Food Truck Business: The Most Comprehensive Guide on the Internet

If you’ve been eying a food truck business to enter the restaurant world or simply because you like the concept, you may want to use this article as a guide. Let’s start by rounding up what a food truck is. 

A food truck is simply a truck that serves food. With its insides scooped out, turned into a kitchen and moving from one busy office district to high footfall night-market. A restaurant on wheels, if you will.

Got 30 mins for lunch? Why go to a restaurant when the restaurant can come to you.

And food truck businesses are of different types- some sell ice creams, some sell frozen and packed food, and some have kitchens on board in order to prepare food from scratch. In recent years, food truck businesses have also begun offering gourmet cuisine and niche menus.

Here are some well-known food trucks from around the world:

 

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Come see us at #trailerfoodtuesdays tonight at the long center. 🎉🍗🍽

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Some sweet shrimp on a sweet night at @govballnyc! #regram

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History of Food Tuck Businesses 

The chuckwagon, a wagon/cart on which people transported and cooked food in the 19th century in the USA and Canada, is considered to be a predecessor to food trucks. In the year 1866, Charles Goodnight, a Texas cattle rancher, fitted a sturdy US Army wagon with interior shelving and drawers, stocking it with kitchen, medical and food supplies. Food supplies consisted of dried beans, coffee, cornmeal, cloth-wrapped bacon, salt pork, and other easy-to-preserve food items. The wagon also contained a water barrel and a sling to kindle wood to heat and cook food.

In 1872, a food vendor by the name of Walter Scott gave birth to the idea for the modern food truck. He cut open windows in a small covered wagon, parked it in front of a newspaper office in Providence Rhode Island, and sold sandwiches, pies and coffee to pressmen and journalists.

In a few years, a former lunch-counter boy named Thomas H. Buckley started manufacturing lunch wagons in Worcester, Massachusetts. He introduced several models such as the Owl and the White House Cafe, complete with sinks, refrigerators and stoves, and had the interiors decorated with ornaments.

T. H. Buckley's the white house cafeThe first commercial food truck

In the 1950s, US Army authorised mobile canteens were created and became popular at stateside army bases.

The recent resurgence of food truck businesses took place due to several reasons related to the Recession of 2008. Food trucks are considered to be trendy, and thus, combined with economic and technological factors led to an increase in the number of food truck businesses in the country. With the construction business drying up, there was a surplus of food trucks and chefs from high-end restaurants were being laid off. For such chefs, with years of experience, going into the food truck business seemed like the only viable and lucrative option.

Food truck businesses have become a very common phenomenon across the United States, with many of them being found in the suburbs and small towns all across the country, graduating from American metropolitan areas like New York and Los Angeles. They are also being hired by people for special events such as weddings, movie shoots, and corporate gatherings, as well as to carry advertising promotions.

Food truck businesses in popular culture
  • The popularity of food trucks in the US speaks for itself. They can be seen very regularly on national television. The shows named The Great Food Truck Race and Eat St. feature food trucks from all around the United States.
  • On Food Truck Face Off, a show in Canada, 4 teams battle for a prize- use of a customized food truck for a year.
  • In the American comedy-drama Chef, a high-end chef has a meltdown and follows to rediscover his passion for cooking while driving and operating from a basic food truck.
  • During Donald Trump’s campaign for the presidency, Marco Gutierrez, the founder of Latinos For Trump famously said in an MSNBC interview that there would be “taco trucks on every corner” if Mexican immigration to the US continued. The comment triggered ridicule and memes under the hashtag #TacoTrucksOnEveryCorner.

 

Considering a food truck business? It’s not a bad idea

An entrepreneur passionate about food or looking to tap into the food industry will have several questions to answer and many blanks to fill. They must make decisions regarding the choice of cuisine, location for the restaurant, how and where to hire staff members from, decor, and many, many more. And the food business is one of the most competitive businesses with skyrocketing rents and increasing customer acquisition costs.

Starting a food truck business would be a viable option for such entrepreneurs, simply because of the benefits it offers.

