Food trucks have lately become quite a rage in the evolving restaurant space. The advantage of mobility in Food Truck format gives owners access to multiple locations at an initial capital that is lower than that needed in opening a restaurant or any other kind of format. In this article, we will take you through each and every step of starting your own food truck business.
How to Start a Food Truck Business
1. Choose the Right Food Truck or Commercial Vehicle.
The first thing to do is to choose the right truck or commercial vehicle. Based on the given menu which is Italian and Continental, you need a commercial vehicle which is 18-Feet long, and a new one would cost around Rs 7-8 lakhs. There are various trucks available in the market from Tata, Mahindra & Mahindra and Ashok Leyland. But to save costs you can start with an old truck which would cost half the price of the new one. However, when buying an old commercial vehicle or truck one should check for proper fitness certificate, registration, road tax receipt, and insurance. Also, it should not be more than 5 years old, as due to pollution problems various state governments and environmental bodies are considering to ban 10-year-old commercial vehicles in different cities.
The old vehicle can further be modified and designed based on the requirement with an additional cost of Rs 1 lakh from the various body builder shops. So, the total cost of the final truck (old) without kitchen equipment is Rs 5 lakhs. This cost seems to very high from the 450 sq ft shop for QSR whose rent is somewhere around Rs 40,000, but in the long run, the food truck cost would be negligible as there is no or very less rent or fees to pay depending upon the vicinity.
How to choose the right location for the Food Truck
Choose a street that doesn’t have too many similar food vendors around, has a regular flow of traffic for inviting large footfall, and has establishments with young professionals and students in the surrounding area. Also, the parking of truck should be such that it does not pose any hassle to commuters, yet should be visible to the people. Also, it is advisable to buy a light commercial vehicle rather than going for a big size heavy commercial vehicle because in certain cities including Delhi big size trucks are not allowed before 9:00 pm.
Read a detailed article on how to choose the best location for your restaurant or food business here.
2. Kitchen Equipment and Raw Materials
The total cost of kitchen equipment comes to around Rs 3 lakhs which includes Microwave, juicer mixer, freezer, refrigerators, griller, steamer, working tables, one burner, exhaust equipment, generator or big batteries with inverter. It is advisable going for new equipment as they are mostly electronic items. Since you get a one year warranty on new ones, you would be relieved of the daily maintenance cost of the equipment. However, if you choose the equipment carefully and determine which can be bought old, this can save you a lot of money which can be used for other essential activities. Apart from the kitchen equipment, you can store raw material for the first week which would cost somewhere around Rs 30,000. Further, it is advisable to keep the raw material less for the first few weeks so as to keep the stock fresh and study the pattern of sale and then procure more.
3. Licenses and Permits
Since there are no clear-cut laws pertaining to food trucks, the defined set of documents required are not present anywhere specifically. However, it is important to procure the following set of documents
• Fire Safety Certificate
• Shop and Establishment License
• NOC from RTO
• NOC from Municipal Corporation
• FSSAI Mobile Vendor’s License
• Kitchen Insurance
The combined paper and licensing work can cost you around Rs 50,000. There are a lot of consultancies which can help you to get the licensing and other permits.
In the food truck format, a maximum of two chefs and one helper are required who can take care of the operations of the entire food truck. The average salary of Chefs can be somewhere around Rs 13k-15k while the helper's salary can go up to a maximum of Rs 8000. If you want to set up a delivery model from the truck, you can hire two delivery boys or can tie-up with third party logistics companies which charge somewhere around Rs 40-50 per delivery. However, to keep the service level up to the mark and if you are looking to create an identity in the food service market, we would like to advise you to hire at least one delivery boy who will also help you to procure raw materials in the case of emergencies rather than depending upon the third party logistics.
5. POS Software
It is always advisable to have a good point of sale software which can keep your data safe and give a detailed information about your inventory and sales. A good POS can be a make or break your food truck business in today's competitive environment as a lot of restaurant players, QSR format, and other food businesses use customer data to get repeat orders and take customer feedback. A good basic software for point of sale can cost somewhere around Rs 24,000 per annum, i.e, Rs 2000 monthly.
6. Staff Uniform
We have already discussed how important the staff uniform is when you start your first food venture in our previous article "How to start a QSR under Rs 5 lakh". The staff uniform gives an overall brand feel to the business which will in return help you gain more trust among your customers. A normal collar t-shirt will cost somewhere around Rs 120, and since you have only 5 employees in this particular format, 2 chefs coats (2 each) which will cost around Rs 300 while rest of the employees can have a t-shirt and a cap. The combined cost of all the uniforms would not be more than Rs 6000-7000.
Unlike QSR, Food Trucks require less number of menu pamphlets for distribution since the primary business of food truck is based on the footfall rather than delivery. Still to create the initial buzz, one can go for 15000 Pamphlets which will cost around Rs 20000 and some billboards and banners in the nearby catchment area which will cost around Rs 10000. However, in the new digital age creating offline buzz is not enough.
Having a presence on Social Media is a must, and as it would keep your customers and followers informed about the location of a food truck on any given day so as to build a regular flow of customers and build brand connect. Also, it can be used to leverage on existing followers to spread the word about the food truck, offering discounts, choosing new food items for the menu, etc. Find out how to do the digital marketing for your restaurant the right way here.
Apart from that, keep a note of events and community gatherings in the local area and park the food truck around. Tie-ups with event planners, personal contacts with customers, and free goodies like t-shirts and mugs carrying the food truck logo, can go a long way in spreading and expanding the business.
Apart from the aforementioned things, while starting the food truck, you require things like two mobile phones, calculator, attendance register, daily book, 2-3 big dustbins to keep the area clean, etc. These items may cost you somewhere around Rs 10k.
Unlike other food business formats, the food truck business has its own pros and cons\, such as the location which is a problem for other formats but here the owner of the food truck can decide the location based on the market information and research, with no rent to be paid, no electricity bills, less capital required and low operational costs.
On the flip side, the food truck business is quite uncertain as there are no proper framework or guidelines to operate but if things are done carefully and responsibly, this format can be rated as the best food format in terms of returns in comparison to the investments made. The investments made in the food truck business is slightly higher than the QSR format but the good thing is that the overall operational cost is much less than a QSR or restaurant in a long run.
Apart from the regular business which has a minimum Rs 8000-9000 sales per day, a food truck can also make money from various events and catering. A single event or catering can generate earnings up to Rs 30,000 in a day.
Inputs are taken from Karan Malik, Owner of Supersuckers Food Truck.