much time and money on things like business cards or websites (wait until if/when your business actually starts to make money). Instead, direct your attention and funds toward things that really matter. For example, look for calendars for outdoor events and festivals that will be taking place around your state. How much are entry fees for food vendors at different events? How much time will you get to prepare your truck before the festival begins? Will you need special permits depending on the locality that hosts the event? Will there be water or electrical hookups that you can take advantage of? How is security at the event, and have there been problems with rowdy crowds in the past? Ask questions and find out as much as you can about any events that you plan on entering. Do some online research on past events to find out if they generate hungry crowds and worthwhile business for you.
  6. Line up your suppliers in advance. Don’t wait until you book your first street fair to figure out where you need to buy your food and supplies in bulk. For many items, a nearby Sam’s Club and/or Costco will be fine; for more specialized needs, you’ll have to do some research. Find the wholesalers and restaurant supply dealers in your community. Locate used commercial equipment on eBay or Amazon instead of buying brand new stuff. Fortunately, the web makes finding commercial grade food prep equipment and exotic foods a breeze. While food trucks have space and mobility considerations to be aware of, you can probably get away with using some standard restaurant equipment that won’t bust your budget once you get started. Festival goers lined up to buy sandwiches from your food truck aren’t going to notice, or care about, the burn marks on your commercial toasters or skillets. They want good food, reasonably quickly, that is very portable.
  7. What kinds of customers will you serve? You’re going to encounter different types of folks depending on your menu. The customer looking to chow down a New Orleans style “po’ boy” will be different than the one carefully considering a quiche Lorraine. Knowing this will give you some direction to take when deciding what types of foods to serve. If you’re going to concentrate on setting up your food truck business at elegant outdoor art festivals, upscale menu items will be more appropriate. On the other hand, maybe you’ll want to concentrate on serving casual fare like tacos or kabobs at live music events. Of course, you can easily change up your menu offerings to match the type of event you’ll set up at on any given weekend (since flexibility is one of the advantages of running a food truck business.) As noted above, doing some “market research” will help you decide the types of food items to sell and the kinds of customers that you’ll want to attract.
  8. Remember: “safety first”. I’ve sold food at outdoor events where safety got little attention. Like the time I catered an affair which featured a funnel cake stand. Located near the stand stood a large, commercial-grade propane tank. During the event, the tank sprang a leak at one of its valves, and a huge propane-fueled flame burst from the top of the tank. The flame shot up a few dozen feet. Time to think fast: I had to get the people who were helping me as far away from our work area as possible, quickly. No one was seriously hurt, though a few folks attending the event had to visit local hospitals for some quick checkups. Do not underestimate safety, and do not use questionable equipment, especially cooking equipment that requires fuel and flame. While festival organizers are usually well aware that they are responsible for the safety of their attendees, smaller events might require you to be cognizant of any unsafe conditions or surroundings.
  9. Small is beautiful. At some point you’ll notice your competition has the latest equipment, more expensive trucks, and employees with slick matching outfits. By contrast, your food truck business may have only a cute logo, some t-shirts, and plenty of help from friends and family. But this shouldn’t mean that your food can’t be top notch, or that your service should be second-rate. You can still do a reasonable business for your size. When starting out, try to rent any equipment that you can instead of buying it outright. There are party rental businesses in every large metro area who deal with caterers on a regular basis. Take advantage of them. Party rental outfits can supply commercial cooking equipment, tables and chairs, tents, and even lighting for nighttime affairs. Renting will help you compete with larger food truck operators without making unreasonable financial commitments. And remember: your competition might be bigger and more established, but it also has a lot of overhead to go with that size. Don’t get into a huge hole when you start a food truck business (or any business). It’s not worth the grief.
  10. Market your food truck business. Social media has been credited for having some responsibility in helping create the food truck phenomenon. The ability to immediately post a food truck location – advantageous since a truck has a different location every day – is one reason why food truck operators took to social media. Twitter allowed food truckers to update their fans on where they were serving meals at any given hour. With Facebook and Instagram, you now have the ability to post plenty of photos of your delicious menu items, your shiny rolling restaurant, or your staff happily serving customers. It’s free, so use social media to promote your food truck business! All it may take is a handful of pics from a single outdoor event to create “buzz” for your budding food truck enterprise. Tip: watch the movie “Chef” (featuring Jon Favreau and Sofia Vargara) to see an entertaining, fictionalized account of a would-be food truck owner who experiences rapid growth thanks to his unwitting portrayal on social media.
  11. Can you expand beyond your core food truck business? Once you’ve managed to successfully sell lots of tasty food at various festivals and give downtown office workers worthwhile lunch alternatives, what can you do next? You can try to expand beyond your core business, and offer to use your food truck to cater private events like weddings, corporate gatherings, or charity softball tournaments. Or, you might try selling customized coffee mugs, bibs, t-shirts, or hoodies online. Get creative; your business on wheels might grow beyond the pavement!
  12. You will work hard, but you can still have fun doing it! Is it all fun and games running a food truck operation? Of course not. The research, planning, decision-making, and prep work alone are just some of the behind-the-scenes activities that will keep you very busy, even before you sell your first bagel, burrito, or banana split. You’ll bust your hump. However, the hard work should pay off in the form of future earnings, additions to your food truck fleet, and even catering gigs. And if things don’t work out, it will be better to know this earlier rather than later. You’ll probably know early on if your food truck business is worth continuing after your first few gigs.

As with any business, running a food truck operation takes decipline, planning, hard work, a knack for dealing with the public, and the talent to create delicious food! So, before you start a food truck business, plan ahead by following the advice outlined above before you decide to purchase, lease, or rent your first food truck. Good luck and keep on truckin’!

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