If you want to run a taco food truck business just because you like to eat tacos, it may not work all the time.
The question is – Can you sell tacos to people and make a 6-figure or 7-figure business out of it?
To be specific, can you make a sustainable and profitable business out of your idea?
That’s where you need to craft the perfect business plan for your food truck business.
A great business plan forms a strong foundation for your business. Once you come up with a food truck business idea, there will be a lot of questions running through your mind – How to finance my food truck, where do I find customers, what licenses and permits I should need, and more.
Read this article to create your food truck business plan, estimate profits, understand your target customers, financing options, and loans, analyze competition, and plan your marketing strategies.
Note: Answering the prompts in each step will help you gain clarity on your business plan and also be precise with your investors in case you are pitching them with your food truck business idea.
Here are the topics you can find in this article:
- Pick your niche
- Location, Location, Location.
- Get your market research right
- Who are your customers?
- Create a unique business name
- Create mission and vision statements
- Elevator Pitch
- Calculate the estimated costs and expenses
- Estimate profit margins
- Competitor analysis
- Decide your menu and pricing
- Food truck permits and licenses
- Marketing, promotions, and partnerships
- Future Projections
- Popular Food Truck Businesses To Inspire Your Journey
The Ultimate Business Plan To Get Started With Your Food Truck Business
Pick your niche
If you already have a specific food truck business idea in mind, that’s great! If not, narrow down the type of food truck business you want to start. It can be something like a gourmet burger food truck, an ice cream truck, or a barbeque food truck. On the other hand, you can create a fusion of some of the Asian or Latin American items.
You can take inspiration from these top food truck business ideas here.
To help you finalize your food truck niche, try answering these questions:
- What inspired your interest in starting a food truck business?
- What specific cuisine or type of food do you envision serving from your food truck?
- Who is your target audience or ideal customer that you want to serve?
- What could set your food truck idea apart in the industry?
Location, Location, Location.
Imagine starting a seafood truck business in a remote town far from the coast where you lack access to fresh seafood. It’s a failed business plan to start with, don’t you think?
Sometimes, location becomes more important than your menu.
Find places like street parking, farmer markets, bars and nightclubs, colleges and high schools, festivals, events, or sports avenues that are perfect for your target audience. More about the target audience in a bit.
As you shortlist some locations, analyze how popular your ideas are in the location you want to start the food truck business.
Get your market research right
As of 2022, the worldwide food truck industry boasts a valuation of $3.19 billion and is projected to surge to an impressive $5.25 billion by 2030 (Source). Customers are inclined to try new experiences and gourmet food, especially people between the ages of 16-35.
In a similar way, understand the estimated demand and growth rate of your food truck industry. This is important because you want to run the business for some years, and there should be sufficient demand for you to play with.
For instance, within the food truck market, the Mexican cuisine segment is one of the largest markets accounting for 34.6% as of 2021. These dishes mostly appeal to health-conscious consumers than other types of cuisines. So know your numbers.
Besides, you should learn the popular trends in the food truck industry and evolving consumer preferences so you can serve better. For example, Dessert trucks specializing in gourmet sweets, such as artisanal ice cream, cupcakes, and creative pastries, are gaining popularity lately.
Who are your customers?
Food truck businesses can never go out of trend. However, you should put customers at the center of the business. Here’s an extensive list of questions to understand the customers of your food truck business.
- What is the age range, gender, income level, and education level of your ideal customers?
- Where do your target customers live, work, or spend their leisure time?
- What types of cuisines do they prefer, and are they adventurous eaters?
- Do they have dietary restrictions or preferences, such as vegetarian, vegan, gluten-free, or keto diets?
- How often do they dine out or visit food trucks? Do they prefer lunch, dinner, or late-night snacks?
- What are their hobbies, interests, and leisure activities? Do they attend food festivals or events?
- What price range would they pay for a meal from a food truck?
- What social media platforms do they use, and how often do they engage with food-related content?
- What challenges or frustrations do they face when it comes to dining out or ordering from food trucks?
I know the list is extensive but it helps you create your Ideal Customer Profile (ICP). The more questions you answer, the clearer your marketing strategy gets.
Pro Tip: Create a customer profile and let it lead your marketing and advertising strategy.
Let’s say, (by answering the 7th question) you understood that your target customers are active on Instagram and Twitter. So you can create your social media marketing strategy by sharing your progress, updates, and weekly menu on these platforms.
Create a unique business name
The right business name creates a unique impression on your customers. In fact, a business name is the first step in your branding efforts. A good business name should be relevant, impactful, and versatile, tell your story, and appeal to the local audience and your food business.
