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How To Start a Food Truck Business [Step by Step]

How To Start a Food Truck Business [Step by Step]

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Once considered a passing fad, food trucks have fast evolved into a foodie’s delight. Long gone are the fears that this was a food risk in waiting. 

Right now, food trucks are trendy, their practical, fast-food nature making them especially important in certain places.

Wondering how to start a food truck business yourself? Of course, you’re aware of the need for a business plan. 

You may also recognize the need for a well-equipped food truck, a proper concept, and a good marketing strategy.

As with any business, though, starting can be tricky. Make the wrong moves, and you’re short a few thousand dollars before you even begin.

So, how do you start your own food truck business – really?

In this article, I’ll be walking you through the steps to help you get started. While we won’t be discussing much about crafting a business plan in this piece, you can find valuable help for that here.

Now, here are 8 important steps to starting your food truck business.

1. Pick the Right Concept

How To Start a Food Truck Business [Step by Step] 1

The first step in starting your food truck business is deciding on your concept. The right concept is one that’s appealing in your desired neighborhood.

If you pick an item that’s really good, but has no appeal in your neighborhood, you’ll be fighting an uphill battle. You’d lose time, effort, and money building a concept that’s not in demand.

With the right concept, though, you wouldn’t have to bother much about marketing or promotion. The concept will be so appealing in the neighborhood, that it’d market itself.

But, how do you identify a concept with high demand?

Your first step would be to find out who the concept would appeal to the most – a.k.a. your target market. The size of this group in the neighborhood determines the size of your market.

Knowing your target market also helps you strike the right chord in marketing, pricing, menu item selection, and even location.

Without knowing your target market, your marketing will talk to no one. Even worse, you may speak to the wrong group.

The trick for you would be to find out the problem of your audience. What challenges are they facing, and how does your food truck solve them?

For instance, many in a young, downtown office environment may have cravings for fresh, healthy, vegan food. They’d also need something quick; a grab n’ go meal for the short lunchtime.

How To Start a Food Truck Business [Step by Step] 2
Photo Credits: The Juice Truck

To tackle the problem, your concept could serve vegan wraps, vegan hotdogs, or even vegan burgers. Any of these will fit into the grab n’ go, healthy, vegan model desired by your target market.

By solving your clientele’s specific problem, you position yourself for success from the get go.

Don’t get lost in the idea of building a business that you forget to confirm the demand for your concept. In fact, identify your target market and their needs before deciding on a concept.

Not sure where to start with your concept selection? Check out this list of 10 top food truck business ideas/concepts you could work with.

2. Carefully Select Your Location

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With your concept settled, it’s time to strategically select your location. You can’t just park your truck anywhere and expect to enjoy good business.

So, where will you park your food truck?

The truth is, some spots are better than others. And some spots just aren’t ideal. Still, selecting the right spot is critical to your success.

To correctly identify the best spot for your truck, you must listen to the data. To do this, you may have to do some trial and error.

Gauge the data points from different spots, and allow the data to tell you the best spot.

If you want to avoid the complexities of trial and error, though, there are some good spots you could consider off the bat.

For instance, financial districts, office buildings, parks, breweries, and large events all drag in good numbers of people. This makes them ideal spots for a food truck.

But that’s not all you’d have to consider.

You’ll also need to consider the cost of being at your desired location, whether there’s an attached monthly cost, and any permit requirements for the location.

Then, you must consider whether there’s enough foot traffic in the area, and what other businesses exist in the area.

Finally, you need to consider how people will consume your food. Are there places to hang out and eat? Perhaps there are long benches, steps, or picnic tables in the vicinity?

Be thorough about your location selection. After all of your hard work, you do not need the wrong location ruining your business.


Need help starting your Food Truck Business?

How To Start a Food Truck Business [Step by Step] 4

Great! You might be like a lot of others who have a food idea for their food truck business, but feel overwhelmed and confused by what to do next. Cause there’s a TON of moving parts when it comes to starting a food truck business.

And any slight mistake could mean $10,000s down the drain…

Join me in my free masterclass where I help give you the confidence to build your food truck business!

3. Craft a Winning Menu

How To Start a Food Truck Business [Step by Step] 5

The menu has always been one of the most important pieces in a restaurant. Indeed, it’s super easy to make a menu mistake that topples your chances.

