The food truck industry has enjoyed steady growth over the last decade. Food trucks are ideally suited to meet the demand for affordable, high-quality food and are a great way for business owners to get into the food industry. With a food truck business, business owners can start their business with fewer upfront costs compared to opening a brick and mortar food store.
Food trucks – also known as mobile food businesses, food vans, and food trailers – cover a lot of ground, from burger trucks to coffee vans to wood-fired pizza vans to smoke vans that visit various blue-collar work sites.
If you’re considering starting your own food truck business in Australia, such as running a food van, here are top 10 tips on how to get started and make a success of your food truck business.
1. Create a business plan
Your food truck business plan is your guiding north star. You will use it to grow your food business and to help you stay focused by defining your goals and objectives, as well as the strategies you will employ to achieve them. Your business plan is also where you include your risk management strategy, which will typically include business insurance* such as food truck insurance.
2. Calculate your costs and secure financing
Start-up costs for a food trailer business include purchasing a vehicle and fitting it out with all the necessary food and cooking equipment. The majority of new food business owners look for funding via business loans or by talking to investors.
3. Get the necessary licenses and permits
You may need to obtain permits to operate your food truck business, which will include adhering to regulations set forth by your local council. You can start by visiting the Australian Business Licence and Information Service website to learn more about licence requirements for food truck businesses in your state.
4. Buy food truck equipment
The cost of a burger truck or a food van, as well as the essentials for preparing food, will be a large part of your start-up costs. Renting a vehicle could help you reduce your initial costs. You may also consider buying a trailer. It’s not as mobile but it is a cheaper way to get started.
5. Create an enticing menu
As with any other food-focused hospitality business, making a success of your food trailer business requires that your menu is flush with uniquely yummy food options.
You won’t have much space to prepare food, so your menu should only include a few items that you can easily prepare in a small area. It is important that your food can be prepared in advance, or quickly cooked. Customers will be waiting outside your truck as you prepare; so avoid keeping hungry customers waiting too long.
6. Establish a marketing plan
Ensure that the location of your food truck is strategic; try to always park it in a location where people will easily notice it. Design bold branding for your food truck that will grab the attention of passers-by and speak to your food concept. Create a marketing plan for your food business and allocate a marketing budget.
7. Create an identify for your food truck business
Food truck menus are restricted due to the limitations of a mobile food unit. Aim to make each item on your menu an absolute winner. To create a menu that is exciting, it’s important to choose a specific concept. Your food concept may make or break your food truck business. The most successful food trucks have concepts that are either niche, unique takes on common cuisines, or completely new fusion foods.
Brainstorming is the first step to settling on a new food truck concept. What type of food are you passionate about? What are your specialties? What are you able to produce within the limitations of a mobile food truck?
8. Analyse the market you are targeting
Generally speaking, the most common age group for food truck customers is between 18-34 years old. What information can you find out about food truck clients in your local area? You’ll want to know as much as you can about them, from their eating habits to the way they prefer to engage with food brands.
You could even conduct a survey to find out what type of food trucks your target audience prefers, or what they feel is missing from their local food options.
9. Research your competitors
When you are defining your concept, it is important to understand your competitors. There are many organisations looking to hire a food truck in Sydney, and in most capital cities and regional centres, but researching your competitors can help you to tweak your food truck business to differentiate it from the competition.
Do people in your local area want a specialised donut truck? Are there opportunities in the Thai mobile market? You may also research the prices of other food trucks to see what they charge. You may also be able to learn from your competitors’ marketing strategies and their successes and failures.
10. Perform a SWOT analysis on your business idea
A SWOT analysis digs into your company’s strengths, weaknesses, opportunities and threats. This type of analysis will give you a good idea of your position in comparison to competitors. The answers you get can be used as the basis for your marketing strategy.
After you have done your research and chosen your final concept, it’s time to create your business plan. A business plan will help you to better understand how you’d like to run your food truck business. The research and planning that you have put into this document will help you to refine your concept.
11. Identify the ideal location for your food truck
The location of your food truck can make all the difference in its success. In the food truck world, locations are categorised as high demand or low demand sites.
High demand sites are often in bustling areas with heavy pedestrian traffic, making them desirable for maximum visibility and sales. However, these locations might have tighter access regulations and may require compliance with stricter management plans.