Case in point, Alvin Cailan and his story.

But nobody should tell you it’s easy. Just like any business, it takes long hours. And grit.

Myths about a food truck Business
  1. It’s easy: Especially at the start of your food truck business, you will be on the streets 6 to 7 days a week. And for very long hours. Not to mention showing up at every event or pop-up opportunity you can find.
  2. Quicker profits: You are likely to spend nearly everything you make, in the early days of your food truck business. Just like a traditional restaurant business, profits take time.
  3. You should get into the food truck business because you love to cook: If you are looking to cut your teeth in the food business world, you could start with catering (not to your friends and family). Testing your menu on a few paying customers is a good idea before you jump into investing time and money in a food truck business. This could help you refine your menu and get a sense of the challenges of running a service.
  4. You don’t have to pay rent:  Depending on where you are, you might need to pay rent for storage space and a commercial kitchen to do your prep work. This apart you will have to pay for licences, permits and municipal clearances. More on this later.
  5. Food truck businesses are not inspected by the health department: Food trucks follow the same regulations as restaurants and have to go through the same (if not more) paperwork.
The benefits that food truck businesses offer over traditional sit-down restaurants
  • Less risky: As a business owner, you are always looking to minimize risk in order to maximize profits. With a food truck, you do save on rent (and a long term lease) which is one of the largest cost centres for a new restaurant. 
  • Novelty: It’s easier to get noticed with a food truck than with a sit-down restaurant. A food truck allows entrepreneurs to test their concept quickly and assert their uniqueness before franchising their trucks or starting a few sit-down restaurants. The possibility of food trucks physically moving allows the brand to reach several high footfall places, thereby gaining more customers.
  • Lower costs: Due to its size being much smaller than a restaurant, food trucks run on lower operational and overhead costs. Thus, you can save up money for future plans and expansions. More on costs later.
  • Flexible location: With food trucks being able to move, they can cater to customers from different areas and have a wider reach than traditional restaurants do.
  • A meaningful experience: It’s easy for a restaurant to be disconnected from their customers. Operating a food truck is a lot more hands-on where you are not only the chef but also the business head, cashier and just about everything else.
Starting a food truck business

At this point, food trucks may seem like a good option for you. Run correctly, it can be a great option to (seriously) enter the food business world.

Here is a list of things to keep in mind if you want to start a food truck business.

Food truck business costs

According to food truck business entrepreneurs who have just started out, or have a more or less established business, the cost of starting a food truck ranges between $60,000 – $75,000 on the lower side. And about ₹8 – ₹10 lakhs in India. On the upper end, a fully loaded commercial vehicle can cost upwards of $250,000 in the US and ₹20 Lakhs in India. This, of course, depends primarily on your location. Other factors, such as the type of vehicle used, the food sold, goals of the entrepreneur and other start-up costs.

The process of starting up

Not as streamlined as starting a restaurant, starting a food truck business requires you to navigate a few crucial steps.