Although designing a menu is always tricky, it becomes even worse when designing one for a food truck.

One thing you must understand when creating your menu is that you aren’t a restaurant. You’re a food truck.

With you, people don’t want to wait 20 minutes just to get your food. Instead, they want something that’s super quick and convenient. Essentially, you’re serving fast food.

This means two things for your business:

First, your menu should only contain items that can be prepared quickly. The faster the preparation time, the better an item is for your menu.

Second, you must limit the number of items on your menu. In fact, your menu should have no more than seven (7) items.

Now, food business has always been a volume game.

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Having only a few items makes logistics a lot easier and cheaper. You incur higher costs (for ingredient purchases, storage, and potential spoilage) with more menu items.

What’s more, the operational meandering also increases as your menu items increase. This means more operational, storage, and preparation headache.

So, keep your operation lean, and only serve your customers what they want.

As a rule of thumb, always employ the 80-20 rule; otherwise known as Pareto’s Principle.

Going by this principle, you’ll get 80% of your sales from only 20% of your menu items. Rather than serve every item, then, why not identify and serve only that top 20%?

A small menu also makes it easy for you to quickly determine what your customers like the most.

It allows you to refine your menu again and again – chopping out items that aren’t in demand, and replacing them with better alternatives – until you perfect it.

As you collect feedback and continue to improve, you become known for the few items you’re very good at delivering.

And this is exactly how you build a community of loyalists. This is how you get people to drive over many miles in search of your pie.

4. Measure Your Startup Costs

With your concept, location, and menu all sorted, it sure feels like you’re ready to begin, right? Not so fast, though!

Having all of those sorted at this point will only make step four easier. This is the point where you determine your startup costs.

A typical food truck isn’t as expensive to start up as a restaurant. Food truck startup costs could range anywhere from $30,000 to $100,000. 

Where your actual number lies depends on a lot of factors. But, there are two big costs you must be aware of:

1. The Truck

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The cost of a truck will vary wildly, depending on whether you’re getting a new truck or a fully equipped truck.

A new truck will require that you refurbish everything, and build it up to your specifications. 

On the other hand, a fully equipped truck is a turnkey solution that comes with all the gear and equipment you may need.

While the latter option is more expensive, it does give you the peace of mind that your truck doesn’t require so much work before usage.

If you want something even cheaper than both of the above, you could consider a third option – a lease.

Leasing an existing food truck also means there’s little work required to get it up to speed. Most importantly, though, you do not have to bear the entire costs of all that equipment at once.

2. Equipment

Even if you purchase a fully-equipped truck, chances are, you’d still need to get one or two extras to perfect the truck for your needs.

Equipment costs can be massive, depending on your concept and size of operation.

When purchasing any equipment, you’d again be faced with four options – new (most expensive), used (cheaper), and lease (cheapest).

You can find used equipment on places like the Facebook Marketplace. There are also a ton of websites that cater to the secondhand market.

And, if you’re really out for a great deal, you could look out for auctions from recently closed restaurants.

As always, the option of leasing is the cheapest of the bunch. It allows you to pay intermittently (perhaps on a monthly schedule) rather than upfront for the equipment you use.

3. Other Costs

Outside of these two major expenses, there are other costs you must consider. These include advertising costs, car maintenance costs, licensing costs, permanent/recurring costs, and car wrap costs.

Although these costs may pale individually in comparison to the other two, they do add up. Be sure to plan for them before embarking on your business journey.

5. Understand the Financials

How To Start a Food Truck Business [Step by Step] 8

You’re almost there. If you’ve followed every step until now, your food truck business should be shaping up nicely by now.

At this point, it’s time to face one of the more difficult parts of any business – the numbers. 

Properly measuring your startup costs should give you an idea how much you’d need to start your business. But there’s more to financials than just the startup costs.

Now, a lot of new business owners do not make projections for a lack of income. What if you aren’t able to make any profits in the first six months, or even up to the first three years?

This is a more common scenario than you might imagine.

Your financial projections must, therefore, account for a shortage of revenue in the beginning. You need a runway of capital that keeps you going for a while, even if revenue is short or profit is missing.