On the flip side, low demand sites are less competitive and can be easier to access. These spots are ideal for creating a vibrant community presence and can be a great starting point for new food truck businesses. The choice between a high demand or a low demand site depends on your business strategy and the kind of atmosphere you want to create for your customers.
How much do food trucks make?
So, how much does the average food truck business in Australia make? This is a tricky question to answer, and the answer for each food truck business owner will vary based on several factors. These factors include your location, how often you operate your food truck business (i.e. how many days a week, how many hours a day), your overheads, and how often you attend big community events. Conducting a financial analysis can be help you determine how much your long-term viability, stability, and profitability of your business.
How much does it cost to start a food truck business?
So, how much capital will you need up front to get your food truck hospitality business off the ground? The answer to this all important question can vary, but at the bare minimum you will need the truck itself and the equipment to prepare the food items on your menu.
As you may imagine, the start up costs for every food truck business will vary. If buying a brand new vehicle, you may end up spending up to $100,000. However, if you are looking to limit your initial capital investment, a used food truck may be found for around the $15,000 mark. The price of interior kitchen equipment will be determined by the quality of your equipment, and whether it’s new or used.
To make your search easier, start with a manufacturer of food trucks, as they will know the equipment requirements for running a food truck business.
Remember to allocate budget for branding your food truck. This can include “wrapping” the entire exterior of your vehicle with eye-catching branding that clearly explains what your food truck business offers. This will help your food business stand out in a sea of food trucks at food festivals.
How to finance your food truck business?
There are less barriers to starting a food truck business than a traditional restaurant, but it still requires significant capital. Between acquiring the truck, stocking up on ingredients, managing licenses, training, and marketing, costs can add up quickly.
One effective way to secure funding is by attracting investors. A compelling business plan that showcases your concept, market potential, and passion can draw in investors willing to back your entrepreneurial journey.
Another avenue to consider is business loans. Weigh the pros and cons of secured versus unsecured loans. While secured loans can offer more favourable terms, they require collateral, which might not be feasible for everyone. Unsecured loans, though typically higher in interest, offer a faster route to getting your business rolling without needing collateral.
Crowdfunding can also be a strategic and innovative way to raise funds. Platforms like Kickstarter or GoFundMe can help you raise funds while simultaneously marketing your brand and gauging customer interest.
What are the laws around food trucks?
Running a food truck in Australia involves being aware of and complying with certain food safety regulations. This starts with the Food Regulation 2001, which outlines how food should be handled, stored, and prepared.
Beyond that, food truck operators should also be familiar with the Food Act 2003 (NSW), the Food Regulation 2015 and the Australia and New Zealand Food Standards Code. These laws set additional standards for food safety practices.
Do you need a food truck license?
The requirements to operate a food truck in Australia varies depending on your location and the type of food you serve.
For instance, in Sydney, you’ll need to secure a Mobile Food Vending Permit and approvals from the NSW Food Authority and Sydney Water. This process includes registering your vehicle, having a valid driver’s license, and potentially having an accredited Food Safety Supervisor on site. If you’re serving potentially hazardous foods like cooked meats, seafood, or dairy products, additional regulations come into play to ensure food safety.
Each local council may have its own set of rules, including zoning laws and specific operational restrictions like exclusion zones or limited hours. So, remember to do your homework on local regulations to ensure compliance and customer safety.
Do you need a liquor licence for your food truck?
You’ll attract more customers if you include alcohol to your food truck menu, but that comes with its own set of rules. If you’re planning to serve drinks alongside your food, you’ll have to get a liquor license. The type of license depends on your operating model and location.
If you have a more permanent setup where your food truck operates similarly to a traditional dine-in business, consider getting an on-premise license. However, if your food truck is intended for special events, a pop-up bar and events license would be more appropriate.
Reduce your risk with food truck insurance
While there are many benefits to owning a food truck business in Australia, there will be risks you will likely encounter as you grow your food business, as the owner of your own food truck business.
That said, there are certain risks to food truck businesses, which is why food truck business owners, including food trailers, burger trucks, and coffee vans often invest in food truck insurance – also known as insurance for mobile food vans.
Learn more about food truck insurance and how business insurance products such as Public Liability insurance and Theft insurance can help your food business recover faster from an insured event.
