6 Things to Know Before Investing in Mobile Concessions
Food trucks can make good money, if you know what you’re doing. While it’s cheaper to run a food stand or truck than it is to own a restaurant, there are still many things you’ll need to consider before jumping into this new business. Here are just six of them:
1. You Won’t Get Rich Quick
Image via Flickr by Ted Eytan
While running a food truck is a great option for a new business, it’s important to realize that this is not a get rich quick scheme. You’ll make money, but you won’t become a millionaire in a few months. Most people work on the misconception that this is a great way to make tons of money. However, there are a many expenses you’ll need to deal with, and you’ll be working on pretty tight margins.
Remember, when you’re running a food truck, you’re going to have expenses that you simply don’t have in other types of business. You’ll be paying for the food and cooking equipment, of course. However, you’ll also have gas expenses, permits from the city, and repairs on the truck. The more you drive around, the more wear and tear on the vehicle, meaning more repairs.
2. You Need to Research
Before you start your food truck business, you need to make sure to do your research. Some cities may not allow food trucks or not in certain areas. Other cities only have a certain number of permits available each year. Check into the city ordinances on this. You can usually do this on the city’s website, or by going to the chamber of commerce.
Once you’ve researched information on the city, you should also do some research on the truck you want to purchase. Do you want something used or new? Are there certain models that are better for your business than others? Another thing you should look into is the types of food stands and trucks that are already in the city. This will help you later in deciding exactly what to sell.
3. You Should Specialize
Image via Flickr by Phillip
It’s tempting to offer everything under the sun from your truck. However, it’s important that you have a specific type of food that you stick to. This will help cut down on the ingredients you have to purchase. On top of that, it will give you a niche that you’re able to market and promote more easily. Decide on a specific style of food you like to make, but also something you cook really well. The better the food tastes, the better it’s going to sell.
Take a look at the other food trucks in your area. What are they selling? While it’s tempting to sell the same thing, because obviously it’s working for them, it’s smarter to find something different. This will set you apart from the crowd, and help you make a name for yourself. Don’t go too far outside the norm, or you may find it difficult to make enough sales to keep yourself going. However, if there’s a ton of hotdog stands in the area, change it up and offer pizza.
4. You’re Still Going to Have to Invest
Opening a restaurant costs hundreds of thousands of dollars. Luckily, food trucks don’t cost quite this much. However, you’re still going to have upfront costs, and you’re probably going to need to get a business loan or investors. Depending on the part of the country you live in, you may find a used food truck for as little as $15,000. However, if you want something new, you’re going to need to come up with more. Some food trucks can cost up to $100,000.
On top of the cost of the truck itself, you’ll need food to start with. Ingredients are not always extraordinarily expensive, depending on what you plan to sell. However, they still cost money. You’ll need menus, and an advertising budget, as well.
5. You’ll Need to Budget
It’s likely that your food truck business won’t make money right off the bat. It’s a harsh reality, but it’s something you’ll need to face. Because of this, you need to be able to carefully budget the money you have. If you get a business loan, consider getting enough to cover expenses for a few months, allowing you something to fall back on. This will help you stay in business for those first months that can be the most difficult. If no one knows about your company yet, you’re going to have a hard time selling.
Make sure you make a realistic budget. Don’t under budget just because the numbers look better. Make sure that you’re not buying too much, either. Wasted ingredients and food that is pre-made and then goes to waste hurts your company overall, because this is just lost money that you didn’t have to throw out, if you planned ahead.
6. You Should Think of the Little Details
There are a lot of little things that you may forget until you come across issues. For example, how are you going to take money? Are you going to accept cash only? While this may seem like a good idea at first, remember that many people don’t carry cash anymore. This will inevitably drive away a lot of customers. You’ll need to have a way to take cards if you want the most flexibility for payment. There are a number of options for this, from your bank to PayPal, an even a Square card reader, which works with tablets or cell phones.
Are you going to have someone else working with you? If not, remember that any time you’re open, you will need to be in the truck. This gets overwhelming for many. When you take a vacation, this is time that the truck is not operating. These may seem like strange things to think about long before you open, but they’re crucial.
Opening a food truck allows you a freedom many other business types simply don’t. However, it’s also a lot of responsibility. What steps have you taken to research your place in the industry? Share your thoughts in the comments below.