By Geoff Williams | Forbes
It used to be that if you were starting out in the restaurant industry, you daydreamed of opening up your own restaurant, or maybe a bar.
Now, more than likely, you’re envisioning the day you finally open your first food truck.
The food truck phenomenon has been growing for awhile now. According to Mobile-Cuisine.com, an online resource for the food truck industry, in 2015, annual food truck revenue hit $1.2 billion, with the industry expanding 12 percent over the last five years.
In recent years, some food trucks have become so successful that they’re opening uptheir own brick and mortar restaurants, while brick and mortar restaurants are starting their own food trucks, so that everyone’s getting the best of both worlds.
And, as you’ve likely noticed, in popular culture, food trucks have popped up as settings and plot points in sitcoms (Happy Endings), dramas (Switched at Birth), reality TV series (The Great Food Truck Race) and movies (Chef).
So if you’re wondering what it takes to run a food truck, you would do well to ask Ross Resnick for his advice. Resnick is the CEO of Roaming Hunger, a company that specializes in helping the public book food truck catering events. They also have a food truck and food cart app that can connect people with 6,000 food trucks and carts across the country. Resnick is something of a living and breathing food truck encyclopedia. So if you’re thinking about one day owning a food truck, or a fleet of them, here are hopefully some of the answers to some of your questions.
The cost of entry. One factor that makes a food truck business attractive is the cost, that it’ll be cheaper to run than a restaurant. But it still isn’t really cheap.
“Starting a food truck business could start as low as $30k but could go up to $300k-plus based on how you want to launch,” says Resnick, whose website also sells used food trucks. “At the low end, leasing a truck may require less money up front than building a custom truck but could cost way more in the long run.”
The average cost of a food truck, according to Mobile-Cuisine.com, is $85,000. And, of course, that doesn’t factor in the cost of buying food, hiring staff, getting permits to run a food truck and on and on.
Advantages that a food truck has over a restaurant. You know the old saying — location, location, location. Probably the best advantage, aside from often being less expensive to run, is the where the food truck sits, Resnick says.
“If a restaurant was not built in the right location, it will probably go out of business whereas a food truck can just drive somewhere else,” he says.
It’s also a fun way to work, if you’re a people person. “I think most successful operators will tell you that they love the human aspect of the business,” Resnick says. “Owners and chefs get to directly engage with their customer and see their faces when they take that first bite and watch them smile in enjoyment.”
Disadvantages. The location can also be a disadvantage. After all, think of your favorite restaurants. You know exactly where they’ll be, at all times. Unless your favorite restaurant closes for good, you probably never have to constantly wonder if, say, your beloved pizza parlor may be in another part of your city or town. So while your customers might be looking out for you and eagerly anticipating your arrival, they may not be able to drop by any time.
But, sure, that’s a built-in problem with food trucks and is probably more of a frustration for the customer and not you. But you will have your own issues with locations. At least until you have a groove and know the best times to be in the best places, you’re always going to be thinking about where you should locate your food truck, Resnick says.
“Operating a food truck is very much like operating a full restaurant, except you have to figure out a new location for the restaurant every single day and in some instances, multiple times per day,” Resnick says, adding that there’s another occasional quirk about food trucks: You could have mechanical issues.
Another oddity: You’d better have your kitchen packed up tight before you go driving around the city. Resnick points out that when you’re mobile, so is your kitchen. You don’t want food or cutlery flying around while you’re making a sharp turn.
Mistakes that new food truck owners make. Yeah, food trucks are cool, and you may have some awesome food, but you still might flop, or be the kind of overnight success that takes years and years.
Resnick says that generally owners make the mistake of thinking that the money will come simply because you have a food truck.
“The single biggest thing we see are food truck operators who don’t understand the revenue drivers of the business and think that they can rely on street service alone,” Resnick says. “Just because you open a food truck does not mean hordes of foodies will be flocking to line up at it. Private catering, corporate events, team lunches, food truck lots, weddings and large public events are where we see operators most financially successful— with a sprinkling of street service in proven locations. It’s difficult to properly forecast revenue based on the street unless you’ve been operating for a long time and then, through trial and error, you can really understand what locations make the most sense for your business.”
So, yeah, you could invest a ton of money and time and still not have things work out. As Resnick says, “In food trucks… there is also no such thing as a free lunch.”