Is Your Dream Business On Wheels?
One of today’s hottest trends is also one of the oldest types of small business in the world: food trucks. Food carts have been with us since ancient times, when it was common to find vendors pushing carts through cramped city streets. In the modern era, food trucks, also known as “gut trucks,” can be found in a variety of locations. These serve anything from gourmet cuisine to specialty desserts and coffees.
At first glance, operating a food truck may seem easier than opening a regular storefront food business. But it’s not without its pitfalls. Owning a food truck is a business with upside opportunity and downside risk, and should be approached as such.
What does it take to run a food truck as a good business?
Food-truck operators likely will need two key attributes. Be sure you have a true passion for food and enjoy being a jack-of-all-trades before plunking your money down on a food truck. Make sure you have the time as well. Food truck operators regularly work more than 60 hours a week.
Do you have the skills?
Operating a successful food truck is the epitome of multi-tasking. You will need to be a:
- Finance specialist
- Tech department
- Social media expert
- Talent recruiter
- Bottle washer
Consider whether you have enough of the needed skills (or the resources to hire someone to do provide them) before you begin.
What will it cost to start a food truck business?
Just because a kitchen has wheels doesn’t make it any cheaper or easier to set up. You are, of course, going to need a food truck. Costs for the vehicle and equipment vary. You can buy a truck and have it converted to your specifications or buy a used food truck.
The second option is to search classifieds or go to websites like usedvending.com or commercialtrucktrader.com and search for a truck that well work. Examples of listings are $15,400 for a van retrofitted to a food truck to $315,000 for a late-model commercial mobile kitchen. A used vehicle can save money. But be careful that neither the truck nor kitchen equipment in it has been damaged.
Your truck will probably be your highest initial expense. Several other costs to consider are:
- Business license and permits
- Commissary fees
- Health department certification
- Insurance (business and vehicle)
- Cash register and/or point-of-sale system to process payments
- Propane and/or generator costs (fuel)
- Truck appearance
An alternative to buying your own vehicle and starting from scratch is to franchise a truck from an established company. The downside to these arrangements is you will have no control over the product, pricing or marketing.
How will you fund your food truck business?
Finding funding for a food truck business can also be a challenge. You will need to develop a business plan. Combined with a strong credit standing, the plan can help you secure financing.
If traditional financing isn’t possible, other methods to consider are:
- Starting out with a booth at your local farmers market or carnival to build credibility.
- Negotiating a lease or rental agreement with someone who already owns a truck.
- Looking for sponsors or advertisers to buy placements on your truck.
- Teaming with a local restaurateur to run a truck for their business.
There are definite advantages to starting a food truck business over a traditional restaurant. The mobility of the food truck can help the business owner find the right spot, since location can be vitally important for a young restaurant business. Like starting any endeavor, it pays to do your due diligence about a food truck business. Use this information will help you navigate the path of starting a food truck business and contact RC4 Insurance Agency, Inc for additional information about food truck insurance.
Article From Selective Insurance