How to Start a Food Truck 01: Should You Go Mobile or Brick and Mortar?
Welcome to the first chapter of our new blog series: How to Start a Food Truck.
If you’ve ever wondered how to start a food truck business, you’ve come to the right place! Over the next several months, we’re going to take you all the way from the very first seeds of your dream to opening day.
Our goal is to help every food truck owner — from the seasoned veterans to the aspiring dreamers like you — take his or her business to the next level by providing the #1 resource of food truck business know-how. That’s why we’re so stoked to bring you an unprecedented level of in-depth information in the “How to Start a Food Truck” series — a comprehensive, chronological, and crazy-awesome guide to starting your very own food truck business.
What’s the first stop on our epic business planning road trip? Helping you decide whether or not a food truck is the right business model for you by looking at some of the differences between food trucks and brick and mortar restaurants. After all, all good cooks know that the baseline ingredients make or break the dish. Let’s make sure the most basic and important of business decisions is the right one for your tastes!
If you’re ready to go, let’s get started by defining the single-most important part of this entire journey — your dream.
Defining Your Dream
It’s no secret that career satisfaction plays a major role in determining our overall levels of happiness in life. Doing work that you love can seriously fulfill your life and nourish your soul — the key is to figure out what it is that you really want.
Are you entranced by the idea of a mobile restaurant that gives you the freedom to move around each day? Or do you dream of owning an establishment where you can decorate the walls with your favorite photos and have a special booth for your favorite customers? Imagine yourself in 10 years. Where are you — smiling through the window of a food truck that’s clocked thousands of miles as you greet a family who comes by every Friday night, or walking the well-worn floors of your restaurant and checking in on every table’s meals?
It’s easy to predict what some people might choose. Think of it this way: If you enjoy travel, discovering new cuisines, and exploring your city, you might thrive on the flexibility offered by a food truck. Aspiring entrepreneurs who are eager to get their hands dirty and get excited by the thought of a road trip will love the daily travel and adventures involved in owning a food truck. On the other hand, if you prefer stable routines, dream of being a famous chef, and love to host big parties for your friends and family, you might prefer the opportunities that accompany restaurant ownership. If the idea of traveling constantly exhausts you and you’re afraid to refill the windshield wiper fluid in your car, you’ll probably enjoy life in a comfortable, reliable building more than life on the road.
Or perhaps your dream involves a little bit of both. After all, some people get started in the food truck industry as a stepping stone to their larger dream of owning a restaurant. You might be excited to get in on the food truck trend while it’s hot so that you can build a name for yourself and open that chain of restaurants you’ve always dreamed about somewhere down the line — and that’s okay.
Every one of these options is a valid choice, so long as you realize that regardless of your long-term path, you need to fully understand the realities of each situation before making any choices. Entering the food industry is risky business — like any entrepreneurial endeavor — but you can make a calculated, informed decision about your dream when you know what life as a food truck or restaurant owner is really like.
Examining the Realities
Let’s look at some of the key differences between owning a food truck and owning a restaurant to help you understand what you’re getting yourself into.
Opening a Food Truck: There’s no doubt about it: starting a food truck is cheaper than starting a restaurant. Forbes estimates that most food truck ventures can get started for between $50,000 and $80,000, while a restaurant will typically cost at least $100,000 to $300,000 to get up and running. If your specialty is sandwiches or gourmet cookies, you’re going to need a lot of…well, a lot of dough!
Obviously, the biggest expense involved with either a truck or a restaurant is the physical space from which you’ll operate — and a truck is much cheaper than a brick and mortar location, particularly if you can find a used truck that is already outfitted to function as a mobile kitchen. You’ll also run into similar costs such as insurance, licenses and permits, marketing expenses, and staff salaries with either type of establishment. But again, each of these categories requires fewer funds when you’re aiming to open a food truck instead of an entire food building.
Opening a Restaurant: Opening a restaurant costs more, but the upside is that you’ll probably run into fewer legal restrictions than someone who is trying to start a food truck. Many cities across the country have laws in place that aren’t very friendly toward food truck owners. Aspiring FoodTruckrs have trouble getting operating permits, difficulty finding places to park, and face strict requirements about the size and standards of their trucks. Worst of all, they must navigate an entirely new set of laws every time they cross city lines.
Though aspiring restaurateurs must lock down a number of permits and licenses for everything from operating to serving alcohol, health code and food handling laws are designed with them in mind. You’ll also only need to figure out the requirements for the one city where your building is actually located. The food industry as a whole is more welcoming to entrepreneurs who are opening brick and mortar establishments — and for some people, this could be worth part of the additional expense.
The Perfect Spot
Owning a Food Truck: The ability to move around is one of the greatest perks of owning a food truck. When there’s an event going on, you can take your truck to where people are. If someone wants you to cater a wedding or festival, you’ve already got a way to transport and serve your food on the go. And if you’re experiencing a slow day without many customers, it’s easy to pack up and move on to somewhere with a little more action.
Of course, no one said that opening a food truck is easy — so even this bright spot brings along some challenges. Finding a place to park can be one of the toughest parts of owning a food truck. Many cities have strict laws in place regarding where and when you can park your truck and for how long — and if you violate those ordinances, you could find yourself faced with a heavy fine that eats away an entire day’s worth (or more) of profits. Local governments are hungry, and they don’t accept burritos and cheesesteaks as payment.
