Starting a food truck business presents an appealing alternative to opening a traditional restaurant, primarily due to the significantly lower initial costs and the increasing popularity of mobile food vending. With the US street vendor sector valued at $2.4 billion as of 2024, the food truck industry offers a perfect setting for testing a new food business without the substantial expenses and risks associated with brick-and-mortar establishments. However, launching a successful food truck requires meticulous planning and a comprehensive business strategy. A well-structured business plan is essential for clarifying your vision, securing funding, gaining a competitive edge, managing risks, and planning for growth.
Key Components of a Food Truck Business Plan
A food truck business plan follows the same general format as a traditional business plan but has a few differences that you’ll want to pay close attention to. Here are the sections that you’ll want to include in your business plan for your food truck:
1. Executive Summary
The executive summary is a concise overview of your food truck business, ideally limited to one or two pages. It encapsulates the core concept, hours of operation, locations, marketing strategy, and required startup capital. It’s best to write this section last, after completing the entire plan, to ensure it accurately summarizes all key aspects of your business. A well-written executive summary should provide a clear snapshot of your business, enabling readers to quickly grasp its essence.
2. Concept
This section describes the general concept or company description for your food truck. What kind of food will you serve? What makes you stand out?
It's crucial to identify your key differentiators. For instance, if you're opening a taco truck, what makes your tacos special? Why would customers choose your truck over others? Alternatively, you might fill a "gap in the market" if there are no taco trucks in your area.
Read also: Healthy food access with Highmark Wholecare explained.
Consider why you prefer a food truck over a traditional restaurant. Does your food suit a food-truck experience?
3. Menu and Costs
Following up on your concept, you need to think through your menu. What items will you sell and how much will you sell them for? How much will it cost you to produce each item? How much time will it take you to prep and cook each item?
Answering these questions is critical. Ensure your food can be served quickly and that your prices cover food costs. You'll explore other costs in your financial plan.
Share your menu with friends, family, and even strangers to get feedback on pricing and item descriptions.
4. Target Market
The target market section of your business plan describes who your key customers will be. What age group are they part of? What are their demographics? Where do they live and work?
Read also: Healthy Eating on the Run
This information helps determine the size of your potential customer base and informs your branding and marketing strategy. For example, if your target market is millennials, your branding may emphasize healthy eating.
5. Location(s)
Despite the mobility of your business, planning your locations is essential. Consistency is key for attracting repeat customers.
First, consider locations where your target market frequents. If targeting the "working lunch" crowd, choose spots convenient for office workers.
Customers value knowing your schedule. Inconsistency can deter repeat business.
If joining a food cart "pod," understand the requirements, costs, and permits. Factor parking and permitting costs into your expenses.
Read also: Mobile Dining Revolution
If serving from multiple locations, detail your schedule, including travel and setup times.
6. Branding, Marketing, and PR
With the explosion of food trucks, figuring out how you’re going to attract an audience is critical. Thankfully, you’ll be driving a mobile billboard, so you can leverage that to your advantage and use that for marketing and advertising.
Ensure your social media handles are part of your branding and marketing strategy so that people can easily find you online and know where you are. Equally important is that you religiously update your social media profiles. There’s nothing worse than a profile that hasn’t been updated in days or weeks. Many customers will think that you’re closed if you don’t appear to be active online.
Beyond social media, you’ll want to make sure that you’re listed in Yelp and any other local food truck directories and apps. Getting a presence in these apps and getting positive reviews is critical, especially in the early days.
If you can get local press, that’s worth chasing down as well. Often, the weekly arts and culture papers will review food trucks, so it’s worth announcing your presence to them. When you do, think about your story - what makes you unique? What’s special about your food? What pushed you to start a food truck business in the first place? Everyone has a story to tell, so tell yours and try and get some coverage that will drive customers to your truck.
7. Company and Management
Food truck businesses are usually structured fairly simply. There’s usually just one or two owners and the business is usually an LLC.
Even if things are fairly simple, it’s always worth writing things down, especially if you have business partners. You’ll want to have agreements about who owns what, what stake in the business each person has, and what happens if one of the partners wants to walk away.
While everything is always optimistic and positive in the beginning, the hard work of running a food truck business can put a strain on any relationship and you’ll want to have a plan in place in case things don’t go exactly the way you think they will. Even the best of friends sometimes have to deal with difficult business situations and it’s always much easier if everything is written down and agreed upon before the business is actually up and running.