Some people also keep other sources of income open in the beginning. This allows them to run the business for the first few years without excessive pressure. 

Scary?

It shouldn’t be! Having all of this in mind, and preparing for them from the beginning, saves you a lot of stress if you don’t immediately hit the ground running.

That said, there are some numbers you must understand in order to be profitable. These include your:

1. Average Order Value (AOV)

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Photo credits: yooncraves

This number refers to how much each transaction you make is worth on average. Put differently, it measures how much each person spends on a single transaction in your truck.

Your goal should be increasing this number as much as possible. But how do you do that?

Think of ways to introduce complementary and alternative items to your menu. Alternative items keep customers even if the original item they needed is unavailable.

Complementary items, however, ensure that order costs are almost always higher. This could be anything from a side dish to an added drink.

2. Margins

Margins in business typically refer to the seller’s cost of acquiring products and their selling price

If you’re a trader who purchases products and resells them, this is a straightforward calculation. Not so much if you run a food business, though.

So, how do you calculate your margins?

First of all, you must know your cost of goods sold (COGS). This number measures the amount of money spent on average for each item sold.

Then, you must know your labor costs. This holds true whether you’re the only worker in the business, or you’re paying others to run the business on your behalf.

Knowing these two numbers allows you to tinker with them in order to increase profitability. You could, for instance, find ways to lower your COGS to increase profit, while holding sales/revenue constant.

Fully understanding your numbers like this also enables you to cut out items that don’t make you enough money or items that take too long to create.

Cutting out these items can save you a lot of money, and increase your profitability in no time.

6. Brand Like a Boss

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The sixth step required in starting a food truck business is your branding. 

A good design helps you make a big first impression on your potential customers. It captures and entices them, drawing them to your truck out of the many available options.

Think of your branding as your first step in converting a random stranger into a customer.

When this first conversion step is successful, good food and excellent customer service wows the customer into becoming a loyal customer.

Without good branding, though, you’d never have a chance to wow customers with your delectable dishes.

So, how do you stand out with your food truck?

For starters, be sure to read your environment. The design for a festival venue will be largely different from that for a business district or a large corporate event.

For a festival venue, LED lights can be combined with brilliant sounds and bright colors to immediately attract attention. 

Be sure to also share exactly what you’re selling right off the bat to avoid any confusions.

In an office environment or a business district, a more understated design may be more suitable. Still, always ensure your design is modern and appealing.

To achieve any of this, you must properly research your environment. Once that’s done, you’d also need a good designer to bring your idea to life.

How do you find a good designer?

Start by looking around your neighborhood for a good local designer. Local business directories can point you in the right direction.

Working with someone in your locality makes communication easier and faster. It helps ensure your vision is brought to life in the clearest way possible.

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If, however, you can’t find a good local designer, platforms like Upwork and Fiverr can ease your stress. These sites are user-friendly, and contain a host of designers.

If you choose to use an online platform, though, you must be careful to sieve out good designers from the crowd of designers on offer.

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Finally, note that your design must invoke a feeling in your target demographic. It should strike in them the experience you’re trying to serve, even before they taste your meal.

This is the only way you can brand like a boss.

7. Obtain Relevant Permits and Licenses

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One important thing you must be aware of when creating your food truck business is the required permits and licenses. 

Like any other food business, you’d need certain approvals to operate. For your food truck, though, you’d need others like zoning and parking regulations.

These extra licenses will determine whether you’d be legally allowed to operate in a particular region, and where exactly you’re required to park.

For example, the downtown core area of Vancouver only allows a set number of food trucks to operate at any given time. Once this number is hit, licenses are no longer issued for operation in the area.

This isn’t always the case, though. Different cities and countries have different regulations regarding food truck operation. 

Before you begin making any plans, therefore, visit your local health authorities or small business associations. These bodies should inform you of the required permits/licenses for your desired location.

Now, although the licenses and permits you need differ by environment, here are some examples of what you can expect:

  • Business registration license
  • Seller permit
  • Zoning regulation permit
  • Health and Safety license
  • Fire permit

Planning your business without first confirming the possibility of obtaining relevant permits can be costly. 

This was the case with a business friend who bought a food truck with a specific location in mind. By the time he learned of the limit to food truck permits granted in the region, it was too late.

