How to Write a Food Truck Business Plan

Find Financing for a Food Truck

Food truck financing
A food truck business plan. Ben Kerckx via Pixabay

A business plan is an integral part of starting a food truck.  Food trucks are one of the hottest restaurant trends right now. With low start-up costs, they make a great alternative to opening your own restaurant. This doesn’t mean that food trucks are cheap or free to start. It costs anywhere between $20,000 to $100,000 or more to open a new food truck, so most entrepreneurs will need some kind of financing when starting out.

To help sell your food truck idea to investors, you’ll need a comprehensive business plan – a road map (pun totally intended) to success. A business plan outlines everything from your initial start-up budget to projected yearly sales. Business plans also include a market analysis: who’s your competition and who are your intended audience? Writing a business plan can feel al little (or a lot) like homework, but in the end it will only benefit your food truck business, offering a well mapped strategy for success.

Why a Food Truck?

Food truck concept has been around since ancient time, when street vendors in ancient Rome sold food to the public from wooden street carts. People did – and still do- appreciate the convenience factor of mobile food trucks.  Today’s food truck menus have evolved from simple street food to host of a different cuisine.  There are food trucks that specialize in cupcakes, waffles, Thai cuisine, Mexican food, Texas barbeque, seafood, vegetarian, vegan….and the list goes on.

The options for a food truck menu are endless.

Food trucks have a great appeal to millennials, who prize simplicity and low prices alongside delicious ingredients.  Unlike Baby Boomers or eve Gen Xers, who wanted quantity over quality (such as all-you-can-eat-buffets and Super-Sized fast food) Millennials are more conscious of healthier food choices and love food that has a story.

Food trucks often feature both these elements.  

Food trucks were once confined to highly urban areas in big cities or as part of a fairs and festivals circuit Places like New York, Chicago, or San Francisco actually have caps on the number of food truck licenses distributed each year, to keep from being overrun with food trucks on every corner.  Today food trucks are popping up all over the United States, including suburban and rural areas.  El Torro, a Mexican themed food truck, just opened up in the sleepy town of Weld, Maine – population summer destination for many.  Food trucks are also gaining in popularity for personal parties – instead of hiring a restaurant or caterer to provide food, parents are renting food trucks for their child’s birthday.  Brides and Grooms are featuring food trucks at their wedding receptions.  

Why You Need a Business Plan for Your Food Truck Business 

At first glance a food truck business seems pretty simple – all you need is a truck and a menu, right? Not quite. Just like any small business a food truck requires planning – what kind of food do you want to sell? How do you know your customers will like it? Who are your customers?  Opening a food truck without any planning or investigation can lead to problems.

Maybe you love specialty waffles, but once you open you realize too late that no one else in the area does.  Or maybe people like you waffles, but your prices are too high to start. Doing a market study helps you flesh out those important details and refine your concept.

Location is one of the biggest success factors for a traditional restaurant.  If people have to go out of their way to get to a restaurant – if the parking is bad – that makes it that much harder to stay in business long term. The same principle applies to food trucks. Location is a vital component of success. Again, it may seem like no biggie – I’ll just drive around and park wherever it looks busy. This pell-mell thinking won’t work. Successful food trucks have a fairly consistent schedule of where they are going to be and they communicate it through social media – loud and clear.

EXAMPLE.  Plus, not every location will allow a food truck to set up shop; public parks and school zones often prohibit commercial businesses. Ditto for downtowns with existing restaurants – they are not going to welcome new competition right outside their doors.

Creating a Food Truck Business Plan 

Once you’ve done your homework and studied the need, wants, competition and determine where and when your food truck will be open, all that information needs to be organized into a business plan for potential investors. A business plan consists of the following parts:   

Executive Summary 

Think of it as your introduction. Make it interesting, to keep your readers attention. Here are some tips for writing an executive summary geared toward a food truck business plan.

Company Description – This part of a business plan is sometimes referred to as a business analysis. It tells the reader the location, legal name and style of restaurant you want to create.

Market Analysis- This part of restaurant business plan is sometimes referred to a marketing strategy.  Who are you going to be serving? Who is the target audience for your food truck business? And who is your biggest competition? Why are customers going to choose you over them?

Marketing- What methods do you plan to use to promote your food truck? How are you going to target your core audience?  

Business Operation- Sometimes referred to as Products and Services. This is where you tell investors about your hours and how many employees you plan to hire.    

Management & Ownership- Explain who is going to do what at your food truck, including any potential employees whom you feel will be a great benefit to your business.

Once you have a rough draft, let it sit for a day or two then rea it over, making any necessary revisions and then ask for feedback from others. Most states have a small business association that offers free help to budding entrepreneurs.  They can help you refine your business flan further.  Print of your business plan and several copies ready for your initial bank interview or investors meeting.  Make it easy for them to review and be ready to answer questions or provide additional information, if needed. Show them that you have carefully thought about this business ideas and are prepared to do the hard work to make it successful.

Food trucks are one of the hottest restaurant trends right now. They run the gamut from simple street food to haute cuisine. With low overhead and operating costs, food trucks are an affordable alternative to a tradition brick-and-mortar restaurant. However, food trucks are still a small business that requires financing.  Creating a solid business plan that outlines the strategy, market, budget will help secure financing for a food truck. A business plan also acts as a road map to success, to help establish and prosper over the sometimes bumpy first year.