Just about anything around us has a smaller and more mobile counterpart – desktop PCs have laptops; traditional and wired phones have smartphones; 7.1 surround sound speakers have 3D headsets…the list goes on and on.
In that sense, the arrival of food trucks is to be expected. What people weren’t expecting is the loud “BOOM” that the industry created…and I’m not talking about a propane tank that blew up.
Let me take you through a tour within the world of food trucks!
Market Statistics And Recent Analysis
Showcasing an amazing fusion of local feel; authentic and fresh food; topped with a convenient dining experience, it’s of little wonder why food trucks are all the rage nowadays.
And for folks who want to jump in the bandwagon, I’ve got some good news for you: food trucks are more of a stable trend than a fad. Market statistics and recent analysis indicate that these restaurants-on-wheels are here to stay.
Thanks to the industry’s fan-based approach; unique food offerings; better mobility; and other competitive advantages, these colorful food trucks can and will stay toe to toe against established traditional restaurants, fast foods, and take-out food vendors.
Matter of fact, Huffington Post released a photo gallery which revealed BIG corporations and well-known celebrities riding the food truck wave. Taco Bell, Red Robin, and even Nabisco and Dunkin Donut endorser Rachel Ray have their own food trucks!
The Graveyard Of Food Trucks?
You can find just about anything on eBay…including used food trucks from business owners who didn’t make the cut. And there’s so many of them that eBay has been dubbed as the “graveyard of food trucks”. This led Huffington Post to conclude that, at the very least, it’s a challenging business model.
No doubt, it is!
After all, you need to have a unique concept to enter the market; be as hands-on as possible; come up with clever ways to keep the customers coming back; keep up with the ever-changing state and health department regulations; and we’re not even talking about the increasing competition!
Having said that, the idea that food trucks are nothing but a fad that reached its peaked and about to fizzle is just silly according to Gary Koppelman, a restaurant consultant from Philadelphia who maintains the “Mobile Food News” website.
The findings of IBISWorld, a popular research firm, seem to nod in agreement. According to the firm, food trucks and mobile restaurants experienced an 8.4% growth in size from 2007 to 2012, which now comprise a $1B-industry.
A Financial And Tax Software Co. Looks Through The Crystal Ball
Intuit, a globally recognized financial and tax software company, took note of the food truck industry’s steady and rapid growth. Eager to assess the industry’s current and future trends as well as its impact on the overall economy, they teamed up with Emergent Research who interviewed 272 food truck customers and 27 owners and managers within San Francisco from May to August 2012.
According to Intuit’s research report “Food Trucks Motor Into The Mainstream,” food trucks will continue to enjoy the profitable trend it experienced from 2007 to 2012. Matter of fact, they predicted that the industry will generate about $2.7B in revenue by 2017, which is a massive 400% increase from the National Restaurant Association’s 2012 revenue estimate of $650M.
But that’s NOT all! The research also pinpointed the major factor that led to the favorable forecast.
Customer Experience – Food Trucks’ Secret Weapon
Intuit’s study and survey results showed that the hassle-free and accommodating customer experience provided by these restaurants on the go is the key to the industry’s increasing revenue.
When asked about the quality of food trucks and their offerings, 43% of the interviewees gave an excellent rating and 48% gave a good rating. Over 80% of the interviewees described food trucks using words like:
…when asked why they choose to dine at one.
Combined with the speed of service and the convenience food trucks provide, the diners don’t mind playing a little extra…spending $9.80 for lunch and $14.99 for dinner on average. And to top it off like icing on a cake, almost all of the interviewed customers assert that they will continue supporting and dining at these mobile restaurants.
Skills A Budding Food Truck Owner Must Have
The statistics, market analysts, and industry experts have spoken: The food trucks will keep on roaming the city streets and the industry will soon generate billions of dollars in revenue.
BUT before you get giddy and take all of your life-savings to start a food truck business, realize that it’s not exactly a bed of roses. We only have to go back to eBay.com to see how many people dreamed about making it BIG in the industry…BUT failed.
Running a mobile restaurant requires the same skills necessary to keep a brick-and-mortar business flourishing. Let’s take a look at some of them:
Good Money Management
It doesn’t matter what business or market you’re in – properly and efficiently managing your money is a MUST.
Good money management allows you to clear the fog and truly see where your money is going; which expenses can be reduced; which aspect of your business requires more of your funds. In simpler terms, it allows you to manage your business better!
At the very least, you should have report weekly or monthly on how much is spent on the following expenses:
– Food and gas
– Routine maintenance tasks and repairs
– Employee salary
– Monthly fees (especially if you’re renting a truck)
Now, a financial report is nothing but a bunch of nicely arranged figures on a spreadsheet unless you decide to do something with it. Here are some steps you can take to get the most out of it:
Know Your Goals: A business without any clear-cut objective is bound to fail! If you want to own a successful food truck biz, you should set goals and work towards achieving them.
Perhaps you want to cut your Customer Acquisition Cost (CAC) by 50%? Maybe you want to add a cool service that will set you apart from the competition? For others, raising the capital for a brick-and-mortar business is their long-term goal.
Whatever your business goals are, you should sit down; write them on a piece of paper; place them somewhere you can easily see; and work towards them! Your monthly/weekly report will help you keep track of your progress.
