Do you want to start a food truck business?
Do you have dreams of starting your own food truck company? If you’re interested in being an owner-operator, working in an urban area, and cooking delicious, specialized cuisines then you may want to start a food truck company. In this article we’ll outline some of the key components to creating an effective food truck business plan.
How do I start a food truck business plan?
Before reading this food truck business plan sample, ask yourself why you want to create a food truck business in the first place? Operating your own business can be extremely rewarding, but at the same time very challenging. Is there a unique, memorable, or fusion cuisine that you want to share with your target audience? A good place to start is by familiarizing yourself with the competitors in your area by creating a competitor analysis of every food truck in your operating area. Ask yourself exactly what you want to offer, and make sure it’s unique and delicious.
Executive Summary
The purpose of this food truck business plan is to secure a $150,000 investment by providing an accurate projection of future revenues, earnings, expenses, liabilities and summary of operations.
Jamaican Jerk Food Truck was incorporated in the province of British Columbia, or January 1, 2017 by sole shareholder, Winston Jones. The company has seen steady growth in the past three years, and is looking to expand throughout the Vancouver area.
Entrepreneurs have a tendency to present their food truck businesses rather bullishly, spotlighting strengths and disguising risks. With three years of respective experience, and accurate financial filings we present to you a plan that outlines our competitive advantage, key competitors, growth strategy, management team, and capital requirements.
Jamaican Jerk Food Truck Inc. was established three years ago utilizing detailed market analysis conducted in Vancouver, BC. It became evident that consumers were seeking more and more ethnic choices in the food truck industry. In this study, Jamaican cuisine was the most underrepresented ethnic choice; in addition, there was a growing Jamaican population that supported more food truck and local restaurant options.
Our financial projections are a conservative estimate based on three years of steady, consistent growth. Moreover, our market analysis accurately describes the emerging trends in the food truck industry that are supported by 10 years of ballooning demand. This provides you with a precise estimation of the opportunity for Jamaican Jerk Food Truck to expand its market share well into 2025.
This business plan also incorporates risk mitigation with a presentation of traditional and non-traditional risks to our food truck business. Instead of not disclosing these risks, we’ve clearly outlined them and developed strong strategies to alleviate them if necessary.
1.1 Mission Statement
Our mission is to offer the most authentic Jamaican cuisine and cultural experience in Western Canada’s food truck industry.
1.2 Vision Statement
Our vision is a Vancouver that embodies the culture of Jamaica; relaxed, revived and well-fed with the delicious cuisine and experience of Jamaican Jerk Food Truck.
1.3 Objectives
Our primary objective is to secure a $150,000 investment for a 30% stake in our company. With the investment we plan to purchase our second food truck for $125,000, and the remaining $25,000 will be allocated to build a new website and provide ongoing search engine optimization. In addition, our objectives are as follows:
- Offer the most authentic Jamaican cuisine and cultural experience in the Vancouver area
- Share the relaxed and cool culture of Jamaica with our customers
- Create an accepting work environment that empowers our staff to be the best version of themselves
- Increase our revenue to $300,000+ in 2021, and maintain a Compound Annual Growth Rate (CAGR) of at least 15% in years 2022 and 2023
- In 2022 rank on the first page of Google search for keywords: food truck vancouver, jamaican restaurant vancouver, best food truck vancouver
- Maintain profit margins of at least 10%
Company Summary
Incorporated on January 1, 2017 Jamaican Jerk Food Truck Inc. is solely owned by Winston Jones.
2.1 Critical Success Factors
- Branding: playing Jamaican music at our food truck, social media, using Jamaican lingo with customers, only offering authentic Jamaican food
- Revenue Growth: (4.1 Revenue Streams – Delivery) Partnering with food delivery apps such as Skip the Dishes and Doordash will provide us with a new and promising revenue stream.
- Quality of Food: At the end of the day our success depends on the quality of our food. With detailed training systems for kitchen staff we ensure our products are equally delicious every time. Our President, Winston Jones will oversee the development of the menu and decide on which dishes are substituted for new options.
Market Analysis
In the past five years the food truck industry has evolved from serving basic options such as hamburgers and hot dogs to a plethora of ethnic, vegan and health-conscious cuisines. Today, consumers expect to be wowed by a food truck’s offering of unique, authentic and delicious options. Food trucks excel in urban settings such as major cities or towns. There are no major players in the Canadian Food Truck industry. The market is primarily made up of owner-operator’s, small and mid-sized businesses.
