How To Start A Food Truck Business

How to Start A Food Truck Business - HK Insruance - Watertown, MAThe mobile food industry is expanding at a rapid pace. According to research authority IBIS.com, mobile food operators are raking in 857 million a year in revenue. Some project that number will hit 2.7 billion in 5 years. All over the nation new food trucks, carts, and kiosks are popping up. In a few years, Minneapolis grew from 10 food trucks to 87. The average consumer spends about $10 for lunch and $15 for dinner at their favorite food truck. It’s usually quicker and often cleaner than a traditional sit down restaurant.  Owning and operating a food truck is a great way to earn a living while doing what you love. But where do you get started?

How to Start a Food Truck Business

In many ways it is the same as opening a restaurant, but on a smaller scale. Instead of finding a building you will need to find a truck. Instead of renovating the building, you will have to renovate the truck. However, there are some differences. You will have a limited menu. It’s probably best to do one or two things really well, then make sure everyone in the city knows you are the best at those things.

Research Is Key

Just as when choosing a location for your restaurant, a lot of research should be conducted to determine what the target market is, what the competition is, not to mention town zoning and other legal matters. For instance, if there are two trucks serving tacos in the same area, you might not want to be the third taco truck. Maybe a burger truck is what’s needed. Then again, after asking around, you may find a burger truck was already tried and never caught on, because the tacos are so popular. Proper market research is imperative to making the right decisions. Make sure to study the flow of traffic and pedestrians as they move through the city.

Securing Funding

One of the challenges of starting any business is gaining the required funding to make your business a success. Here are five options to explore which will expand your funding beyond your personal resources.

  • Government Loans
  • Local Small Business Development Center
  • Business Loan
  • Crowd sourcing websites
  • Angel investors (family and friends)

Pros and Cons of a Food Truck Business

As with any business, there are pros and cons to a food truck business.

Pros

  • You are your own boss
  • Keep your profits to yourself
  • You have about half the overhead of a brick and mortar restaurant
  • You can follow the crowds

Cons

  • Normally only specialize in one food category
  • Long hours
  • Startup funds are hard to start up

Insuring Yourself

Once you’ve finished your research and are ready to enter the food truck frenzy, it’s time to ensure your investments. There are several reasons you will need insurance. For instance, you might get in an accident while driving. Property might get damaged from a cooking mishap. Unless you are the only worker, you will need all the insurance associated with being an employer. Make sure you have each of the following insurances:

  • General liability
  • Workers compensation
  • Commercial auto liability
  • Personal business insurance
  • Umbrella insurance
  • Unemployment insurance

The mobile food business is an exciting and rapidly expanding industry. If you are interested in breaking into the market, go for it! If you have any questions on your insurance policy or other business coverage you should carry, please contact the H&K Insurance Agency. We’ll help you get your restaurant or mobile food business fully insured and help you reduce the risk to your business.