Owning a food truck business can create the perfect intersection between exercising culinary creativity, serving your local community, and traveling to exciting locations and events — all while being your own boss and pursuing a path to financial freedom.
Behind the scenes, there are a lot of steps a business owner has to take before they can enjoy running a successful food truck. Here are some tip for avoiding common missteps:
1. Don’t Just “Wing It,” Have a Plan
Running a business is more than just cash in, cash out. You have to consider all aspects of the business from branding and marketing down to the equipment you use. A good business plan should include detailed procedures for every aspect of your business, such as:
- Creating your brand identity
- Compiling operational procedures
- Developing handbooks and training program for your employees
- Planning your menu items
- Managing inventory
- Maintaining equipment
- Determining pricing vs. food costs
- Accounting and managing cash flow
- Developing a marketing strategy
- Researching your industry and popular locations
- Complying with health codes and permit regulations
- And more
Many of these things probably don’t come to mind initially when you’re caught up in the excitement of getting your food truck business started. But it’s extremely important to have all your bases covered and develop a comprehensive business plan to give your food truck the best shot at success.
2. Make Sure to Get Your Licenses and Permits
To operate a food truck business, a business owner has to complete, on average, about 45 regulatory procedures that are required by their state and city government. This includes paying various fees necessary to obtain the insurance, licenses, and permits required before the food truck can legally open for business, and the exact number of procedures and expenses varies depending on your location.
It’s important to be aware of and comply with all the necessary health code, insurance, and permit regulations that your business needs for things to run smoothly and avoid incurring any fines or, even worse, risk your business being shut down for non-compliance.
3. Keep Track of Finances
An incredibly common reason for the failure of food truck businesses is the lack of financial planning. This can happen in a number of ways, such as:
- Not hiring a professional bookkeeper or lack of accounting knowledge
- Miscalculating the cost of operations
- Mismanaging food costs
- Underestimating truck, fuel, and equipment costs
- Not preparing for ongoing maintenance costs
- Not planning for regulatory fees
- Overlooking insurance costs
- Being unprepared for unexpected expenses
To avoid going under due to unexpectedly high operational costs, it’s important to understand all the costs of starting your business, and plan for its financial health ahead of time. If you feel like you’re lacking in financial knowledge, don’t be afraid to hire a professional to help you track and monitor your expenses.
More Than a Manufacturer, a Business Partner
Legion Food Trucks decades of experience in helping entrepreneurs like you bring their food truck business to life. Not only do we help with every step of designing and creating your custom food truck, but we also help you obtain any required permits and make sure everything is up to code. Contact us today to get started on your food truck business journey.