3.1 What does a food truck profit?
Strong competition and the labour-intensive nature of the industry provides street food vendors with a moderate level of profit. Common purchases such as foodstuffs, beverages and packaging are the biggest expenses for most food trucks, though wages are also a considerable cost.
Wages are expected to grow at an annualized rate of 2.2% to total $83.6 million. Imputed wages, being the wages the owners avoid paying by providing the service themselves, are included because most of the businesses in the industry are owner-operated.
Industry profit, defined as earnings before interest and taxes, has fallen over the past five years to reach an estimated 11.8% of revenue in 2020. Despite steady purchase costs, the loosening of regulations and a flood of new entrants have exacerbated price-based competition. Furthermore, the failure rate of businesses remains high and many operators struggle to turn a healthy profit. Industry operators are not only up against traditional brick-and mortar establishments, but also endure a barrage of new operators with niche offerings as industry competitor growth continues.
3.2 Government of Canada – Statistics
Mobile Food Services: This industry comprises establishments primarily engaged in: preparing and serving meals and snacks for immediate consumption from motorized vehicles or non-motorized carts.
Information on the number and size of businesses for 2019:
Establishments: 2,416
0-99 Employees: 99.9%
Average revenue: $155, 200
Profitable: 77.8%
3.3 Market Growth Rate
Industry growth is foreseen to proceed over the five years to 2025 at an expanded rate, as social distancing guidelines unwind and the domestic economy starts to recuperate. An expanding number of urban dwellers looking for proximate and advantageous food alternatives bodes well for street vendors in light of the fact that most industry revenue is earned in urban communities. The red tape of regulatory barriers has been cut in many Canadian cities to empower a more prominent number of food trucks and other road merchants to serve a developing number of shoppers looking for gourmet food choices. Consumer spending is relied upon to grow at an annualized 2.4% throughout the following five years, boosting customer interest for industry items. Hence, industry revenue is expected to grow at an annualized 3.5% to $385.6 million over the five years to 2025.
3.4 Key Trends
- Food trucks that offer gourmet or healthy options will be best positioned for success
- A reduction in regulatory barriers has contributed to the food truck industry’s growth
- Food truck businesses operate with a moderate profit margin
- An influx of businesses is expected to join the food truck industry
- The broader food service sector has been outperformed by the food truck industry
- Heightened purchase and labour costs are expected for the industry
3.5 Market Concentration
The food truck industry in Canada is highly fragmented with more than 65.0% of enterprises being owner-operators with no employees. Of those operators in the industry that do have paid staff, 62.5% employ four or fewer individuals. Due to the highly fragmented nature of industry operators, there are no major players in the industry with a market share of 5.0% or greater. In 2020, we estimate that the top players in the industry combined account for well under 5.0% of available market share, providing the industry with a low level of concentration.
3.6 Competitive Landscape
Operators that are able to secure permits for areas near office buildings, sporting events or social outings such as concerts or breweries have a competitive advantage due to their close proximity to key consumer markets. Additionally, vendors that are able to provide high-quality food and other products in a quick manner are more appealing to a time-sensitive market. Street vendors also compete on the basis of service standards and their attitudes toward customers. Consumers compare operators based on the quality and range of foods and beverages offered, the overall cleanliness and appearance of the mobile facility and the relative price and value for the cost of the products being sold. This has led to the increased volume of specialized cuisines such as ethnic fusion meals and gourmet product offerings, as entrants into the industry increasingly have to provide unique dining experiences to differentiate themselves from the growing number of industry establishments. Furthermore, the formation of personal relationships with regular customers is also important to ensure repeat visitors.
Reference: Canada Industry – IBIS World: Street Vendors
www.ibisworld.com
3.6 Competitive Analysis
Business Plan Tip: In order to write an effective competitive analysis for your food truck business plan you must research which businesses have the most similar business model in your area of operation, and area of expansion.
For example: Jamaican Jerk Food Truck Inc. is planning on expanding throughout the Vancouver area. We would first find every Jamaican food truck in this area, and then understand which are owner-operators, or multi-truck businesses focused on offering an authentic Jamaican menu and experience. The key is to understand which businesses have the most similar business model as you.