Eventually, he sold off his truck and discontinued the business. Poor planning had cost him lots of money, time and effort.

Once you confirm what’s required, ensure you obtain them before spending any monies on the business.

8. Market for Growth

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According to a 2019 survey, over 70% of US diners will check a restaurant’s website before deciding to dine in or order takeout.

This trend is only set to increase even further. As a result, online marketing is even more important in the marketing plan of any restaurant.

Unfortunately, a good number of restaurants still ignore digital marketing. This is a mistake. Digital marketing must be used in addition to any other marketing tactic you adopt.

Note, however, that digital marketing is broad. There are a lot of digital channels to be used for marketing. But you do not need to use them all.

Which digital channel should you employ for your marketing needs?

1. Website

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Takenaka website

The survey quoted above makes clear the importance of a website to your marketing. Your website must, thus, be appealing enough to visitors, to encourage their patronage.

In fact, 36% of website visitors end up abandoning a restaurant if the photography is bad. But there’s more to a good website than the pictures.

36% of diners say they abandon restaurants whose websites aren’t mobile-friendly. And, 44% and 35% respectively abandon restaurants with difficult-to-navigate websites or unreadable online menus.

People also love to research websites before ordering takeout, with 43% of diners visiting a restaurant’s website before making that decision.

Indeed, the opportunity for placing direct orders is a particularly great feature of modern websites. Not only is it more convenient for the diner, it’s an important source of alternative revenue for you.

Not sure where to start with your food truck business website?

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Thanks to platforms like Square, you can set up a website that’s mobile-friendly, easy to navigate, and classy in no time. Not only is Square easy to use, it’s also free to use.

2. Instagram

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Takenaka instagram

Instagram is arguably the most important digital channel for any food business. With over 1 billion monthly users, Instagram is a fertile ground for customers.

People like to keep tabs of friends – where they visit, what they do, and what they’re eating – using Instagram.

For your business, Instagram allows you build a connection with your customers. The more you show up on their device, the more they commit you to mind, and the more they remember you.

These regular interactions with potential customers positions you for success. It increases their chances of buying from you, as well as their chances of becoming loyal fans of your brand.

Unfortunately, using Instagram for marketing is a confusing task for most. 

You may wonder, how do you use Instagram to… create content that engages your audience?  reach out to influencers for promotion? market your service to the right persons?

If you’re interested in all of this, I’ve put together a free masterclass for you. This masterclass discusses how you can use Instagram to build a food business in no time. 

3. TikTok

TikTok has to be the fastest growing social media platform at the moment. Its viral video nature has made it easy for many small businesses to go viral by posting the right content.

If you have a great personality, or enjoy making short videos about restaurants and their foods, you can create TikTok content around these.

Your food concept idea can also make for great TikTok content, if it’s fairly unique or rare.

Interestingly, TikTok content can also be very easily repurposed for Instagram reels. This makes it possible for you to satisfy two social channels with one content.

4. PR and Awards

For many, PR is old news. I disagree.

Having an article on reputable publications speak about your business is a really good show of proof. It adds authority to your food business.

In fact, having someone else sing your praises has a much bigger impact than whatever you say about yourself.

Once your business has been discussed on other websites, it’s time to spread the word. Put it on your website, post it on Instagram, add it to the design of your food truck.

Just get the news out there. 

The same holds true of awards like the Michelin Star and the James Beard Award. Social proof like this tells of your quality and acceptance. Take advantage of them.

The Bottom Line

If you’ve been dreaming of starting your own food truck business, know that it’s an exciting process with lots of opportunities.

Although setting up may be more time-consuming and involving than setting up a regular restaurant, it brings with it unique benefits over traditional restaurants.

The steps outlined above will help you on your journey. Be sure to go through them before you begin, and use them as a checklist once you’re ready to start.

Need help starting your Food Truck Business?

How To Start a Food Truck Business [Step by Step] 4

Great! You might be like a lot of others who have a food idea for their food truck business, but feel overwhelmed and confused by what to do next. Cause there’s a TON of moving parts when it comes to starting a food truck business.

And any slight mistake could mean $10,000s down the drain…

Join me in my free masterclass where I help give you the confidence to build your food truck business!

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