The food industry is tough to navigate for restaurant and food truck owners. Therefore, having the requisite knowledge of the average life of a restaurant and a food truck’s viability is essential.
Success and Failure Rates of Food Trucks and Restaurants
Food trucks are a culinary treat across the US Mobile kitchens are enticing due to their low overhead costs and low-pressure ways of implementing restaurant concepts. Approximately 40% of food trucks are still operational three years after opening and have a current annual revenue of $ 1.2 billion. Despite their financial success, 60% fail within the first three years due to failure to adhere to common business requirements like having a solid business plan.
On the other hand, most brick-and-mortar restaurants close during their first year, while around 10% have an average life span of five years. The failure of many restaurants in the first year is attributed to a lack of sufficient capital, given that you may need an average cost between $200,000 and $400,000 to open one. Food trucks are cheaper to start and have a better survival rate in the first operational years, although the average life of a restaurant with sufficient funding is longer.
Reasons Why Food Trucks Fail and Tips on Avoiding the Problems
Buying an old truck is fatal for your food business aspirations. To avoid this problem, ensure your truck can be serviced easily before purchasing. Buy a tall truck to enable you to install upright equipment, and pick a truck that gives you at least five years of service.
Your Line Isn’t Optimal for Customers
You should think about how operational your line is before opening a food truck. Critical concerns like where your grill is located, spacing, and how efficiently your food will get plated should be addressed. To avert the issue, make sure your truck setup is right, including your cooking appliances and personnel space.
Similar Foods on Offer
Food truck businesses fail because they cook and serve the same foods in the same block. You should stand out and offer unique cuisine in order to beat the competition. Customers are tied to habits, and once word gets out that you’re serving something different, you’ll get traction in no time.
Reasons Why Restaurants Fail and Tips on Averting the Problems
Lack of Sufficient Operating Capital
Opening a restaurant is expensive, but so is running one. Restaurant owners spend the bulk of their capital to obtain prime spaces, forgetting to cater for the operational expenses after that. Ensure you keep track of all that you need to run a restaurant, including leasing costs, kitchen equipment, marketing, labor, and food costs.
Location is critical for any restaurant owner. Many shops have failed because the locations they are situated in are inaccessible and unprofitable. In order to avoid this mistake, do thorough research for a prime restaurant location. Assess a location based on competitors, food traffic, clientele, ambiance, and accessibility.
Failure to Adapt
Restaurants, like any other business, should be able to adapt to the new class of consumers. Find innovative ways to operate without steering away from your vision. To be innovative, you should embrace technological trends, update your menu and maximize on online platforms.
Food trucks are becoming more popular due to their flexibility and low overhead costs, among other reasons. However, restaurants have been a mainstay across the US, and their track record is also solid. However, opening and operating a food truck is cheaper, and with careful management, it can be a very profitable business. If you’re thinking about starting a food truck business, Legion Food Trucks is here to ensure your venture is a success. At Legion, we build food trucks to fit the needs of every individual client. We also offer repair and maintenance services to keep your truck in check. Contact us today to learn more.