If you want to know more about how to name your business the right way, read this detailed guide.
Coming back, here are some food truck business names that you can inspire from:
- Rolling Delights
- Urban Bites on Wheels
- TasteWagon
- Mobile Munchies
- Gourmet Go-Go
Create mission and vision statements
Mission statement
A company’s mission statement outlines the fundamental reason for your company’s existence. It answers the question, “What do we do?” and describes the core activities or services. It often includes information about the target customers, the market or industry your company operates in, and the primary products or services it offers.
A food truck business mission statement could be something like:
“Our mission is to serve fresh, locally sourced ingredients crafted into flavorful dishes that satisfy cravings and inspire foodie adventures on the go.”
Vision statement
The vision statement articulates the company’s long-term aspirations and goals. It answers the question, “Where do we want to be in the future?” and provides a clear picture of the desired future state of the company.
Vision statements often have a broader, more aspirational outlook and focus on the bigger picture.
For a gourmet food truck business, a vision statement could be something like:
“To be the premier destination for gourmet street food, offering unique flavors that ignite the senses and create lasting memories.”
Elevator Pitch
If you own a food truck business, you should speak about your business in an interesting and concise way. In fact, your ability to pitch creates the difference between simply surviving and truly thriving in your business. Yes, it’s a big deal!
An elevator pitch is a quick and compelling way to introduce your food truck business, showcase its offerings, and pique others’ interest in learning more about your business. Create a 30-second script or a paragraph about your food truck’s unique selling points, such as cuisine, specialties, and target market. It should capture your passion and the essence of your mobile food truck venture in a few impactful words.
Here’s an example of a burger food truck elevator pitch.
“Our ‘Burger Bliss’ food truck is all about indulging your taste buds with a twist on classic favorites. From our signature truffle aioli to our innovative veggie stack, every bite is an explosion of flavor. We’re not just about the food; we’re an experience, a destination for foodies on wheels. Join us in a culinary adventure savoring the joy of gourmet burgers, served fresh and fast, right at your doorstep!”
Tip: You can ask ChatGPT to give you some food truck elevator pitch examples.
Use the output and refine it depending on your menu, flavors, vision, and target audience.
Calculate the estimated costs and expenses
Our goal with this step is to research and create a detailed food truck business plan to get a more accurate estimate of your startup costs.
When it comes to finances, the first question you’d get is – How much does it cost to start a food truck business?
In general, an average food truck costs around $28,000 to $170,000, and used food trucks cost around $28,000 to $80,000.
However, if you’re planning to rent a food truck, it costs about $1,500 – $4,000 per month on a lease of six months in the US, $1000 – $4,000 in Canada, and around £500 to £3,500 per month in the UK.
You’ll also need to factor in:
- The food truck
- Equipment and serving utensils (Greatly varies by cuisine, equipment, and others. Rough estimates could be something around $10,000 to $40,000)
- Interior design and decor (Mostly a one-time investment of $5,000 to $15,000)
- Commercial kitchen space (May range from $500 to $3,000 per month)
- Parking (Depends on location, set aside between $100 to $1,000 per month)
- Permits and Licenses (Costs vary by country, city, and state. Budget anywhere from $1,000 to $5,000 or more for initial permits and ongoing renewals)
- Additional costs for setting up wiring, plumbing, gas, generator, and others
Please remember that these are rough estimates, and actual costs can vary depending on factors such as your location, the truck’s condition, and your kitchen equipment.
If you are starting a food truck business without money, you might want to consider financing options. We’ll get to that in a bit.
Estimate profit margins
Depending on the location, menu, and serving size, food truck business profit margin can vary from 0% to 8%. A food truck can earn anywhere from $4,000 to $50,000 per month. Popular food trucks in major cities earn somewhere around $40,000 – $50,000 per month.
A survey conducted by Food Truck Empire showed that around 50% of the food truck businesses earn more than $150,000 per year.
If you want to calculate estimated profit margins for your food truck business, you can follow these steps.
Calculate Total Revenue:
Determine the average price of each item in your menu.
Multiply the price by the average number of units sold.
Total Estimated Revenue = Average Price x No. of Units Sold
Calculate Total Costs:
Identify all your costs, including both fixed and variable costs.
Total costs = Fixed Costs + Variable Costs
Here, fixed costs include permits, insurance, truck maintenance, and equipment financing. You can go to the previous step for reference.
And, variable costs would include ingredients, packaging, fuel, labor, and more.
You should also consider your marketing expenses, unexpected repairs, etc.
Calculate Gross Profit:
Gross profit is the revenue that you get after subtracting your total costs from your total revenue to get your gross profit.