8. Financial Plan
The financial plan is potentially the most important part of your business plan. Here’s where you’ll figure out exactly what it will take to make your business work so that you can make a living.
First, you’ll want to forecast your sales. How many meals do you think you can serve on an average day? On average how much will each customer spend? What about seasonality? When the weather is bad, will you sell as much as when it’s warm and sunny?
Next, you’ll want to look at your “cost of goods”. This is how much it costs you in food and supplies to serve the food that you are serving. Subtract your Cost of Goods from your Sales and you’ll get what’s called your Gross Margin. Of course, you’ll want this to be a positive number, but that’s just the beginning.
In addition to food costs, you’ll have labor costs including your own salary as well as any additional help you need. You’ll also need to consider insurance, licensing from the city and county, as well as fuel and commissions to event hosts. It’s fairly common for food trucks to pay a flat fee plus a percentage of revenue to event hosts, so if you’re going to consider taking your truck to events you’ll need to factor those costs in as well.
Other expenses can include access to a shared kitchen space. As a food business, you won’t be legally allowed to prep food in your home, so food prep will have to be done either in your truck or in rented kitchen space.
With your sales forecast and expense budget, you’ll be able to calculate your profitability. If your business isn’t looking profitable to start, you can make adjustments to expenses, potentially increase the price of your food, or explore how you can serve more meals.
It’s not at all unusual for a food truck and equipment to cost north of $50,000 and can easily extend beyond $100,000 depending on how custom of a setup you need. Of course, there’s a healthy market for used food trucks, so that’s worth exploring as well.
In terms of startup costs, $100,000 is relatively modest compared to many other businesses and certainly substantially less expensive than opening a restaurant. Many food truck entrepreneurs may find that they can fund their startup with savings and loans from friends and family. Bank business loans for food trucks are also a possibility since most of your startup costs are going towards a physical asset that the bank can reclaim if things go horribly south.
With all of these numbers, you’ll be able to assemble a Profit and Loss forecast and Cash Flow forecast.
9. Appendix
The appendix is a useful place to fit in relevant bits of information that do not cleanly fit into any of the sections above. This can include items such as building permits, ServSafe certifications, quotes for food truck insurance, letters of reference, or sample menus.
Essential Legal and Compliance Considerations
Before launching your food truck, ensure you are up-to-date on all applicable local and federal laws. Key legal matters include obtaining the necessary licenses and permits, such as parking and commissary permits. Insurance is crucial, encompassing general liability, commercial auto, workers’ compensation, and business property coverage. Food handler’s certification is also required to ensure food safety and compliance with health regulations.
Securing Your Food Truck
Your truck is your physical store-without it, you don’t have a business. Will you buy a new truck or a used truck? Which appliances do you need to install to build out your food truck kitchen? The inside of your truck must be safe and sanitary with non-slip flooring, good ventilation, and proper waste disposal. You might also need to install a fire suppression system if you’re cooking with open flames.
Location, Location, Location
The success of your food truck hinges largely on location-but you can’t just park where you please. Most cities have zoning regulations specifying where food trucks can and can’t operate. This often means you can’t park near certain areas, like schools, or within a set distance from a brick-and-mortar restaurant.
Marketing Strategies for Food Truck Success
A strong marketing plan is essential for attracting and retaining customers. Start by detailing where you’ll park and what your truck’s branding will look like, since these are the two biggest factors in attracting walk-by customers. The food truck marketing and sales portion of your business plan should also account for what makes your offerings different from every other food truck on the road. In the products and services section, we discussed how your menu should fill a niche, whether it is the type of cuisine, quality, or cost.
Consider additional revenue streams, such as online sales of things like bottled sauces, spice packs, baked goods, and other packaged foods related to your food truck’s menu. If you have the resources, you may want to offer online ordering with delivery or pickup. You can set up an ordering system by using third-party services like DoorDash, Skip the Dishes, Uber Eats, or any number of apps preferred in different markets around the world.
Be intentional about choosing your food truck’s start date. For example, if you plan on opening right when the good weather hits, you’re likely to be too busy to have enough time for building a brand identity and online presence alongside daily operations. So, you may have to weigh the pros and cons of different opening date options.
