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Starting a Food Truck Business in the US
From:
Tracy P. Jong --  Tracy Jong Law Firm Tracy P. Jong -- Tracy Jong Law Firm
For Immediate Release:
Dateline: Rochester , NY
Tuesday, October 22, 2019

 

If you’ve been eyeing a food truck business to enter the restaurant world or simply because you like the concept, you may want to use this article as a guide.  

A food truck is simply a truck that serves food. With its insides scooped out, turned into a kitchen and moving from one engaged office district to a great footfall night-market. A restaurant on wheels, if you will.

And food truck businesses are of different types- some sell ice creams, some sell frozen and packed food, and some have kitchens on board in order to prepare food from scratch. In recent times, niche menus and gourmet cuisine are also being offered at food trucks.

History of Food Truck Businesses 
The chuckwagon, a wagon on which people transported and cooked food in the 19th century, is deemed to be an antecedent to food trucks. In the year 1866, Charles Goodnight, a Texas cattle rancher, implemented a firm US Army wagon with inner shelving and drawers, stocking it with kitchen, medical and food supplies. The wagon also carried a water barrel and a sling to kindle wood to heat and cook food.

In 1872, a food vendor named Walter Scott gave birth to the idea for the modern food truck. He cut open windows in a small closed wagon, parked it in front of a newspaper office in Providence Rhode Island, and sold out sandwiches, pies, and coffee to pressmen and journalists.

In a few years, a former lunch-counter boy by the name of Thomas H. Buckley started manufacturing lunch wagons in Worcester, Massachusetts. He introduced various models like the Owl and the White House Cafe, complete with sinks, fridges, and stoves, and had the interiors embellished with ornaments.

In the 1950s, US Army authorized mobile canteens were formed and became famous at stateside army bases.

The modern resurgence of food truck businesses took place due to several reasons associated with the Recession of 2008. Food trucks are considered to be trendy, and thus, combined with economic and technological factors led to an increase in the number of food truck businesses in the country. With the construction business drying up, there was an excess of food trucks and chefs from high-end restaurants were being laid off. For such chefs, with years of experience, going into the food truck business seemed like the only viable and lucrative option.

Food truck businesses have become a very familiar phenomenon across the United States, with many of them being found in the suburbs and small towns all across the country, graduating from American metropolitan areas like New York and Los Angeles. They are also being hired by people for special events such as weddings, movie shoots, and corporate gatherings, as well as to carry advertising promotions.

Food truck businesses in popular culture
  • The popularity of food trucks in the US speaks for itself. They can be seen very regularly on national television. The shows named The Great Food Truck Race and Eat St. feature food trucks from all around the United States.
  • On Food Truck Face Off, a show in Canada, 4 teams battle for a prize- use of a customized food truck for a year.
  • In the American comedy-drama Chef, a high-end chef has a meltdown and follows to rediscover his desire for cooking while driving and working from a basic food truck.
  • During Donald Trump’s campaign for the presidency, Marco Gutierrez, the founder of Latinos For Trump famously said in an MSNBC interview that there would be “taco trucks on every corner” if Mexican immigration to the US continued. The comment triggered ridicule and memes under the hashtag #TacoTrucksOnEveryCorner.
The perks that food truck businesses offer over traditional sit-down restaurants
  • Less risky: As a business owner, you are continuously looking to decrease risk in order to maximize profits. With a food truck, you do save on rent (and a long term lease) which is one of the greatest cost centres for a new restaurant. 
  • Novelty: It’s simpler to get regarded with a food truck than with a sit-down restaurant. A food truck offers entrepreneurs to check their ideas quickly and affirm their individualism before franchising their trucks or beginning a couple of sit-down restaurants. 
  • Lower costs: Due to its size being lesser than a restaurant, food trucks run on lower operational and overhead costs. Thus, you can save up money for future plans and expansions. More on costs later.
  • Flexible location: With food trucks having the ability to maneuver, they could cater to customers from distinct areas and have a broader reach than typical restaurants do.
  • A meaningful experience: It’s easy for a restaurant to be disconnected from their customers. Running a food truck is a lot more hands-on where you are not only the chef but also the business head, cashier and just about everything else.
Starting a food truck business

Here is a list of things to keep in mind if you want to start a food truck business.

Food truck business costs

According to food truck business entrepreneurs who have just started out, or have a more or less established business, the cost of opening a food truck ranges between $60,000 – $75,000 on the lower side. On the upper end, a fully loaded commercial carrier could cost upwards of $250,000 in the US. This, of course, depends primarily on your location. Additional factors, such as the type of vehicle used, the food sold, goals of the entrepreneur and other start-up costs.

