Food trucks offer increasingly varied food and menus. A few years ago, you only saw burgers on these trucks. Today, food trucks offer menus ranging from a poke bowl to mixed salads and charcoal-grilled cuts of meat. There’s something for everyone.
However, a significant portion of them don’t survive past the first year. Many entrepreneurs are seduced by the idea of opening a food truck. However, not everyone has the skills to carry out this business venture.
In fact, while opening a food truck is fairly simple, opening a profitable food truck is much more complicated. Like any business, a food truck generates recurring expenses and costs that must be controlled to maintain margins that allow your food truck to break even.
From planning initial investments to limiting various expenses, including advertising budgets, maintenance costs, food truck location, market research, menu preparation, financial forecasts for financing your food truck, and menu pricing, we give you all our advice to maximize your chances of opening a profitable food truck.
Initial investments: start with a good foundation
Table of Contents
Buying a truck: be careful
Some entrepreneurs want to save money when purchasing the truck that will serve as the base for their food truck project. This is often a bad strategy. In fact, a neglected and poorly maintained truck could cost you more in the long run.
Don’t hesitate to invest in a quality truck (preferably equipped) to start on a solid foundation when opening a profitable food truck.
Don’t forget any expense
Be careful not to underestimate the initial budget for opening a profitable food truck. Of course, there’s the truck purchase we just mentioned.
But beyond that, you’ll likely need to plan for accessories, as well as the purchase of kitchen equipment, an initial supply of food, and the costs associated with setting up your new business.
Remember to invest in an advertising budget for the launch
This is a cost element that business owners too often overlook.
Just because you’ve found a good location doesn’t mean everyone will rush to your food truck’s door. We mention this budget in our food truck financial plan .
You have to make it known… and that means investing in communication and marketing
Plan a budget of at least $40,000 MXN or $60,000 MXN to start your food truck.
These expenses relate in particular to creating a website, creating a menu, printing brochures, managing your social media, and perhaps even investing in the Google Ads and Facebook Ads advertising networks, as we can see in the business plan for a food truck .
To open a profitable food truck, you need to plan for recurring expenses!
Minimize food costs by ordering in bulk
It’s a well-known trick in the restaurant world, yet too many entrepreneursrs don’t even think about it. In fact, there’s a good chance there are other businesses in your area that offer the same type of food as you.
They may be competitors; that doesn’t mean they can’t become partners.
Reach out to these people and see if you can place bulk orders with their suppliers to save money on your orders. We mustn’t forget that food costs represent 30% to 40% of a restaurant’s expenses. With this technique, you could easily save 5% of your total without compromising the quality of the products you use. This is essential to opening a profitable food truck.
Anticipate demand to optimize your inventory management
Inventory management is essential to controlling your expenses and increasing your profits. Demand for your food truck is likely to change depending on several factors (especially seasonal and weather effects). Anticipate these changes to manage your inventory effectively and avoid waste.
Implement other techniques to limit waste, such as running limited-time promotions on products you have in excess or that you need to remove from your inventory soon.
A good investment at the beginning
It’s better to make a good investment at the beginning than to spend a lot of money each month on repairs and maintenance.
We discussed this point earlier in the article. You need to buy a quality truck to avoid having to make costly repairs later. The same goes for the rest of your equipment and infrastructure. The appearance of your truck, the design of your menus, the look of your website, and the quality of service you offer will allow you to have a profitable food truck in the long run.
To open a profitable food truck, you must maximize your income!
The location of your food truck will be essential to its success.
It was a well-known (and fairly obvious) piece of advice in the restaurant world. It’s often said that the location of a restaurant or food truck accounts for 80% of its success. It’s absolutely essential to set up your food truck in a solid catchment area.
Even if the costs are higher or city permits are more difficult to obtain, it’s an essential factor for success; don’t neglect it.
Don’t neglect market research for your food truck
Through market research, you’ll be able to better understand your future customers and their needs.
You’ll also have the opportunity to study your competition, conduct a SWOT analysis for your food truck, and discover how you can capture different market segments (building competitive advantages for your food truck). Spend time interviewing potential customers and researching restaurants and food trucks in your area. All the hours you dedicate to market research will translate into time (and money) saved in the long run.
Offer a coherent offer
High prices and low volume? Low prices and high volume? You can choose any strategy you want; you just need to maintain a consistent approach to developing your food truck. If you offer above-market prices, then your brand image and the quality of the food you offer should reflect this positioning.
Conversely, if you decide to offer below-market prices, then you’ll need to find a way to pay less for the same expenses.
Conduct a thorough profitability study before opening your food truck!
How many customers do you need to be profitable?
This is an essential question to answer before opening a profitable food truck.
You must know exactly how many customers you will need to serve, at a minimum, each month to cover your fixed expenses and also your variable expenses. This information is easily found with a good financial plan for your food truck .
How will your margins change if you increase the price of your menus?
This is also a critical question to answer before opening a profitable food truck. If you’re creating a business plan for your food truck , you’re probably wondering what prices to set for your menu items.
You can experiment with different prices and see how your margins evolve with your food truck financial plan .
Can you afford him a salary?
From the beginning? After a year? This question also needs to be answered before opening a food truck.
Too many business owners don’t think about it and quickly realize that the food truck won’t allow them to pay the bills at the end of the month.
Answer all these questions with our financial plan for a food truck.
We’ve built an easy-to-use financial forecasting model for a food truck that allows you to analyze the feasibility of your project.
This forecast contains a specific section entirely dedicated to testing different scenarios where you might change the price of your menu items, the number of customers you receive, or the salary you will pay yourself. The model automatically updates when this information changes, and you can see how your margins change instantly. This is an essential exercise that will allow you to optimize your chances of long-term success.
