Starting a Food Truck Business

May 2015

El Tapatio Taco Truck-BellinghamFood storage and preparation is one of the most overlooked elements in the mobile cuisine business. Bright-eyed young entrepreneurs jump into the mix, thinking that once they’ve financed their trucks, settled upon a brand aesthetic and whipped up their menus that everything else will be a breeze. The reality is that running a mobile cuisine business—a food truck—requires prudence and diligence on the part of the chef and his/her sous chefs. Here are a few storage and preparation tips and considerations for food truck chefs:

Type of food —How much refrigeration will be needed? How much grilling space? This of course depends on what kind of food you’re serving. If you’re running an ice cream truck, you’re obviously going to need a lot of refrigeration and no grilling. Same with a sushi truck. You will need top notch refrigeration in order to keep your fish cool and may only need minimal cooking for tempura and rice. Conversely, if you’re slinging burgers, you will need both refrigeration and grilling, although you can significantly reduce your refrigeration costs on the truck if you only store the beef patties and vegetables on the truck directly prior to a shift.

Each truck is different and will depend upon what type of food you serve. Right now, the biggest food truck trends are 1) culturally diverse foods such as Korean, Indian, Scandinavian, Peruvian, and Native American, 2) vegan menus, 3) health menus with less salt, 4) cupcakes and homemade pastries and pies, and 5) molecular gastronomy.

Off-truck location —Do you need a facility to store food off the truck? Do you need a place where you can do prep work prior to getting on the truck? The answers to both of these questions will determine issues of truck layout, refrigeration, and overall storage costs. If you have long term food storage taken care of externally from the truck, your layout should cater largely to issues of preparation. Your truck will only be packed with the amount of food necessary to get through one meal shift at a time. This will reduce overhead costs and will allow your chefs more room to move and more room to store items like sauces, spicesand herbs.

Volume of sales —This will dictate the number of assistants you need in the truck and will determine how much storage you need, how much prep will be required and how much space you need inside the truck. Your average food truck can comfortably fit about three people. Any more than that and you’re going to have too many cooks in the kitchen–literally. Typically two of the workers are the chefs preparing the food and the third worker is the cashier/server, the liason between the chefs and the customers.

A big question for food truck chefs is how much food to keep on hand. For many lunchtime diners, mobile cuisine trucks provide sustenance foods–quick food that’s not fast food. If you can’t keep up with demand and consistently run out of food, diners will look elsewhere for lunch. On the other hand, you don’t want to overstock and end up with leftovers or reduced-quality food.

Serving style —Some food trucks have distinctive packaging for the their food which accompanies their branding theme. However, your main consideration should be convenience for the customer. Priority #1: make sure the food won’t fall out. Additionally, make sure the wrappers and packaging doesn’t hinder the eating process. Then you can think about perhaps providing a seating area for your customers, if your city food truck mandates allow.

Food costs —The budget for a food truck meal is going to vary widely based upon the type of food being served and the volume of sales. Some hot dog and grilled cheese trucks report meal budgets of barely over a hundred dollars, whereas higher end, high-volume food trucks serving sushi and gourmet burgers could spend upwards to $500 to even over $1,000 a shift.

Serving locations —Your locations will depend on several factors: local food truck regulations, neighborhoods with heavy foot traffic, and areas with clientele that match your food truck theme and menu. Firstly, you have to make sure you’re allowed to be in a certain location. Some city ordinances restrict food trucks from operating within a certain distance of schools, for instance. Secondly, pick trendy neighborhoods that see a lot of foot traffic. When people walk they get hungry. Thirdly, set up shop in areas where people are likely to be interested in your food. Upscale neighborhoods are likely to embrace sushi and vegan salads whereas poorer areas may not be able to afford these pricier items. For common staples like hot dogs and grilled cheese sandwiches, try colleges and streets with offices, where stressed out people need quick food.

