Opening a business involves talent, hard work, and a bit of luck. According to Investopedia, 20% of new businesses fail within the first two years of opening. That number jumps to 45% within the first five years and 65% for the first decade.
Operating a successful food truck is hard but not impossible. If you’re asking yourself why food trucks fail, you’re on the right track to running a profitable business. Here are the four most common ways food truck owners fall short and how you can fix them.
Excess Cost of Operations
Most food trucks fail because they don’t get the cost of operation under control. Some owners enter the industry expecting food, labor, and the vehicle to be their initial costs. However, other expenses can slowly add up, especially if you do not have an established budget.
Some easy-to-overlook costs include:
- Auto insurance
- City, county, and state permits
- Legal fees
- Liability insurance
- Vehicle maintenance
A budget is your best friend when keeping costs under control. Noting all your monthly operating expenditures keeps you aware of how much money you’re spending versus earning. You don’t have to be an accountant to start a budget, either. Just open an Excel document and start listing expenses.
Food trucks succeed when they go where the people are. The more people there are in a given area, the more likely a vendor is to have a customer. As a rule of thumb, food trucks sell to 5% of people during a festival or large event.
A poor location doesn’t attract enough customers or the right customers. Consider your target demographic when choosing a location. If you’re parking outside a college bar, sophisticated dishes like sushi or beef Wellington shouldn’t be on the menu.
Some of the best places to set up shop include:
- College campuses
- Designated food truck parks
- Farmers markets
- Office buildings or business districts
- Sporting events
Doing Too Much
The mantra of every food truck should be KISS: Keep It Simple, Stupid. Too many owners want to show off their creative flair with extensive menus and intricate dishes. If you’re going to serve complicated items that you’d find on a tasting menu, you’re better off opening a brick-and-mortar restaurant.
Successful food trucks require a streamlined menu with straightforward dishes. Create flavorful items without going overboard on preparation, cooking, or costs. Keep your list to 6 to 12 dishes, and you’ll save yourself time and money.
Lack of Social Media Presence
Social media and food trucks go hand in hand. You need to actively tell patrons where you’re going to be and when. The planning lets them build their schedules around you and even make advanced purchases with mobile ordering.
Many failed food trucks neglect social media or do not understand how to leverage the platform. Establishing a presence on major apps like Instagram, Facebook, and Twitter provides a centralized point of contact between you and customers. Social media is where your target audience hangs out, so get on it if you want to attract new and loyal customers.
Are You Up For the Challenge?
Roughly half of food truck operators fail in the first five years, in large part because of poor planning. They fail to consider all the operating expenses and the importance of marketing and finding reliable locations. When you take all these factors together, it’s challenging to turn a profit.
Strategic planning goes a long way in making a food truck successful. Truckster offers a free mobile app that helps you take care of all the little things from accepting mobile orders to creating a menu. Download it today from the Apple or Android stores.