By Danielle Bowling | Hospitality Magazine
There’s no denying we love our food trucks and Sydney council’s trial of the concept is dispensing some high quality eats for the city’s hungry hordes. But there’s more to operating a mobile food business than meets the eye. Ken Burgin explores some of the management issues.
ICE-CREAM and coffee vans have been around in Australia for decades, and at every street festival there’s a well-organised kebab seller – maybe even one for dagwood dogs! But recently the food truck industry has hit the headlines.
The image is appealing – a life on the road, hungry crowds and all that cash money. But creating a long-term success will be more challenging: every year has fast and slow seasons, hot and cold, sunshine and rain. Are you just swapping a landlord for the parking police?
On the positive side, startup costs for a brick and mortar restaurant range between $100,000 and $5,000,000. Food truck owners quote far lower expenses – a second-hand van with renovations may get you going. Starting is simpler – licensing, staff, equipment and a concept. Once you’re underway, the daily workload is usually simple and predictable.
Mobility allows you to target public events, gatherings and the best locations. Your truck could cover a soccer game in the morning, an outdoor concert in the afternoon, and then head to a busy nightspot to close the evening. Social media is an inexpensive tool for keeping potential customers updated on your travel schedule – much of it can be pushed out from your mobile phone. These are quick-start businesses ideal for quick-start people, and the glamour factor has the media and even local government smiling on these ‘urban food pioneers’.
Sounds good so far, but there are many potential problems – it’s not as simple as finding a used truck with a fridge and a flattop grill. Health and hygiene regulations grow more onerous every year, and food trucks won’t be given a free pass. They get the same regulatory oversight as traditional restaurants. Inspections will be easy to conduct and hygienic issues fairly obvious to customers.
Maintenance challenges
Keeping vehicles clean and washed down will be a challenge without the ready supply of hot water that restaurants enjoy. Food service requires massive amounts of water, but in your truck you will be measuring it carefully. Designing for hygiene will be of major importance – and stainless steel is not cheap.
Initial startup costs are appealing, but after acquiring a truck, food, employees and insurance, you’ll still need a sales permit. Make sure you watch out for council regulations. Is there a cap on active permits in your area, and has that figure already been met?
Competition can be fierce, and nothing will stop competitors from swooping in and stealing your spot after seeing its value. There will always be parking regulations, and tickets can pile up.
Business dampeners
Weather influences daily trade in any restaurant, but even mild inconveniences like a light rain can drive away mobile food customers so be prepared for bad weather and its effect on your cash flow. You may also have truck problems – taking this on means you now have the joy of maintaining a motor vehicle. Plus security is an issue – lots of cash in a small van late at night.
And relationships with local restaurants may become strained. Some areas designate locations for food trucks that are a certain distance from the nearest restaurant or food outlet – but is it good for your trade? Adequate power supply and backup must always be available, as a simple malfunction could destroy the earning potential of the day and also put your valuable perishable stock in jeopardy. Generators need fuel, and can be expensive to run.
The nature of a mobile business requires a much larger focus on promotion and keeping customers aware of your current travel plans. You’ll need to develop awareness for every single location you frequent and be actively using Facebook and Twitter, You need to love these mediums, as they’re the lifeline to your customers. Tweeting while you cook and wipe the grease off your phone? Are you ready for that?
Also think about your height, and that of your staff. If you’re tall, a van will not be an easy space to work. This may also limit who you can recruit.
Toilets and personal supplies must be on hand or readily available – do your staff fancy a late night dash to the public toilets?
Your mobile truck may look like the place where the food is produced, but depending on local laws, you may be required to prepare the food elsewhere, in a commercial kitchen or commissary. If not, you still face the strong possibility of needing a second truck for cooking your food, or even just delivering to the main vehicle.
High volume needs plenty of storage and the extra vehicles and premises you may need will mean extra costs.
Finally, what happens when it’s time to sell? Restaurants and cafes can sell for a good price if they have a good long-term lease, good figures and they’re easy to run. You may have good profits, but the lease is as long as your vehicle registration, the work is hard and the cashflow uncertain. The pool of buyers for businesses like these is small.
There’s money to be made in these types of businesses but the glamour image needs close inspection.
Read Danielle Bowling’s feature here, where she talks to three different food truck operators about what their days involve.
http://www.hospitalitymagazine.com.au/management/food-truck-trials-and-tribulations
