When commencing a new business, it is really easy to slip into the romantic part of commencing a business. Haven’t all of us who have started a business, stayed awake in our beds dreaming about how my business will really take off? Will it be successful and how much time will I need to make my business successful?
All of us have been staying awake in our beds dreaming about how our businesses will take off.
But we also need to think, quite realistically, about how exactly you are going to get things off the ground.
Are You Ready for a Food Truck Business? Here’s the Process to Follow
Well, a food truck business starts with quite a few things, which are:
- Develop a Startup Budget
That’s the first step when starting a food truck business. Prepare a worksheet, where all expense types are mentioned clearly. Be realistic when preparing the list of expenses, as that would give you a clearer picture of how much money you need to run a food truck business.
This point is one of the best ways to start planning for a food truck business. The budget – it is everything that your business needs in the beginning.
You have to buy everything – right from the food, marketing costs, fuel, truck’s maintenance to supplies. So, a proper plan regarding costs is vital, to know how everything will be managed and how you will need to invest money in the food truck business.
- Figure Out Skill Set
So, what’s the most important skills needed to begin a food truck business? Cooking! Figure out how proficient you are in cooking the meals. Besides how many cuisines can you really cook in the least possible time.
What’s your skill set? Figure that out! Be it the cooking part or the management part, everything has to be on point for running a successful food truck business.
- Does the Market Support Your Business?
Well, that goes for almost any type of business you wish to start. Is the current market supporting the idea of opening a food truck business? it is vital to know about the business you are getting into. You know customers will be demanding, they will judge your business based on what you serve them – in this business type i.e., food business.
Analyze the market, figure out your competitors, determine the demand of business, compare the market (last year and current year). If the market is expanding, don’t hesitate to invest in that particular business. Figure out what customers are demanding in that specific business.
The need is to understand the business, do thorough research, and finally figure out the best for you. It is vital to know what’s trending in the current market and does it really support your idea.
- Discuss Your Idea
Now, many don’t believe this step to be very important, however, it can save you from potential risks in the food truck business. Talk to your friends, family, and maybe, experts about how good is your idea of opening a food truck business in that particular location.
Owning a business – be it a food truck business or any other – eats up a large portion of your time and research. If some of that time is dedicated to family, friends, and experts in figuring out what they think about this business, then it would be much easier for you to start your food truck business.
No one will be as honest as your family about the very idea of beginning such a business. hence, speaking to your near ones is a must before you actually begin your food truck business.
- What’s Your Financial Situation?
Figuring that out is, perhaps, the most important thing to do, when setting up a food truck business. Many business owners rely on day jobs while commencing their own food truck business at first. It, indeed, is a good idea to set up your business while having a steady income.
Remember, it will take some time to generate little income from your food truck business. so, it is recommended not to quit your day job while starting a food truck business of yours.
Besides, do you think your day job is enough to support your business? You will have to plan for the worst-case scenario. So, figure out whether your financial condition will support your business or not, in case your business is not generating enough money. Be smart enough not to expect too much from your newly set up food truck business.
Sources of Financing for ‘Food Truck Business’
There are certain sources of financing for food truck businesses. However, many of those stepping into the food truck business might not know about it.
- Personal Resources
Sometimes people have their retirement funds available for running their own food business. That’s a good idea to follow when you know you have enough to invest in such a business from your retirement funds. Some others might rely on their savings account for starting their own food truck business.
Then, the next option is to borrow the funds from someone – be it someone from the family or your friends or maybe, from sources, who you think can be trusted upon for funds. You can borrow funds, and that could be your second source of financing when starting your food truck business. generally, one expects help from the family.
- Bank Financing
Then you can even rely on the banks for borrowing funds, but there will be a certain interest rate charged to borrow the funds from them. almost everyone is familiar with this option of financing. They, usually, offer commercial loans, using which you can begin your food truck business. The only drawback here is the high rate of interest, which can be a burden, especially when you commence a business like a food truck.
- Local Lenders
They are most likely to lend you money for your food truck business. Apparently, larger financial institutions will think, at least once, before lending you money for your food truck business. However, that’s not the case with local lenders. They are probably going to lend your business a decent amount of money to commence your business.
- Investor’s Network
People even go to investor networks for borrowing money for setting up their businesses. An investor’s network is a group of people who earn their living by investing in small or large businesses, usually startups. Although this option of financing for your food truck business could impose certain pros and cons. The cons could be investors indulging too much in the business, which is not a very good deal. Another disadvantage of borrowing from investors could be a limited period to return investor’s money. The advantage is that you get money for your business really quickly.
It is an option where you can solicit the public to invest in your business. In return, a favor is done, which could be anything as agreed by both the parties. Generally, the entire business plan is shared with the public via a video or a message, where how business actually works is discussed. Also, there could be a special deal for the first few investors. For instance, the first 50 investors can be offered free to eat and drink in the food truck for one or two months. Hence, this is a lucrative option for investors and business owners as well.
Things to keep in mind before financing for your ‘food truck business’
– Maintain a good credit score to lend a decent amount of money for your food truck business.
– Cash flow projection for the next 2 years
– Latest financial statement
– A reliable business idea
Roles to Play as a ‘Food Truck Business’ Owner
There’s a lot that the owner of any business is required to do. Here are a few roles to play when acting as a food truck business owner.
