How To Start A Food Truck Business Without Applying For A Loan

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You don’t have to start a food truck business by being in debt. It is an acceptable way of starting a business but why do it this way when you can avoid getting into debt? At the very least, you should consider aiming for a low loan amount so you don’t stress on your first 2 years about repayment.

Before you even decide to limit your debt exposure, you have to accept that not applying for a big business loan will mean learning to cut corners whenever and wherever necessary provided you do not compromise on quality and integrity. You may also have to accept that it will require you to work harder since you may have to avoid hiring too many employees.

Keep Your Primary Income

A food truck business can start as a weekend business. This will allow you to keep your day job and schedule the food truck to go out on weekends and special holidays. Your plan should include the tipping point when you can transition to being a full time food truck business. This tipping point should include a net income that can support your lifestyle and a growing list of regular customers and venues where you can park your truck including a daily parking slot for the lunch crowd.

Look for Investors

If you have a great menu and fantastic reviews on your food, you can start searching for investors who will be willing to put up the capital for a food truck.  Surprisingly, there is a growing number of business-minded entrepreneurs who do not want to work in a kitchen but want to own a food truck. These are the people you should target and you will see them roaming food truck areas and festivals looking for great food truck ideas.

There are also websites that connect investors with people who have business ideas like crowd-funding websites. Another option would be to approach friends and family although this kind of personal relationship can be troublesome down the road.

How about Starting Small First?

Instead of testing your food truck menu on a full scale kitchen truck, why not join food festivals with a small food cart first? The capital investment is much smaller and you get real feedback on your food – just like you would with a food truck. You will have to scale down your menu and only offer your most delectable item. However, you can also rotate your food to test each item in real time.

Technology You Can Use To Operate Your Food Truck More Efficiently

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Operating a food truck is not easy because of the pressure to make money as soon as possible and the need to stay relevant so income gradually increases and stabilizes providing you with a steady income year in and year out. One way to reduce the anxiety regarding operating, finance, and accounting details is to install software that can help you monitor your progress on a daily, weekly, monthly, quarterly, and annual basis.

In addition, with technology you can save on other costs such as labor and productivity.

Here are some suggestions on what technology you can use to keep a vigil eye on your business while you attend to your customers’ needs and orders.

Install a POS system

A Point of Sale (POS) system does not only record your daily sales, it can help you keep track of your inventories and work hours for the computation of payroll. You will need to invest in the software, hardware, and training of your workers. There are more than half a dozen options that can be bought online, many of which have free trial offers.

The basic criteria for a good food truck POS system are: affordability, user-friendliness, ease in customization, and with a good selections of functions.

Get a Simple Mobile Payment System

This is one way to accept credit card payments without having to go through the complex system. You can use your mobile phone or tablet to process payments, or tie the mobile payment system in with your POS set-up.

Consider Cloud-based Services

From managing your workers to securing your files, you can use different cloud-based systems like Dropbox, Mailbox, Asana, 30/30, Evernote, Skype, Quickbooks, Neverlate, Pramata, ZenPayroll, Expensify, and Square. You will have to check for charges associated with cloud services because you can easily rack up thousands of dollars in charges if you leave your workers free and unlimited access to some cloud services.

Social Media Marketing

Naturally, you need to use social media like Twitter  to spread the word about your outstanding products. Just make sure to screen everything that is posted online so you avoid offending anyone or commenting in such a way that would question your integrity and business ethics.


Planning Your Food Truck’s Commissary

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Every successful food truck has an organized commissary so if you plan on staying in the food truck business for a while, you should think ahead about setting up a commissary to help you stay organized, clean, and ready for anything including food or ingredient shortages, price fluctuations on raw materials, and an area where you can create new dishes to offer on your menu.

Understanding the Need for a Commissary

A commissary is the place where you can stock up on your ingredients so you do not have to keep making trips to the market or ordering from your suppliers. Some food ingredients can be stocked up without affecting the freshness of your food like seasoning, oil, baking ingredients, and packaging, among others. If you can order in bulk, you get a chance to lower your costs by asking for the wholesale discount. The commissary is not where you cook the food you will sell daily but you can create new dishes and use the area to store the perishables on your food truck every night.

Depending on your location, you may even be required to have a commissary if you are not allowed to cook from your food truck by some city ordinance. If this is the case with you, will cannot use your personal home kitchen as a commissary but you will be required to find a place that is licensed for commercial use.

Thus, before you make plans about a commissary, find out what the local laws require. This will save you a lot of time and grievance not to mention unnecessary expenses.

Some of the common rules on running a commissary:

  1. Commissaries are subject to sanitation inspection and must have local certification renewed every year.
  2. It is possible to rent shared space with other food truck owners to save on rental and local government fees.
  3. Some cities do not allow the food to be cooked in the commissary stating that they have to be served fresh from the food truck. This usually applies to meals that have to be served hot or contain fresh ingredients like salad greens.

The benefits of having a commissary are multiple. For instance, you get storage space. You also have a place to park your food truck when it is not in use. It also makes it convenient for disposing of trash and cleaning your kitchen equipment.  Finally, you can use the commissary as your  business address which will make it convenient for anyone to contact you.

Choosing Your Food Truck: Should You Buy Used or New?

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The biggest expense when setting up a food truck business is buying the food truck. And although the growth rate for new food trucks in the past 5 years is around 12.4% or over 4,000 food trucks now operating around the country, there are used food trucks being sold in the market. The question to answer then is whether to invest in a new truck or buy a used truck.

There are some people who believe in the superstition that buying second-hand or used items especially if it is connected to failure will mean trouble. If you think along these lines, you should buy a new food truck although it will cost you more and still give you a 50/50 chance of success or failure.

Other Factors That Should Be Considered

Superstition aside, there are other factors that must be considered when buying a truck. The first questions you should answer are:

  • How much storage do you need? How much cooking will you be doing?
  • Do you want gas or diesel?
  • Where do you plan to sell because there may be parking restrictions on size and length of truck?
  • Would you rather buy a food truck ready-to-use or buy a truck and customize it?
  • Are you willing to consider leasing a food truck?

A ready-to-use food truck will mean that you have to make do with the lay-out and plan around it whereas a customized truck can be outfitted to suit your business plan.  In addition, to order a custom-made food truck would take time to finish and this will delay the opening of your business. You are also taking a chance that the person you order the custom built food truck from is spot on with your instructions.

One way to decide on the truck to buy is to scout around at existing food trucks that are selling foods similar to what you have in mind. Many food truck owners are happy to discuss their business if you approach them properly and you could solicit excellent tips on buying your own truck.

Keep in mind that food trucks do not necessarily have to be trucks. You have other options like buying a minivan, cart on wheels, or a minibus. The idea is to tie down the food truck design to your business concept so it is attractive and a crowd-pleaser.