Idea in a Nutshell
Thinking of opening a food truck business? Have you considered what licenses are needed? Got a business plan for your food truck start-up? Whether you have no experience or you a restaurant veteran, start planning now …
The food truck restaurant business is hotting up. It has had a foothold in the UAE for a while – and is now beginning to reward entrepreneurs in the Kingdom. Maybe it is time for you to take your first step along this simple and profitable route into the restaurant business?
Opening a food truck business is a great way into the restaurant business because the initial outlay required is low – compared to a fixed venue – but the financial opportunities are high. Owners of food truck businesses make decent money because they can offer a) a range of delicious premium fare at a high rate of covers b) from a small investment and c) move around to follow the crowds.
And, of course, one key thing to remember is that a food truck is not necessarily what we might call a ‘truck’. A truck often means a small lorry, whereas a food truck is simply a customised vehicle with a kitchen and serving area. Sometimes the operational area is housed in a trailer and towed; sometimes, the food truck is a single vehicle. Some startups begin with just a food cart to scope out the market and try different approaches; this is an excellent idea.
Usually, food trucks operate with the chef (that’s you, or your staff) working in the kitchen and providing meals from a hatch to customers who then eat al fresco. Sometimes, food trucks have the space (and appropriate permissions) to lay out some tables and chairs for customers.
Opening a food truck business is a great way into the restaurant business because the initial outlay required is low - compared to a fixed venue - but the financial opportunities are high.
How Much Does it Cost to Start a Food Truck Business?
Committing to a food truck startup is less expensive than most forms of fixed-venue restaurant (apart from budget take-away kiosks).
But remember that, even though you will not need to pay rent like you would for premises, you will need to buy/rent a customised vehicle as well as pay for all licenses which allow you to do business in certain places; licenses can catch you out, so do your research …
You will need to budget for start-up costs of at least 100,000 Riyals (approximately) and then recurring costs:
Start-up Costs of a Food Truck Business:
- Your food truck - new? Leased? Or bought outright?
- Point-Of-Sale (POS) system - for taking the money.
- Licenses - food safety, fire safety and the all-important zoning permits.
- Marketing - including pre-marketing and grand opening costs.
- Professional - legal, accounting and banking fees.
Main Recurring Costs of a Food Truck Business:
- Food
Mark-up on food will be high, but you need to make sourcing your ingredients at low cost an absolute priority. As you go on, use the standard industry calculation of ideal vs actual food cost to stay on top of food costs.
- Staff payroll
even if you start off working alone, staff will allow you to expand your business.
- Fuel
not the biggest cost, but a regular investment.
- Equipment repair and maintenance
don’t expect to get away without updating and maintaining your kitchen kit, so invest in top brands that offer great after-sales support.
Five Key Steps to Start your Food Truck Business
Get some experience!
Whatever you do, make sure you know how a professional kitchen works. You will be able to adapt and improve – but you face a hectic workload. Start off with some skills.
Get some expert advice
Talk to people in the food truck business already. You will save yourself a fortune.
Research Licensing Viability
Find out from your local authorities whether it will be legal for you to start a food truck business at all. There may be no pitches available, or perhaps all licenses for available pitches have been taken; maybe the permits are prohibitively expensive. Find out! This must be your first step, or all your efforts will be for nothing.
Research the Market
What are your competition offering? In terms of price/pitch/food? Before you get your own food truck startup going, make sure you conduct what is called in marketing a ‘competitive review’. Get out there and review the competition, and use that data to plan your own strategy.
Experiment
What makes the food truck sector stand out is the flexibility it offers you. It is a very popular choice for a reason. So embrace experimentation early. Maybe even trial run your food truck startup by using a cart, instead of a vehicle – so you can try out ideas without breaking the bank. Regulation pertaining to food carts is generally rigorous, but not as exhaustive as for bigger, vehicular food trucks.
Choose your Food Truck Name and Concept
This is the fun bit! But it is also critical to your bottom-line.
You need to pin down which area of food truck cuisine you are going into. What is your concept? Will you be offering high-end fare or budget? Are you providing one type of dish (shawarma, for example), or many? Is the food particular to your country or region – or maybe it hails from abroad? Is your offering simple or sophisticated? Trendy or conservative? What personality is your food truck overall? Answering these questions will allow you to be clear what your food truck business concept is. Then you can pick a name which fits.
Make sure your name for your food truck business is:
- Unique.
Your name must be unique. Otherwise, if your business expands, you might find it difficult to protect your brand legally. Your name also needs to be one of a kind so that people remember it.
- Memorable.
If your food truck name is memorable, word of mouth will get around a lot quicker about what a great experience you are offering.
- Simple.
Align your choice of name to your choice of offering. Promote one idea only. If your food truck name is too complicated, people won’t remember it.
- Easy to spell.
You might not think that the spelling of your brand name is important, particularly for a mobile business. Who, after all, will be writing it down? Well your brand name needs to be easy to spell so that (again) people can remember it properly.
- Inoffensive.
Make sure the name doesn’t cause offence (Google it) – or people won’t use your business.
