You need a food truck business plan to increase your chances of success.
With this valuable document, you will know exactly what roads lead to your food truck’s success. Lucky you, this article delineates how to write this plan step by step so you can start making waves in this exciting and trendy industry.
What Is A Business Plan?
A business plan is exactly what it sounds like: a written guide that defines how you will run and operate your business.
No matter what type or what size, any successful business needs a business plan to operate efficiently and effectively.
A typical business plan will include things like:
- Your target market analysis
- A marketing strategy
- What you’ll be selling
- Your goalS
Why You Need A Food Truck Business Plan?
Like a brick-and-mortar restaurant, food trucks have the potential to generate reasonable profits. But, unlike running a restaurant, trucks are low-cost and require less management to run successfully.
As a result, they offer great opportunities for ambitious entrepreneurs.
But, as with any other food business, it’s vital to have a business plan to operate a food truck effectively.
Creating a comprehensive business plan will ensure that you are fully prepared to run your business and will help you establish goals to grow your business in the future.
Fortunately, preparing a solid business plan isn’t too tricky.
The Benefits Of A Food Truck Business Plan
There are several reasons why it’s vital for a new food truck business to have a solid business plan.
Identifying Your Market
Food trucks are mobile businesses. Therefore, it’s important to know where your target market is to encourage business growth.
A business plan for a food truck will help you learn where to run your food truck and what products you should sell based on your target audience.
Depending on the type of food truck you run, you may have a seasonal business. For example, most food trucks that sell ice cream and other cold treats primarily aren’t going to be as successful during the colder months.
It’s essential to have a plan to deal with the common problems that seasonal businesses face.
Every business needs to access capital to pursue new business ventures.
For example, if your food truck is very successful and you want to open a new location, you’ll likely need financing to do so. Or, if it’s a seasonal business, you may need a business loan to help support it.
Food trucks are a very popular business trend, so you’ll likely be facing a lot of competition.
It’s important to research the competition in the food industry so that you can create a strategy to compete with them.
The ultimate goal of every food truck is to be successful and expand to a restaurant business.
To do this, you need to establish goals and plans to achieve those goals. Preparing a food truck business plan will help you do exactly that.
These are just a few reasons that every food truck relies on a business plan to succeed.
How To Write A Business Plan For A Food Truck
Ready to start planning your food truck?
Preparing a food truck business plan is incredibly important, but you don’t have to do it on your own. Instead, follow these steps to create your comprehensive business plan.
This is where you create a brief overview of your entire business. It should highlight what your business is, what you are selling or what you plan to sell, your goals, and your business strategy.
Your executive summary should include items such as:
- Why do you want to start a food truck, or why do you have already one
- The type of food you plan to sell or are currently selling
- The market gap that your food truck can fill
- Where you plan to operate
- What other services you may provide, such as catering
- Expansion plans
- Projected expenses and profits
This section shouldn’t be long but should give a clear overview of your business and how you plan to succeed.
Whereas the executive summary is a brief overview, the company overview is where you really start to get into your food truck concept details.
Why do you think your food truck will be successful? Why did you choose food trucks instead of a brick-and-mortar restaurant?
You should go over many of the things included in the first section, such as:
- What are your food costs? (Hint: use the food cost formula)
- Where do you prepare your food: in a separate kitchen or the truck?
- How will you compete with other food businesses in your area?
- What is your target audience, and how does your food truck meet their needs?
Essentially, the company overview should explain, in detail, what separates your food truck from others.
Service Or Product Line
Your service or product line is the heart of your business. But, the delicious food is what drives customers to your business and keeps them coming back.
As such, creating a detailed, unique and exciting menu is crucial to creating a food truck business plan.
Simply stating what your menu will be isn’t enough, though. You’ll also need to detail all the ingredients required to create your menu and the shelf life of the food items, so you know how quickly you’ll need to go through them.
Finally, you’ll want to describe what sets your product line apart from the competition.
No business plan is complete without a comprehensive market analysis for a food truck business plan.
This is where you explain how you will move into the existing food truck market and how you will succeed.
This means understanding and explaining the food industry, your competitors, and your potential customers:
This section will detail what the food truck business looks like at a few different locations.
You’ll start by incorporating national data and then drill down to state and local data to fine-tune the analysis.
What you’re looking for is how well the industry does as a whole based on the different locations.
It’s also essential to analyze your competition.
What other food trucks are operating in your area?
What kind of food do they offer?
How do they market their business?
Where do they operate, and for how long?
What are their menu prices?
