The street food industry experienced 7.5% growth, on average, for each year between 2015 and 2020, with an overall valuation of more than a billion dollars in the US alone. It's time to find out how to start a business that makes mouths water! The first step is writing that business plan!
For those with aspirations of culinary greatness, a food truck is the perfect setting to develop new recipes while building a fan base, or even an online business, without the expense and risk of opening a brick-and-mortar restaurant. There is even a street food chef in Singapore with a Michelin star, proving that you don’t need a giant kitchen and 50 sous chefs to build a reputation for quality, innovation, and deliciousness.
With the increasing popularity of food trucks, it’s essential to prep your operation before you start prepping your mise en place. A solid food truck business plan puts you at the front of the grid when the race begins.
How to write a food truck business plan
Starting a street food business is subject to the same challenges and pitfalls as any other startup operation. But there are special considerations for food trucks to address before you open the window to start slinging sandwiches (or tacos, or barbeque, or …)
You may want to open up our handy business plan template so you can take notes, or jot down your brilliant ideas as they come to you. We also talked to seasoned food truck operators Natalie Basile and Mikey Wheeler-Johnson of Eats Amoré Mobile Italian Cuisine, who share their knowledge and experience throughout this guide.
From the executive summary to the financial details, we’ll show you how to build a food truck business plan for savory success.
1. Set aside a page for your executive summary
Even though this is the first section in your business plan, it’s the last section you should write. Your executive summary captures all the highlights from the rest of your business plan, so get those sorted out first.
When it’s time to write this section, think about your audience. If you’re writing a business plan for yourself as a way to stay organized, motivated, and focused on your goals, this summary can be quick and dirty.
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Don’t worry too much about style or flair—instead stick to the most important elements of your business plan. You might even use bullet points to create a checklist of the major tasks that you’ll need to complete before you can start dishing out Korean fried chicken.
If your business plan is meant to secure a loan from a bank, your executive summary will need to focus on profit, reliability, and the fact that you know what you’re doing—so your food truck feels like a safe bet.
While it’s important to mention what makes your food service model unique, spend plenty of time showing that you also understand the realities of running a small business.
2. Write an overview of your company
This section is your opportunity to explain what is going to make your vehicular vittles different and more successful than every other food truck on the road.
As part of this section you’ll need to tell your audience what makes you capable of running a profitable food business. Do you have professional cooking experience? Have you managed a commercial pantry before? Do you have an existing reputation for creating delectable meals? Banks might invest in you based on the strength of your idea, but experience will improve your chances.
At Eats Amoré, even though neither Mikey nor Natalie has professional cooking experience, they do have a proud family history of producing delicious food. “Natalie learned to cook from her grandmother, who’s from Naples, Italy. And then her mom is an organic farmer, so she learned traditional recipes with fresh ingredients, which is the backbone of Italian cooking.”
In addition to your own position in your food truck business, this section is the place where you’ll outline the types of employees you have or will need to hire. Food trucks are small, so chances are you won’t need a lot of staff out on the road, but you could consider hiring prep staff, cleaners, etc.
The company overview is also the best place to set some goals. As a short-term goal, most food truck owners (and restaurateurs for that matter) aim to pay off the bulk of their startup costs (licensing fees, insurance, supplies, food, website, branding, etc.) within the first year, though this will depend heavily on your anticipated margins.
Other short-term goals may include building a social media following, finding predictable parking spots to encourage repeat traffic, or securing a spot at a big event.
Your largest capital investment is, of course, the truck itself. Although food trucks cost a lot less to set up compared to brick-and-mortar locations, they can still set you back between $50,000 and $175,000, depending on what kind of food you’ll make and the equipment required to do it. Paying off your food truck is likely to be your major long-term goal, which you can fulfil with your own funding or Shopify Capital.
3. Conduct a market analysis
A huge factor in setting your business up for success is understanding the market where you will operate.
