Food Trucks 101: How to Start a Mobile Food Business

The food truck phenomenon is still booming especially in Los Angeles with many entrepreneurs and now, brick–and–mortar restaurants following the trend similar to meals on wheels. Credits: BlogHungry

By Rich Mintzer | Entrepreneur

A new generation of street food lovers are lining up at food trucks and food carts. Though the idea is a long-standing part of American and world culture, the street food industry has never enjoyed so much popularity or publicity.

Chefs can open up shop for much less than a restaurant, and develop simple menus that focus on particular cuisines or ingredients. Fans can follow their favorite trucks on Twitter and sample an assortment of dishes at large gatherings of trucks. Even the Food Network has leapt on the trend with The Great Food Truck Race, which features gourmand trucks like Roxy’s Grilled Cheese; Seabirds (vegan cuisine); Spencer on the Go (authentic French foods like escargot); and the season one winner, Grill ‘Em All, a heavy-metal themed truck from Los Angeles that serves gourmet hamburgers.

The food truck phenomenon is still booming especially in Los Angeles with many entrepreneurs and now, brick–and–mortar restaurants following the trend similar to meals on wheels. Credits: BlogHungry

The industry is booming with approximately 3 million food trucks in the U.S., more than 5 million food carts, and an unknown number of kiosks, which have appeared in malls, train and bus stations, airports, stadiums, conference centers and other locations in recent years.

Food industry observers claim that the increase in food truck business is largely in response to the slow-growing economy. People are seeking inexpensive breakfasts and lunches. Also, more employees are often pressed for time, with more work and shorter lunch hours. With new gourmet trucks, foodies can also sample unique dishes for less than a restaurant meal.

From an entrepreneurial standpoint, mobile food businesses have a lower overhead and require fewer employees than restaurantsand can be easily moved if one location does not generate enough business.

Here’s a quick rundown of nuts and bolts of the food-truck business, including the basics for getting started.

Going Mobile: Your Options
Even before you decide what foods to sell, you’ll want to consider how you want to sell them. There are several options, including the ubiquitous food truck; food kiosks (small, temporary food stands in malls, stadiums, airports and other locations); food carts that sell pre-prepared or easy-to-prepare food like hot dogs and ice cream; and catering trucks. A new option is “bustaurants,” refurbished double-decker buses where patrons dine on the second level.

A decision on how to sell your foods will depend on:

  • Your startup budget and potential for returns
  • Your commitment to the business: part or full time
  • Your creative ideas and what it will take to fulfill them
  • The type of food you wish to prepare
  • Your experience at running a business
  • The size of the business you want to start
  • Your ideal demographic

Typical Customers
There are several demographic groups that can provide potential customers. Who you focus on influences your menu, locations, and daily schedule of food preparation. You might focus on the breakfast or lunch crowd at office parks, where quick service is crucial. Other options are tourists, who might want to experience your home-town favorites, or event attendees who want a bite to eat between innings or before the headlining band goes on. Still another option is late-nighters, those hungry club-goers craving the types of gluttonous, greasy snacks best consumed after midnight.

Startup Costs
There’s no set formula for determining how much it costs to start a mobile food business. The field is broad, and there are too many possibilities.

You might spend $3,000 on a food cart, $500 on your initial food bill, $400 on permits and registrations, $200 on marketing, $300 on an attorney, and $300 for the first month to park and clean the cart. Tack on $300 in other miscellaneous costs, and you’re off and running for $5,000.

On the other hand, you could spend $60,000 on a retrofitted food truck, and miscellaneous amounts on initial ingredients, permits and licenses, commercial kitchen rental, kitchen supplies, parking and truck maintenance, marketing and promotion, and packaging. It could cost as much as $75,000.

But, compared to a restaurant, $75,000 is not bad for starting a business. The point is that startup costs can vary greatly. You need to do the math on your plans before spending any money so you do not run out before you get started.

A Day in the Life
Most mobile food business owners follow a routine, whether they run their own mobile unit or have employees run it. The routine may include very early morning food shopping a few days a week, if not every day. Then there is food prep, possibly at a commercial kitchen location, and then stocking the kiosk or vehicle and heading to your destination. There is also a need to take some time during the day for marketing, usually via Twitter or other social media. At the end of the day, it’s time to clean up.

Most mobile food vendors work about 10 hours a day. Then there are office tasks: paying taxes and bills, renewing licenses, and handling other paperwork responsibilities. The work generally is tiring and the days can be long.

Do You Have What It Takes?
To earn money in mobile food service means being hungry. It means moving fast before too many players get into the game and your city limits its licenses. It means having menu items your competitors don’t have (or at least making your own unique versions of popular favorites), and finding locations that aren’t already teeming with competitors.

Mobile lunch trucks have long been based on the simple concept of bringing quality food to people in areas where there are not many other food choices. Now it is also about bringing cost-friendly options to places where there are other food choices. Faster service and lower prices allow you to compete with brick-and-mortar eateries. To succeed, you need to serve good, in some areas perhaps even unique, food and maintain the highest levels of cleanliness.