Pros and Cons of Opening a Food Truck Business
In 2008, Roy Choi sold Asian-infused tacos from his truck in Los Angeles. Although Kogi BBQ wasn’t the first food truck in American history, Choi sparked a movement that’s continuing to thrive today.
According to IBISWorld, the food truck industry is worth nearly $1 billion and has grown by 7.3 percent in the past five years. Currently, there are more than 4,000 food trucks in the U.S. with more than 14,000 people employed in the industry.
Of course, starting a business in any industry has its risks. Even if you have a solid business plan and a passion for the mobile food industry, it can still be challenging to get your business off the ground. Even more so, it can be hard to sustain long term success. Due to this, we're reviewing the pros and cons of opening a food truck business, so you can decide if serving food on wheels is right for you.
What Are The Pros of Opening a Food Truck?
1. You Can Create Your Own Menu
Most chefs dream of the ability to create their own menu and serve food that they invented. A food truck is a great opportunity to showcase your culinary skills and produce a small themed menu. Whether you have family recipes that have been passed down for generations, or a new creation that your friends rave about, you get the freedom to develop your own menu items.
2. You Get to Be Your Own Boss
For many people, being their own boss is a dream come true. There’s no one telling you what to do, how to do it, and where to be. On the flip side, there’s also no one writing your paycheck. You must be motivated and willing to work long hours, even if you don’t make a lot of money in the beginning.
3. It's Less Risky Than Opening a Brick-and Mortar Restaurant
For all small business owners, minimizing risk is a top priority. Since there are less startup costs required to start a food truck, it's a less risky way to get into the restaurant industry. Many chefs start food trucks and go on to become successful restaurant owners.
On the flip side, some food truck owners realize they don’t want to own a restaurant due to the considerable risk, and instead invest their time and money into growing their food truck empire.
4. There's Ample Opportunities
When you run a food truck, there's so many ways you can market your business. For example, you can park near busy office areas when employees take their lunch breaks, cater summer festivals, or park a other outdoor events. These are just a few examples, but there's plenty of ways you can promote your food truck business and reach new customers.
What Are The Cons of Opening a Food Truck?
1. You'll Work in a Small Space
Food trucks are small, and once you add in kitchen equipment, a pos system (if you're accepting credit cards), and other necessary cooking items, the space feels even smaller. Each city has requirements on food truck sizes, and most aren’t large.
For instance, Madison Wisconsin mandates all food trucks be no larger than 120 square feet (10’X12’). You’ll be in the small space for hours at a time, so you must be okay with working in cramped quarters. If you’re claustrophobic, starting a food truck business might not be the best option for you.
2. You Must Abide by Local Zoning Laws
Even though your restaurant is mobile, you can’t park anywhere you’d like. Cities have local zoning restrictions, which designate commercial and non-commercial zones. Due to this, most food truck owners plan their schedule months in advance so that they can get permits to park in certain locations. Also, some cities don’t allow food trucks to park in the same spot two days in a row, so it takes careful planning to stay compliant.
In addition, it’s important to remember that in many cities, food truck owners must adhere to parking restrictions and pay for parking just like normal cars. Due to this, make sure that you allot money in your budget to afford parking fees.
3. You'll Need to Be Prepared to Pay for Future Repairs
According to the Balance, food trucks can cost $30,000 to $100,000. Some food truck owners don’t have enough capital to buy a new vehicle, so they opt for an old truck they can remodel. This can be a costly and time-consuming process. Furthermore, each state has different construction standards for a legal mobile food unit, so it’s important to fully understand the requirements in your state before you purchase a vehicle or remodel it.
In addition, while buying a used truck can save money in the beginning, the repairs can be costly if the vehicle breaks down. Not to mention, you won’t be able to serve customers when the vehicle is getting repaired and you’ll lose out on revenue.
4. There's Considerable Competition in this Industry
Before you open a food truck, it's important to be aware that it's a competitive industry. While it's encouraging that there's a demand amongst consumers for quick, inexpensive meals, many entrepreneurs want to start their own food truck businesses. In Portland, for example, there are 500 food trucks competing for customers!
Before you open your business, be sure that you have an idea that’s unique and in demand in your area.
In Conclusion: Every City is Different
Every city has different laws and opportunities for food truck owners, so it’s important to understand your market before jumping in. Conduct research and determine if your city offers incentives for small business owners and if they allow parking on city streets.
It’s a good sign if there are food trucks already established in your city, but you’ll want to ensure your market is not over-saturated with food trucks. Even if you’re the best chef in the city, it’ll be difficult to attract customers if other trucks are taking up the available parking spaces.
Editor’s Note:This post was updated for accuracy and comprehensiveness in April 2019.
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