February 22, 2016

Opening a Food Truck Instead of a Regular Restaurant: A Safer Option?


With the rising costs and risks involved in opening a brick-and-mortar restaurant these days, would-be entrepreneurs in the food industry are turning more and more to food trucks as a better option, at least to as a way to get their foots in the door.

While the trend has seen a serious spike over the last several years, food trucks are nothing new in America and the world.

Street food is big business today, there’s no doubt about it. It’s a billion dollar industry that has been steadily growing, especially since 2007. Truthfully, this industry is most likely even bigger than the statistics can show, considering the fact that these businesses are hard to count.

When looking not only at food trucks, but all types of mobile food stands like carts and kiosks, the industry is truly a massive one with limitless growth potential.

One reason linked to the rise in popularity of food trucks is the slowing economy. In terms of costumers, it seems that more ad more people want quick and inexpensive food options. They want the ability to get great food on the go without having to leave tips every time they want to get some breakfast or lunch.

Entrepreneurs look at food trucks as a great way to gain some experience as restaurant owners and food servers without having to commit enormous amounts of money to opening up and running a more traditional eatery.

If you are a budding entrepreneur in the food industry and are considering whether or not you should try to open a restaurant or food truck first, here are some reasons why opting to start with a food truck could be the best option for you.

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How Do the Costs Compare?

Opening a food truck is a lot cheaper than opening a full-fledged restaurant; and it’s not even close. According to Forbes, you can open up a great food truck for in between $50,000 – $80,000. It would take in between $100,000 – $300,000 to get going in the brick-and-mortar restaurant business.

In both situations, space is the biggest expense. And obviously, there’s a lot less space involved in owning a food truck. When you are crunching the numbers, you’re taking all of the same things into consideration: licences and permits, staffing, marketing, insurance, equipment, etc. But with food trucks, the funds needed for each of these categories are significantly smaller.

But remember, there is a cost associated with running a food truck operation that you might overlook at first: maintaining the truck itself mechanically. You are going to need to change the oil regularly, go in for tune ups, and pay for mechanical repairs every now and then. If you are a car guy or gal and can do a lot of that stuff yourself, that’s great. But that’s not the case with most would-be restauranteurs.

No matter how you slice it, getting your restaurant business going by way of a food truck is an significantly more frugal option.

Location Redefined

One of the best things about owning a food truck is that you are not tied down to a single location. If business isn’t booming at one location, you can always find a new one. That means that the process of choosing a location for your restaurant isn’t even close to as difficult as it is when you are deciding on a location for a regular restaurant. Because you simply don’t have to settle.

Your options are always open in terms of location. Heck, you can even move to a different city if you want. Sure, you’re going to have to resubmit for new permits whenever you move, but at least you have the option of moving if you are not happy with your current place on the map. If you aren’t happy with your restaurant location, the proposition of moving to another one is much more daunting.

However, let’s not pretend that moving your food truck around is the easiest of things to do. If you’re working in a big city, finding a good parking spot can be incredibly difficult. Parking laws are very strict in most cities, allowing you to park only in specified locations and for specified amounts of time. If you are constantly violating these laws, fines stacking up can eat away at your profits very quickly.

If one of your main problems when trying to figure out how to start your own restaurant is deciding on a location, then you might want to start out with a food truck. A food truck is also a good investment for funding your potential restaurant. Start with a food truck and save money to eventually open up a restaurant in that high-rent part of town that you’ve been coveting.

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According to statistics, nearly 80 percent of food truck operators employ four or fewer workers. But that also really means that food truck owners work very long hours. You have less people on your payroll but you are asked to contribute on a much more direct level.

The work day doesn’t start when the food truck opens. You and your staff usually need to be there a couple of hours before that to handle all of the preparation work. You don’t have to clean as much as you would if you owned a full-fledged restaurant. That basically means that you are going to cleaning yourself instead of hiring someone to do the cleaning.

So while the obvious advantage is that you are spending a lot less money on staffing a food truck, you are also committing yourself to do be more hands-on with all of the unglamorous tasks that come with serving food to people.

Legal Issues

While there are many legal issues that you have to take care of when opening a brick-and-mortar eatery, at least they are clear cut. It’s an easier process to work through, but it’s still worth employing an experienced attorney to navigate through all of the permits and licenses that you need to open your restaurant anyway.

And while the entire process might be cheaper when opening a food truck, the laws are a lot less concrete. You will need all of the regular business and health permits when opening a food truck, but you are also going to need parking permits. And if you want to move around regularly and switch cities a lot, you are going to have to adhere to a new set of rules every single time you cross new city lines.

Also, city governments can often subtly discriminate against food trucks in order to help regular restaurants survive. Many would-be food truckers have reported situations in which city laws aren’t necessarily very fair towards food trucks.

There are city laws in places like Seattle and Boston that don’t allow food trucks to serve customers in direct proximity to their competitors and they also have limits on how long food trucks are allowed to serve food in various parts of the city where other restaurants operate. There’s definitely a lot more confusing red tape involved than there appears to be at first glance.

Why Not Both?

There are many aspiring restaurant owners who start off with a food truck in order to get their feet wet in the industry. It makes a lot of sense. Food trucks cost less to open and you get a chance to test out your branding and your food while building a customer base for yourself without having to take the huge risk of investing in a permanent residence for your restaurant.

Many restauranteurs have made that leap successfully. Operating a food truck business allows you to experiment and find yourself. You can change and tweak your menu constantly and play around with your restaurant image and style without having to commit to anything until you are completely sure of it.

And even if you do end up opening a restaurant after starting as a food truck owner, there’s no reason to close it down. A food truck can be great advertising for your brick-and-mortar restaurant. It’s basically a moving, interactive billboard.

On top of that, food trucks can supplement your restaurant financially, especially in off seasons. If you have less people coming to your restaurant during the summer when it’s nice outside, there’s a good chance that they would much rather eat your food outside from your food truck.

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If your dream is to own a restaurant, opening up a food truck to begin with might be the best possible business model. However, it really does depend on your dream and what type of restaurant you want to have.

The type of food you can offer from a truck is certainly a bit limited. If you have set your sights on serving complex gourmet dishes, having a brick-and-mortar establishment might be your only real option.

If nothing else, the increasing popularity of food trucks gives you a great alternative. It offers you another, less expensive option for getting your foot in the food industry door and chasing your dream of one day running a “real” eatery of your own.

Photo credit: lewismd13 via Visualhunt / CC BY-SA
Photo credit: davidcwong888 via Visual hunt / CC BY-NC-ND