Archive for the ‘Start Up’ Category

In today’s economy, more than ever, people are looking for alternative sources of employment for themselves. Throw a dash of American entrepreneurship into the mix, and you will find that one of the largest growing search areas on Internet sites such as Google, Yahoo Search, and Bing! is the Mobile Food Industry. Mobile Cuisine Magazine would like to help these potential vendors and the food truck industry by providing a series of articles that will help each individual in deciding if being a mobile food vendor is the right career shift for them.

You have a menu, your truck has been ordered and the clock is ticking while you wait for your truck to be delivered. What are the other costs may be involved in operating a food truck? This article, (the third of a four part series) will provide you with this information.

Commissaries

Outside of the initial cost of purchasing your vehicle, the usage of a commissary will tally the largest expense in your monthly bills. The commissary is the lot that you are legally required to park your vehicle in when it’s not in use. You will be able to plug your vehicles refrigerator in to use for storage at some, but in others, you will have to rent refrigerators from them to store your food in overnight. In various cities across the country, you cannot prepare your food in your vehicle so the commissary can also include the usage of a health department regulated commercial kitchen for your food preparation. Please note, it is illegal to prepare or cook your food in your home, no matter how clean you keep it.

At many commissaries you can purchase food, supplies and propane. The services offered at these commissaries vary from lot to lot so we suggest you find a list in your area and speak with each one. In some cases the fees can be negotiated down as long as you sign a long term agreement with them. We have found that the average cost for commissaries will run between $800 and $1200 per month.

Insurance, Fees and Licenses

Mobile vendors, much like brick and mortar restaurants must carry insurance, hold a city business license in each city you operate in and get permitted with county health departments.  As mentioned in the previous article, these costs can be covered by a rental company if you go the route of renting a vehicle that suites your needs. If you do not rent, outside of standard business insurance, you will need to carry additional liability insurance, (normally 1,000,000 in vehicle coverage). Include your commissary as an additional insured on your coverage if you are preparing food in their kitchen.

In some cities getting permitted and licensed can be as simple as applying for each. Within a week of having your kitchen and truck inspected you can receive all of the necessary approvals. However, for the majority of the country, the hoops you must jump through can be rather difficult and time consuming. Some counties require food truck owners to take classes on how to keep your vehicle clean and operate as the health department sees fit. Other municipalities require applicants to enter an annual lottery to receive a permit or license as they have limited numbers of permits they can issue. The results of these lotteries, can leave you hanging in the wind with a truck that is ready, but no way of selling your goods.

Because of the varied costs of licensing and permitting it is hard for us to give you a definitive cost for these items. We suggest contacting your local health and business licensing departments to find their requirements and fees for starting up your food truck. One additional suggestion we will make to everyone researching this issue, is not to try operating without insurance or proper permitting and licensing. Sure, it will allow you to avoid some initial delays and headaches, but comparing what you will face should you get caught operating illegally and the fines you will have to pay, take the proper steps to follow the straight and narrow on this issue. You will thank us in the long run.

Regulations

Even though Mobile Cuisine Magazine has been online for a short period of time, it is already clear what the most frequently asked question is, Parking. Where can we park? How long can we park? Can we find a parking spot and just feed the meter all day? These are all wonderful questions, unfortunately, all questions that only your local parking department must answer.

In some states if you park in a location for over an hour, you are required to get written permission from a store owner within 200 feet of your parking spot that you and your employees can use their restroom facilities. In other locales, you cannot park in the public right of way for more than 15 or 30 minutes, and in other municipalities, you can park in a meter spot, and as long as the meter is feed, you may sell your fare there. As you can see, just as the common answer for permitting will require you to get answers from your local city, township or county personnel, so too will you need to look locally to get the correct response for parking.

Taxes

Taxes and bookkeeping can be the area where many owner-operators have to give some control up to professionals outside of the food industry. Do not risk fines or even imprisonment because you don’t take the time to find a trusted team member to do your books. Having a partner who will be on top of your daily sales and keeping track of taxes owed will allow you to concentrate on your businesses day to day food operations.