With this information in hand, you can start crafting your competitive advantage.
Who is your target market, and what defines them?
A solid demographic analysis of your customers is essential for any business, as it helps you create products they’ll love and then market those products to them.
Characteristics you’ll look at include: age group, location, gender, interests, and where you can reach them, to name a few.
Food Truck Operational Plan
This section needs to outline your daily business operations, including what you need to complete those activities.
It should include:
- Hours of operation
- Menu items, including the ingredients you need to make those items
- Cooking equipment you need to run your food truck
You don’t need to go over your expenses in this section, which will appear in a later section.
In this part of your business plan, you’ll go over your food truck’s management and team.
This includes discussing:
- Who is in charge
- How many team members do you have, and what are their roles
- How you will divide profits between owners and team members
- What each team member brings to the table
This may be a short section, depending on the size of your team.
Food Truck Marketing Strategy
Every business relies on solid marketing tactics to succeed. This section is where you’ll outline the food truck marketing plan you plan to use to attract foot traffic and help your business succeed.
The marketing and sales portion of your business plan should include:
- The design of your food truck
- Promotional items
- Your website
- Digital marketing strategy
- Social media marketing
Additionally, you should go over how many sales you need to make to generate a profit. You should discuss how you will price your items, how many days per year you will close the truck, and whether or not you will operate on a seasonal basis.
Financial projections are crucial to a business plan, as they help a potential investor see the value in the business and help operators have something to work toward.
To make realistic financial projections, you’ll want to draw on historical data from similar businesses in your region.
Combine that data with your plan for operations and your specific menu items. Doing so will give you a solid projection of how much you could make from your food truck business.
This section is critical if you’re using your business plan to acquire funding. This is where you’ll go over your operating and food costs, employee wages, expected profits, and similar financial factors.
You should include:
- Expected sales
- Equipment costs
- Expansion costs (if you want to open an additional location)
- Other expenses (such as maintenance, employee turnover, etc.)
- The capital required
Lenders and potential investors need to understand how you will make money and how you will put their money to use.
Most businesses require an external source of funding to operate and expand. In this section, you need to go over the numbers. This includes:
- How much money do you need
- What you will use this money for
- How do you plan to repay lenders or investors
- Whether or not you expect to need more funding in the future
It’s essential to be clear about how much money you need and how you can use that money to grow your food truck business.
Lastly, you should include an appendix. This is where you can put any additional necessary information that might not fit into any other sections, including:
- Legal and licensing documents
- Design concepts
- A copy of your menu
- Additional research and data
Example: Bakery Food Truck Business Plan
In this food truck business plan example, we’ll be looking at a mobile bakery business called Cake My Day.
- Executive summary. It gives a brief overview of the business, including its mission and goals: to provide delicious cupcakes on the go.
- Company description. Provides more information on the bakery itself, the owner, as well as the team that will be running it.
- Product line. This business will focus on providing gourmet cupcakes, cakes, and pastries on the go.
- Market analysis. Describes the cupcake-eating customers in the greater Los Angeles area: women in their 20-30s.
- Marketing and sales strategy. The company plans to reach its target market by using a heavily based Instagram campaign.
- Financial projections. Shows that the business is viable and has the potential to be profitable.
- Funding. Cake My Day needs $50,000 to increase the number of food trucks they have.
- Appendix. It includes a list of suppliers or sample cupcake recipes.
How To Present A Food Truck Business Plan To Investors
The best way to attract investors to your food truck business is to create a detailed business plan. After you’ve done that, though, you’ll need to get it in front of as many potential investors as possible.
Once you have a fully written and detailed plan, send it to traditional investment banks and other investors in your area. Talk up your food truck business idea at networking events and among some of your colleagues.
Attend as many events as you can that relate to your proposed business. This could be other food truck events, restaurant events, or even local business events.
When networking with people, make sure you have a prepared quick sales pitch to help you work out how you’d market the business to them.
You don’t want this to sound too rehearsed, but having a short elevator pitch ready to go will help you hit the key points you need to in a short amount of time.
Your goal should be to set up a meeting with a likely investor. For that meeting, you’ll prepare a much more detailed and formal pitch presentation, which will hopefully land you the investment you seek.
Is Starting A Food Truck Business Right For You?
The food truck business can be a lot of fun and very rewarding, but it’s not for everyone. If you’re wondering if the food truck business is right for you, you should consider the following things.
First, Do You Know The Business Well Enough?
Running a successful business isn’t just about making good food. You need to know how to do it in a small space and have various permits.
