How to Start a Food Truck Business

by Joshua Botello

Starting a food truck seems to be all the rage now as an alternative to a full brick-and-mortar restaurant. While a food truck might seem like a cheaper alternative to starting up, this doesn’t mean it takes any less work to get your business started. The food truck industry is fairly regulated and there are a lot of things to consider before you get started. In this video, I’ll cover five areas of consideration and answer the question: how do you start a food truck business?

Business Concept

You need to determine what cuisine of food you want to create for your business. Much like the concept of a brick-and-mortar restaurant, your food truck fare should be based on some concept of cuisine or fusion.

The next step is you need to nail down your menu. Based on your cuisine you will need to figure out what food can be made in a small space like a food truck. Now that you have a solid menu, you will need to think about what equipment may be needed to make each item or multiple items. Keep this stuff in mind because you will need this list later for your costs.

Finally, you will need to figure out where you will serve customers, meaning will you be found at regular locations where customers can find you? Or will only be serving events that customers will need to reserve in advance to enjoy your food.

Costs & Revenue

It’s time to estimate the costs to start up your food truck business. Let’s begin with the backbone of your business: the Truck. You have a few options here either new or used. There are advantages to both. A used truck affords you a quicker start and a lower barrier to entry. The other consideration is the equipment you will need based on your menu are food decisions you made when creating your business concept and since this is a kitchen on wheels, many of the kitchen equipment like air hoods and fire suppression systems will still be needed.

Many businesses may be able to customize a new or used truck with all the equipment you need, but note this could cost from as low as $40,000(used) up to $150,000+ (new) so know your costs when starting this step. You will also need to keep your truck maintenance in mind and what it will cost for upkeep. New trucks will need less upkeep at the beginning and used trucks while cheaper to start will need regular maintenance to make sure you're not buying a whole new truck too soon.

Food will be the other critical cost you will need to keep in mind when you start out. Do you want to make sure you are buying food at a reasonable cost and charging enough to prepare your menu to make a profit for running the business? Finding the right suppliers for fresh food or farmers’ markets will be a great way to save on money and deliver a higher-end product.

When starting a food truck you need to realize you’re not going to have the infrastructure of a brick and mortar restaurant. So you will need to come up with some creative ways to take payments and keep track of whatever revenue that you’re able to generate from the business. This means finding alternate points of sale services like Square or Clover. I can use Internet connections from either a mobile phone or a mobile hotspot. The other consideration you’ll have to make is how you will want to process payments either through simple ATM transactions or if you will need to accommodate credit card processing for your food truck.

Business Planning

So now that you have all your planning ready it’s time to get that business started. You're most likely want to set up an LLC to limit the liability of your business against any type of legal trouble. Fortunately, the LLC allows you to set up a business name and the entity all in one place with the secretary of state of California it will only cost $100 to form your LLC. You will need to know that there is an $800 franchise fee once you look to renew for the next year and thereafter.

Before you start operating your food truck you want to check with your local county two identify any particular restrictions with operating your food truck. Each county will be different, but generally speaking, they will have specific rules for registering and operating your food truck with the proper licensing.

Besides setting up your food truck licensing to operate within a specific county, you may have to register with the county public health department and get a food inspection permit to serve food to the general public similar to a restaurant. These inspections may include checking equipment and refrigeration storage to make sure all food is within city limits and clean of the space. You may also have to get food handler safety certificates for all of your employees including yourself if you are talking to handle food to the public as well.

Record Keeping

So as a business you will want to keep track of all the money you make during your travels. A great resource for this is QuickBooks online. QuickBooks is a trusted accounting program that many small businesses use and it’s easy to get started if you wanna do it yourself. The online version is fairly easy to get started and you’re able to check any of your accounting or financial health of the business through any Internet connection or even through your mobile device. You can also log mileage and pay bills wherever you go.

If you’re looking to hire employees, you will want to make sure that you have the proper paperwork. Using a service like Gusto for small businesses can give you the flexibility you need without a full HR department. Still allows you to offer benefits and process HR and payroll for your employees. Other tools that you can use to manage employees can be the program When I Work, which allows you to create schedules and the ability for employees to clock in and out and manage hours for payroll.

So, depending on how you want to set up your business, you may want to have a roaming schedule where the food truck is located in different places throughout the week. Having a tool to schedule where you were going to be located and who is going to be with you and each location will be vital to have a smooth operation. If you’re looking to set up events as your primary source of business then having a simple schedule program like Calendly or Acuity can help your business set those up.

Marketing

So you have a great concept, good food, and a solid business model, now you have to get customers. Depending on your concept you may want to start doing events to get some awareness with potential customers. You may also want to start building an email list to get promotional deals and entice more customers to come out and try you out.

Another way to market your business effectively is through social media. How? Using platforms like Facebook, Instagram or Twitter is a great way to inform your followers where you are with pictures or videos. Using geotags or marking your location where you when you start serving food, will entice your followers to drop by or plan trips around where your food truck will be located throughout the week.

Customer service will be vital to your success and getting repeat customers will be your lifeline. Offering loyalty programs for repeat customers for buying so many products and getting a free one, is a great way to get them to come back and even seek you out integrating the promotional techniques I provided earlier.

Conclusion

Starting a food truck is generally much less expensive than opening a full brick and mortar restaurant which is very attractive for restaurateurs who are looking for more freedom with their business. Depending on the truck and equipment you require and reduced cost licensing, food trucks have become the better way to start a food business compared to a restaurant or expand your reach for an existing restaurant. If you are looking to start a food truck business or need a loan to expand your food truck business, you can sign up at www.lavernesbdc.org/newclient to schedule an appointment with a consultant for your small business.

Have you started your food truck business? Let me know if you used any of these tips to start your business in the comments below.

Funded in part through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, conclusions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.