Fuel

Although the goal of most food trucks is to find a parking spot and sit there all day, this isn’t the typical avenue most trucks can operate. The typical food truck has a minimum of 3-5 stops per day. Depending on the size of the area you operate in, this can vary your fuel use greatly. Earlier this month, we provided some tips to cut your fuel usage, so check out the list and follow the tips that you can. At an average of three dollars a gallon and trucks burning one gallon per 10-12 miles, you can see how conserving fuel can save you in the long run.

Please stay tuned for the final article in our series on starting a food truck business. We will provide you an inside look at the daily grind of a food truck owner, and provide you with some final things to look at to assist you in determining if owning a food truck is the right career path for you.

Part 1

Part 2

Part 4

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In the first of our series, we discussed the basics and initial thoughts you should put time into to assist you in getting a mobile food business started. In Part 2 we will look at the costs involved in buying a food truck.

So you’ve pinpointed what food you would like to sell, whom your competition is and where you plan to sell your mobile cuisine. That’s a great start; however, now you have to take the next step.  You must now identify the means in which you plan to get your fare to your customers and how much it will cost.

Your first step in determining what type of vehicle you can afford is based solely on how much capital you have on hand or how much you can be approved to finance. Once you have determined your budget, you’ll be able to look at the various avenues in which you can acquire your mobile restaurant.

From the earlier article, we suggested that you needed to find out who your competition is, now it’s time to go to them and see if they are willing to share their wisdom with you. Finding a current truck owner to use as a mentor not only will keep the competition friendly, but you will be able to learn from their mistakes. Find out who the reliable local vehicle dealers are in your area and who provides follow up after a purchase.

Renting a Food Truck ($2,000 – $10,000 per month)

Dependent on the type of equipment needed and the condition of the truck, the rental option (if available in your area) can be the least expensive way to start up a food truck business. When factoring in that most rental agreements include insurance and working permits in at least one municipality, this option eliminates much of your risk and initial cost. This may be the least initial expense; however it is an ongoing monthly cost, and you will not own the truck you are using.

Buying a Used Food Truck – ($10,000 – $75,000)

This is by far the most economical way to purchase your rolling kitchen, but at the same it carries with it, the most issues. If you decide to purchase a used truck, be sure to have a certified mechanic available to conduct an inspection. This is the largest investment you will have when starting up your business; you cannot afford to purchase a vehicle that is consistently in the shop.

Investigate regulations in the area you will be working. In many cities even if a vehicle meets the health department codes in one area, once a truck is sold, the new owner is responsible for bring it up to all current standards they plan to be licensed in.

Retrofitting your Food Truck

Although you can find a used vehicle on of the many sales sites such as eBay or Craigslist for under $10, 000, your investment price can skyrocket the minute you start installing vending windows, lined walls and floors, electricity, hot running water and a retail payment system are all necessary

Buying a New Food Truck – ($75,000 – $125,000)

Purchasing new is what most startups, we’ve spoken with, prefer if they can afford it. Ask your salesperson about the warranties they offer and what each covers. Another question you should have answered is if the dealer supplies a loaner truck should there be issues that take your truck off the road. The longer you are off the road; you will need an alternative plan to sell your product.

Buying Custom Food Trucks – ($125,000 – $300,000)

If a truck with the proper equipment configuration cannot be found, customizing a vehicle will be your last option. This by far is the most expensive and can take the most time before the truck is ready for delivery. Although most timing quotes will be from 4 to 6 weeks, be sure to talk with the shop’s previous customers to see if they followed through on their promises, or if it took much longer. Missing a proposed opening date because you received your truck 1-3 months late will make you look quite unprofessional. Reneging on timing can hurt any positive word of mouth you may have already received, and can be very difficult to recover from.

If you decide to have your truck built from scratch, be sure to use a local company who is familiar with all the current health code requirements. A knowledgeable builder can help speed the plan check process and your final inspection.

