Starting a business in the food industry can be very rewarding but aspiring entrepreneurs must also be ready for the challenges. The growing popularity of food trucks today makes it very appealing to people who want to initiate or expand their culinary ventures. But what can you expect when it comes to starting a mobile food business?
Food Truck Venture: The Advantages
With relatively lower initial investment and operating costs, starting a food truck is cheaper and faster than opening a restaurant. The smaller expenses of a mobile food business make it a great avenue for first-time entrepreneurs to enter the food industry and learn the landscape, providing invaluable experience that can be beneficial for future undertakings. Food trucks can also become a complimentary addition to established businesses like catering companies wanting to increase revenue or expand their market without the need for drastic changes on operations.
The dynamic of the food truck business is a bit different compared to running a restaurant or providing catering services, which makes it great for people who enjoy bustling working environments. In peak hours, working in a food truck is rarely boring because service is faster and more intimate as you develop rapport to customers when they become regulars.
Trying new recipes or modifying products are also much easier for food trucks. Menus are designed to be uncomplicated but delicious, which can be both challenging and enjoyable for entrepreneurs. The variety or customization of dishes and the ability to offer new products quicker also gives an edge to food trucks over non-mobile restaurants. Also, many customers who love food trucks enjoy trying out new innovative products.
In addition, the ability to participate on events like concerts or festivals can be very profitable to mobile food businesses, a revenue stream that is not available to restaurants.
Food Truck Venture: The Drawbacks
Though the mobile food industry is exciting, prospective entrepreneurs must be ready for its challenges.
Getting a food truck business started through a bank loan can be tough. Banks are skeptical lending money because some believe that the food truck trend is just a fad and may suddenly vanish. It might be easier to get a loan if you have a substantial business history, some form of collateral, or if the loan is cosigned by someone with a good credit record.
Another challenge is the regulations. Some states and municipalities have clear rules regarding mobile food businesses while others do not. Entrepreneurs need to research and contact relevant agencies on individual locations they plan to operate or sell at and obtain business requirements. In addition, local restaurants may lobby against food trucks due to the increased competition and unclear regulations, which makes starting a mobile food business a bit more challenging.
Buying the right truck and finding a commercial kitchen can take time and money. A retrofitted used food truck typically cost $30,000 while a newly designed mobile food preparation vehicle with all new equipment can cost more than $100,000. A state licensed commercial kitchen is also a requirement in most municipalities where the food truck must be parked. In some cities where cooking in the truck is not allowed, food must be prepared and packaged in a commercial kitchen. A shared-use commercial kitchen can save you money but may cause delays when another food truck is using the facility. A private commercial kitchen (whether purchased or leased) will always be available to you but require a larger investment.
The mobile food industry is also very competitive as more businesses take the plunge. Margins can be low and sometimes, the business may even lose you money. Because customers will be out in the open to buy from a food truck, the weather can affect revenue. Food truck operations can be seasonal in places with cold climates while even in warmer locations, unexpected rain can put a dent on sales.
Food trucks are nothing new but the industry’s surging popularity offers great opportunities and potential for success to innovative and passionate entrepreneurs today. Every business venture has its risks and rewards. But knowing where you want to go and striving to get there despite the challenges makes a difference.
As Benjamin Franklin once stated, “Energy and persistence conquer all things.”