How to Write a Food Truck Business Plan
When you go online and search, "How do I start a business?" you will turn up tons of articles telling you that the first step to starting a successful business is to write a detailed business plan.
Unfortunately, you will also turn up just as many articles telling you that writing a business plan is a colossal waste of time and energy.
The answer isn't exactly clear, but what should be clear are your vision and your goals. At the very basic level, your goal is to start a food truck. However, there are a few other questions you should be asking yourself. First off, are you going to make your millions selling the latest fusion cuisine, or will you park in a popular downtown area and capitalize on the late night munchies (deep fried pizza, anyone)? Who is going to work for you and how will they carry out your vision? What if you can't make a decent living? Not to mention, how will you handle the startup costs of a new business?
With all of these important questions to answer, maybe a business plan is starting to look more attractive by the minute. Whether you're convinced or not, it's vital to keep in mind that you're not chiseling your business plan into stone. It's a dynamic document that will be revised and rewritten several times before you're actually ready to put any of your plans into action.
Parts of a Business Plan
Think of this as your introduction to whomever will be reading your final product. To make a good first impression, it's important to be concise and interesting, without getting bogged down in the details. This is your chance to highlight who your company is, how you expect it to grow, and why it will ultimately be successful. In order to convince your reader of that last part, you should show that you've identified a key gap in your target market and that you have just the idea to remedy the situation. It's also a good idea to cover how your knowledge and background will benefit you as you pursue your company goals. Although this will be the first thing your potential investor will read, it should be the last thing you write.Key things to include in a food truck executive summary:
- What type of food do you plan to offer?
- Where do you plan to sell your food?
- Why will this type of food be successful in the area where you plan to sell it?
- What is the projected cost and profit of your food truck business?
- What are your future goals for your food truck business?
This is the part where you explain your company and do get bogged down in the details. This section should describe your business and show your reader that it will be a valuable addition to the existing market. Basically, this is where you want to expand upon everything you briefly touched on in your executive summary.Key things to include in a food truck company description:
- What kind of food truck will it be?
- Why a food truck as opposed to a brick-and-mortar location?
- How will the food items you provide compete with the menu items of existing food trucks or restaurants in your target area?
- What specific consumer niche will you serve?
- What is your overall competitive advantage (your unique cuisine, your outstanding customer service, your creative marketing, etc.)?
The market analysis section of your business plan is where you get into the nitty-gritty of how you'll fit into the existing market. It's important to do extensive research before writing this section so you can demonstrate your industry and market knowledge by having solid research findings to back up your conclusions.
Key things to include in a food truck market analysis:
- Describe the food industry, including current trends, growth rate, major consumer groups, etc.
- Pinpoint the age group, geographic area, socioeconomic status, and other key demographic information of the target market your food truck will appeal to
- Identify the needs of your target market as well as any seasonal trends that could impact your business (walking to the food truck in the snow? How about delivery instead.)
- Define the size and growth potential of your target market
- State how you will gain a large percentage of the market share in the geographic area your food truck will serve
- Explain your pricing structure, gross margin levels, and any other financially-relevant information
- Identify your competitors and show how you will make your food truck a viable contender in current and future markets
- Address any obstacles you may encounter as you startup your food truck business
- Cite food codes and other governmental regulations with which you will have to comply and show how you will do so
Organization and Management
Explaining your organization and management structure may not seem that important if you're planning to open up a food truck manned by two people. However, outlining responsibilities from the get-go can help you avoid confusion, or even confrontation, as your business grows and develops. This section should include a detailed profile (think resume!) of your management team, information about the ownership of your company, the salary and benefits you'll offer your workers, and growth opportunities for people within your organization.
Creating a chart that shows the organizational structure of your business is a great way to illustrate that you have all of your bases covered from the cooks in your food truck kitchen to the person who balances your checkbook. And, if opening a food truck has been your lifelong dream, this is the section where you share your passion! Sell yourself and your team to your readers so there's no doubt in anyone's mind that you have the next big (successful) idea.Key things to include in a food truck organization and management section:
Ownership information, including:
- Legal structure (Are you forming a partnership? Are you a sole proprietor?)
