What is the pros and cons of having a food truck?
Starting a food industry in this era can be very awarding especially those trending Food and Beverage business. However, it could be challenging for the young entrepreneurs or startup as it has a very high cost to start a regular café. The concept of a mobile food truck is very popular among youngster. Let me show you why you should start your own food truck.
Food Truck Pros
- Lower Initial Investment and Operating Costs. It is an advantage of running a food truck instead of a regular restaurant or café as the excessive money that has been saved up could be used for other operating costs. Besides, operating cost such as utilities, supplies, and foods can be minimized in the mobile food truck and also with smaller staffing costs. Starting off with minimal investment costs is an advantage for first-time entrepreneurs and young individuals.
- An easier and faster step up speed. A mobile food truck is relatively small as compared with a regular restaurant and the step up speed including designing and getting your kitchen equipment done are much faster. For a standard food truck, all you need are a generator to keep your fridges running, kitchen stoves, grills, fridge, sinks and water tanks, food preps and storage and ventilation.
- Flexible time and location. Running a mobile food truck does not necessarily have a fixed operating hour like other restaurants. Mobile food truck owner can rove around until they find an optimal location for sales (with appropriate licenses and permits). Food trucker could also attend festival such as food truck carnival, Food Truck Park for people to enjoy their foods in an open area.
- The flexibility of modifying the menu. Mobile food truck also provides the flexibility of changing their menu time over time. As changing a food truck menu require writing the new selection of food choices and making photocopies of the new menu.
- Can build your own brand before expanding. With a mobile food truck, the owner can build their own brand at a smaller level before expanding into something much more significant such as franchise, or transforming into a sit-down restaurant/café. Here are some of the good examples, La Famiglia (https://www.lafamiglia.com.my/#about-us) and Little fat Ducks (https://www.littlefatduck.com/) and others.
- Easier to Cater. The mobile food truck has the ability to sell your food in various events such as festivals, concerts, private event or food carnival. By doing so, you are having your truck in front of many people and this is also another way of promoting the business. This is because the mobile food truck has flexible working timing and hours.
- Less Risk. One of the top priorities for the business owner is to minimize the risk. Although there is still some risk in running a mobile food truck, it can still make a great deal of money if the business owner has the right attitude and mindset in running this mobile food truck. The business owner entering this industry as a chef, they should also understand the business side of things to further minimize the risk.
- Overhead Costs. Operate a sit-down restaurant or café, utilities, working capital, supplies and maintenance fees can really stack up. Whereas, with a mobile kitchen business, these costing could be minimized and also the fact that the day to day costs are also cheaper as a mobile food truck does not operate for a very long business hours. Hence, it would be easier to operate and maintain.
- Good and cheaper ways of breaking and understanding the industry and learn. There are many great chefs or culinary students who want to challenge themselves in F&B industries but aren’t prepared for the business. Another way of breaking into the industry is starting off with the mobile food truck. Because mobile food truck required lesser initial startup cost, the lesser risk involved, easier to manage and operate. By operating a mobile truck allows the business owner to identify their audiences and food options in an easy and cheaper way (smaller level) before they could expand to a sit-down restaurant or entering shopping mall market.
Food Truck Cons
- Laws and Regulations. The mobile truck has been facing many laws and regulations. The fact is that every state has their own rules and regulation toward mobile truck which has been an issue for some food trucker to travel around. The business owner has to do their research to figure out where they want to be and contact relevant local authority to obtain appropriate licenses.
- A bank loan can be tough. Mobile owner rarely has a financial statement that is very detailed and strong. It might be easier if the business itself has a substantial business history otherwise bank or credit financial are skeptical in lending money to the business owner. Besides, mobile food truck seems to be a risky business and high failure rate to the banks and credits. Hence, the loan can be tough unless the business owner has a strong financial background. However, there are other credits, SME bank or Kojadi that the business owner could engage with.
- Competitive. As the year goes on, the growth of the mobile food truck business has increased rapidly. Many of the young start-up owner, entrepreneurs or even young chefs mostly likely want to run a food truck business as it provides the flexibility of working hours and locations. It might take up sometimes for people to discover your food truck, so spreading the word by offering free special or promotion that can attract your target audience in order to be stand out among others well-established food truck. In order to survive in this increasingly competitive industry, there are some tricks the owner would need to keep up with to be standout in this market.
- Low margin. The mobile food truck margins could be low because the prices of the food could not be as high as in a cafe otherwise consumer would rather select a more comfortable environment to enjoy their food. Hence, the prices of the food should be monitored and enough to cover the basic costing of the foods and etc. However, a food truck business is relatively fast pace as compared with a sit-down cafe. So, customer turnover is relatively fast and could potentially have more sales.
- Climate/Weather. Running a mobile food truck is known as greatly affected by seasonal changes and various weather conditions. A perfectly blue sky can quickly transform into rain clouds and indeed will put a dent on sales. The customer might rather spend more money in a more comfortable environment such as café to enjoy their food and drinks in such weather. An alternative such as having a canopy or boosting up sales on a sunny day would definitely help to improve this issue.
- Limited spaces. A business like mobile food truck is relatively small as compared to a sit-down restaurant and hence there will not be plenty of space to fit too many customers and also due to the small operation team would not be able to serve too many customers at once. However, the turnaround time for the mobile food truck is faster due to its face paced environment, customer most likely will not spend too much time on your truck, they will leave as soon as they finish their food. A quick customer service can also help in boosting up your sales by shortening the turnaround time. This is one of the factors impacting the sales and quality of the services.