When writing a business plan it’s best practice to list your three closest competitors, their websites, and a few notes on their model.
What are the most popular food truck foods?
Yes, the food truck industry is absolutely shifting it’s demand to health-conscious, vegan, fusion, or gourmet cuisines. This doesn’t mean that starting a poutine, burger, or hotdog stand will be unsuccessful; it just means that you’ll need to make a specialized poutine, burger or hotdog. If you know that your food truck business plan is based on a cuisine that’s not quite “health-conscious” then consider doubling your efforts. In the end consumers want to be wowed, regardless of what type of cuisine they choose. Create a cuisine that’s memorable, unique and delicious.
Business Model
Due to space constraints and the location of mobile operations, which is generally on the street or in a high-traffic area, vendors do not typically provide tables and chairs for patrons. However, operators ensure the surrounding area is kept tidy and litter-free to attract customers and provide a comfortable and clean environment.
Typically, businesses follow one of two models. An operator runs a single cart or a small- to medium-sized business owns one or more vehicles and hires employees to operate them. Due to strict health regulations regarding the cleanliness of vehicles, food preparation and storage, operators are usually linked to wholesale supermarkets or similar establishments that can provide food and beverages in accordance with these requirements.
4.1 Revenue Streams
Food trucks are commonly located near entertainment venues, at transit stations and at various other high pedestrian traffic areas, including parking lots of shopping malls. Movements in unemployment rates are particularly relevant for this industry since it affects the number of people that are passing by mobile food service locations or that are working on certain worksites or taking public transport to and from their place of employment. It directly influences potential street foot traffic and sales.
- Street Food App – Your guide to Vancouver’s best food trucks & food carts, with schedules updated daily: Up-to-the-minute food truck & food cart schedules, See today’s locations on a map, Search & sort to find your perfect mobile meal, Daily specials
- Carribean Days Festival – Caribbean Days Festival is held in North Vancouver, British Columbia, Canada. The setting is Waterfront Park, a large green space with a picturesque view of the Vancouver skyline. Waterfront Park is divided into North and South zones, each with their own attractions during Caribbean Days.
- Greater Van Food Truck Fest – Our 2020 objective is to help food trucks safely navigate the COVID-19 “new normal” to allow them to continue to serve the communities we love. As always we aim to bring the best of BC’s Food Trucks, Artisan Market Vendors and entertainers together for free events within our local BC communities.
- Dine Out Vancouver Festival – Dine Out Vancouver Festival is about community, collaboration, and sharing Vancouver’s culinary story with the world. Along with our Festival Partners, Tourism Vancouver is proud to continue to showcase Vancouver’s culinary talent as well as the many different culinary and cultural experiences that only a city like ours can offer: everything from neighbourhood food tours to lunch-hour food truck fests to global guest-chef collaborative dinners.
- Private Event Catering – Food trucks can bring a fun, casual and fresh vibe to your next party or event. You can choose from a wide assortment of cuisine from our large selection of food trucks. The food is made fresh on the spot and served quickly to your guests.
- Delivery – Partnering with food delivery apps such as Skip the Dishes and Doordash will provide us with a new and promising revenue stream.
4.2 Menu
Jerk Chicken – Authentic jerk chicken with sweet potato or regular fries. $15.00
Jerk Pork – Jerk rib tips with sweet potato or regular fries. $15.00
Chicken Wings – Jerk, Buffalo, Cajun, Garlic Butter, Lemon Pepper, sweet potato. $14.00
Rasta Wrap – Jerk chicken, onions, peppers, tomatoes, and cheese stuffed in a burrito. $14.00
Roasted Beet & Chickpea Burger – The best veggie burger you’ll ever have. $14.00
Chicken Strips – Homestyle strips with sweet potato or regular fries. $12.00
Fries – Sweet potato or regular $7.00
Fried Green Tomatoes – Seasoned perfectly and battered. House-made aioli. $5.00
Jalapeno Poppers – Cream cheese stuffed and battered. Sweet chili sauce. $5.00
Cajun Mac n Cheez’ – Macaroni and Cheese, Jamaican style. $5.00
Fried Plantains – Fried Sweet Plantains with caramel sauce. $5.00
Jamaican Soda – Ginger Beer $3.00
4.3 Unique Selling Point
Our unique selling point is our offering of the most authentic Jamaican cuisine and food truck experience in the Vancouver area.