The process of starting up

Not as streamlined as starting a restaurant, starting a food truck business requires you to navigate a few crucial steps.

  • Truck, equipment and raw materials: Food trucks are customized commercial vehicles and come in various shapes and sizes. A brand new commercial truck to use as the base of your food truck business would cost you between $20,000 – $40,000. Along with that, kitchen equipment like a kitchen chimney, stove, cutlery, utensils, and other items can cost you another $20,000. Finally, raw materials to cook your meals would cost about $7,000, depending on what you serve.
  • Deciding a location or locations to serve: A person beginning a food truck business must scope out a few high traffic places in their city. Busy commercial district with a lot of offices is a good option. Another great option is to park close to malls or marketplaces.
  • Deciding a menu: Adding a new variant to classics is a great idea. Or you could take a regional cuisine and serve it in a novel way. Be sure to create your menu keeping in mind that people are likely to eat your food on the go. So food that is easy to carry and is tidy to eat.
  • Insurance: Insurance is an important step, in order to take account of possible risks and liabilities.
  • Billing & POS: Using POS is an important part of running a food truck, as it helps you store data that can come in handy while suggesting repeated orders and collecting customer feedback. Very good POS (that does more than just billing) can cost between $79-$899.
  • Marketing costs: Marketing is essential for your food truck to succeed and attract customers, and there are various steps that need to be followed in order to successfully market your product. Using marketing methods suitable for your food truck business would run you almost $7000(per month).
  • Staff: You’ll need to hire a few staff members (when your food truck business takes flight) and pay for their uniform (if any), and salaries. This number can vary with the number of people you rope in. 
  • Licensing: Since a food truck is a business, it is important to note that one would need certain licenses to begin.
Health & safety concerns

Food truck businesses carry a health and hygiene concern with them, which arises from the fact that food truck employees have to do their jobs in a very confined space, which is typically 8 x 20 feet on average, and due to the restricted space, trucks often lack equipment that restaurants are able to use. This leads to more contamination. Air pollution is another area of consideration.

According to an article by The Los Angeles Times, about 27% of the food truck businesses in the city earned lower than an A grade, as per a review by the Los Angeles County Department of Public Health. In comparison, 5% of restaurants and almost 18% of food carts got below that mark.

Onto the “softer” stuff
What theme can I go for?

Now that you have the necessary information required to start a food truck business, you need to decide on a theme. Your theme may be influenced by the menu you choose, or the location you decide to serve at, or a combination of both. It could also be influenced by a culinary experience you once went through or a story that is true to you.

How can I brand my food truck?

Once you have your theme or concept it’s time to turn that into your brand. Branding is one of the first steps one must take in order to promote their product or service. It is a way to attract customers, by spreading a message, and a vision that shows the public what the company is all about.

In order for your food truck to become popular, you will need to brand it as well. A brand isn’t simply the tagline of your company, but also the name, the various designs, packaging, and the story your company carries. All of them need to be catchy enough to attract the attention of prospective consumers, in order for them to give your products a try. While building your brand, you need to take care of the following aspects-

  • Name and tagline: The name of your food truck is the first thing that customers will look at, and thus, it needs to be catchy. In today’s world, using basic names rarely works; the name of your food truck needs to have a punch, while at the same time, it must inform the people about what exactly you’re selling. Coupled with the name is the tagline, which works best when it’s both catchy and clever. The use of humor and/or wordplay tends to work best.
  1. Captures the spirit of your food and service
  2. Gives your brand a personality
  3. Differentiates you from your competition
  4. Helps you resonate and relate with your customers
  • Design and logo: Your company’s design and logo are visual representations of what you’re offering to the masses. While there are many ways to go about it, your design should be such that it works best on both posters and packaging. It is important to keep in mind that the usage of colors is an important aspect of your design and logo, and thus, it is always wise to hire or take the help of a professional designer to get this done.
  • Brand story: Brands have a variety of stories. Some of overcoming hardships, some of becoming successful overnight, some of discovering something, and some that involve two or more people from the same or different backgrounds coming together to create something unique. Remember, a good story always sells.
How can I promote my food truck business?

After you have given your food truck business a sole name, design, and logo, it is time to start marketing it. There are several ways to market your product to potential customers, and you can take advantage of a combination of those in order to achieve your business goals and reach more customers. You must choose what works best for your brand.