- Be a Technical Expert
Know-how of technical aspects of any business, food truck, in this case, is important. Of course, you can rely on a technical team to get things done for your business. but, you can’t completely rely on them for everything. You will have to attain skills, knowledge, and expertise in the technical aspects too.
- Act as a Manager
When you are into a food truck business, it becomes essential for you to manage things. And, it will not just be one particular department that has to be managed. You will have to know everything about every department, be a smart manager, and manage things accordingly.
- Be the Boss
Of course, your staff members can get lazy at times or might not understand your passion anyhow. In that case, you will have to act like a boss and manage the staff to stay motivated and active throughout the day.
- Work as Marketing Executive
You might even have to work as a marketing person for your food truck business. Yes, you will even have to spread the word about your business, market your food, and improve as a marketing person every single day.
- Become the Market Researcher
When starting a food truck business, you even have to play the role of the market researcher. Of course, you will have to be updated about what’s happening in the market, the current trends, and even how your competitors are behaving in the current scenario. Hence, being the owner of a food truck business, you will even have to act like a market researcher.
In short, when you are a food truck business owner, there will be a need to supervise and manage every department – you will have to act like a boss, employee, accountant, marketing executive, tax collector, business planner, and even IT expert.
What Factors Decides the Success/Failure in ‘Food Truck Business?’
There are three different sectors or areas which majorly decides the success of the ‘food truck business.’ Here are those factors:
In case, any of these three factors are not managed properly, there is a big chance of failing in the food truck business.
So, how to actually be an expert in all these areas?
a) Technical – For this area, it is important to have the support of people who are experts in particular skills required to run a food truck business. Nowadays, business owners do have an ‘about us’ section, where everything about the owner is mentioned, including the background of the owner, his passion, the reason for commencing the business, what training have they been through, their certifications, years of experience, and almost everything about the owner. The technical aspect is one of the most important factors to be worked upon when in the food truck industry.
b) Management – The next factor is how well you are managing your food truck business. Managing the food truck business even involves maintaining the quality of food, keeping it consistent, and allowing the customers to enjoy high-quality services. The location also plays a role in deciding the success or the failure of the food truck business. Pick a location that can get more customers. So, when in the food truck industry, you will even have to manage the meetings, administrative tasks, bills, constant supplies, customer service, legalities involved, and much more.
c) Marketing – The struggle is real in the food truck business. Marketing is generally about ‘who.’ Who are you speaking to? Who are your targeted customers? Why would they eat at your food truck? What is your geographic region? For proper marketing, you should be focusing on a particular type of group, who visit your truck and even bring more customers. The regular customers would be from a specific geographical area, which should be targeted at first using different advertising techniques.
Mistakes You Might Make in the ‘Food Truck Business’
Being a newbie and even those already in the business, there are chances of committing mistakes in the food truck business. Here are some common mistakes that one could commit in the food truck business.
1) Unplanned Budget
That’s one of the biggest mistakes that one can commit in the food truck business. Not planning about how many funds are going to be used in the business is a big mistake, which will make you repent later on. So, the foremost need of starting a food truck business is to plan the budget. You should have enough money to support your business, and that’s what you need to check in advance.
2) Not Deciding the Location
Another big mistake in the food delivery business is not deciding the location. Take your truck to the locations where your customers are. For knowing where exactly you need to go to sell your food, you will have to rely on a robust marketing plan. It will not only assist you in finding your potential customers but also grow your business in the least possible time. The best places to park your food truck is around colleges, schools, city street corners, and other happening public places.
3) Staff Mismanagement
Running a food truck can be an intimidating task if you don’t have the right staff. In case, you are managing everything yourself is a different case. But you have to be extra careful when you are relying on staff for your work. Finding the right staff for your food truck is essential, otherwise, your business will be suffered.
4) Dirty Workspace
The biggest mistake in the food truck business is when you don’t keep the workstations or even the truck clean and organized. When you are running a food truck, it could be tough to maintain cleanliness and organize everything. However, with proper planning and organization, it is easy to maintain cleanliness and organize everything properly.
5) Poor Customer Service
Another mistake in the food truck business could be a ‘non-appreciating’ attitude towards the customers. Quality customer service should be your priority. That is what becomes the basis for building loyal customers. Poor customer service can affect your business negatively, which could further affect your sales and business.
6) No Legalities Considered
In the food truck business, you could even be at fault, if you are not paying attention to the legal matters of the business. You wouldn’t need a professional for your administrative tasks, though. However, knowing what legalities are included in the business will do. You wouldn’t want to be stuck in such matters in the future, right. So, it is recommended to get acquainted with the legal terms and matters related to the food truck business.
The Takeaway Message
Commencing a food truck business can be a daunting task if the right path is not followed to reach the customers. Besides, you can’t just rely on certain tips learned by someone. Of course, these tips will come in handy later on in the business, but the need is to understand the business and how you are going to achieve results in that business. Remember to prepare strategies for competing with your competitors. The need in the food truck business is to spend time in knowing the market and responding actively towards the current scenario. If you follow this food truck business guide, there is a high probability of running a successful business.