Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
How to Make Money with a Food Truck Business
Daniel Bostock
15th Jun 2020
A food truck business could be the solution to setting up a career in catering even in the days of social distancing. Street food has seen a surge in popularity in the UK recently, and it’s easy to see why: restaurant quality meals at fast food prices. What more could you possibly want?
The food truck revolution of the US has taken over the UK in recent years, too. It’s no longer about kebab vans at 2am after a drunk night out. Gourmet food trucks are incredibly popular, with returning customers and a reputation for excellent food. It’s a great way to set up a catering business without the overheads of running a restaurant – and you have total control over where you go to sell your food, too.
If you have the passion for cooking and the drive to set up your own business, there’s never been a better or more profitable time to set up a food truck business.
Where do you start though? Whether you’ve never started your own business, or you are an accomplished entrepreneur, there are plenty of things to know before you begin. So, buckle up and start your journey here.
- Why set up a food truck business?
- What type of food can you sell?
- Skills you need
- Essential licenses
- How much does it cost?
- Late nights and lunchtime customers
- Get into festivals
- More business ideas
Why Set up a food truck business?
With lockdown (hopefully) coming to an end, everyone is looking forward to being able to get outside just in time for summer! Lots of people are ready to start frequenting their favourite restaurants and café’s again, but there will be a stigma around being in a busy bustling room for a while after lockdown ends. A food truck is the best way around this! You can provide fantastic, high quality food without the stuffy setting of a restaurant holding you back.
The summer is a time to be outside with your friends and family, taking in the good weather and having a few laughs. Food trucks have a major advantage over other restaurants in that they can go to the people instead of hoping the people come to them.
If you can impress your customers enough in the summer you will find that they will come back to you throughout the year. Everyone has a favourite restaurant to go to, so make their favourite you! Food trucks can start to struggle through the winter months, so building a loyal following in the summer will make that easier. If you build it, they will come. If you impress them, they will come back!
What type of food can you sell?
The brilliant thing about a food truck business is you can sell almost any type of food! Some offer the classic something-with-chips varieties, while others provide a gourmet experience with artisan ingredients. Others are focused purely on just selling desserts, or even one type of dessert (like crepes). Finally, a food truck business could also be a drinks truck business, too! Portable bars have grown in popularity over the years and are perfect for special events like weddings.
Food trucks have a few things in common that’ll help you decide what to cook:
- It must be easy to eat without a table
- Small kitchens mean you’ve got to be efficient with your cooking processes
- You need to produce food quickly to avoid big queues
For some food trucks, like bakery trucks, you can cook ahead of your day to limit the amount you have to make on-the-spot. However, this can limit your sales if you’re suddenly very popular on the day! Being able to cook on-demand can help you manage the ebb and flow of customers on a busy day.
Skills You’ll need to get started
Before you dive in head first, make sure you have the right skills to make your business a success. If you’re planning to go it alone, it’s a lot of work. Consider going into business with a partner, or hiring staff quickly! If you don’t have these skills at the moment, don’t worry. You can pick these up on the way.
- Cooking ability
- Business skills
- A marketable niche
- Customer service
Cooking skills
The most obvious thing when starting a food truck is you will need to have some cooking skills. You will spend a large portion of your time in the kitchen prepping and cooking. You will need to be consistent, fast and able to do it on your own at the beginning. Hiring staff before your food truck is a success will not be easy. Your unlikely to have the money to pay staff, and getting the best staff behind you won’t be easy if you are an unknown.
Having previous experience as a professional chef or caterer will ensure you are well suited to the environment you’re putting yourself in. If you have never worked as a chef professionally, then you should only start a food truck if feeding people is something you are incredibly passionate about.
Business acumen
Cooking skill alone will not allow you to succeed when it comes to running a food truck. You or your associate will also need to have some business skills.
Make a business plan before you do anything else. Work out realistic budgets, including the expense of setting up and marketing your food truck business. You’ll need to price your food so it’s attractive to customers – yet still make a profit. As your overheads are smaller than a fixed cafe, you’ll find it easier to recoup the setup costs relatively quickly if you have a good marketing plan.