Develop a Strong Food Truck Marketing Plan
Within your marketing plan, you must outline how you plan to promote your business, menu items, and availability - physically and within set time periods - for your customers to line up and enjoy your delicious offerings. As of February 2021, you can expect to face some competition in your area. Conducting a strong competitor analysis helps you gain valuable insights about the existing market in order to differentiate your business and stand out among the crowd. Learn as much as possible about your competitors by asking these questions:
- Who are your competitors?
- What are their strengths and weaknesses regarding food quality, marketing strategy, social media marketing, promotions, and more?
- Which food truck businesses in the area have the strongest performance?
- What are the market opportunities and potential threats?
- Are other food trucks selling the same cuisine type that you plan to offer?
- Who are your competitors’ target audiences?
- What are customers saying? Do they share regular photos on Instagram and place themselves as industry influencers in your area or nationally?
- What are their SEO and keyword strategies?
- Where do they set up for business? Do they have a regular daily location, or do they set up for special events?
Learn as much as possible about your competitors to become one of the 85% of owners bringing in between $100,000-150,000 annually.
Establishing Your Brand
Once you have learned as much as possible about your competitors, it’s time to establish your mobile food service brand. As you develop your brand, consider these core components:
- What type of food or cuisine do you plan to offer?
- How will you appeal to your target audience’s appetite and lifestyle? Do you need vegan, vegetarian, low-cab, or omnivore dietary options?
- What equipment will you need to support your business plan? For example, a grill, freezer, range, fryer, etc.
- Does your financial plan allow you to implement your intended brand?
- Does your brand and menu pricing align with your target audience’s budget?
While these considerations might lean toward the mundane, they offer insights into what is possible for your business, your brand, and your marketing goals. Additionally, keep in mind not only your target audience, but who their friends and family are - not everyone uses social media as a primary source of information for new businesses. Ensure that your business comes up when visitors search for keywords specific to your business strategy in your area, such as ‘the best burgers in Providence’ or ‘top breakfast food trucks in Charlotte.’
Rely on Google Business Profile to help drive customer engagement locally, regionally, and nationally. What advertising and marketing tactics will you implement to create awareness and conversion to your food truck? Entrepreneur shares that strong advertising relies on your creativity to inform others of your business, management, personality, and the type and quality of food in a clever manner. When you ask others about food trucks, they often speak about the quality of food and the experience. Otherwise, they might pack a lunch that serves their dietary preferences in a budget-friendly manner.
A few advertising considerations to keep in mind include:
- Choosing your name wisely and with a touch of whimsy to ensure memorability.
- Understand the audience, usage, and engagement differences for each channel.
- Today’s consumers value the opinions and experiences of their peers - research shows that influencer marketing often yields higher results than branded marketing.
- Consider festivals, concerts, and other events your target audience may visit - ask about sponsorship opportunities to improve awareness.
- Create an event plan for your local area - look at your competitors’ event histories as a starting point.
Brand Loyalty Program
There are brand loyalty programs for nearly every type of business - food services are no exception. Brand loyalty programs encourage and reward customer retention with incentives, such as a free meal or beverage after 10 visits. Consider creating stamp cards or a digital wallet option, like Google Pay or Apple Wallet, and to see happy faces return to your food truck counter.
Consider Online Ordering or an App
Once you’ve established awareness and a loyal customer following, consider online ordering or a mobile app as an alternative option for your customers. There may be times where your customers cannot venture to your food truck, but are hungry for your delicious meals. Many of us are online for a large portion of the day and appreciate the value and convenience of online ordering. As you build your business, providing this service to your customers will add to your marketing value and position - keep this in mind during your journey.
Additional Considerations for a Healthy Food Truck Business
Menu Planning
Your menu must have at least one healthy meal option. Describe how your products are different from other nearby offerings. You should mention the quality of your ingredients and if your food is culturally diverse.
Customer Management
Outline how you plan to have customers line up for your truck and your strategy for keeping other vehicles from parking around your truck.
Site Maintenance
Detail your strategy for keeping the site clean. You should keep a trash can next to your truck, and plan to take all trash with you when you leave. You also must sweep your site and wash the sidewalk - if you need to - at the end of each shift. Remember, you’ll get a violation if you dump food in the sewer.
Financing Your Food Truck
Starting a food truck requires a significant upfront investment, typically ranging from $50,000 to $100,000. Food truck businesses can be very profitable compared to a traditional restaurant business. For one, you don’t have to pay building fees (like rent). They can also be managed with fewer employees.