Food Truck Business Plan | The 10 Steps For Success
Creating a food truck business plan is essential for your business. A good business plan will eliminate any guesswork that usually arises from a new food truck business. Even the experienced entrepreneurs use business plans. they would not be able to run a successful business without one. They use a plan for a variety of reasons from convincing investors to fund your business to when, how and what to pay a new employee. A business plan is a blueprint to your entire business. The question is, how do you write a food truck business plan?
According to the SBA.gov, they recommend that a business plan include the following sections:
- Executive summary – An overview of your food truck business
- Company description – This section describes what you love about the food truck business
- Business Operations – This section states what you will be doing as a business
- Market analysis – Explains details about what you foresee with the success of your business according to current trends
- Management – This section provides details of the staff
- Services – Explanation of all services and products you will be providing
- Marketing and sales – This section explains how you will promote your business and attract customers along with retaining them
- Funding request – Detailed breakdown of the amount needed to to fund your business over the next five years and why you need it
- Financial projections – A section to provide clear, upfront details about why your food truck will be a success
- Appendix – An additional section to write about things that you deem important, but do not quite fit in the above sections
There are number of sections which are all critical in the plan. They may seem daunting, but are crucial to having a successful business. If you find yourself needing help, you can reach out to SCORE which can provide free help with any of this process. They are a partner with the Small Business Administration providing free business mentoring and education.
Building Your Food Truck Business Plan
An executive summary is usually the first part of a business plan offering an overview of your business. An executive summary includes areas such as reasons for creating your business, gaps you will fill in your market, how your products or services will be sold, amount of capital needed and other important areas about your business.
The executive summary is the first part of your food truck business plan. This is where you are going to start introducing your business. You will want to give information here, but don’t make it detailed. Thinks about it this way, how would you introduce yourself when meeting someone new? You would most likely tell who you are and a few small bits of information. Right? The executive summary is the same thing. You want to give a good first impression and not drown the reader with details.
This section is important, because it provides the reader with information to who you are and what you do. This is the section where you can give a brief overview of your plans, especially if you plan on asking for financing. An explanation which makes you sound like you are knowledgeable is key here. You can explain how your knowledge will benefit your business.
A great breakdown of things you will want to add here are things like:
- Who your business is and the location you are planning to sell in
- Why you are opening a food truck business
- What your future plans are for the business (your goals)
- Any business partners and if so, who they are
- What types of food you are planning on selling
- Will the food be made in the truck or pre-made and sold as a packaged good
- How much you project things are going to cost to open this business
- How much you project to profit from the business
Although there are a lot of sections here, the executive summary should provide a good outline of your business without going into too much detail and should not exceed two pages. Also, if you are going to request funding, this should be listed last in this section.
Now you get to talk more about details and about your business. The goal of this section is to explain why you are so excited about opening a food truck. You will inform the reader the details of your business goals along with the purpose of your truck and what plans you have in store. This is the section where you will give details from what you provided in the executive summary. By the time this section is complete, it will provide anyone reading it a great understanding of how you plan to operate your business.
The company description section should include things such as:
- Your food truck business name
- Why you decided on a food truck instead of an actual restaurant
- Information about the structure of your company such as if your a sole proprietor, in a partnership, LLC, Corporation, etc.
- Your Mission Statement
- The history of your business (when you started and any significant turning points)
- What advantages you have that will help you succeed over others
Although this section is not listed in the SBA website, it is a great section to have. This section can be merged into the company description, but when adding this as a separate section, it can split up the details from the company description and make your food truck business plan easier to read for the reader. It can also make it easier to read when you revisit the plan to make any changes.
This section can provide the reader with more detail to what equipment and supplies your food truck will need along with adding areas like:
- Hours of operation
- The locations/s you plan to sell at
- Description of your food and how it will meet the needs of the marketplace
- Where your food will be prepared (in a commissary or in the truck or both)
- Who your target market is
- Your detailed goals and plans for growth
Market analysis is a section which should not be taken lightly. This section of your food truck business plan requires research to find trends of a specific market. In your case, this is where you will identify trends in food trucks so you can find where marketing are needed most. This will allow you to make business plans and execute them accordingly.
When performing market analysis, you will find information about food trucks, your competitors, the target market, the market’s customers and any challenges you might face in the food truck business.
As market analysis can be tough and it may be a good idea to get a professional to assist in this. They will be able to help you with all aspects of your marketing analysis. Just remember to give facts and do not provide any guessing. Backing everything up with data is your best bet to preventing any issues with the reader.