If you’re not sure where to start with planning your business, don’t panic! Your local authority will have a ‘business hub’ with access to mentors and even funding to get started. If you’re currently claiming Universal Credit, you can apply for the New Enterprise Allowance, too. This scheme pays you while you’re setting up your business, gives you mentorship from experienced professionals, and helps you access cheap startup loans, too.
Your local Citizens Advice Bureau will also be in a position to signpost you to local business mentorship programmes, too. If you’re between 18 – 30, get in touch with the Prince’s Trust for free mentorship from a nationally-recognised organisation.
A marketable niche
To give yourself the best start possible for your food truck, you need an instantly recognisable brand. You also need to master the art of social media to spread the word about your business and tell customers where you’ll be pitching up next.
Choose a niche that’ll make it easy to market your business, too. Is your style fast-and-filling? Artisan ingredients? Soul food? International cuisine? Whatever you choose, make sure you can easily describe what you do in one short sentence. This makes it easy to sell the concept – and therefore, your food – to new customers.
Design your logo, business cards, and flyers early in your business setup. Get the word out before you start operating, to generate interest in your food truck business. Many food trucks also have external signs (like A-frames) to put out near their pitch. This is a great way to display your menu, help customers decide what they want while they’re in the queue, and entice those walking past to try your food.
Customer service
A food truck is as much about the customer experience as it is the food. You want people to feel valued and welcome from the first moment they see your truck. Think carefully about the full customer journey, from the moment they approach your truck to when they leave. How can you give them a good experience?
Remember that fewer customers are carrying cash and are using their card or mobile phone to make payments. To service everyone, use a portable card machine to take card and contactless payments.
Also, it’s inevitable – as with any business – that some customers may have complaints. Make sure you deal with them politely – a smile goes a long way to resolving any issues! Train any staff you’re hiring to manage customer queries, too – it’ll make a huge difference to building a great reputation.
Essential Licences
To sell any food in the UK, you must apply for food business registration at least 28 days before you begin trading. You’re looking at a 2-year prison sentence if you are caught trading without one, so make that priority number one!
To sell food as a street vendor, you also need to register with your local council at least 28 days before you start selling. How handy both licenses are both needed with 28 days notice! Apply for both on the same day to start your journey as soon as possible. You can apply easily through the Government website. Trading without this license comes with a fine of £1,000.
Food safety qualifications
You and all of your staff must have current Level 2 food safety qualifications. You can get the certificate on a day-long course from the Chartered Institute of Environmental Health. It costs around £100 per person. Remember to budget this for every member of staff as it is illegal to sell food without it.
You should also write up a HACCP plan for your food truck. This helps any authority investigating the hygiene and food safety of your business see that you’ve planned for potential problems and provided solutions. For example, to avoid cross-contamination for certain allergies, you might use separate equipment for gluten-free dishes.
All on-site gas equipment needs to be gas safety compliant, and all electrical equipment must be PAT (Portable Appliance Tested) every year. You must also carry adequate fire-fighting equipment at all times, and will also be required to have onsite hot water hand washing facilities on board.
Insurance
Do not forget Public Liability Insurance! This is what protects you against compensation claims from a customer, client or the general public arising from any hazard associated with the running of your business.
This could be, for example, food poisoning, falling signage or damage to someone’s else property. The minimum insurance cover most councils and event organisers will accept is £5 million. However, this seems to have risen over recent years, with some only accepting £10 million. Not all insurers will cover mobile caterers or street food vendors. There are, however, some speciality insurance companies that deal specifically with this type of business.
How much does a food truck business cost?
If you have decided this still sounds like something you want to venture in to, then how much are you ready to spend to get your business off the ground? A food truck business can take a fair amount of capital to get started. Check out our article on getting funding for ways to secure that cash.
