Over the last several years, food trucks have gone from being few and far between, and often without the best reputation, to a crucial part of the food landscape.
Whereas, the image of a small hot dog stand or a white burger van in need of a paint job may have been the one to come to mind for previous generations, Australia’s food truck scene has gone through an incredible transformation.
The popularity of food trucks
It is not hard to know why they have proved so successful once you have visited a few. They offer a unique way to enjoy a selection of food from all over the world.
For the modern age, they present food in just the right way, making it fun, affordable, and incredibly convenient. It is now abundantly clear that food trucks are no longer a novelty, having secured their rightful place in the world of food.
Whether it is a truck that regularly situates itself in your local area or next to your workplace, or at a food truck festival at the weekend, you can rest assured that will receive a friendly welcome as well as food made with love and attention.
In a world that is often being accused of being disconnected, the rise of the food truck stands in opposition to this, and its popularity proves that we still yearn for a sense of community when it comes to breaking bread.
Getting back to basics
For those who dream of owning their own business in the food industry, the prospect of opening a restaurant can often prove to be too daunting of a task. As an alternative, food trucks have come to be the choice for a host of aspiring business owners in the food and drink industry, as they offer a route in at a much lower cost.
By opening a food truck, one has the possibility to get straight to the point of opening up a business in the food industry, providing excellent food. You can put the vast majority of your energy and focus into the actual cooking, as you don’t have to worry about all of the other aspects that come with opening a restaurant. Moreover, as one would expect, the overheads for opening a food truck are relatively low when compared to a full scale brick-and-mortar operation.
With a food truck, when it comes to getting started, your main focus can be on getting the truck and the in-house equipment to prepare the food. While there are other aspects to take into account, which we will look at in the next section, there are far fewer things to organise than when it comes to a traditional restaurant.
While this is not to say that opening and running a successful food truck is a cheap and cheerful endeavour, it does offer a fantastic opportunity for anyone looking to be their own boss and actively become a part of the food industry revolution.
So, let’s take a deeper dive into what you need to consider in order to get started.
Things to consider
There are a large number of factors that go into determining the start-up costs of a food truck. This, naturally, depends on the type of food truck you are interested in opening, as this will directly affect the size of the truck required.
Our advice is to look into similar trucks that have provided the same service that you plan on providing, and base your decision on this. There is no point going into this project blind, and thanks to the huge popularity of the food truck market, there is so much to learn from others.
So, let’s start with the first step: the truck itself. There are a number of ways to get started in a cheap manner, from renting one to test the water, to selling at a farmer’s market to hone your recipes and raise public awareness, to starting from a second-hand trailer. However, if you are serious about this, the time will eventually come when you want your very own truck.
While the research side is of crucial importance, acquiring funding is more than likely going to be the biggest challenge when starting your own food truck business. Yes, the first questions you will likely ask yourself are ‘how much does a food truck cost?’ and ‘how much does a food truck make?’, but this line of questioning will quickly turn to how you can actually get your hands on one.
The process for financing a food truck can, of course, proceed in a number of different ways. This will depend on whether you can buy the truck outright or if you need to get a loan for the truck.
The most important thing is to have a comprehensive business plan, and to know exactly what you will need to spend in order to get your feet off the ground. While not all of the following are necessary, you should also consider the costs of a register or point-of-sale (POS) system, kitchen equipment, a truck wrap, a professional website, advertising, and the required professional and legal fees and/or permits. Moreover, with payment solutions like Smartpay’s Zero Cost EFTPOS, managing transactions becomes seamless and cost-effective for small businesses.
The permits will differ depending on your location, so always check with your local authorities what is needed to legally operate a food truck. The last thing you want to meet is an avoidable stumbling block after you think you have everything organised.
Funding your food truck business
Once you have purchased a food truck, you may need to acquire a loan to purchase the aforementioned items. This loan will likely be unsecured if you don’t own the truck, which means that the loan doesn’t require collateral, although lenders may ask for a personal guarantee instead. This is still a very good way to get started in the food truck industry, provided that you have put together a solid business plan.
While a truck is the most essential item to acquire, obtaining the necessary kitchen equipment will likely take up the second largest percentage of costs. This is not something you want to skip corners with as it can make or break a business. There are some pieces of equipment that you will need in order to get started.
This is why a loan is of crucial importance. The majority of entrepreneurs will not have the equity readily available that is required to start a food truck business. Instead of holding yourself back, a business loan is the optimal way to get your foot in the door and launch your business in a manner that gives it the opportunity to be successful.
If you are lucky enough to be in a position to buy a truck outright, you will be in an advanced position. You will be able to acquire truck financing (secured) if you do own the truck.
The main difference between a secured loan and an unsecured loan is the use of collateral, although there are also a number of other differences in the requirements, interest rates, and terms.
Top 5 tips for a successful food truck
When it comes to our five top tips on how to start a food truck business, we would like to put forward a motto that is at the heart of a successfully run food truck business: people, process, and profit.
If you remember these three keywords and keep them in mind when making any and all business decisions, you’ll have the best chance of heading in the right direction. Here are five factors to consider:
- Have a business plan
- Know your concept
- Funding
- Quality is key
- Promotion
1. Have a business plan
As alluded to earlier, this is an absolute crucial part of any food truck business.
You have to know the pros and cons of owning a food truck, and what you will need to actually operate legally and successfully. This is, in essence, the research stage of the process and you should take it with the utmost seriousness.
2. Know your concept
This will be based on the research that you conduct and, once again, is of vital importance.
You need to know what it is you want to do as well as what the local area wants and needs. You want to have a passion for what it is you are doing, build an identity, listen to your locals, and go from there with absolute determination.
Ideally, you will be able to find a gap in the market in your local area and provide a service to the community that it didn’t even know it wanted.
3. Funding
While this was discussed in detail above, our top tip is to always work within your means.
If you simply can’t afford something, be aware of this and find alternatives. This may mean buying second-hand equipment to start with, obtaining an unsecured loan, or altering your menu in order to reduce certain costs. Where there is a will, there is a way!
4. Quality is key
Our best piece of advice here is to keep things simple in order to ensure that what you do prepare is of the highest quality. You are much better off having only two or three top quality items on your menu as opposed to ten or twelve average ones.
Build a reputation for doing things right and once you have established yourself, you will have more than earnt the freedom to expand and experiment with your menu items.
5. Promotion
Remember, we are living in the digital age and this allows you promotional opportunities that business owners could only have dreamed of in years gone past.
Have a presence on a number of social media platforms, make creative posts on a daily basis, make a note as to what the public responds to and follow their lead. Get a logo, build an identity and have some fun with it.
The bottom line
While the majority of people struggle with actually financing a food truck, the advice included in this article will allow you to go forward with this process in a responsible manner. Do the research, have a detailed business plan, secure funding, and know your concept like the back of your hand.
Once you get started, focus on the customer, the quality of food, the fact that it is a process, and always have your eye on making a profit. This will all require hard work and patience, but the final goal is that you will have built yourself your very own business!