Take the time to test drive any food truck you are interested. You must determine the maneuvering of the vehicle and how its sightlines are. You do not want to get on the road and find out you need multiple spotters to be able to park in most areas, and why risk your insurance premiums if you can find a truck which maximizes your visibility?

Finally, if you decide to purchase, be sure the asking price is fair. Make sure you have researched similar equipped vehicles in similar condition. If you don’t have any skills in haggling, either learn, or take someone with you that can. In many cases the sellers are willing to accept offers as low as 15% or their asking price. Saving money on the front end can only help you in the long run.

Stay tuned for the next article in our series.

Part 1

Part 3

Part 4

In today’s economy, more than ever, people are looking for alternative sources of employment for themselves. Throw a dash of American entrepreneurship into the mix, and you will find that one of the largest growing search areas on Internet sites such as Google, Yahoo Search, and Bing! is the Mobile Food Industry. Mobile Cuisine Magazine would like to help these potential vendors and the food truck industry by providing a series of articles that will help each individual in deciding if being a mobile food vendor is the right career shift for them.

In the first of our series, we will discuss the very basics and initial thoughts you should be putting time into to assist you in getting a mobile food business started.

Setting up your Menu

Number one, what in the world are you going to sell? There are a huge number of factors you need to look at before you make your decision. Where are you located? What can you cook? What do the people in your area think is worth spending their hard earned money on to feed themselves? Just as any restaurant owner must decide, you must find out what suites you and your customers. Do you have a gourmet or professional culinary background? Maybe taking a simple idea like barbeque, or tacos, and giving them a new twist on old recipes will thrill the crowd.

Once you have determined what you will be selling, you must take the time to perfect your recipes and technique. Have friends and family help you conduct taste tests. If you have enough early investment capital, find a marketing firm to run the tests for you. Find out what people like, and don’t like, and tailor your menu to the results you receive.  One of the worst things a vendor can do, is start prematurely, and sells its customers bad food. Word of mouth as advertising works both ways. Sure it can be a positive, but if you are serving poor tasting food, it can be almost impossible to turn that perception around without having to rebrand your entire enterprise.

Location, Location, Location

Alright, you’ve got it, you know what you can and will be able to sell from your truck. Now what? Well, you have a product in mind, but whom and where will you sell it? Take look at what type of demographic will be interested in your food. Are you selling something that the late night bar hopper will be interested in, or will you need to find locations where the customers will have more interest in a gourmet food item, than fries and a hot dog? Travel around your area. Find the local hangouts; find where the majority of the cities foot traffic takes place. If your competitors are going to be brick and mortar restaurants, where are they located?

Now that you have gathered this information, you will need to find out where you will park your rig. Many municipalities across the country have strict guidelines on where mobile food vendors can park. Take the time to speak with the zoning and parking officials in the areas you wish to sell. Find out how long you can stay in one spot, find out the hours you can park with or without feeding a meter. Another avenue food trucks are using, is parking in open lots. Contact the owners of the lots, and get their permission to park there, and be sure the permission is in writing. You may need to supply them with times and days of the week you plan to use their lot. Rather than denying their request and risk the lost opportunity to partner on their site, write up a proposal with the required information which both parties can agree to. In most cases a flat fee or a percentage of your sales may be a prerequisite to making an agreement; however, having a regular site for sales can be a great start to getting your business noticed.

Using your Competition

In most high traffic food truck communities it will be very difficult to start up a business that will be unique. Once you have determined what type of fare you will be serving to your customers, you must find out who your direct completion will be.  Search the streets, the internet and more importantly, use twitter to track them down. Find out when they operate and what their menu consists of.  Be sure to find them and visit their sites. Besides trying to find out what their customers are buying, the more important aspect of your clandestine efforts should be to taste their product. If it’s possible, come back on multiple occasions, this approach will give you a better understanding of how they operate and how you can manipulate your menu, your prices and your locations.

If this article was helpful, let us know. The next in our series will be published soon, so keep coming back to check.

Part 2

Part 3

Part 4