Since food trucks are mobile, you’ll enjoy some flexibility compared to a restaurant, but many cities still restrict where, when, and how you can serve your customers as part of the license that allows you to operate (which costs an average of $1,800).
If your ideal customers live and work in an area or at a time when you can’t sell to them, you could be in for some difficulty. For example, if you were to open a food truck in Vancouver, you would find that restrictions include:
- Not operating during nighttime hours
- Avoiding certain neighborhoods
- Staying 100 meters away from brick-and-mortar restaurants
- Staying outside park boundaries
- And plenty more
In some cases, you may find that food trucks have not yet been considered in city regulations, and you may have to blaze a trail for your business, like Mikey and Natalie did. “We had very limited locations that we could pick from. The zoning in Kamloops was absolutely terrible. We were not looked very favorably upon. So after many council meetings and lots of emails with counselors and going back and forth, we finally got the city to give us a pilot project location in the downtown core.”
Every city has different restrictions that affect food truck owners, so be sure to consult the city hall website in your area. And start early—licensing can take time, especially in locations with high demand.
Beyond the restrictions imposed by municipalities, each city is subject to conditions that could help or hinder your business. If you’re planning an ice cream truck for Edmonton, you might only have the warm, sunny weather you need for four months of the year, severely limiting profits. Conversely, the same ice cream truck in San Diego, with 266 days of sunshine on average, might be a sensation with lines around the block.
You should also take into account population in your city, demographics, foot traffic in your preferred neighborhoods, and the number of events that host food trucks, in order to establish an estimate of how many days per year you are likely able to operate.
Lastly, consider competition. Are there already a lot of food trucks in your city or in the area where you would prefer to park? Is there a robust restaurant scene driven by owners who don’t want food trucks diverting their customers? Too much competition and you might have trouble finding customers or a place to park. Too little and you may find that there is a reason no one is running a food truck.
4. Lay out your products and/or services
This section is your opportunity to outline your creative food vision, so keep in mind that there are some limitations and considerations when it comes to the meals coming out of your truck.
- Food should be easy to eat in a variety of settings, such as on a bench, standing on the sidewalk, or at a crowded concert, without spilling down the front of a CEO’s Brooks Brothers shirt.
- Keep it simple: while you may be able to make complex individual dishes, trying to offer a broad, complicated menu with limited space, staff, equipment, and storage could prove to be difficult or impossible.
- A long menu can be intimidating or time consuming for those trying to order quickly during their lunch break.
- Try to fill a niche in your city. If there are already a lot of pizza trucks but no Thai food, make som tam instead of a margherita pie. Or, for example, if you live somewhere with plenty of trucks making mediocre burgers, your ultra-high-quality version might corner the market. You can also differentiate your offerings based on cost.
Go out and study the existing food truck scene in your area to get an idea of what might work. “We made a point to go to Vancouver to talk to as many owners as we could. What are your hardships? What’s going on? But then we also went to Seattle and Portland and a lot of those trucks gave us a lot of advice,” says Natalie.
This section is a good place to consider additional revenue streams such as online sales of things like bottled sauces, spice packs, baked goods, etc. Selling online can be a lifesaver during quiet winter months, when festivals aren’t happening, or even during a global pandemic.
Eats Amoré has found that online sales and catering bookings via its Shopify website are becoming increasingly important to its bottom line. “It’s to the point where we have to turn it on and turn it off because it’s so busy,” says Mikey.
We came up with this idea called the Ravioli Club, which is essentially a membership that you buy from our online store, and you get three mystery deliveries of ravioli delivered to your house every two weeks.
Mikey wasn’t always an ecommerce expert: “I was very green in learning how to do all the online sales, and I’m still learning a lot,” he says.
"And even with the small increments of learning that I’ve done, sales are going up exponentially. Not only has it boosted our sales, but it decreased the amount of time that I have to spend doing back and forth work with people. Because once you have all your information laid out on the website, you get a lot less tire kickers and you get a lot more people that call you and want to hire you [for catering]."
