The street vendor sector in the United States was valued at $2.49 billion in 2022, compared to the previous year’s total of $2.29 billion. The market is expected to grow by 1.7% in 2023.
Getting Started
For those with culinary greatness ambitions, a food truck is the perfect environment to develop new recipes while building a fanbase, or even run an online business, without the costs and risks of opening a permanent restaurant.
There’s even a street food chef in Singapore with a Michelin star, proving you don’t need a huge kitchen and 50 chefs to build a reputation for quality, innovation, and deliciousness.
How to Write a Successful Food Truck Business Plan, Step by Step
Preparing a strong business plan for your food truck puts you ahead when starting the race. Here’s how to write a successful food truck business plan, step by step:
- Dedicate a page to the executive summary
- Write a company overview
- Conduct a market analysis
- Define your products and/or services
- Create customer personas
- Prepare a marketing plan
- Create a logistics and operations plan
- Write a financial plan
Starting a Mobile Food Business
Starting a mobile food business faces the same challenges and risks as any new venture. However, there are specific considerations for food trucks that need to be addressed before opening the window to sell sandwiches (or tacos, or BBQ, or …).
You might want to open our helpful business plan template so you can jot down notes or capture your brilliant ideas as they come to you. We also spoke with expert food truck operators Natalie Basil and Mikey Wheeler-Johnson from Eats Amoré Mobile Italian Cuisine, who share their knowledge and experience throughout this guide.
From the executive summary to the financial details, we will show you how to build a food truck business plan for delicious success.
1. Dedicate a Page to the Executive Summary
Although this is the first section of your business plan, it is the last section you should write. The executive summary summarizes all the highlights from the rest of your business plan, so arrange those first.
When it’s time to write this section, think of your audience. If you’re writing a business plan for yourself as a means to stay organized, motivated, and focused on your goals, this summary can be quick and simple. If your business plan aims to secure a bank loan or catch the attention of potential investors, your executive summary will need to focus on profitability, reliability, and the fact that you know what you’re doing – making your food truck seem like a safe choice.
While it’s important to mention what makes your food service model unique, spend enough time demonstrating that you also understand the realities of running a small business.
2. Writing a Company Overview
This section is your opportunity to explain what will make your food truck different and more successful than any other food truck on the road.
Experience
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 ever managed a commercial kitchen before? Do you have a previous reputation for preparing delicious meals? Lenders may invest in you based on the strength of your new business idea, but experience will enhance your chances.
At Eats Amoré, although Mikey and Natalie don’t have professional cooking experience, they have a proud family history of producing delicious food. Mikey says, “Natalie learned to cook from her grandmother, who comes from Naples, Italy. Her mother is also an organic farmer, so she learned traditional recipes using fresh ingredients, which is a cornerstone of Italian cooking.”
Staff
In addition to your role in your food truck business, this section is where you’ll specify the types of staff you have or will need to hire. Food trucks tend to be small, so you likely won’t need many staff or a management team, but you might consider hiring prep and cleaning staff, etc.
Goals
Goals are
Company overview is also the best place to set some goals. As a short-term goal, most food truck owners (and restaurant owners in general) aim to pay off a significant portion of startup costs (licensing fees, insurance, supplies, food, website, branding, etc.) during the first year, although this will largely depend on your expected margins.
The largest capital investment is, of course, the truck itself. Although food trucks cost significantly less to set up compared to brick-and-mortar locations, they can cost you anywhere from $50,000 to $175,000, depending on the type of food you will be serving and the equipment required for that.
Paying off your food truck is likely to be your primary long-term goal, which you can achieve through your own financing or capital from Shopify.
3. Conduct Market Analysis
An important factor in preparing your business for success is understanding the target market in which you will operate.
Restrictions
Because food trucks are mobile, you will enjoy some flexibility compared to restaurants, but there are still many cities that restrict where, when, and how you can serve your customers as part of the licensing that allows you to operate (which averages $1,800).
If your ideal customers live in a certain area or work at times when you cannot sell to them, you may face some challenges. For example, if you decide to open a food truck in Vancouver, you will find that restrictions include:
- Not operating during nighttime hours
- Avoiding certain neighborhoods
- Staying 100 meters away from brick-and-mortar restaurants
- Staying out of park boundaries
- And many others
In some cases, you may find that food trucks have not yet been considered in city regulations, and you may have to pave the way for your business, as Mikey and Natalie did. Mikey says: “We had very limited locations to choose from.”
Every city has different restrictions that affect food cart and truck owners, so be sure to check the website of the city hall in your area. And start early – obtaining a license can take a long time, especially in high-demand locations.
Local Conditions
In addition to restrictions imposed by municipalities, every city is subject to conditions that may help or hinder your business.