The cost of a brand-new food truck with all of the fittings and equipment you will need (fridges, freezers, plancha grills, gas etc.,) will cost you around anywhere between £5000 and £50,000! While that sounds like a lot, it’s still far cheaper than running a restaurant. Leasing a restaurant space costs thousands of pounds a year in rent – plus business tax rates. If you’re buying a building, then it gets even more expensive – upwards of £70,000 for a small cafe, before you buy any equipment. Kitchen equipment would set you back around £150,000, and then you need to decorate and furnish at around a further £70,000.
So, when you add all that up, £50,000 for a food truck business is a good deal! You can always buy a second-hand truck when you’re starting out. Try Gumtree for a bargain, anywhere between £1,500 and £20,000 for a high-spec truck. You’ll still need to pay for any refurbishments and to make sure equipment is in working order.
If your food truck business doesn’t need so much kitchen equipment, consider smaller vintage-style vans. These are very popular with private events and festival organisers, as they’re easy to get into smaller spaces. Alternatively, you can look for converted trailers for your pop-up bar or food business.
Running costs
You’ll often need to pay for a pitch fee (especially at events like festivals), as well as local licenses. Remember that your customers will need napkins, disposable cutlery, and boxes to take their food away in. Try to purchase eco-friendly materials like compostable ‘plastics’, bamboo, or wood alternatives. You’ll need to budget for ingredients, advertising, staff, and fuel to drive your truck!
You may also want to invest in some portable tables and chairs, too. Not every pitch will allow outdoor seating – but it can be a real selling point when there are several food trucks at a festival or event. People like to sit down when they can!
Make a realistic budget for the first six months of your business. Review it after this time, to see where you can make extra savings or which elements need more expenditure.
Make the most of lunchtime and late night customers
Through the week, many of us can’t get out of the office for lunch. Many offices are in business parks outside the city centre and finding great places for lunch can be difficult. So, having a food truck come around selling top-notch food at a reasonable price just outside the office buildings goes down a treat! Find local business or retail parks where you can post up around lunch and you’ll have a constant stream of customers from Monday-Friday tiding you over until you next head out.
First, you need permission for a food truck or food stall from the owner of the land or the property management company. Most business parks welcome a visiting food truck, so it should be quite easy to find a regular haunt to keep your income steady.
On the flip-side, there is a big market for late night food trucks. Late night revellers and people coming off late shifts all need to eat. You can be their knight in tin foil armour, as it were. Just remember any premises selling hot food or hot drink at any time between 11pm and 5am must be licensed under the Licensing Act 2003.
Get into festivals with your food truck
Next year should see the return of all of the biggest festivals around the country. The biggest music acts from around the world with thousands of gleeful campers having the time of their life. Whether they are there to sing, dance or just have a great time with their friends, they all need to eat. And that’s where you come in. Food trucks make their highest profits during the festival season, and that is not a coincidence. You have 100,000 potential customers within a two-mile radius. You’re going to be busy!
You can’t just rock up to a festival and park your truck there. You have to apply for a pitch, months in advance. The earlier you apply, the more likely you are to get in.
Remember, when you apply you will have to mention:
- Your business details and contact number
- What food you sell (They want a diverse collection. Having 5 burger vans together is boring!)
- How big your truck is (to make sure it’s feasible you’ll fit in the space)
- How many passes you will need (for your staff at the festival)
- If your passes need a camping pitch, too
- What electrical requirements you require (how many hookups you’ll need)
You’ll also need to provide evidence of any licenses and hygiene certificates. Many festival organisers like to try your food before you set up a stall, too – so they can make sure it’s quality fare.
Finally, even though we’re talking about next summer, keep an eye out NOW for announcements about festival dates. Food truck pitches book up extremely fast, so get in now! It’ll also help you plan your cashflow and business forecast if you’ve got things in your diary for next year.
More business ideas
Want to know more about running a business? Perhaps you’re looking for more startup ideas. Check out these articles next!
- Benefits and funding for the newly self-employed
- Make money with a floristry business
- Business ideas you can start with (almost) no money
- Make money as an event planner
- Teach online classes to make money from home
- How to overcome long-term unemployment
- Cashflow management tips for the self-employed
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I know people that have made a success of this, but it’s certainly a lot of hard work.