About the Author: Amanda is a foodie who is always on the go! Her passion for the revolution for food trucks can be seen above. When Amanda isn’t in the city she is usually in the wilderness with her own survival food filled backpack. Since Amanda is into the outdoors she is also one to study long term food storage from freeze dried meal to left overs from yesterday’s lunch.

Continuing the Discussion… additional feedback

Taking Credit Cards — As a food truck owner, accepting credit cards is one of the first steps you can take to cater to busy people who are looking for the right mix of quality and convenience. Until a few years ago, it was easier for food truck owners to accept cash rather than credit cards. If you were able to accept credit cards, you likely had to invest in an expensive POS system or use one of those obnoxious carbon copy machines that never quite pressed the right way. But today, new technology gives food truck owners more options than ever before. ConsumerAffairs.com has researched and created a comprehensive guide about credit card processing that will help break down how to accept credit cards the cheapest and most effective way.

Brian Roemmele had some great info on income and has given permission to post his comments here…
Food Truck Income — This sector is much wider than most assume. I can speak of my direct experience in this sector seeing the financial transactions of over 900 current clients (and far too many to count over the years) spanning from the high end gourmet food trucks to the simple hot dog cart. Like any business it always appears to be much simpler on the outside.

My data is skewed in the direction of vendors that are accepting credit cards and have either known the value of accepting credit cards or were convinced of its value. So by no means is this a scientific overview of the entire industry. I will pick just a few of the basic categories. And because my data-set is in monthly, I shall deliver month volume.

High End Market Food Trucks
The high end is the modern gourmet food truck. They typically are in major cities and focus on a food specialty. This is not your Grandpa’s feed wagon. One could argue that the cuisine from these trucks are sometimes better than the finest restaurants in town. There is a renaissance in this sector and trendiness and expert use of social networking has played a big part of it’s growth. These trucks do not need to be sold on the aspect of accepting all forms of payments and they active seek out the best deals. We have some business in this category that are producing north of $50,000 per month in credit card volume. Given the ratio to cash sales in this high end of the market you could add perhaps 1/3 more in cash. Lets call this at $65,000 for the high end and perhaps $20,000 for the mid line.



 
Middle Market Food Trucks
The middle market spans quite a number of categories. I’ll focus on the simple lunch/catering truck, it is alive and prospering in middle America. This market is focused on the factories and office complexes. They offer a wide alternative to the local fast food and will even make custom requests. There is a renaissance in this sector also. Customer demand has driven this sector to need credit card acceptance about 5 years ago. With very low average tickets the owners are usually very, very savvy and look to any way to limit expenses given up on each transaction. I would say the typical business in this category is pulling in about $9,000 per month on credit cards. In cash they see perhaps 60% more. Let’s call this at $14,000 for the high end and perhaps $6,000 for the mid line.

Entry Market Food Trucks
Finally there are the carts, from Hot Dogs to Knish and maybe anything in between. Surprisingly the sales volume here can be higher than expected for the apparent size of the operation. The simple Hot Dog cart in most areas will not accept credit cards because giving up even 1% with 10 cents transaction fees eats far too deep in to the profits of a typical $3 purchase. So in the very low end I have no direct data. I suggest it is less than $5,000 per month. The more upscale gourmet carts can see transaction volume of $10,000 per month on credit cards and perhaps 60% in cash. There is a clear trend in the growth in the upper end in this category, even in this economy. Let’s call this at $16,000 for the high end and less than $5,000 for the low end.

I hope I have shed some light on this sector. It is an amazing and dynamic space that is driven by the best forces of capitalism and creativity.

These considerations are important for the food truck entrepreneur/chef to think about prior to cooking. They will allow you to consolidate your materials and ingredients and make sure they are fresh and high-quality. They will also ensure your truck’s overhead costs are commensurate with your volume of sales.

Did you notice something which is missing on this page? If you have additional information about Food Truck Business Considerations for Chefs please add a comment and include detailed specifics. Our goal is to have detailed information which is relevant to professional chefs and foodies.

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