Food truck business plan requires minimal investments and ensures high profitability. Runumber recommends: amount of investments – $26k, payback period – 1.5 years, profitability – 71%.
Review of Food Truck Market
Street food is a widespread business in the world and the larger the city, the higher the profits. In fact, this business may be more profitable than a stationary cafe.
Van’s mobility allows you to experiment with markets and choose the most profitable one. If in the 1960s food trucks were a rare phenomenon, nowadays their number is constantly growing. They even unite together and arrange street food festivals which represent a separate niche of the restaurant industry.
The most famous businessmen who sell food from food truck are two brothers from the USA. With minimal investment, they founded the company Cousins Main Lobster. Within a couple of years, their van has grown to the size of a small street food empire and the brothers are already thinking about opening a real restaurant. There are also successful cases in Russia. For example, the founders of Papa Jon’s scale up their business selling the franchise.
Peculiarities of Food Truck Business
The most important thing in this business is to agree on the rental of the territory on which the food truck will be located. Not all municipal authorities offer an affordable price, so planning must begin with finding a suitable trading place.
Mobility is the main advantage of food truck. It is not the customers who look for the food, but the food is looking for customers. Therefore, you can reduce the payback period of the business project to a single year, as the food truck moves to the locations where it is really needed. According to experienced food truckers, the payback period of food truck business plan rarely exceeds a year.
The second advantage of the business is the absence of expenses for the rental of premises, repairs and heating in winter.
Finally, a quick start is the third advantage. If you buy a ready-made food truck with equipment, then the time of entering the market is a bit more than a month.
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What You Need to Purchase to Open a Food Truck Business
Food truck does not require millions of investments, but still you can’t do without them. Business plan about food truck, first and foremost, includes expenses on the van purchase and its re-design. It takes about $25,000 to buy a van in good condition and equip it with modern equipment. An important point is the purchase and installation of ventilation system inside the van, because it’s getting hot in a small room and the van will be full of odors. All these expenses are taken into account to make work conditions in the van comfortable and reduce staff turnover to the lowest possible level. Since the business directly depends on personnel, it’s necessary to plan at least an average level of wages with the possibility of their constant growth.
After these tasks are completed, a menu is being developed. Equipment is chosen considering the menu peculiarities. You need to buy items that are really needed for cooking. Typically, equipment costs up to $5,000. It’s necessary to purchase disposable tableware and napkins just before the start of operations. These costs account for at least 10% of the production costs. Branded napkins and dishes positively affect the reputation of the food truck.
Peculiarities of Advertising Food Truck
Advertising costs are related to the design of the van. Business experts admit that the key to success is the attractiveness of the van, which means you need to consult professional designers. Try to invent a memorable name for your van, which will help you create viral marketing campaigns in the future. Another point that will accelerate the popularization of the new food truck is a special meal that people can buy only here.
If you want to know more about financial calculations used to elaborate a business plan, feel free to visit Sample of Pittsburgh Brewery Business Plan by Runumber