Owning a Restaurant: When you own a restaurant, you clearly don’t need to worry about finding anywhere to park. A stable location also has an added benefit: Customers will always know where to find you, which makes it easy to build repeat business over time.
However, if you don’t have a good location, your business could be doomed before it’s time to change your calendar page to the next month. So, finding a prime location is the simple solution, right? Not so fast — good locations almost always have higher rent, and they might not be available when you want them. Though a food truck owner has to find a good spot every day, he or she can move on easily if it doesn’t work out. A restaurant owner needs to find a location that he or she will be happy with for many, many years.
The Daily Grind
Operating a Food Truck: Time for a truth-bomb: Food truck owners work long hours. This industry isn’t for the faint of heart. Even before you open for business (and even once you’re done serving for the day), there’s dicing, slicing, mixing, and other miscellaneous prep work to be done — plus an entire kitchen to be cleaned. The area you have to maintain and clean every day is a lot smaller than it would be if you owned a full restaurant, but you also won’t have as many people to help out. With a smaller team working on your truck, that means you’re going to be doing a lot more of the grunt work on your own.
And though you have less space inside your truck to clean, you also need tomaintain the mechanical workings of your truck. A restaurant can’t get a flat tire, but something as seemingly insignificant as a stray nail or a shard of broken glass could derail a FoodTruckr for an entire day if he or she is caught off guard and gets stuck somewhere. Your food truck needs regular oil changes and tune-ups just like your car does, so be prepared to spend some time (and money) at your favorite mechanic’s shop.
Operating a Restaurant: Brick and mortar restaurant owners enjoy a lot more space to work and serve customers than food truck owners — but that also means that cleanup at the end of the night is going to take more time. In addition to cleaning your larger kitchen, there’s also floors to vacuum, tables to clean and reset, menus to wipe down, and a lot more food that needs to be dated and sorted regularly to prevent expiration.
While you have a much larger area to clean, you also probably have more hands on deck to help out. As the restaurant owner, you can hire a staff of servers, hosts, bartenders, and table bussers to handle some of the more unappealing parts of maintaining your space. Running a restaurant is typically more of a team effort than running a food truck, where the bulk of the work often falls on one or two sets of shoulders. Of course, having a larger team also means that you have to find more qualified applicants and train more newbies — and sign more paychecks every week.
Evaluating the Risk
Investing in a Food Truck: You can almost certainly open a food truck for less than six figures, but getting your truck up and running off the ground is going to require a lot of planning and a lot of time. Navigating your area’s local laws and restrictions will be challenging, especially if you’re new to the industry and unfamiliar with the policies in your area. Of course, that’s where FoodTruckr comes in — we’re here to make the process a little easier.
According to a report by the National League of Cities, food trucks made approximately $650 million in 2012 — and that figure is expected to quadruple to $2.7 billion by the year 2017. Food trucks are more than just a hot trend. They’re quickly becoming one of the fastest-growing and most flexible small business opportunities for entrepreneurs around the country. However, that doesn’t mean there isn’t risk involved. Before you make this decision, understand that a lot of aspiring truck owners never make it as far as actually purchasing a truck because they get overwhelmed by all the red tape and challenges along the way. It’s a tough business, and you need to be prepared to dive in headfirst if you want to make it.
Investing in a Restaurant: As we established earlier, opening a restaurant requires a huge monetary investment upfront. You’re looking at spending at least six figures, and most likely several hundreds of thousands of dollars. There used to be a popular myth that said that nine out of ten new restaurants would fail in the first year. That statistic has since been proven false by researchers from places such as Ohio State University, who instead estimate that around 60 percent of new restaurants will fail within the first three years of business. That’s still a big risk to take right off the bat for a small-time entrepreneur with a dream — and you may have trouble finding someone to finance your aspirations.
However, restaurants aren’t going anywhere any time soon. People will always need to eat and they’ll always be willing to pay someone else to prepare their food for them and to deliver an enjoyable experience. You’ll just need to remember that there are a lot of other people out there who have the same dream as you — and having great food, a great staff, and a great location are only the first things you’ll need to do to set yourself apart.
Choose Your Destiny
Whether you opt for a food truck or a restaurant, the realities of the food industry can feel a little daunting and discouraging. Don’t let them get you down! At FoodTruckr, we believe in pursuing big dreams not because they are easy — but because they are worth it. We also believe that if you’re really determined to make a successful go of this journey, it’s smart to learn about the path that lies ahead of you. And most importantly, we believe in you and your ambition to squash hunger with magical, mouth-watering meals.
With that in mind, the only thing you have to decide is what will work best for your business model and your dreams — a food truck, a brick and mortar, or perhaps both. Consider your options thoroughly and create a business plan that outlines what you really want, how you’ll achieve it, and where you’ll find the funding to get started. You have a tough decision to make that will spawn further difficult choices, but if you approach your choice with vigor, you will bend the circumstances to your will. After all, the way you respond to each new challenge will determine your likelihood of success.
Coming up next: In the second chapter of “How to Start a Food Truck,” we’ll get down to one of the most fun parts of planning — deciding what you’ll sell and coming up with a concept for your truck. In the meantime, visit our Facebook page to tell us what questions you have and to connect with other aspiring food truck owners who can support you on your journey. See you next week!
This blog originally posted on Foodtruckr.com on January 8, 2014.