We recently connected with Brett Lindenberg, Founder of Food Truck Empire, who gave you some time tips on what mobile food entrepreneurs should be doing to ensure success in their businesses. Food Truck Empire is an educational website and podcast for anyone that wants to start or grow a mobile food business. Whether you want to start the innovative food truck concept or just a simple hot dog stand, Food Truck Empire has information published from real vendors that can help you with this process. Even if you're just thinking about starting a mobile food business, FoodTruckEmpire.com is a great place to get a sense of what operating a food business is really like... both the good and the bad about being an operato.
Kiva: What are the main challenges that mobile food businesses face today and how can they be overcome?
Brett: There are a couple of big challenges that almost every food truck will encounter on their journey to starting a business. One is figuring out what the local health codes and regulations are in your area. Every city and state will have a slightly different set of requirements and sometimes those requirements can be unclear, especially if you live in a smaller community that does not have many mobile food businesses. One smart way to figure out the local laws in your area: you can ask current food truck owners that are actively operating in your area. They will know who you should talk to and can point you in the right direction as they have been where you are before.
The second challenge is getting enough startup capital to actually fund a food truck or trailer. Even though a food truck is considerably less money than starting a restaurant, getting a lump sum of $50,000 - $100,000 is tough for the average person. Fortunately there are a lot of solutions for raising capital for a food truck, including working with non-profits like Kiva.org or generating money from KickStarter campaigns.
Kiva: What are some common characteristics of successful mobile food ventures?
Brett: Successful food ventures think about serving a product that people crave. Serving food that's cravable is certainly an important aspect of operating a concession business. However, you've also got to put a lot of consideration into your numbers. Here are two important things that successful food trucks measure and try to continually improve:
Food cost: Managing the variable cost of producing your food is an ongoing battle for food business owners. You need to price your menu items right so that your business generates a profit and you can continue to operate the business long-term. This may not be possible with all your menu items, but it's a good marker to aim for. A good rule of thumb is that your food costs should not be more than 33% of the menu price to ensure profitability.
Speed: Just a few hours of the day will generate most of the revenue for your business. For example, over the typical lunch hours between 11 a.m. - 1 p.m. you may get a rush of customers, but not much after that. To make sure you take advantage of those critical hours you need to get food out of your serving window within just a few minutes. If you have food items that take 10 minutes or more to produce, it may be difficult to make a living with that concept.
Pay attention to the food trucks that have been around for a few years.
There are some food concepts that maintain low food costs and can be successful in just about any area of the country with proven models like shaved ice, tacos, hot dogs, burgers, pizza, Philly Cheese Steaks, and others. There's a reason there are successful vendors in every major metro that use these proven models for their business and don't reinvent the wheel. They all have solid margins, can be served quickly, and customers love them.
Kiva: What early investments should mobile food entrepreneurs consider making?
Brett: As an early investment, you want to think about what type of a budget you can invest toward a reliable food truck, trailer, cart, or pop-up. The keyword here is reliable. After all, you probably want to be spending most of your time serving customers your amazing food and not becoming a food truck repair man. The old saying you get what you pay for certainly applies to the mobile food business.
Kiva: If you could say one thing to new mobile food business owners, what would it be?
Brett: Before embarking on this journey into owning your own business, take a lot of time up front to create a solid business plan. By going through the process of writing a business plan, you will force you to think about some important aspects of the business that will put you in a position to be more successful. For example, you'll be forced to make an estimate of what your food costs will be and what type of menu you plan to serve. You will also put down in writing how you actually plan to make money, whether that's through daily lunch service or catering gigs. Surprisingly, there are many first time food entrepreneurs that do not go through this process before launching a business, and it's a contributor to high failure rates.
To find out more about Food Truck Empire, visit FoodTruckEmpire.com or find them on Twitter, Facebook, and don't forget to listen to the Food Truck Empire podcast on iTunes or wherever you get your podcasts.
