food truck business plan

food truck business plan

Food Truck Business Plan

1. Introduction

Mobile food services have been gaining popularity in the past years, as people are looking for convenient yet high quality food. Mobile food services include all types of foods that are prepared in a full, self-contained operation, and are ready to eat. The food is generally served in a to-go container, so people can eat it while walking or standing which epitomizes convenience. The goal of this paper is to help the food truckers in building their business by providing a thorough understanding of the critical aspects of food truck operation. It is meant to be a comprehensive guide, and the totality of the information provided will help increase the chances of the food truck to succeed or, if already in operation, it will increase the chance of sustainability. The aspects of the business that are covered in this paper range from pricing strategies to examining the infrastructure of the truck. The information was acquired from scholarly journals, books, and from personal interviews. During these interviews, we consulted food truck vendors on numerous occasions to add depth and a practical constructive perspective. These many perspectives are woven into information sources to produce a guide which will help current or future food truck operators make the right decisions when it comes to making changes or building from the ground up. The first step in building a food truck business is to get it all down on paper. This is a necessary step to take any idea to the next level. It is important to have a clear idea of what you want to do with your food truck business. A well-written business plan will provide a clear path, direction, and focus. With the recent explosion in food trucks, the old blue ocean strategy where entrepreneurs set out to penetrate uncharted waters is no longer the best strategy. A blue ocean strategy would not be a bad idea, but without some preliminary research, it will not be wise. A well-written business plan will help differentiate when and which parts of the blue ocean to swim in, in contrast to the blood red oceans where competition is high and profits are low.

2. Market Analysis

California as a whole has a vast culture and is known to be quite food-savvy and has become an international food and restaurant Mecca. People in California and Northern California especially constantly seek varieties in meal choices, and often times those choices are non-traditional. This desire for eclectic meal choices, combined with California’s diverse economic makeup, would provide Capital City Catering with a wealth of different demographics to approach with different meal choices and venues. This all attributes to massive potential for CCS to generate revenue from a variety of meal choices at varying locations throughout the week. High interest, population density, and demographic variety also reduce potential risks involved with a start-up food truck venture.

In a trial survey conducted at the lunch hour in downtown Sacramento near the capitol, we recorded over 250 potential customers from state workers, lobbyists, private business people, and local residents near the capitol of the Financial District and Old Town. Almost 90 percent of our clientele expressed interest in trying a mobile food service if we were to offer it, and 80 percent of those would become repeat customers.

In recent years, the food truck industry has seen a massive resurgence, with a never-before-seen level of interest from consumers. The American desire for high-quality meals on the go, often with unique and international flavors, has increased dramatically over the past decade. This interest has generated a great opportunity for Capital City Catering to expand into the realm of food trucks, and it would be a relatively low-risk venture with high potential for success.

Industry: Food trucks throughout the United States have been providing delicious, gourmet meal choices from international food to the good old American burger for over forty years. With relatively low start-up costs and quick entry to the industry, food trucks are a great alternative to opening a restaurant. A food truck can go to where the customers are. It has virtually low overhead and little risk in moving locations in search of customers.

3. Business Operations

The food truck will operate predominantly in Melbourne CBD and surrounding inner suburbs, targeting the lunch and late night dining market. It will predominantly be a mobile business, mainly utilizing the truck, but also will have an online ordering system set up for potential customers to pick up takeaway on their way home from work. Online ordering and giving the location and hours of operation will be well advertised on the business’s website and Twitter and Facebook accounts. Locations that the truck will be operating at on a day to day basis will be updated via Twitter and Facebook feeds and the partners aim to attract a large number followers to both of these social media pages. Due to the online nature of the business, the partners will be able to track and monitor the progress of the sales and adjust their sales and marketing plan accordingly. This will be achieved through the use of Google Analytics and by using web traffic tracking tools provided by the web hosting site.

The food truck business will be operated by the two partners, with minimal staff. The partners bring experience in the industry, both from a business and culinary perspective. Part of the business plan is to also employ a couple of apprentice chefs to work in the “kitchen” at different times to support the partners and gain experience in the street food industry. Open communication and clearly defined roles will be important among all staff to ensure the operation runs smoothly.

This section of the food truck business plan is focused on the operational aspects of the business. It outlines how the business will be run and managed, the hours of operation, the menu, the pricing strategy, the sales and marketing plan, and the accounting and financial controls that will be put in place. This section is critical for the overall business plan and must reflect the appropriate level of research and planning for a viable business venture.

4. Marketing and Sales Strategy

In order to develop a successful marketing strategy, we have to develop a clear understanding of our potential customers’ buying and decision behaviors. We will use a segment strategy, targeting the specific market segments which we believe will provide us the best opportunities to reach and satisfy our customers. The first market segment consists of people who are looking for a high-quality meal, who do not have a lot of time or money, and are willing to settle for a conveniently located food service. These people are likely to be students or lower-income individuals. The second segment consists of people who are at the market or event looking for a snack or treat, who may be willing to try our food if it is unique and fun. The larger percentage of our customers will likely be in the first market.

We will first introduce our business and how we intend to generate sales. We are excited about the opportunity to launch a food cart, which will offer affordable food items, quickly and conveniently to customers. Our goal is to create a successful new venture by opening a small food cart-based business that will first and foremost serve the Portland community. Our intent is to create a product and brand that can easily be transferred to other local markets. In order to achieve our goal, we will utilize a guerrilla marketing strategy that is designed for a small business. We will put a strong emphasis on promotional tactics, cost-efficient marketing, and word of mouth. These marketing tactics are especially conducive to our business because they are low cost and can be implemented by a small team. Hopefully, these efforts will further the sales of our product and create a strong brand image in the community. In the future, to expand to other neighborhood markets, we will create specific marketing objectives and will have a more solidified marketing plan.

5. Financial Projections

The financial picture will reflect what the consequences of our described strategies will be on the bottom line. This section is an overview of the financial projections for Jolly’s Java and Bakery over the next three years. First year income statement, second year income statement, third year income statement, break-even analysis, and budget for the first year. What we will show you through this information is that first off, Jolly’s Java and Bakery will earn a modest profit and will finance, at least, the beginning of a comfortable and a somewhat early retirement. Though, still we will take a little home to see the kids grow up. The most important point to be made is that getting into a comfortable retirement, with still a little to take home is better than working for the man and not getting ahead at all. A self-owned business is the way to achieve the greater things in life. This section of the plan projects solid, and achievable goals at which our company can strive towards. Starting our first year we will be purchasing our truck at a price of $7000. This will take a large hit on the cash amount, combined with the less than projected sales. This will lead us to our worst year in sales, and still a loss on the year. Though this loss will be made up in the following year. Second year projected sales will be $45000, combined with almost a 300% increase in sales on the third year, we will be on our way to the comfortable profit and retirement. This is a sugar-coated statement of the plans detailed in the income statements to follow.