Yes, food trucks are all over the place around the country and the world but have you noticed the junked food trucks that are also piling up? Aside from non-compliance, the most common reasons for food trucks closing shop are mismanagement, poor flavors, and duplication of a better product.
According to the Statistics Brain Research Institute in a report published February 2015, there are 4,130 food trucks in the United States generating annual truck revenues worth $1.2 billion with a steady 12.4% increase in the past 5 years. The average annual income from a food truck is a little below $300,000 and an average start-up cost of $90,300. Based on these figures, it should logically mean that the ROI on owning and operating a food truck is quite fast.
The Challenges of Making a Profit
It’s all about maximizing your small space to generate the most income within the limited work hours. In fact, experts say that the honeymoon period in owning and operating a food truck is less than 12 months because the problems keep coming that drain funds.
These basic challenges are:
- Not passing health and safety inspections
- Unsanitary and reckless use of equipment such as not cleaning properly resulting in the need to replace equipment
- Improper inventory controls
- Seasonal industry
- Competing with other food trucks that have way better food and lower prices than you
- Parking in an already congested (food truck wise) area
How to Survive these Challenges
- Make the rounds of food truck festivals, country fairs, and special events but choose events that do not charge high participation fees or percentage of sales (10 to 15% is high)
- Offer catering services
- Make sure not to compromise on your food: taste and quality
- Have regular operating hours so your loyal customers can depend on you for their food needs
- Train, train, and keep training your staff. One bad apple can ruin the attitudes and work habits of others. Set a good example.
One sad case of a food truck that had to close shop was the Cinnamon Snail, a vegan food truck that New Yorkers loved since it opened 5 years ago. In February, its owner, Adam Sobel announced that he would not be renewing his permit. Behind all the glamour and long lines for his food was a mess. Almost daily, there were problems to deal with from broken equipment, parking, city laws, and labor-intensive food. His food truck was a huge success and he is happy with its run but he’s tired. He calls the food truck business “tough” which brings this article to the last tip on how to avoid being a one-season success. Have a partner or someone you can trust with your recipes and running the operations so you can take a break. Otherwise, you will burn out.