In today’s times, however, it is essential to promote your food truck business through the following means:

  • Website and/or application: A website describes everything about the business- its story, products, and services offered, available discounts, etc. Using these means are a great way to reach more people outside your designated geographical zone, and educate people about your food truck. Mobile applications make ease of access simpler for customers, due to their generally user-friendly interfaces. And a well-designed website that allows your customers to place orders for pick-up is a good idea to start off with.
  • Search engine visibility or “food trucks near me”: Individuals keep Googling queries like “food trucks near me” or “food trucks in (name of city)” all the time. It is important to make sure your website ranks higher in search engine searches, through the use of proper keywords or paid campaigns. Ranking higher in search engines allows more and more people to view your website and click on them, thereby grabbing more attention. For food truck businesses, however, the search results are often dominated by food magazine articles called “listicles”. You could get in touch with these magazines to explore your options of getting reviewed or running a campaign on their platform.
  • Social media marketing or “sliding into dms”: Social media websites will be your buddy when it comes to promoting your product. Websites like Facebook, Instagram, and Twitter let you to buy ads for a reasonable price, thereby helping you promote your work further. Instagram is the go-to social network for food businesses. 

Apart from these online means to promote your food truck business, you should look to take advantage of a few traditional methods as well. With food truck businesses, the following tools of promotions would work the best.

  • Fliers and posters: Fliers and posters are effective for local communication. You could distribute fliers and put up posters in neighborhoods that you visit frequently or get more sales from.
  • Promotional offers: Offering customers benefits like a discount or buy 2 get 1 free is a surefire way to gain new customers and popularity. You may also offer loyalty points and coupons that offer a free meal after a figurative number of purchases, in an attempt to look for loyal customers.
  • Developing contacts: It is important to be able to maintain important relations with people, especially those who hold an important place in society and can help popularize your food truck business. Food critics, journalists, and food events organizers, to be specific.
  • Follow up with customers: One way to retain customers is by following up with them, thanking them for visiting your food truck and taking their opinions and criticisms respectfully.
  • Get involved with the community: Take part in community events and interact with people, keeping in mind that every person is a potential customer.
  • Give out handouts and coupons: Handouts and coupons are a great way to promote your food truck since they provide information and a possible method to spread awareness of discounts and other special offers.

How to appeal to customers with customer service

The following are a few great tips to follow in order to correctly appeal to potential customers:

  1. It is important to mentally prepare yourself for long hours of service and make preparations for the same. 
  2. Keeping a positive attitude is important, especially when things seem to become chaotic.
  3. Caring about customers by striking up conversations with them.
  4. Being community-minded will allow you to gel well with the people and reach more people.

Thus, it’s important to carefully choose your style of promotion by looking into your target market and budget. 

Which restaurant POS should I use?

Operating your food truck business means you will have to manage lots of data. But this data can be used in many other clever ways. Regardless of how data-heavy your approach is, you will still need to store all this data.

This problem is solved with a Restaurant Point of Sale (POS) System.

Restaurant point-of-sale systems (Restaurant POS) enable transactions, increase operational functionality that enhances the guest experience and streamlines business operations. For your food truck, you’ll require a POS in order to conduct your business smoothly and that too without much hassle.

But what POS must you choose from? Here is a list of the ones you can opt to use:

  • Traditional restaurant POS: The traditional restaurant POS has ruled restaurants for a very long time. These systems run on a closed internal network and store data on local servers. These are built on the traditional client-server groundwork and aim to provide high-end functions such as inventory management, customer relationship management, and analytics, in order to meet the increasing demands of the restaurant industry. As such, the cost of maintenance is high as well. This system, however, has its drawbacks, which include:
  1. Risk of data loss
  2. Expensive to maintain
  3. Requires constant maintenance
  4. Not scalable
  5. Does not provide a complete solution
  • Cloud Restaurant POS: Cloud POS allows restaurants to access information remotely instead of having to be physically present, due to the information already being uploaded to the internet. With this system, there is a lesser risk of you losing your data and you can carry on with your transactions even when the internet is unavailable; they will simply sync when the internet comes back on. Most importantly, cloud POS is much cheaper to use than traditional POS. However, cloud POS charge a regular fee, that can get quite expensive in the long run, and most of its features become unavailable upon disconnection from the internet.

A cloud-based POS, or cPOS permits data to be stored in a cloud server. While a physical system isn’t required, a stable internet connection is a must in order for this to work properly. They offer the services that traditional POS systems offer, as well as analytics, customer relationship, loyalty, and inventory management.

All that is left, is to begin!

If you are exploring a food truck business plan, know that it’s not all easy. There are setup costs, licenses and permits to navigate. On top of marketing your food truck business, establishing your brand and gaining followers. But it also is a good entry into the food business world with lesser risks and financial hardships. Most of all, it is a great way to give shape to your dreams of having a food business.

 
attorney
Tracy Jong Law Firm
Rochester, NY
585-247-9170
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