  • Truck, equipment and raw materials: Food trucks are customized commercial vehicles and come in different shapes and sizes. A brand new commercial truck to use as the base of your food truck business would cost you between $20,000 – 40,000 or ₹4 – ₹5 lakhs, in India. Along with that, kitchen equipment such as a kitchen chimney, stove, cutlery, utensils, and other items can run you another $20,000 or ₹2 – ₹3 lakhs. Finally, raw materials to cook your meals would cost about $7,000 or ₹30,000, depending on what you serve.
  • Deciding a location or locations to serve: A person starting a food truck business must scope out a few high traffic places in their city. Busy commercial districts with a lot of offices is a good option. Another great option is to park close to shopping malls or marketplaces. Plan for parking availability and one-way streets when you decided on your location.
  • Deciding a menu: Something about food truck spells comfort food, whatever that might be in your city. Adding a new twist to classics (that everyone will want to eat regularly) is a great idea. Or you could import a regional cuisine and serve it in a novel way. Be sure to design your menu keeping in mind that people are likely to eat your food on the go. So food that is easy to carry and is not messy to eat.
  • Insurance: Insurance is an important step, in order to take account for possible risks and liabilities.
  • Billing & POS: Using POS is an important part of running a food truck, as it helps you store data which can come in handy while suggesting repeated orders and collecting customer feedback. Very good POS (that does more than just billing) can cost between $79-$899 or ₹24,000 – ₹50,000, in India.
  • Marketing costs: Marketing is vital for your food truck to succeed and attract customers, and there are various steps that need to be followed in order to successfully market your product. Using marketing methods suitable for your food truck business would run you almost $7000 or ₹40,000 (per month).
  • Staff: You’ll need to hire a few staff members (when your food truck business takes flight) and pay for their uniform (if any), and salaries. This figure can vary with the number of people you rope in, but assuming you take in 3 people, you’d need a little over $8000 or ₹40,000, in India (per month) for salaries and additions.
  • Licensing: Since a food truck is a business, it is important to note that one would need several licenses to begin.

For the US,

Start with a health permit: This will determine the location, hours, your audience, and other street food vendors you may partner with.

This will cost you, $800 – $5000.

For India,  

Food license: For starters, the FSSAI license (Food Safety and Standards Authority of India) is required, since a food truck is essentially a food business. The same standards related to the availability of safe and wholesome foods for human consumption need to be followed, and businesses with an annual turnover of ₹12 lakhs or more are required to obtain this license.

Follow these steps to get your FSSAI license. 

Fire Department NOC: Since the trucks have gas appliances like fryers, boilers and ovens, chances of a fire-related accident happening exist, no matter how little. Therefore, a certificate from the Chief Fire Officer is compulsory.

Permission from the local municipal corporation: Permission from the local municipal corporation is required for locations where the entrepreneur intends to serve food.

Commercial vehicle license: A vehicle license issued by RTO of commercial vehicles, and a NOC of vehicle ownership is required.

All the required paperwork would cost you approximately ₹25,000.

Health & safety concerns

Food truck businesses carry a health and hygiene concern with them, which arises from the fact that food truck employees have to do their jobs in a very confined space, which is typically 8 x 20 feet on average, and due to the restricted space, trucks often lack equipment that restaurants are able to use. This leads to more contamination. Air pollution is another area of consideration.

According to an article by The Los Angeles Times, about 27% of the food truck businesses in the city earned lower than an A grade, as per a review by Los Angeles County Department of Public Health. In comparison, 5% of restaurants and almost 18% of food carts fell below that mark.

Onto the “softer” stuff
What theme can I go for?

Now that you have the necessary information required to start a food truck business, you need to decide on a theme. Your theme may be influenced by the menu you choose, or the location you decide to serve at, or a combination of both. It could also be influenced by a culinary experience you once went through or a story that is true to you.

How can I brand my food truck?

Once you have your theme or concept it’s time to turn that into your brand. Branding is one of the first steps one must take in order to promote their product or service. It is a way to attract customers, by spreading a message, and a vision, that shows the public what the company is all about.

In order for your food truck to become popular, you will need to brand it as well. A brand isn’t simply the tagline of your company, but also the name, the various designs, the packaging, and the story your company carries. All of them need to be catchy enough to attract the attention of prospective consumers, in order for them to give your products a try. While building your brand, you need to take care of the following aspects-

 

  • Name and tagline: The name of your food truck is the first thing that customers will look at, and thus, it needs to be catchy. In today’s world, using basic names rarely works; the name of your food truck needs to have a punch, while at the same time, it must inform the people about what exactly you’re selling. Coupled with the name is the tagline, which works best when it’s both catchy and clever. Use of humour and/or wordplay tends to work best.
  1. Captures the spirit of your food and service
  2. Gives your brand a personality
  3. Differentiates you from your competition
  4. Helps you resonate and relate with your customers

These are just a few tips to name your food truck. You might want to dive deeper into naming ideas.

