Starting a food truck business is an exciting venture, but it can also be intimidating. It requires a considerable amount of planning and financing to get up and running. The food truck industry is growing, but it still comes with its own unique set of speed bumps and hesitations that might deter you from getting started.
In this blog, we’ll discuss five common hesitations that food truck owners consider when financing their business.
Starting a Food Truck Business: Typical Speed Bumps for New Entrepreneurs
The food truck industry is competitive and requires diligent marketing, menu planning, and customer service. Many food truck owners enter the business without doing enough research or considering their true talents as small business owners.
Before you jump into food truck financing, make sure that you have sound reasons for starting such a venture and understand how the food truck business works. Some of the reasons why some small business owners hesitate to start food truck businesses include:
1. Is a food truck business a good fit for your skills and goals?
Running a food truck is a lot of hard work, and it’s important to make sure it’s the right fit for you or your team. Consider if this type of business fits within your current set of skills, as well as your desired income and work-life balance. In addition, food truck owners should understand the legal obligations they have to food safety regulations, food vendors’ licenses, and other food industry standards.
2. Can you get the food truck equipment you need?
In addition to a food truck itself, food truck businesses require other specialized food service equipment such as deep fryers, stainless steel counters, commercial refrigerators, freezers, cutting boards, etc. Some of these items can be expensive and difficult to find for food truck businesses.
The typical cost of setting up a food truck can range from a few thousand dollars to nearly $100,000, depending on the size of the truck and the type of equipment needed. The biggest amount you will need to shell out if this is the business path you want to take is for the truck itself, followed by the equipment.
3. Do you have access to food truck financing?
Food truck financing is not always easy to come by, especially if you don’t have a strong credit history or assets such as real estate or a car to pledge as collateral. Look into food truck financing options such as government grants, small business loans, and crowd funders. Financing providers usually have their own eligibility requirements, so make sure you know what you need before applying.
4. Can your food truck manage food cost expenses?
Food costs are one of the biggest challenges food truck owners face. The food you serve should be of high quality at a price that is affordable to your customers while still generating a profit. Doing food cost analysis, managing food waste, and finding the right suppliers are key to making food truck financing cash flow positive. In addition, food truck owners should also consider the cost of labor and other overhead expenses.
5. Are there food truck laws and regulations in your area?
Food trucks have their own set of food safety, liability, and zoning regulations. For example, food trucks may be limited to certain hours of operation and food preparation areas. Make sure you understand food truck laws in your city or state before getting started.
Are you ready to manage a food truck business? If you’re considering food truck financing, be sure to do your research and look into these considerations mentioned. They look like roadblocks, but they are actually just speed bumps that you can easily overcome. Learning the food truck business and your local food truck laws will be key to your success.
Food Truck Financing: Moving Forward With Confidence
It’s understandable to feel overwhelmed with everything that comes with setting up a business from scratch. The good news is, you don’t have to do this alone. Our experienced financial brokers from Charter Capital can help you evaluate your financing options and get the money you need for your food truck business to grow and thrive. We have helped small business owners just like you get the equipment financing they need.
Contact us today to find out how we can help get your food truck business up and running!