4.4 Risk Mitigation
Traditional Risks:
The food truck industry benefits from growth in consumer spending. During times of recession, the inevitable spike in unemployment leads to declining consumption. When consumer spending is high, consumers will be more likely to spend money on eating out. Consumer spending is expected to decrease in 2020.
Non-Traditional Risks:
Initially COVID-19 hit the industry hard, but since then we’ve seen some of the health and safety advantages food trucks offer. These benefits include a reduced transmission risk from customer to customer thanks to the outdoor environment customers occupy; in addition, the physical barrier of the food truck from customer to staff lessens potential transmission risks.
The biggest detriment to demand for industry products will be the cancellation of numerous events, such as concerts, festivals and sporting events. These events are typically among the largest sources of industry revenue, but many have been forced to close as a result of the spread of the coronavirus.
Mitigation Strategy: Keep informed and respect all health and safety requirements set forth by the Fraser Health Authority.
Marketing Strategy
5.1 Marketing Segmentation
Our target audience consists of three demographics:
- The Carribean Community
- Millennials “The food truck generation” Food trucks have a great appeal to millennials who prize simplicity and low prices alongside delicious ingredients. Millennials are more conscious of healthier food choices and love food that has a story.
- Working Professionals
5.2 SWOT Analysis
| Strengths
-established brand, customer base, and social media following -one of few Jamaican food trucks in the Vancouver area |
Weaknesses
-minimal 3 person team -lack a strong and optimized website -our menu is effective but rather short -clarity of our company culture |
| Opportunities
-expansion throughout Vancouver and surrounding cities -launching new and exciting menu options -offering delivery through skip and doordash |
Threats
-increased level of competition -potential lockdowns from COVID-19 -potential drop in consumer spending index -industry volatility |
5.3 Key Channels
Website: Our website has been a disappointment, but with this investment secured we will be allotting $8,000 to create a new and effective one. We have budgeted $1,200 a month to pay for third-party SEO services to rank first in our local area for “food trucks” and “Jamaican food’’.
Social Media: We keep our customers engaged through platforms such as Facebook, Instagram and Youtube. Staying active on these platforms allows us to update our audience on upcoming events and new additions to our menu. Our positioning on social media has been one of our strong suits in marketing. We use a lot of Jamaican puns and sayings throughout our posts. Ja’ Feel me?
Financial Projections
Please note this food truck business plan is based on an established company with three years of sales growth. To expect $300,000 of sales in your first year is possible, but awfully ambitious, and would likely require intensive marketing plus multiple trucks.
6.1 How much do food trucks make a year?
Great question. In 2019 industry revenue reached $324.9 million, and with 2,080 food trucks in operation the average food truck makes around $156,202 dollars.
6.2 Income Statement
| Projected Income Statement | |||
|
REVENUE
Total Income
COST OF GOODS SOLD
Gross Income |
Year 1
$300,000
300,000
46,750
253,250 |
Year 2
$360,000
360,000
66,550
293,450 |
Year 3
$432,000
432,000
91,960
340,040 |
|
EXPENSES
Marketing
Wages and Benefits
Bank and Credit Card
Insurance
Depreciation
Licenses
Office Rental
Office Supplies
Truck / Kitchen Repairs
Uniform Laundry Service
Total Expenses |
12,000
170,000
1,500
1,750
2,000
1,625
2,400
500
10,475
6,000
208,250 |
13,000
185,000
1,700
1,800
2,400
1,790
2,600
550
24,010
6,600
239,450 |
14,000
200,000
1,900
1,850
2,800
1,945
2,800
605
42,140
7,200
275,240 |
|
GROSS PROFIT
EBITDA
Taxes Incurred
Net Profit |
45,000
47,000
13,950
$31,050 |
54,000
56,400
16,740
$37,260 |
64,800
67,600
20,088
$44,712 |
Capital Requirements
Jamaican Jerk Food Truck Inc. is seeking a $150,00 investment in return for a 30% equity and voting stake in the company.
7.1 How much does starting a food truck cost?
It all depends. Are you looking to purchase a used truck or a new one? Will the kitchen be installed, or not? Purchasing a food truck can cost anywhere from $50,000 to $210,000.
When purchasing a food truck you should take a few things into account: buying an inexpensive truck will be cheaper initially, but typically comes with costly repairs, upgrades and maintenance. Purchasing a brand new, top of class food truck will likely require less work, but will decrease in value by approximately 15% as soon as you drive off the lot.