  • Design and logo: Your company’s design and logo are visual representations of what you’re offering to the masses. While there are many ways to go about it, your design should be such that it works best on both posters and packaging. It is important to keep in mind that the usage of colours is an important aspect of your design and logo, and thus, it is always wise to hire or take the help of a professional designer to get this done.
  • Brand story: Brands have a variety of stories. Some of overcoming hardships, some of becoming successful overnight, some of discovering something, and some that involve two or more people from the same or different backgrounds coming together to create something unique. Remember, a good story always sells.

Your brand image will be one of the factors that is going to determine the continuity of your business in the long run. Therefore, it is a must that you take your time to come up with something that is strong and is guaranteed to attract customers.

How can I promote my food truck business?

After you have given your food truck business a unique name, design and logo, it is time to begin marketing it. There are several ways to market your product to potential customers, and you can take advantage of a combination of those in order to achieve your business goals and reach more customers. You must choose what works best for your brand.

In today’s times, however, it is necessary to promote your food truck business through the following means:

  • Website and/or application: A website describes everything about the business- its story, products and services offered, available discounts, etc. Using these means are a great way to reach more people outside your designated geographical zone, and educate people about your food truck. Mobile applications make ease of access easier for customers, due to their generally user-friendly interfaces. And a well-designed website that allows your customers to place orders for pick-up is a good idea to start off with.

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  • Search engine visibility or “food trucks near me”: People keep Googling queries like “food trucks near me” or “food trucks in (name of city)” all the time. It is important to make sure your website ranks higher in search engine searches, through the use of proper keywords or paid campaigns. Ranking higher in search engines allows more and more people to view your website and click on them, thereby garnering more attention. For food trucks businesses, however, search results are often dominated by food magazine articles called “listicles”. These lists round up the best in a given city, neighbourhood or region. You could get in touch with these magazines to explore your options of getting reviewed or running a campaign on their platform.
  • Social media marketing or “sliding into dms”: Social media websites will be your friend when it comes to promoting your product. Sites like Facebook, Instagram, and Twitter allow you to buy ads for a reasonable price, thereby helping you promote your work further. Most Social Media platforms are welcoming more direct communication with customers (which is perfect for a food truck business). Instagram is the go-to social network for food businesses. And with WhatsApp launching a WhatsApp for Business, it is easier for people to keep in touch with the company through a phone number. WhatsApp For Business is a relatively new tool that allows businesses to have their own verified WhatsApp number, in order to interact with customers over textual messages and send them promotional messages. The idea behind this is to give customers a more personalized feel and retain them longer. 

Apart from these online means to promote your food truck business, you should look to take advantage of a few traditional methods as well. With food trucks businesses, the following tools of promotions would work the best.

  • Fliers and posters: Fliers and posters are effective for local communication. You could distribute fliers and put up posters in neighbourhoods that you visit frequently or get more sales from. You could do this ahead of time so that you have a long line of customers when you visit.
  • Promotional offers: Offering customers benefits such as a discount or buy 2 get 1 free is a surefire way to gain new customers and popularity. You may also offer loyalty points and coupons that offer a free meal after a set number of purchases, in an attempt to look for long term customers.

Try these ideas to promote your restaurant.

  • Developing contacts: It is important to be able to maintain important relations with people, especially those who hold an important place in society and can help popularize your food truck business. Food crticis, journalists and food events organizers, to be specific.
  • Offer to help: Once you develop contacts, you can offer to provide catering services to the people you know in order to build your credibility. The extra revenue would not hurt either.
  • Follow up with customers: One way to retain customers is by following up with them, thanking them for visiting your food truck and taking their opinions and criticisms respectfully.
  • Get involved with the community: Take part in community events and interact with people, keeping in mind that every person is a potential customer.
  • Give out handouts and coupons: Handouts and coupons are a great way to promote your food truck since they provide information and a possible method to spread awareness of discounts and other special offers.
How to appeal to customers with customer service

The following are a few good tips to follow in order to correctly appeal to potential customers:

  1. It is important to mentally prepare yourself for long hours of service and make preparations for the same. 
  2. Keeping a positive attitude is essential, especially when things seem to become chaotic.
  3. Caring about customers by striking up conversations with them.
  4. Being community-minded will allow you to gel well with the people and reach more people.