If you are planning for an ice cream truck in Edmonton, you may get the warm sunny weather you need for four months of the year, which significantly restricts profits. Conversely, that same truck in San Diego, with an average of 266 sunny days, would be the talk of the town with long lines.
You should also take into account your city’s population, population distribution, foot traffic in your preferred neighborhoods, and the number of events that host food trucks to estimate how many days you can operate in a year.
Competition
Finally, conduct a competitive analysis. How is the food truck market in your city? What do other food trucks offer? What is your competitive advantage? Is there a strong restaurant scene led by owners who do not want food trucks to take their customers?
If there is significant competition, you may have a hard time finding customers or a place to park. If there is weak competition, you may find that there is at least one reason why no one is running a new food truck.
4. Determine Products and/or Services
This section is your opportunity to define your creative vision for food, so keep in mind that there are some restrictions and considerations when it comes to the meals coming out of your truck.
Ease of Eating
The food should be easy to eat in a variety of settings, such as on a bench, standing on the sidewalk, or at a crowded party, without spilling onto someone’s shirt. Keep it simple: while you may be able to prepare individual complex dishes, trying to offer a wide and complicated menu with limited space, staff, equipment, and storage can be challenging or impossible. A long menu can be overwhelming or take too long for those trying to order quickly during a lunch break. Try to fill a gap in your city. If there are many pizza trucks but no Thai food, prepare som tam instead of a margherita pizza. Or for example, if you live in a place where there are many trucks offering average-quality burgers, your high-quality version might capture the market. You can also differentiate your offerings based on overall costs and food cost.
Go ahead.
study the current scene of food trucks in your area to get an idea of what might work.
Alternative Revenue Sources
This section is a good place to consider additional revenue sources such as online sales of items like canned sauces, spice packs, baked goods, and so on. Selling products online can be a lifeline during the quiet winter months, when festivals aren’t happening, or even during a global pandemic.
Eats Amoré found that online sales and catering bookings through their Shopify site became increasingly important to their net profits. Mikey says, “We reached a point where we had to turn it on and off because it’s so busy.”
“We came up with this idea called Ravioli Club, which is a subscription you buy from our online store, and you get three mystery ravioli deliveries sent to your home every two weeks.”
Mikey wasn’t always an e-commerce expert. He says, “I was very green in learning how to do all the online sales, and I’m still learning a lot.”
“And even with the small increments of learning that I’ve had, sales are skyrocketing. Our sales have not only increased, but it has also reduced the time I have to spend working back and forth with people. Because once you put all your information on the website, you get fewer people wandering around and you get more people calling you who want to hire you [for catering].”
5. Create Customer Personas
This part of the food truck business plan is where you’ll define your ideal customer. Where do they live? How old are they? What types of food do they like? How much disposable income do they have?
You will need to conduct some serious demographic research to fill out this section, as every city and neighborhood is different. Then, use it to highlight your menu and pricing.
If you plan to set up a food truck outside rock concerts and baseball parks, selling caviar and foie gras may be tough, while home-cooked barbecue might not do so well on the street in front of the local opera house. Ask questions to pinpoint what potential customers might want.
6. Develop a Marketing Plan
You can make a lot of delicious food, but if no one knows about it, you’ll struggle to make a profit. Your marketing strategy is essential to your business’s success, and this section is where you will outline it for yourself or your business loan officer. Differentiation and communications.
Start by determining where to park your truck and what it looks like, since these are the two biggest factors in attracting passing customers. After that, demonstrate how you will raise your business profile above foot traffic using traditional marketing techniques and especially social media.
If you plan to park in different locations on different days, having a dedicated following on Instagram, Twitter, and/or Facebook is a great way to keep people informed of where you’ll be. Social media is also the perfect place to update your followers about new menu items. Remember to capture great photos of your food for maximum impact.
The marketing and sales section for a food truck should also include what makes your offerings different from all the others on the road. In the products and services section, we talked about how to fill a gap in your city, whether it’s the type of cuisine, quality, or cost.
In this section, you will need to provide details about how you intend to communicate those distinguishing factors to your target customers.
Online Ordering
Regarding technology, this is the perfect time to explore ways to interact with your customers via smartphones and computers.
You may
You want to submit your application online with delivery or pickup service, which can be achieved using third-party services like DoorDash, Skip the Dishes, and Uber Eats, or any number of preferred apps in different markets around the world – be sure to know which app most restaurants and delivery services use in your area.
Timing
A less clear aspect of your marketing plan is the start date. If you plan to open when the weather is nice, you may be too busy to spend much time building your brand identity and online presence, although your cash flow will likely be in good shape.