5. Create customer personas
This area of your food truck business plan is where you’ll outline your ideal customer. Where do they live? How old are they? What kind of foods do they like? How much disposable income do they have? You’ll need to do some serious demographic research to fill in this section, since every city and neighborhood is different. Then use it to inform your menu and pricing.
If you plan to set up outside rock concerts and baseball parks, caviar and foie gras could be hard to sell, while home-cooked barbeque might not do well on the street in front of your local opera house. Ask questions to determine what your potential customers want.
6. Put together a marketing plan
You can make as much delicious food as you want, but if no one knows about it, you’re going to have a hard time making a profit. Your marketing plan is essential to the success of your business and this section is where you’ll outline it for yourself or your loan officer.
Branding and communications
Start by detailing where you’ll park and what your truck will look like, since these are the two biggest factors in attracting walk-by customers. Next, show how you’ll raise the profile of your business beyond passersby using traditional marketing techniques and, especially, social media.
Sugar + Spoon in Seattle has done an amazing job of coordinating the look and feel of its food, trucks, website, and excellent Instagram account to reinforce its brand recognition wherever customers may encounter it.
If you intend to park in different locations on different days, having dedicated followers on Instagram, Twitter, and/or Facebook is a great way to let people know where they can find you. Social media is also the perfect place to update your followers on new menu items. Remember to take great photos of your food for maximum impact.
Your marketing plan should also account for what makes your offerings different from everyone else on the road. In the Products and Services section, we discussed how your menu should fill a niche, whether it is the type of cuisine, quality, or cost. In this section, you’ll need to provide details on how you plan to communicate those differentiators to your customers.
For example, Eats Amoré publicly refers to its cuisine using the acronym S.S.O.L (seasonal, sustainable, organic, local), which sets it apart from other food trucks that may be serving Italian dishes without the care, ingredients, or legacy that go into everything Mikey and Natalie cook.
Natalie finds that “people are so liberal with mac and cheese. … There’s other trucks that put mac and cheese on a hot dog or they put mac and cheese on a grilled cheese.” Not particularly authentic.
Mikey agrees: “I think there’s so much room in the culinary world for creativity that if you are not being creative and you’re just trying to mimic someone else, customers will see that. Would you want some Italian food from the Italian truck or the one that kind of looks like a burger or hot dog truck?”
Speaking of technology, this is a good time to explore the possibility of having your customers interact with you via smartphones and computers.
You may want to offer online ordering with delivery or pickup, which can be accomplished using third-party services like DoorDash, Skip the Dishes, Uber Eats, or any number of apps preferred in different markets around the world—be sure to find out which app most restaurants and delivery services use in your area.
Not having to wait in line could be a boon for hungry, busy office workers and increase the amount of business you’re able to do in a day.
A less obvious facet of your marketing plan is your start date. If you plan on opening right when the good weather hits, you’re likely to be too busy to spend a lot of time building a brand identity and online presence, though your cash flow will probably be in good shape.
Conversely, opening during a slower time of year may result in fewer sales but will allow you to get organized and accustomed to the pace of running a food truck. If you live somewhere with proper winter weather, you may want to consider taking some time off through the darker months.
“A huge mistake that we had in our first year’s business plan was that we were going to work through the winter,” says Mikey. “But what I forgot was that the people in Kamloops are very fair weathered. They’re used to nice weather. So a little bit of cold and they’re like, No, we're out of here. It wasn't until last winter that we actually did become a year-round business when we opened our Shopify account."
7. Create a logistics and operations plan
This section is where you’ll need to dig into the nitty-gritty, day-to-day operations of your food truck.
You need ingredients in order to sell food. But where will you get them? Let’s look at your options.
Pros: Reliable and cost effective.
Cons: Large volume-packaged products could be hard to store on your truck.
Pros: Convenience—shop whenever you want.
Cons: Prices may be higher than restaurant wholesalers.
Example: Trader Joe’s, local greengrocers, specialty markets
Pros: The greatest variety of ingredients, including local, organic, and specialty items. Smaller package sizes.