- Full names of the owners
- Percentage of the company each owner holds
- Type of ownership (common stock, general partner, etc.)
- Stock information
Profiles of your management team including:
- Full name
- Position / primary responsibilities
- Educational background
- Prior employment and how it relates to his/her position within your company
- Important experience and skills that will help your business be successful
- Past track record with hard numbers to back it up
- Food industry recognition
- Community involvement
Service or Product Line
Step into the minds and taste buds of your customers. What unique flavors do you have to offer them? How will the products from your food truck entice passersby and convert them into diehard fans? What impact do you hope to have on your target customers? This is the section where you let your innovative ideas out into the open by describing your products and showing how you plan to keep customers coming back for more.Key things to include in a food truck service or product line section:
Describe your menu
- What type of cuisine will you offer?
- Why are you passionate about this type of food?
- Why will customers eat your food?
- What is your competitive advantage?
- Are your recipes tried-and-true or still being developed?
Explain where your products are in terms of life cycle
- Are you launching a totally new product?
- Are you already gaining popularity with your target market?
- What might cause a decline in demand for your product?
Discuss any intellectual property
- Do you have any trade secrets or patents in the works?
- Will you require your staff to sign any non-disclosure or non-compete agreements?
Predict the future
- How do you see your menu changing over time?
- Are you developing any new products?
- Do you plan to own a fleet of food trucks someday?
- Will you expand your reach by attending food truck fairs or booking catered events?
Marketing and Sales
Building customer loyalty should be one of your main goals because—let's face it—if you don't have customers, you don't have a business. In this section of your business plan, you will need to define your overall marketing and sales strategies, but how you do so is completely up to you. One important thing to remember is that people value originality, whether that means adopting a recognizable truck design like Bernie's Burger Bus or developing creative ways to drum up returning customers like Wafels & Dinges did by creating a daily challenge question that awards free waffle toppings to those who participate.Key things to include in a food truck marketing and sales section:
How do you plan to initially penetrate the market?
- Will you set your prices lower than your competitors'?
- Will you offer a product that has never been seen before?
How will you grow your business?
- Will you hire more employees?
- Will you acquire more food trucks?
- Will you extend the geographic area your truck serves?
How will you distribute your products?
- Will you sell only from your truck?
- Will you attend food truck fairs or rallies?
How will you reach your customers?
- Will you advertise in traditional mediums (on the radio, in the newspaper, etc.)?
- Will you develop a large social media presence by utilizing Facebook, Twitter, Instagram, etc.?
- Will you offer special rewards or discounts for returning customers?
- Will you give away free samples to entice possible customers?
- Will you have an interactive map that allows people to easily locate your truck?
How many sales are necessary for your food truck to be profitable?
- What is a fair menu price for the products you'll be selling?
- How many days will you take off in a year?
- Will you sell all through the winter or just during the warmer months
Not every business plan has a funding request section, but it's definitely something to consider including. If you do plan to request funding, you should clearly explain how much funding you need, what you need it for, and how you'll repay anything you owe. If you'd like to explore alternative options for funding your business, check out sites like Fundable or Gofundme.com, which allow you to crowdfund your business by raising money from investors, customers, and friends. One thing to keep in mind is that some sites like this will take a cut of what you raise, so be sure to do your research before jumping in with two feet.Key things to include in a food truck funding request:
- How much capital do you really need?
- Do you foresee needing more funding in the future?
- How will you use the funds you are awarded?
- How will you repay your loans?
- What are the potential benefits to an investor if your food truck does well?
- How would these funds create new opportunities for your food truck?
It's difficult to know what realistic financial projections are when you're starting from scratch, but in order to allocate funds efficiently, it's important to analyze your target market and set clear financial goals. If your business has already been in operation for a few years, this is the section where you'd include historical financial data. However, if you're just starting out, you will need to calculate how much your business will potentially make over the next five years using realistic assumptions. Make sure that these projections align with the funds you asked for in your funding request.
The Appendix section isn't necessary in every business plan, but this is a great place to include information that didn't fit anywhere else, from product photos to building permits to letters of reference.