Gross Profit = Total Revenue – Total Costs
Calculate Gross Profit Margin:
Gross Profit Margin = (Gross Profit / Total Revenue) x 100
Here, a higher gross profit margin indicates that you are efficiently covering your costs and have a healthier profit. Compare your gross profit margin with industry standards to see how your business stacks up.
Calculate Net Profit Margin:
Net Profit is the amount you get after deducting all your business and marketing expenses, unexpected repairs, etc.
Net Profit = Gross Profit – Additional Expenses
From that, let’s calculate Net Margins.
Net Profit Margin = (Net Profit / Total Revenue) x 100
A few tips to stay on track
- Regularly monitor your profit margins and look for ways to improve your profits and reduce costs.
- Experiment with pricing, menu items, and marketing strategies to boost revenue.
- Adjust your business plan so you can maintain healthy profit margins.
Competitor analysis
Competitor analysis is a crucial part of your food truck business plan. You should assess the competitive landscape of your industry to stay informed about industry trends and adjust your selling strategy accordingly. When done right, this analysis will provide valuable insights to help you refine your menu, pricing, marketing, and overall business approach.
So how does it work?
The first part of competitor analysis for your food truck business is to know your direct and indirect competitors.
A direct competitor would be another food truck business or a pop-up food stall that provides a similar cuisine. On the other hand, fine dining restaurants, food trucks, supermarkets, and healthy/organic options that sell different but appealing food to similar audiences can be your indirect competitors.
Here are some questions you can answer to understand the competitive landscape.
- What dishes do your competitors offer?
- Are there any unique or signature items on their menu?
- How do their prices compare to yours?
- Where are your competitors located? Are they strategically positioned near high-traffic areas or events?
- What is the pricing strategy of your competitors? Are they premium, budget-friendly, or somewhere in between?
- How do your competitors position themselves in the market? Are they known for specific cuisines, unique dishes, or a particular theme?
- How can you differentiate your food truck’s positioning?
- How do customers perceive your competition? Research their online reviews and customer feedback.
- What do customers like or dislike about each competitor’s food, service, and overall experience?
- How are their marketing and branding efforts, including their online presence, and social media engagement? Do they run ads?
- Perform a SWOT analysis for your and competitors’ businesses
- Are there opportunities to target a specific customer segment that your competitors are not serving yet?
- Evaluate the operational efficiency of your competitors, including speed of service, food presentation, and cleanliness.
- How can you give a better customer experience?
Along with competitor analysis, you should also stay updated on industry trends and innovations and understand how competitors are adapting. See potential opportunities and emerging trends that you can capitalize on.
Decide your menu and pricing
Your food truck menu is one of the core pillars of your customer experience.
- What is your signature or unique dish(es) that will define your food truck?
- What items do you want to cater to various audiences, such as vegetarian, vegan, gluten-free, or keto-friendly customers?
- How do you balance the menu? How can you create a cohesive menu that offers variety without being overwhelming?
- Will you feature seasonal or limited-time specials? How do you make them fresh and exciting?
- Will you offer premium items alongside budget-friendly options? How will you price your dishes so you stay competitive yet profitable?
- Will you offer small and large portions for different appetites and budgets? How will you price them?
- What do your target customers want to see on the menu? How can you make them unique and interesting based on their preferences?
- Do you want to try certain themes or fusion concepts to make the menu exciting and memorable?
- Do you want to talk about the sourcing or ingredients of your menu? How can you showcase the freshness and quality of your menu items?
- How can you make your dishes attractive and Instagram-worthy to encourage customers to share them on social media?
- This one comes after the launch. How can you streamline operations to minimize wait times for customers?
Food truck permits and licenses
Starting a food truck business requires several licenses, permits, and legal and insurance documents to ensure compliance and protect your business. These requirements depend on the location you’re selling in. So do check with your local professional consultants before you start your food truck. Here’s a general list of documents you need:
Business License: A general license to operate your food truck business in your city or town.
Food Service License: Typically issued by the local health department, this license ensures that you meet food safety and sanitation requirements.
Mobile Vendor Permit: A permit specifically for mobile food vendors, which may include restrictions on where and when you can operate.
Employer Identification Number (EIN): Apply for an EIN from the IRS if you have employees or operate as a corporation or partnership. This unique tax identification number is essential for tax reporting and compliance.
Driver’s License: A valid driver’s license is required for anyone operating the food truck or driving it to various locations.
Seller’s Permit: Also known as a sales tax permit or resale permit. It is necessary for collecting and remitting sales tax on taxable sales of food and beverages.
Parking Permit: Required to legally park your food truck at specific locations within your city or jurisdiction.