Cons: High prices.
Many food truck operators use a combination of suppliers to achieve their goals, so look at what is available in your area that fits into your menu and budget. Also consider your menu: if you have a fixed set of meal offerings, will you be able to reliably get the same ingredients throughout the year? If your menu rotates frequently, will you have time to source new ingredients on a regular basis?
Mikey has found that the sources of their organic and local ingredients are part of the appeal of their truck.
It is a slightly more expensive route to go because locally grown food is better. But our menu changes all the time. It’s seasonally rotating. And I think that creates a bit of a supply and demand thing too, where if you want that [ingredient] and it’s in season, get it now because it won’t be here in two weeks.
Your truck is your facility. So think carefully about what kind of vehicle you decide to buy.
Mikey says, “We got this HandyDART bus for a steal, and we spent the beginning of 2013 turning it into a food truck. We learned so much. It’s a fiberglass vehicle, which wasn’t ideal compared to a big stainless truck. But we made it work.” Retrofitting a vehicle that isn’t perfect may be an option considering your budget and skill set, or you may want to purchase a vehicle that was purpose-built to be a food truck.
But your facility requirements may be substantially more than just putting four wheels on the road. This is the place to outline the physical equipment and maintenance requirements for your business, such as:
- Specialized cooking equipment
- Fuel (cooking and engine)
Many cities also dictate that some aspects of food preparation, such as chopping vegetables, making soups, baking bread, or preparing other ingredients, be done in an off-site commissary kitchen outside of sales hours, rather than in the food truck or in your home. This is to ensure food safety, and you’ll need to factor the cost and logistics into your plan.
It’s also a good idea to determine if you can store additional ingredients at your commissary kitchen location.
How long does it take to make an item from your menu, on average? This is a major consideration that could limit how many customers you can serve in a day. And unlike brick-and-mortar restaurants that can bring on more staff during busy periods, a food truck is likely limited to just a few people, no matter how many hungry folks are waiting.
How do you intend to cope with changes in pace and demand over the course of a day, week, month, or year? Mikey notes, “I go home and do dishes for two hours. It's far more labor intensive than people realize.” So don’t forget to factor in how much work you can realistically do yourself.
If you plan on offering products for sale online, you’ll need to sort out a plan to ship them to customers. Fortunately, shipping can be accomplished quite easily at reasonable prices.
8. Write out your financial plan
Like most businesses, yours will likely live or die on the strength of your financial plan. You have to know how much money is coming in, how much is going out, and how those numbers are likely to change in the future. So be sure to dig deep into your prospective balance sheet to truly understand how profits and costs will affect your operation.
Fortunately for you, startup costs on a food truck are a lot less than a brick-and-mortar restaurant, so your break-even point could come a lot sooner. That said, your profits could be limited by the food truck model.
Many municipalities don’t allow food trucks to serve alcohol; traditional restaurants tend to assume a 30% profit from alcohol sales, which you probably won’t be able to access. Instead, food trucks can expect to average about 8% profit, which means they are a volume business. You’ll need to work fast to serve a lot of customers in order to earn a profit.
In addition, certain cuisines, like burgers, have a perceived upper price limit in the minds of consumers. Regardless of how much it costs to make, it could be tough to get people to shell out $25 for a food truck hamburger, depending on where you set up shop—menu pricing is critical to your financial plan.
You’ll also need to outline your cash flow scenario. Since food trucks can’t store a lot of inventory (ingredients and supplies), you’ll need to sell and restock more frequently than a brick-and-mortar restaurant.
This section is also the place to factor in other costs, such as licensing, maintenance, and staff wages, if you have employees. And if you don’t plan on hiring help, remember that you probably can’t work 16 hours a day, seven days a week, which will limit your profits too.
Now write that business plan
Now that you’ve had a chance to think about how your food truck dreams will shape your food truck business plan, it’s time to actually sit down and write it.