It’s best to purchase a goldilock food truck, one that’s positioned somewhere in the middle. Consider purchasing a food truck that’s relatively new; 3-5 years old, has it’s kitchen completely installed, and has had a thorough mechanical inspection performed.
Personnel Plan
Before starting a food truck company, it’s imperative to estimate the number, and type of employees necessary. Our personnel plan, developed with the help of our Human Resource experts is as follows:
8.1 Company Staff
Winston will act as our Operational Manager, and oversee the following positions:
(2) Head Chefs – Responsibilities: Overseeing the food that is provided to customers. Ensuring that every dish meets our safety, quality, and detail requirements.
(2) Line Cooks – Responsibilities: Preparing foods, set-up, driving and cleaning.
(2) Service Attendants – Responsibilities: Providing customers with a hassle-free experience. This position is key in offering an authentic Jamaican cultural experience. Service Attendants must encompass the positive, yet relaxed culture that Jamaicans are commonly known for.
We currently employ one each of these positions. With our new truck we’ll hire one more of each staff member.
8.2 Wages of Employees
| Personnel Plan
Head Chef
Line Cook
Service Attendant
Total Wages |
Year 1
$65,000
$55,000
$50,000
$170,000 |
Year 2
$70,000
$60,000
$55,000
$185,000 |
Year 3
$75,000
$65,000
$60,000
$200,000 |
8.2 Management Team
Business Plan Tip: When writing your food truck business plan leave your management team for last. What’s the defining factor between a successful business plan and not? Trust. This is why some entrepreneurs make the investment into our services. By having a professionally developed and polished business plan by BSBCON; you have a 97% chance of success; moreover, this is also why we stress having your management team summary last. Your audience needs to have complete confidence in your management team. In addition, we advocate having at least two management team members.
A business’ management team is often the difference between investment or not, in the private and public sector. Investors have been known to invest in a company with a subpar business concept purely because of the reputation and track record of the management team. A strong management team can reverse a failing business, and put a start-up on the right track.
How do I present my management Team?
Ensure you have at least two management team members. This provides reassurance to investors in a multitude of ways:
- In the extremely unfortunate circumstance that you pass or fall extremely ill, your fellow management team member would be positioned to keep the business going.
- Having multiple directors with diverse, specialized backgrounds is proper practice. It adds great value to have various proven directors as a part of your management team.
When writing your management team segment include the following.
Full Name
Position – Credentials
What uniquely qualifies them for this opportunity? An investor wants to know exactly how your management team’s past experience and credentials uniquely qualifies them for the opportunity.
What is an example management team summary?
Winston Jones
President – Professional Cook 3
Winston Jones began his culinary journey as a teenager, preparing food at his mother’s restaurant in Negril, Jamaica, and soon found his passion in creating mouth-watering dishes. In 2005 Mr. Jones moved to Vancouver, BC and fell in love with the city and it’s offering of world renowned eateries. In the past 15 years Mr. Jones has humbly climbed the ranks of the culinary industry. In addition to becoming a Red Seal – Professional Cook 3, he has led the kitchens of arguably the best restaurants in Vancouver: Le Gabriel, Africa Kine and The Wild Horn.
In 2016 Mr. Jones experienced the first plateau of his career, but then decided to get back to his culinary roots of traditional Jamaican cuisine. He incorporated Jamaican Jerk Food Truck Inc. with a focus in offering the most authentic Jamaican cuisine and cultural experience possible. Impressively the business has doubled it’s year over year revenue since 2017. With a fiery passion for the culinary arts, and experience in leading some of Vancouver’s greatest restaurants; Winston Jones is uniquely qualified to lead Jamaican Jerk Food Truck Inc.
Completion of Food Truck Business Plan Sample
Conclusion
Remember, the food truck industry is growing, but it’s also extremely competitive. What started as a boom has developed into a more mature market. Even brick and mortar restaurants are now involved by launching food truck’s to increase sales and brand recognition.
In order to have a solid chance at success you’ll need to perform rigorous planning in market research, analysis, strategy, financing and licensing through a professional business plan. By doing it yourself you’ll save some upfront costs, but paying a trusted consulting firm such as BSBCON will pay serious dividends over time.
We wish you the best with your food truck business plan.