Mikey says: “We had a major flaw in our business plan in the first year that we would be operating all winter. But I forgot that people in Kamloops love nice weather. If there’s some chill, they say no, we’re out here. It wasn’t until last winter when we became 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 dive into the daily operations of your local food truck.
Supply Chain
You need ingredients to sell food. But where will you get them from? Let’s look at your options.
Restaurant suppliers: Example: Sysco. Pros: Reliable and cost-effective. Cons: It can be difficult to store large packaged products on your truck.
Wholesale clubs: Example: Costco. Pros: Convenience – shop whenever you want. Cons: Prices may be higher than restaurant suppliers.
Grocery stores: Example: Trader Joe’s, local grocery, specialty markets. Pros: Largest variety of ingredients, including local, organic, and specialty items. Smaller package sizes. Cons: Higher prices.
Many food truck operators utilize a mix of suppliers to meet their goals, so look into what’s available in your area that fits your menu and budget.
Also pay attention to your menu: if you have a fixed set of meals offered, will you be able to reliably source the same ingredients year-round? If your menu changes frequently, will you have the time to source new ingredients regularly?
Facilities
Your truck is your facility. So think carefully about what type of vehicle you decide to purchase.
Mikey says: “We got a HandyDART bus for a cheap price, and spent the beginning of 2013 converting it into a food truck. We learned a lot. It’s a fiberglass vehicle, which isn’t ideal compared to a big stainless steel truck. But we made it work.”
Outfitting an imperfect vehicle may be a choice depending on your budget and skills, or you may want to buy a vehicle specifically designed to be a food truck.
This is where you should clarify the actual equipment and maintenance requirements for your business, such as:
- Specialty cooking equipment
- Tires
- Brakes
- Battery
- Fuel (for cooking and the engine)
Many cities also stipulate that some food preparation aspects, such as chopping vegetables, making soup, baking bread, or preparing other ingredients, must be done in an external kitchen outside of sales hours, rather than inside the food truck or your home. This relates to ensuring food safety, and you should consider the cost and logistics in your plan.
It’s also a good idea to determine whether you can store extra ingredients at your kitchen location.
Production Capacity
How long does it take to make an item from your menu, on average? This is the main consideration that can limit the number of customers you can serve in a given day.
How
You plan to deal with changes in pace and demand throughout the day, week, month, or year? Mikey says: “I go home and do the dishes for two hours. It’s more intensive work than people realize.” So don’t forget to realistically consider how much work you can do by yourself.
Shipping
If you intend to sell products online, you will need to come up with a plan to ship them to customers. Fortunately, shipping can be easily implemented at reasonable prices.
8. Writing a Financial Plan
Like most businesses, your business is likely to live or die based on the strength of your financial plan. You should know how much money will be collected, how much money will be spent, and how these numbers will affect your operation in the future.
So be sure to dive into the potential financial table to get a real understanding of how profits and costs affect your business. Manage your money as you earn it with Shopify Balance.
Shopify Balance is a free financial account that allows you to manage your business funds from Shopify’s management. No monthly fees, receive payments up to 7 days in advance, and get cash back on eligible purchases. Discover Shopify Balance.
Profit Margin
Lucky for you, the cost of starting a food truck business is much less than that of a brick-and-mortar restaurant, so your break-even point can come much earlier. However, your profits may be limited due to the food truck model.
Food truck profits are expected to be around 8%, which means they are considered volume-dependent businesses. You will need to work quickly to serve many customers in order to turn a profit.
You will also have to determine your cash flow scenario. Since food trucks can’t store much inventory (ingredients and supplies), you will need to sell and restock more frequently than a brick-and-mortar restaurant. Additional Costs.
This section is also where you should consider other costs, such as licensing, maintenance, and staff wages if you have employees. And if you don’t plan to hire help, remember it’s likely you won’t be able to work 16 hours a day, seven days a week, which will also limit your profits. Make sure to write accurate financial projections so you have a good idea of how much you will earn.
Turn Your Business Idea into a Delicious Reality.
The food truck industry is booming. Now that you have a chance to think about how to shape your food truck dreams through your food truck business plan, it’s time to actually sit down and write it out.
Do you need a little push in the right direction? Check out some examples of business plans, then start filling in your template once you’re inspired.
Are you ready to create your business? Start your free trial of Shopify – no credit card required.
Frequently Asked Questions about Food Truck Business Plan
How profitable is a food truck?
Food trucks can be very profitable compared to a traditional restaurant, as you don’t have to pay building fees (like rent) and can be managed with fewer staff. You also have the advantage of being able to change locations in preparation for high-traffic events.
How do I start a food truck business plan?
Customize a page for the executive summary. Write an overview of the company. Conduct market analysis. Identify products and/or services. Create customer personas. Set up a marketing plan. Create a logistics and operations plan. Write a financial plan.
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