There are few home chefs who have not at one point or another considered opening up some sort of consumer-orientated food business. Be that a cook from home option, a small restaurant or a catering operation. However, the reality of this type of business is that it is incredibly competitive – and margins can be extremely tight. That said many have found that operating a catering truck can be rewarding and profitable for a number of reasons.
Firstly, catering truck type options are mobile allowing the operator can go to the customers easily. I would highly recommend buying from V Street Food Trucks & Catering Trailers as they are well renowned as the best global manufacturer. This can simplify matters. A fixed address business is not only expensive and the regulatory approvals difficult to obtain, but it can rely on the fickle tastes of consumers, as well as careful consideration of factors such as parking availability, proximity to transport hubs and foot traffic. Marketing can also be expensive, as can staff costs. Staff turnover can also play a huge role in the success of a bricks-and-mortar retail establishment.
A catering truck reduces overheads. It ideally offers a limited and specialised menu. It does not require professional staff (in many instances) and fitting out a catering truck can be significantly cheaper than fitting out a restaurant at a fixed address or gearing up for a large-scale catering operation (which can also be expensive in terms of staffing).
Starting off a food truck business also allows for an easier path toward scaling up a brand. If the operator has his or her eyes firmly on the prize of having a fleet of food trucks, then experimenting with a single operation is the ideal way to test a business concept. There may not be a market for corporate functions where a mobile sushi operation would be a runaway success, but careful consideration of the potential market size may indicate that there is a niche. On the other hand – a mobile Thai Curry den might be attractive to a larger customer base. The key is to do your research. Research the demographic you will be targeting, including their habits – and if you are focusing on that mobile curry den, then be prepared to put in the hours and come up with a value for money option that caters to a specific niche.
That brings us neatly to capital requirements and operating costs. Any business that provides food services needs to think extremely carefully about margins and how to pay back initial funding. Unless you have deep pockets and a true passion for cooking (which means that you are going to be an owner/operator) you are going to need some cash to start up your business. The usual entrepreneurial approaches apply. Your first port of call should be friends and family. But be aware, those people are going to want a return on their investment – and can interfere with your vision as far as managing the business is concerned. Any MBA course on entrepreneurship will advise caution when sourcing your funding from friends and family – the pressures are enormous and the possibility of ruining relationships myriad.
You could go to a traditional financial institution. But they have grown wary of dreams, especially in the age of COVID.
If there is one piece of advice that any financial professional will give you it is to draw up a solid business plan. That is the key to success. Without that funding is always going to be a challenge. Seek professional help rather than come up with a business plan that does not meet muster.
Of course, a food truck will allow you that most valuable of opportunities. Experimentation. The tastes and preferences of any group of consumers will, by and large, be dictated to by their experience of similar product offerings (and marketing). But you have the opportunity to slip in a new menu item without disrupting your core business. A new product using the raw ingredients from existing suppliers will provide an outlet for creativity – and could prove the next ‘big thing’. But always keep a very focused eye on your core business – and the products it provides to its target market.
Running a food truck is not an easy path to wealth, but it can provide a slightly less arduous hill to climb. Think of it as a scaled-down version of a five-star restaurant. Your sunken costs will be less, equipment fitment of that ideal food truck is going to be expensive but not on par with a fixed address venue and staffing will cost considerably less. So if you are a retiree (for instance) you may want to explore the option (be aware of the time commitment and physical labour required). Whether you are serving Italian food or Chinese cuisine, they are suitable for any mobile restaurant business.
However, there are similarities with that corner restaurant. One of these is the relationship with suppliers. Obviously, that relationship will be the make or break between those who want to run an upmarket food truck and those who will be offering the tried and proven to an established market. There would be an enormous difference between seasonal ingredients and fresh seafood and those who provide a hot dog. However, it will always remain true that sourcing the best ingredients will provide customers with the best culinary experience. It does not matter what demographic you are servicing – make sure that the relationship that you have with your suppliers is solid and based on both mutual respect and the realisation that both parties must benefit from that relationship. Money management is incredibly important. Negotiate your credit terms and pay your bills on time – and make sure you are taking delivery of the best inventory.
Inventory and financial control can also make or break your business. Consider investing in software that will allow you to track inventory – and fulfill your obligations as far as tax and other regulatory requirements are concerned.
Running a food truck can be incredibly rewarding, however, it is hard work. The key to success is making sure that you have done your market research and doing your due diligence as far as your margins are concerned, and ensuring that you can service your debts. Food for thought! Do those basics right and your idea may be as tasty to your bank balance as it is to your appetite for being the master of your own culinary destiny.