Separate The “Needs” From “Wants”: Even the most profitable food truck business will fall flat on its face if the revenue it creates is spent recklessly. But when you’re flipping steaks; serving customers from left, right, and center; and with so much stuff on your plate, it’s hard to focus which stuff you really need and which ones you just want.
That’s why you need a regular financial report. You can use it to have a close and objective look at your spending at the end of the week or month…allowing you to make necessary adjustments.
When looking at your list of expenses, ask yourself:
– Which of the items should be prioritized?
– Which expenses can be reduced or completely eliminated?
Emergency Funds: Emergency funds become are twice as important for food truck owners. The fact that you conduct your business on the road exposes you to a lot of risks. Theft, blown head gaskets, leaking propane tanks – these are just some of the emergencies that might crop-up along the way, and all of them require immediate action.
Without backup funds, a single accident could send your business crashing down. At the very least, you should have 6 to 12 months’ worth of profit saved. So the next time you sit down to create your financial report, don’t forget to include emergency funds in the list of expenses.
Customer Service And Experience
Your customer-base is your food truck’s life-blood. You can have the best-looking van; the best chefs in the area; or best-tasting dishes in the city. BUT if you can’t keep your customers satisfied, who’s going to buy from you!?
Statistics show that a happy customer could translate to 5 new customers while a disgruntled diner could mean losing 10 more. Yes, word of mouth can be a powerful promotion tool or a bane to your food truck business…and it all depends on how you handle your customers.
Don’t get me wrong – it’s impossible to please all comers. At one point or another, you will encounter that difficult customer that you simply cannot please no matter what. However, there are a few things you can do to keep your diners happy and involved:
– Listen to positive and negative feedback regardless of the medium (social media, email, face-to-face, etc.)
– Always be on time (deliveries, serving food, showing up on events, etc.)
– Keep your customers in the loop especially regarding your locations and specials. It only takes a minute or two to tweet your next stop. There’s simply no excuse for not doing this!
– It’s amazing how much a sincere smile can do. Use it!
– Keep your clients involved! Talk to them through Twitter or Facebook – run a poll for your next truck design; ask them what they want to see on the menu next week; or crowdsource new recipes. It will make them feel like a part of your business, which can only be good!
Good Time Management
“Winging it” isn’t a very good business strategy. It’s very easy to day-dream, procrastinate, and miss important tasks without a thorough list to remind you of what to do. It’s highly recommended that you plan your tasks weekly and create a daily to-do list. Here are some examples of tasks you need to include in your list:
– Delivery pick-ups
– Food preparation
– Routine safety and maintenance checks
– Checking emails and reading customer feedback
– And more
Oh! And don’t forget to write down how much time you intend to allocate for each task. If you want to take your productivity to the next level, consider learning a time management program like Francesco Cirillo’s “Pomodoro” technique or David Allen’s “Get Things Done” method.
Food Truck Tips And Success Stories To Inspire You
This article (which is already lengthy as it is) won’t be complete without the following food truck start-up tips and success stories from people who’re once like you. Be inspired!
Don’t Be A Copycat. Specialize!
It’s very easy to tread the same road that other food truck owners have taken. They’ve tested the market; they’ve proven that it’s profitable; and all you have to do is follow them…or should you?
BACONMANia’s chef and co-owner Jay Di Eugenio took the road less taken. Instead of offering the same dishes that other food truck owners serve, he decided to specialize and created a menu with bacon all over it (hence the name). From classics like BLT to weird-but-tasty bacon-wrapped brownies with whipped cream, BACONMANia’s menu has it all.
Now enjoying a huge, devoted, and bacon-loving customer base, it’s clear that Jay and the rest of the guys at BACONMANia know who their customers are and what exactly they want.
With people raving about how profitable the food truck industry is, it’s very easy to be carried away and charge ahead at full throttle.
STOP! While starting and running a food truck business is not as expensive as a fine-dining restaurant, your day-to-day expenditures can still get hefty. You need to pay for permits and parking; buy propane tanks, gas, and ingredients; shell out top dollar for cooking equipment, and that’s just to name a few!
The duo of Nicolette Mall and Lisa Carlson knew better and started modestly even if they have 20 years of fine dining experience under their belts.
Instead of diving head first, they started with a farmer’s market table in central Minneapolis. After only a year of profitable and successful operations, they’ve built up a financial safety net…they’re ready to buy a brand-new food truck.
Five years after they launched Chef Shack, both Mall and Carlson are 100% free from debts. And to make it even sweeter, their food truck business generates enough revenue within 6 months to let them spend the other half of the year traveling around the globe!
Follow Your Customers
What’s that one thing that food trucks have which stationary restaurants and vendors don’t? The answer: They’ve got wheels, which can take them where their customers are. Yes, those two pairs of tires aren’t just for show!
Let’s take LA-based Frysmith as an example. While their menu is very creative (French fries topped with shawarma steak, kimchi, etc.), they understand that the competition will eat them alive if they don’t adjust. After all, Los Angeles is home to many gourmet food trucks.
Instead of waiting for customers to come to them, the owner Erik Cho and the rest of Frysmith got in touch with bloggers and local media to spread the word about their business. They kept their fans and customers always updated with regular Twitter tweets and FB updates.
However, the most important step they took is to be as available as possible. They went to as many concerts, events, and festivals as humanly possible. Fast forward today, their gourmet snacks are sought after across the city. And with tons of email requests to show up at events, their previous efforts undoubtedly paid off.