Management is a key component in any business. Without good management and management skills, your business will not succeed as well as it could.
The management section of your food truck business plan explains your management, the staff under them and how it is all structured. Anyone reading your business plan will be reading about who your management is and how their skills can benefit the staff and business.
The structure of the management section can be broken down into the following parts:
Structure of Ownership
Here you will define the percentage of ownership. If you are a sole proprietor, it can be a single sentence. Otherwise, you will want to explain who holds what percent of the business. You will want to add items such as:
- Names of owners
- What percentage of the business each person owns
- What type of ownership they have in the business
This sub-section of the management section will explain the different pieces of your business and who will be in charge of each piece. For example, you will explain who will be in charge for sales, marketing, etc. You can add:
- Names and positions
- Previous employment experience
- What important skills which will bring success to your business
- The salary they will receive
Providing this information will give the reader a good insight on who the owners and staff are and how they will help your business be successful.
In the services section, you are going to write about what food you are going to sell and to whom you will sell it to. You will also explain what need your food will specifically fulfill.
You will want to include information about:
- A basic description of your food including details about your food and what will make it stand out from others
- Your food status
- What type of food are you going to offer?
- Do you have a final menu or is all this still in an idea stage?
- If in idea stage, explain how you will bring it to completion on the menu
- Why you think customers will love your food
- Any non-disclosure agreements for secret recipes etc.
- Future growth – Any changes to the menu or additions of food trucks to your business, etc.
You want to be specific and lay out all the pieces here so the reader knows about your food, type of customers you will attract and the impact you hope to achieve.
Marketing and Sales
Now that all the core sections of your food truck business plan have been written, it’s time to talk about how you plan to attract customers.
The marketing and sales section of your business plan explains how you plan to… well, market and sell. You will explain how to plan to get people coming to your truck to partake in your delicious food. This could be from online marketing to advertisement via your truck wrapping. Just remember that being original is key here.
Area of importance are:
- Position your business – What will make you stand out against your competitors? Will it be lower prices, a guarantee, etc.
- Promoting your truck – This is the advertising area of this section. How are you going to get the word out about your food truck?
- Social media
- Public relations
- Newspaper ads
- Loyalty rewards
- Online location page to inform where your truck will be next
These are all important to identify and explain to the reader. It will also benefit you as you keep coming back to your plan to ensure you are staying on track or need to revise while discovering a certain idea is or is not working.
Now for funding. Ah yes, funding. This is one of the most important sections of the entire plan. In here, you will provide detailed projections based on past financials or estimated ones if you are a new business and do not have any history.
If you have been in business for a while, you will need to include previous statements of:
- Cash flow
- Accounts receivable and accounts payable statements if available
Since, this is a guide for creating a food truck business plan mainly for beginners that are interested to starting your own food truck business, you probably do not have any account history. However, you will still need this section. Therefore, you will need to base projections from research and analysis on the food truck industry. You will want to include:
- Projected income
- Cash flow projections based from the analysis
- The amount you may need if asking for a loan
- How you will repay any loans
- How the loan money will be used if rewarded
You will need to identify any and every part of loan money and how it will be used and paid back. Any investors are going to require this and once again, when you revisit your plan, you can make appropriate changes for future funding.
Financial projections is the projected plan of financial use for the next three to five years. This is a projection of how you will allocate your funds and set clear goals.
No matter where you plan on getting your loan, you are going to need certain section in this plan. These can include different tools to help visually demonstrate your business financial plans like:
- Excel sheets
For creating financial projection flows, you can get a number of tools and a lot of them are free. Financial Post has a great article providing a slew of tools like spreadsheet templates and software. They explain how going through SCORE, you can get assistance on your food truck business plan and get free cash flow and projection templates. They also explain how there is software like QuickBooks and Float to help with your projections.
Providing details to your financial projections will provide your potential investor how their investment will contribute to your business.
Now you have your food truck business plan created. There is one last part you will want to include and that’s the appendix. This is the section that you can include all the information that did not fit in any of the above sections. For example, you can include any charts or notes which contain further explanations from any of the parts above. The appendix is also a great place to add your resume (along with any employees), contracts, permits, legal documents, etc.
Remember that this plan is a story of your business and vision. It’s hard to tell a story with graphs and charts, so you will complete your story here.
Writing a food truck business plan takes a bit of time, research and planning, but a well written plan will help result in a more successful business with a much higher chance of being rewarded funding. Remember that a business plan is a blueprint to your business. Without a blueprint, it will be MUCH harder to find direction in the beginning and as time progresses.
Now go get started!
Wishing you the best for your business!