Running a food truck business can be both personally and professionally rewarding, and now is a great time to get in on this exciting and trendy industry. But to increase your chances of success, you need a food truck business plan!
Why a food truck business plan?
Like restaurants, food trucks have the potential to generate reasonable profits. But, unlike running a restaurant, food trucks are low-cost and require less management to run successfully. As a result, food trucks offer great opportunities for ambitious entrepreneurs.
But, as with any other business, it’s vital to have a business plan in place in order to effectively operate a food truck.
Fortunately, preparing a solid food truck business plan isn’t too difficult. Let’s take a look at how you can write a food truck business plan.
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.
Any successful business, no matter what type or what size, needs a business plan in order to operate efficiently and effectively.
A typical business plan will include things like:
- Your target market
- A marketing strategy
- What you’ll be selling
- Your goals
- And similar ideas
Preparing a comprehensive business plan will ensure that you are fully prepared to run your business, and will help you establish plans to grow your business in the future.
How Does a Food Truck Business Plan Helps You?
Identifying your market
Food trucks are mobile businesses. It’s important to know where your target market is so that you can encourage business growth. A food truck business plan will help you learn where to run your food truck business and what products you should sell based on your target audience.
Depending on the type of food truck you run, it may be considered a seasonal business. For example, dessert food trucks that sell mostly ice cream and other cold treats aren’t going to be as successful during the colder months.
It’s important 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 your food truck is a seasonal business, you may need a business loan to help support your food truck.
Food trucks are a very popular business trend, so you’ll likely be facing a lot of competition.
It’s important to research your competition so that you can create a strategy to compete with them.
The ultimate goal of every food truck business 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 of the many reasons that every food truck business relies on a strong business plan to succeed.
How to Create Your Food Truck Business Plan
Ready to start planning your food truck business?
Preparing a food truck business plan is incredibly important, but you don’t have to do it on your own. Follow these steps to create your own comprehensive business plan.
#1 Executive summary
Nearly all business plans kick things off with an executive summary.
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, what your goals are, and what your business strategy is.
Your executive summary should include items such as:
- Why you want to start a food truck business, or why 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 what your business is about and how you plan to succeed.
#2 Company description
Whereas the executive summary is a brief overview, the company description is when you really start to get into the details of your business.
Why do you think your food truck will be successful? Why did you choose a food truck instead of a restaurant?
You should go over many of the things included in the first section, such as:
- What are your food costs?
- Where do you prepare your food: in a separate kitchen or in the truck?
- How will you compete with other food trucks in your area?
- What is your target audience and how does your food truck meet their needs?
Essentially, this section of your food truck business plan should explain, in detail, what separates your food truck from others.
#3 Market research
No business plan is complete without a comprehensive market analysis.
This is where you explain how you will move into the existing food truck market and how you will succeed.
This means explaining:
- What your target market is
- Who your competition is and how you can succeed in spite of them
- Where your ideal location would be
- The current trends in the foodservice industry
- Your growth potential
- Any potential roadblocks and how you plant o overcome them
#4 Business operations
In this section, you need to outline your daily business operations, including what you need to complete those activities.
This should include:
- Your hours of operation
- Your location(s)
- Your menu items, including the ingredients you need to make those items
- Equipment you need to run your food truck
You don’t need to go over your expenses in this section, as that will be included in a later section of your business plan.
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 you have and what their roles are
- How profits will be divided 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.
Every business relies on solid marketing tactics to succeed. This section is where you’ll outline the marketing tactics you plan to use to help your business succeed.
This might 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 in order to generate a profit. You should discuss how you will price your items, how many days per year you will be closed, and whether or not you will operate on a seasonal basis.
If you’re using your business plan to acquire funding, then this section is particularly important. This is where you’ll go over your operating 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)
- Financial projections
- Other expenses (such as maintenance, employee turnover, etc.)
Lenders and investors need to understand how you will actually make money and how their money will be put to use.
Most businesses require an external source of funding in order to operate and expand. In this section, you need to go over the numbers. This includes:
- How much money you need
- What you will use this money for
- How you plan to repay lenders or investors
- Whether or not you expect to need more funding in the future
It’s important 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 important 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
By following these steps, you can put together a solid and successful food truck business plan.
If you need help getting started, check out this food truck business plan template from LegalTemplates.
Other FAQs about Food Trucks
- How profitable is a food truck? 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 among the most profitable businesses.
- 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 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, 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, make use of the best social media for restaurants.
- How do I start a food truck? You’ll need to get permits, licenses and insurances, your truck or cart, research your potential market, and gather the funds you need to start. All those areas will be covered in a proper business plan, so make sure you follow the advice we shared in this post. Then we recommend you to follow this step-by-step guide that explains to you how to start a food truck.
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 a great 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 so that you can 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. If you need funding for your food truck, apply for a business loan today.