Do some of your fondest memories involve travelling and tasting different street foods? If you have a penchant for adventure and a head for business, you may have decided to open your very own food truck.
Before buying a van and mapping out your route, however, it's important to think carefully about your food truck business plan - because the success of your venture depends on it.
If you're not sure how to go about drafting up a food truck business plan, then you've come to the right place. Simply read our guide below to make your food truck business plan come to life.
Why a food truck business plan is essential
As you're probably aware, the number one objective of a business plan is to ensure the financial viability of your venture. First and foremost, you need to make sure that your food truck will be profitable.
A food truck business plan also enables you to examine your business in detail, evaluate the amount of funding needed to get it up and running, and assess its expected profitability.
A food truck business plan will also be specifically requested by any bank or investor you decide to approach, so drafting one up is a mandatory step when it comes to securing financing.
Finally, a food truck business plan serves as a roadmap for your food truck's first three years of operation. As your food truck moves (literally and figuratively) through its first stages of operation, you can use the business plan to track whether it's flourishing as it should, by comparing the figures estimated in your initial forecasts.
What information should a food truck business plan contain?
Market research is an essential prerequisite for the creation of any business plan.
It will not only enable you to understand the dynamics of the market you've chosen to enter (whether you're opening an independent food truck or joining an already established chain) but also help you understand the expectations of your customers to ensure your offering the type of food they're looking for.
Writing a food truck business plan also enables you to keep track of the staff and equipment requirements of launching and operating a food truck, as well as how much each investment will cost.
It's also within your food truck business plan that you'll add up the costs associated with the stock, insurance, legal and accountancy fees, as well as your utility bills and rent.
To obtain the best rates and ensure you estimate these expenses as accurately as possible, get in touch with several professionals and ask them for quotes.
The financial forecast of a food truck business plan
Let's now look at the financial part of your food truck plan. The financial forecast is composed of four tables, all of which have a specific function that we delve into below.
The projected profit and loss account
With this table, you'll have an overview of the expected turnover, growth, and profitability for your food truck over the first 3 to 5 years of activity. This essential chart helps you identify potential opportunities to reduce costs and enables you to ensure the profitability of your food truck.
The projected balance sheet for a food truck
The projected balance sheet shows the value of the company's assets at a given time, and, in particular, the value of the assets (what the company owns) and liabilities (what the company owes to suppliers, lenders, etc)
The projected cash flow statement
With the help of a projected cash flow statement, you will see how much cash is generated in your food truck business plan, where it comes from, and how it is used, whether it's to repay its loans or purchase new tires.
You'll also be able to see if you have enough cash to fulfil these obligations, or even if you might soon have enough cash to expand your business by opening more food trucks.
The start-up capital
This section of your food truck's financial forecast gives your bank or investor a quick overview of the resources needed to launch your business and their costs - as well as ways in which they'll be financed, including via equity contribution, shareholder loans, and bank loans.
What does the editorial part of a food truck business plan look like?
Once the financial forecast of your food truck has been set up, you have the opportunity to put these figures and estimations into context by delving into the written part of your food truck business plan.
The editorial section of your food truck business plan is just as important as the financial forecast because it presents each aspect of the business in detail and proves to investors that you've thought carefully about the risks associated with it.
It's broken down into 7 sections, which we have summarised below:
The executive summary
Think of this section as the equivalent of a cover letter for your food truck business plan. The aim here is to introduce your project to investors in as engaging and concise a manner as possible, encouraging them to read on and learn more about your exciting venture.
In this part, you place a spotlight on the business's partners and their roles, as well as the distribution of the company's capital and the location of your food truck.
The products and services offered by your food truck
This section explains the products being sold by your food truck.
It's within this section of the food truck business plan that you'll present the results of the market research we mentioned at the beginning of this article. The objective here is to demonstrate that there is indeed a viable business opportunity for your food truck to flourish.
Your business strategy
In this part, you'll reveal three key plans for your food truck business plan:
- Your sales strategy - the prices you'll set
- Your marketing strategy - the actions you'll take to attract customers and build customer loyalty
- Your risk management strategy - how you'll minimise the risks related to your business
From your employees to your relationship with suppliers, you'll detail the operational organisation of your business.
The financial plan of your food truck
The financial plan of your food truck business plan puts your numbers into tables that you'll be able to present to potential investors so they get a better idea as to your expected profitability and how much funding you need.
Our advice for creating a realistic food truck business plan
The business plan for your food truck will be your pillar throughout the preparation and launch of your business. It's an essential document that must not only anticipate all the questions that a potential investor might ask you during your meeting, but it must also enable you to know the strengths of your business (as well as the risks associated with it) inside out.
We've listed several key areas of consideration below for you to pay special attention to when creating your food truck business plan:
- The fluctuation of stock prices: the cost of ingredients change all the time, so it's important to monitor their prices and anticipate any price fluctuations that are likely to have a considerable impact on your profit margin.
- Seasonality: every business is at the mercy of unpredictable risks and the rhythm of the area in which it's based, which is slightly easier to anticipate. Depending on your location and your concept, you'll experience a heavier influx of customers in either the summer or winter, or during certain days of the week - make sure your food truck business plan takes the impact seasonality has on your food truck into account so you can implement actions to keep your profitability up all year round.
- Recruitment issues: in the food truck business, the cramped working conditions and frequent travel brings with it a high turnover rate. When creating your recruitment plan, seek out candidates with experience in the food truck industry so they know what they're getting themselves into.
- Double-check your information! Conducting market research means referring to several resources to inform yourself of sales figures within the food truck market and emerging trends. You can turn to a wide range of professional bodies for this information, including the Office for National Statistics (UK), Eurostat (EU), or the Census Bureau (US), and the resources listed on UKHospitality. Whichever sources you use for data, double-check to ensure they can be trusted.
What tool should I use to write my food truck business plan?
There are several tools available to help you write your food truck business plan. To ensure you pick the solution that best suits you, we've reviewed the pros and cons for each below.
Write your food truck business plan using Excel and Word
This solution has one major advantage: it's cheap.
Be wary, however, that you'll need to have an accounting background (or at least be very good with numbers) to write your plan in this way without making mistakes in the calculations.
Hire a consultant to develop your business plan
Hiring a chartered accountant or consultant to take care of the financial part of your food truck business plan is a good way to avoid errors.
However, the fees are generally quite expensive: budget around £1.5k ($2.0k) for a complete business plan, plus more if you need to make changes after the initial version (which happens frequently after the initial meetings with lenders).
If you decide to hire a consultant or accountant, remember to check what's included in the service - are they developing a complete business plan or just doing the financial forecast? And are you willing to pay extra for them to make changes, if necessary?
Use online business plan software
If you're not used to writing business plans, another good solution would be to use online business plan software.
There are several advantages to using specialized software:
- You are guided through the writing process by detailed instructions and examples for each part of the plan.
- You can be inspired by already written business plan templates
- You can easily make your financial forecast by letting the software take care of the financial calculations for you.
- You get a professional document, formatted and ready to be sent to your bank.
If you are interested in this type of solution, you can try our software for free by clicking here.
That's it for now, we hope this article has helped you better understand how to write a food truck business plan. If you have any questions related to setting up your business, please do not hesitate to contact us.
Also on The Business Plan Shop
- How to open a food truck
- 5-step guide to estimating your food truck's turnover
- Business plan template for a food truck
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