Both your business concept and your food truck name underpin your marketing …
Market and Advertise your Food Truck to Attract Customers
If there’s one thing you get right with your food truck marketing, it must be the design of your food truck; your visual branding. It doesn’t matter if your website is down, your menu is poorly-written, even if the food is not great – provided your food truck stands out on the street, you will always get custom. Obviously you must not sacrifice quality in any area if you can help it. But you MUST focus on visual delivery in your marketing.
Your menu, of course, will generally be written on chalkboards and/or handouts. Invest in a quality visual presentation, and check out some top menu-writing tips here.
Write a Food Truck Business Plan
A food truck may not look like a conventional restaurant. But it is a restaurant nonetheless.
Check out Raqtan’s comprehensive guide to writing a restaurant business plan. Our checklist is brimming with top tips on how to be smart, systematic and ultimately successful when it comes to opening and developing your start-up restaurant.
Financing your Food Truck
Successful food truck startups get their finances straight from the beginning. Here are three key tips:
- Loans
Food trucks are recognised by the financial industry as a reputable enterprise, so you should be able to get a business loan if your business plan is reasonable.
- Investors
Investors in your food truck startup will be looking in particular for visual branding for your food truck that stands out a mile and a secure plan for pitching your food truck in high traffic areas. Nobody wants to invest in shabby food trucks, and the whole profitability of your future business depends on securing decent pitches. You will also need to have a competitive review and a sensible pricing strategy as part of your business plan.
- Franchising
don’t expect to buy into a food truck franchise until you have significant experience as well as a significant lump sum. Franchising is neither cheap nor 100% easy to get into.
Get the Licences and Permits for the Food Truck Business
A number of regulations will need to be satisfied. These regulations may differ across municipalities, so you will need to research.
A top practical tip when it comes to licenses and permits for your new food truck business is to talk to somebody who is already in the food truck business! They have had to do their own research which will apply to your startup too; so pick their brains. Local community business groups may help here too, showing you the full breadth of local regulation.
Three key areas of regulation will apply (as well as others):
Food and hygiene safety
Your municipality will have specific regulations regarding food trucks, as well as the generic hygiene precautions that apply to bricks-and-mortar restaurants.
Parking/zoning pitches
There is no point in you investing in a food truck startup unless there are enough legal pitches available in your operational area, or if you can’t afford the cost of permits.
Environmental safety
Requirements in this area will vary, but generally fire/electrocution safety must be a priority.
Buy The Right Kitchen Equipment for the Food Truck Business
The good news is that you need a lot less equipment for a food truck business than you do for a fixed venue restaurant. The bad news is that you need to fit that equipment into much less space!
You need, then, to be smart – and commit to buying decent equipment from the beginning. With space being so tight in your new premises, there is simply no point in filling it with low-grade stuff. Spend properly with a reputable company, and then enjoy aftercare and repairs on your kitchen that you can trust. When it comes to kitchens, few businesses ever regret buying quality equipment.
A key aspect of the kitchen in your food truck is hygiene, and this is why stainless steel products will play a key role. Check out Raqtan’s stainless steel range: CNC-engineered, certificated to ISO 9001 2015 standard and designed exclusively for the demands of the restaurant environment.
Depending on which type of food you intend to serve, your food truck kitchen is likely to require stainless steel sinks, shelves, cabinets, hoods (for ovens) and other basics.
Other culinary necessities include prep tables, grill, microwave, fryer, oven, countertop warmer and display cases, food processor, ice maker, blender, slicer, toaster and a variety of smaller appliances and utensils.
On top of that you will need packaging, cutlery, utensils and condiments for all dishes served, cleaning and sanitizing chemicals and equipment, your POS (Point of Sale) payment device, key health and safety items (like fire extinguishers), and marketing material.
A priority when choosing equipment for your food truck is to make fire suppression a priority. Your new kitchen area will be a lot more cramped than a fixed-venue kitchen, which means accidents can happen easier and get out of control quicker.
Buy/rent your food truck - a top tip
New food truck business owners are often astonished by how much it costs to adapt their food truck to adhere to local regulations. So, when you come to lease or buy your food truck, get smart about cost: it is critical to factor in that you may need to make significant alterations later on down the line, depending on what your local regulations are.
Get a Food Truck POS System
Your POS System is one area where you can breathe a sigh of relief. Manufacturers in the GCC are already well on top of providing cost-effective POS systems for food trucks, which UAE/KSA-based Foodics say ‘are the hottest trend right now and show no signs of slowing down.’
With wireless systems now the norm, you won’t have to worry about bulky equipment or dangerous cabling. You will be able to offer full cash and card services from a simple till/touchscreen – as well as access inventory and pricing information from your smartphone. If you expand your food truck to a fleet, you will be able to centralise your pricing – live! – from your smartphone too.
Pros and Cons of a Food Truck Business
You don’t get a free ride as a food truck startup. But you do get to be flexible. A key advantage to this business model is that, if your food truck is not doing well in a particular area – or even with a particular type of food offering – you can make changes fairly quickly.
Flexibility: that is your trump card. Don’t forget it!
Thank you for reading Raqtan’s guide to starting a food truck business in the GCC. Please contact one of our sales representatives who will be happy to talk you through your equipment options for your food truck startup.
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