Fire Department Permit: Ensures compliance with fire safety regulations, such as the use of propane or other cooking equipment.
Sales Tax Permit: Allows you to collect and remit sales tax on your food and beverages.
Emissions Permit: If your food truck uses generators or other equipment with emissions, you may need an emissions permit.
General Liability Insurance: Protects against third-party claims, such as bodily injury or property damage, that may occur on your food truck premises or as a result of your business operations.
Commercial Auto Insurance: Covers your food truck and any vehicles used for business purposes, including liability coverage in case of accidents.
Workers’ Compensation Insurance: Required if you have employees and covers medical expenses and lost wages in case of work-related injuries or illnesses.
Product Liability Insurance: Protects against claims related to foodborne illnesses or injuries caused by the consumption of your food products.
Commissary Agreement: If required in your area, a formal agreement with a licensed commissary kitchen where you prepare, store, or clean your equipment.
Employee Documents: If you hire employees, you’ll need documents such as employment contracts, tax forms (W-4), and employee handbooks.
Standard Operating Procedures (SOP) Document: An SOP document outlines how your food truck operates. This document should cover food preparation, safety protocols, equipment maintenance, and customer service standards.
Special Event Permit: Sometimes called a vending permit, this is typically required when you plan to participate in events, festivals, etc.
Financial Records: Maintain records of your business finances, including income, expenses, and tax filings.
Health Department Permits: Depending on your menu, you may need additional permits for handling specific food items, like alcohol or raw seafood.
Signage and Branding Approval: In some locations, you may need approval for the signage and branding on your food truck.
Zoning and Land Use Approvals: Ensure your chosen parking locations comply with local zoning regulations.
Keep in mind that the required documents list would change depending on the state and city.
Marketing, promotions, and partnerships
Marketing is the voice that tells your business’s story. It helps you foster relationships and conveys your narrative to the world. Discussing the marketing aspect of your food truck business is a vast topic, so let’s save it for another day.
However, in your food truck business plan, use the marketing part to outline strategies for reaching and engaging your target audience.
Include strategies like:
- How to increase your online presence
- Social media strategy
- Website development and branding
- Ways to boost customer reviews
- Email marketing, loyalty programs, and collaborations with food influencers
- Promotional campaigns to engage with customers
Include Partnerships
Partnerships are instrumental in expanding your food truck business. In your business plan, highlight the partnerships you intend to establish. These could include collaborations with local businesses, event organizers, or suppliers. Explain how these partnerships benefit both parties and contribute to your overall business strategy.
For instance, partnering with a nearby brewery can offer a unique dining experience. And, teaming up with a local coffee shop can expand your customer base.
The purpose of these partnerships is to increase visibility, reach more customers, and create a thriving food truck business empire. In the end, ensure you direct all these activities to grow your foot traffic and sales.
Future Projections
Future projections help you set the direction of your food truck. You can analyze where you want to see your company in the next three to five years. It should also include financial forecasts, as they’d be helpful when you pitch to potential investors.
You should have an idea of the following questions:
- How do you plan to control and optimize operating expenses as your food truck business grows?
- What is your take on ROI, sales growth, market expansion, and customer acquisition?
- What contingencies do you have to respond to unexpected challenges, such as economic downturns or shifts in customer preferences?
- Do you need financial or funding options to support your growth plans? How do you get them?
Popular Food Truck Businesses To Inspire Your Journey
Before we wrap up this article, I want to share some of the popular food truck businesses across the world to give you some ideas as well as inspire your food truck business journey.
Kogi BBQ (Los Angeles, California)
Kogi BBQ is a pioneering and immensely popular food truck based in Los Angeles, California. Founded by chef Roy Choi, Kogi BBQ made its mark in the food truck industry with its fusion of Korean and Mexican flavors. Chef Roy Choi’s inventive creations, such as Korean BBQ tacos and kimchi quesadillas, drew crowds and garnered a massive following.
The Lobster Roll Express (New York City, New York)
Bringing the taste of Maine lobster to the streets of Manhattan, The Lobster Roll Express is renowned for its mouthwatering lobster rolls. Their commitment to sourcing fresh lobster and pairing it with buttery toasted rolls has made them a popular seafood destination.
The Lobster Roll Express on Instagram
Nomad Donuts (San Diego, California)
Nomad Donuts has gained a reputation for its exceptional and creative approach to crafting donuts. They are known for their unique and innovative flavors. While they offer classic favorites like glazed and chocolate-covered donuts, their menu also features unconventional and exotic creations. The ever-rotating menu ensures that customers are continually treated to new and exciting flavors.
