John White, MBA
Columnist at Inc. Magazine
Restaurants can be a tricky business. Generally, as businesses go, the first year is the toughest. This rule is exaggerated in the restaurant business. Startup costs for an average restaurant can reach into the hundreds of thousands of dollars, and maintaining equipment and other capital investments can mean a struggle that goes on for years.
Yet people need restaurants and many restaurants do well, which makes getting into the restaurant business an alluring proposition. But what if there were a way to test the waters of the foodservice industry without the hefty capital investment? Enter food trucks.
There was a time when eating food out of a truck meant you were possibly laboring at a construction site or riding carnival rides with your family. Today, food trucks are everywhere, from city blocks at lunchtime to a busy day at the park. Getting food to people has become mobile, and most people are happy to have options so close by. In fact, food trucks are the fastest growing channel in the foodservice industry today.
So what’s all the fuss about?
Food truck businesses have grown fourfold in the last five years
Food trucks have always been around on a limited basis, from the ice cream man who drove through your neighborhood when you were a kid to the corn dog truck at the state fair. But when food trucks started to become popular as a mobile restaurant option in mainstream everyday life back in 2012, it was a $650 million industry.
In 2017, by contrast, food trucks are projected to be a $2.7 billion industry. Growth in the food truck sector is outpacing growth in the brick-and-mortar restaurant sector by 1.1%. Food trucks may have been considered a fad at one time, but this is a fad that shows every sign of sticking around.
What are the advantages of owning a food truck business?
There are numerous advantages to owning a food truck business, not only because of their soaring popularity, but also because of the extreme flexibility that comes along with them. Some of the major advantages include:
- Low startup costs – Less than $100,000 can get you started in this business
- High return potential – Earn between $250,000 and $500,000 on average
- Location, location, location – If you’re in a bad location today, you can be in a new location tomorrow
- Low payroll costs – Food trucks can be run by just one or two people typically
- Social media advertising – Millennials use social media to find out food truck locations
- Immeasurable flexibility
- Don’t like your menu? Change it!
- Want to go on vacation? Park your truck!
- Want to move to a new town? Take your business with you!
There can be challenges along the way
It’s important to know the laws where you live, because there are still a few places where food trucks either aren’t allowed or are heavily regulated. Even parking can be an issue in the least regulated areas. Food truck business challenges include:
- Challenging mobile vending laws
- Need for parking permits
- Health codes
- Rules about distances from other businesses
- Needing a commissary for food preparation
- Insurance costs and challenges
- Fire codes
- Rival food trucks
Major food chains are jumping on board
Many brick-and-mortar food chains are seizing the popularity in food trucks by spinning off their own versions, though the objective may be a little different than a typical food truck business. Chains such as Starbuck’s, Chick-Fil-A, Cousins Subs, and White Castle have all been experimenting with food trucks as a way to bring their brands to the customers instead of trying to get the customers to come to them.
Taking familiar food to festivals in a food truck is a great way to expand business without having to build another brick-and-mortar establishment complete with all its necessary equipment and overhead.
So what are you waiting for?
Food trucks are a great way to test a restaurant concept, develop your customer base before you build a new restaurant, or even just give you a solid, steady income where you can be your own boss. Getting started can be very inexpensive, especially if you start with a used, fully furnished food truck instead of a new one.
Chances are there are several food truck operators in your area who have moved on to brick-and-mortar locations and are looking to offload their trucks.
Of course, there are plenty of folks who continue to operate their food trucks as a mobile location even after they’ve established a fixed restaurant. The flexibility is great and it’s yours to seize. Learn more about the food truck business from this infographic.