You’ll also need to find permanent or temporary locations for your food truck and market yourself well online if you’re moving around from day to day.
Next, Do You Know What You’ll Need In A Vehicle?
Getting a food truck isn’t like going to a local dealership and purchasing one.
Unless you’re buying a used food truck, you’ll most likely be creating one on your own. This can be time-consuming, expensive, and requires a lot of research.
Finally, Are You Prepared For What’s Ahead?
The food truck business can be very demanding, with long hours at different times.
In this regard, it’s similar to other food preparation businesses in that weekends and evenings are essential to success.
But it’s not just about whether you can handle the demanding schedule, though.
Do you have the funding necessary to purchase a food truck and get your business started and sustain it for the long term?
Ongoing costs will include food and beverages but will also include expenses such as:
- gas for the truck
- ongoing maintenance
- marketing and advertising
That last part is crucial, as you need people to know about your food truck if you want them to try it out.
Starting A Food Truck: The Technical Side
Creating unique food combinations, cooking them up, and serving them to customers is the fun part of running a food truck business. But, there’s a technical side to starting a food truck business, too.
The most significant part of this is having your food truck inspected and gaining the appropriate licenses you’ll need to operate and sell food.
Each location where you operate may have different rules and regulations for obtaining a license to operate a food truck.
Start by researching what your state requires, and then fill out all the appropriate paperwork to get a license to operate in the state.
You’ll also need to research if a specific location within that state has additional regulations.
For example, a major city may have specific licenses you’ll need to obtain to operate a food truck in addition to the one you got from the state.
You should also prepare to have your food truck inspected to ensure it’s up to health and safety standards.
A local health department official is likely to conduct this inspection. It’ll include a check on:
- your operating equipment, such as the running water, refrigeration units, cooking appliances, and proper signage
- whether you have the required documents to operate and if you’ve posted them correctly
There will be some scheduled inspections, but you should also prepare for unannounced random ones.
Consider A Business Loan To Grow Your Food Truck Business
Like any other business, food trucks require funding to purchase equipment, fund business operations, hire employees, and more.
When creating your business plan and running your food truck, you’ll realize that there are many unexpected expenses that you may need additional capital to afford.
Camino Financial small business loans are an excellent resource for food truck owners who need help funding business operations and expansion plans.
We know the ins and outs of your industry: in fact, many of our members are restaurant owners.
You can use our business loan calculator to help you determine how large of a loan you can afford to include this information in the relevant section of your business plan.
Our business loans are available in a range of amounts, we have lenient eligibility requirements, and our whole loan process is quick and easy; you can receive the funds you need for your food truck in just two days!
At Camino Financial, we operate on the motto, “No Business Left Behind.” This includes food trucks, regardless of their size and type. So, if you need funding for your food truck, apply for a business loan today.Apply now!
How to write a food truck business plan?
Write the following sections:
How profitable is a food truck?
A food truck business can be very profitable if you’ve done your research and created a solid business plan. According to IBISWorld, the average profit of most food truck owners is 7.7% of the total revenue.
The average food truck can gross up to $300,000 annually, which equals $20,000-$25,000 in monthly sales.
Considering the low overhead expenses food trucks have, it’s no surprise they are very profitable.
How much does it cost to run a food truck?
Food truck startup costs vary greatly, depending on the licenses and permits required and other costs and fees that change in every state.
A simple truck with the basic kitchen equipment could cost about $30,000-$40,000.
Once your food truck is operating, estimate a low ballpark of $5,000 on monthly costs. This includes your ingredients, marketing plan, parking and cleaning fees, and other miscellaneous costs.
This is still lower than what it usually costs to run a brick-and-mortar restaurant.
Why do food trucks fail?
Lack of proper planning and not enough advertising are among the causes of food truck failure. That’s why creating a food truck business plan is essential. To properly promote your business and attract new customers, use social media.
How do I start a food truck?
You’ll need to get permits, licenses, and insurance for your truck or cart, research your potential market, and gather the funds you need to start. You will cover all those areas in a proper business plan, so make sure you follow our post’s advice.
Is a food truck business a good investment?
Yes, although it takes a lot of planning, hard work, and a little luck to be successful in the long term.
You should always be willing to be flexible and adjust your approach based on what is and isn’t working.
What is the most profitable type of food truck?
Sandwiches and hamburgers are some of the most popular food truck items. That’s because they are very easy for people to eat on the go and grab quickly to eat wherever.
Keep in mind that people will be eating your food on benches, small tables, or standing. So, they need to be able to eat your food without making too much of a mess.