Whatever means you use to promote your food truck business, it must be able to strike a chord with the people you are targeting. Not all methods work for everyone. Constantly refining your customer service is possibly the single most important way (apart from your food of course) of gaining a fan following. 

Thus, it’s important to carefully choose your method of promotion by looking into your target market and budget.

Which restaurant POS should I use?

Running your food truck business means you will have to manage lots of data. To track sales and accounting. But this data can be used in many other clever ways. Regardless of how data heavy your approach is, you will still need to store all this data.

This problem is solved with a Restaurant Point of Sale (POS) System.

Restaurant point-of-sale systems (Restaurant POS) enable transactions, increase operational functionality that enhances the guest experience and streamlines business operations. For your food truck, you’ll need a POS in order to conduct your business smoothly and without too much hassle.

But what POS must you choose from? Here is a list of the ones you can opt to use:

  • Traditional restaurant POS: The traditional restaurant POS has dominated restaurants for a very long time. These systems run on a closed internal network and store data in local servers. These are built on the traditional client-server groundwork and aim to provide high-end functions such as inventory management, customer relationship management, and analytics, in order to meet the increasing demands of the restaurant industry. As such, the cost of maintenance is high as well. This system, however, has its drawbacks, which include:
  1. Risk of data loss
  2. Expensive to maintain
  3. Requires constant maintenance
  4. Not scalable
  5. Does not provide a complete solution
  • Cloud Restaurant POS: Cloud POS allows restaurants to access information remotely instead of having to be physically present, due to the information already being uploaded to the internet. With this system, there is a lesser risk of you losing your data and you can carry on with your transactions even when the internet is unavailable; they will simply sync when the internet comes back on. Most importantly, cloud POS is much cheaper to use than traditional POS. However, cloud POS charge a regular fee, that can get quite expensive in the long run, and most of its features become unavailable upon disconnection from the internet.

Once again, the choice of POS lies in your hands, but it is important to weigh the pros and cons of both the options and go for the one that suits your needs the most. For a detailed guide on which POS you should look to choose, read our guide on Choosing a Restaurant POS system.

A cloud-based POS, or cPOS allows data to be stored in a cloud server. While a physical system isn’t required, a stable internet connection is a must in order for this to work properly. They offer the services that traditional POS systems offer, as well as analytics, customer relationship, loyalty and inventory management.

Choosing between the two for your food truck business

What POS system you end up choosing for your food truck is ultimately your decision, but we can help make that for you. In the table underneath, we have highlighted a few points of differentiation between the traditional POS and cloud POS system.

Parameter Traditional POS Cloud POS
Cost One time + Regular maintenance costs Monthly fee
Software Installed on hardware Online
Hardware Stationary Computers/Smartphones/Tablets
Data Security Low High
Data Accessibility Stored in local servers Stored in remote servers
Data Storage On-site systems Cloud servers
Drawbacks Lack of data security, no remote access, manual update of data A requirement of stable internet connection at all time
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All that is left, is to start!

If you are exploring a food truck business idea, know that it’s not all easy. There are setup costs, licenses and permits to navigate. On top of marketing your food truck business, building your brand and gaining followers. But it also is a good entry into the food business world with lesser risks and financial burden. Most of all, it is a good way to give shape to your dreams of having a food business.

And being outdoors, seeing customers smile, travelling and doing what you love, is definitely a bonus. Wouldn’t you say?

 

Souradeep Datta

Souradeep Datta

Souradeep is a content marketer at LimeTray. His roots are in advertising, digital marketing, and design. Loves food, music, simple things and making things simple. Prefers writing about himself in the first person. But he knows he can't always have what he wants. Reach him on: Twitter @deepsour Instagram @deep_sour