What is the No. 1 reason for food truck failures?
Is the No. 1 food truck failure cause menu, location, marketing, branding, employees, team enthusiasm, or undercapitalization? No. Many small business experts believe that it is the failure to write an appropriate business plan — or failure to even write a business plan!
Food truck business failure reason No. 1
Richard Myrick, editor-in-chief and founder of Mobile Cuisine Magazine, recently wrote that "although the mobile food industry has been growing exponentially over the past few years, there are still some food trucks and carts that have not been able to succeed during the industry's rapid expansion. Owning a restaurant on wheels in a good economy can be a challenge, but owning one in a down economy can be even more difficult."
He further states that a business plan MUST be right the first time. "The business plan is what everything your mobile restaurant will do is based on. It will force you to plan ahead, think about the competition, formulate a marketing strategy, define your management structure and plan your financing, among other things. It is your roadmap to success. Do not proceed without a solid business plan."
Another recent article published online (www.allbusiness.com) lists "The Top 10 Reasons Why Small Businesses Fail" — and one of those reasons is "an inadequate business plan. It further states that "A well thought-out business plan forces you to think about the future and challenges you'll face. It also forces you to consider your financial needs. Your marketing and management plans, your competition and your overall strategy."
Laura Scott, Demand Media on www.smallbusiness.chron.com, recently listed "The Four Major Reasons for New Business Failure" as:
- Lack of planning,
- Insufficient funding,
- Overreaching and
- Personal spending.
She states entrepreneurs often start small businesses centered on a product or service they know and love, and many brush off advice to write a detailed business plan, figuring their enthusiasm and creativity are the most important prerequisites. But business plans aren't like classroom busy work. A business plan helps entrepreneurs understand the market, where they fit in, how they compete and how many customers they need to succeed.
Food truck business plan requirements
Because food trucks are a unique business niche, I believe they require a unique business plan based on the following business requirements:
- A Business Strategy: Year 1 through Year 3;
- Competitive Landscape Analysis: That includes competitive food trucks, QSR restaurants, convenience stores and food carts;
- Menu Fit to Consumer Demographics; That still allows for "menu innovation;"
- Single Thread Brand Marketing Strategy that supports your menu: For example, the brand identity permeates all aspects of the business;
- Financial Performance and Growth Metrics;
- Management Roles and Responsibilities;
- Employee Qualifications, in addition to an "All In" mentality;
- Food Truck Overhead Analysis: Lease or buy;
- Community Connections;
- Plan B Response Strategy: If Plan A hits some snags.
For more information on implementing a "New Product Innovation Culture in your company, Food Technical Consulting (www.foodbevbiz.com) is providing on-site hands-on corporate 2-day workshops and coaching sessions – and a yearly 3-day industry workshop in Denver, Colorado on "How To Start & Maintain A Food Business", March 13-15. Please contact me at email@example.com or 303-471-1443. A course manual will be available for sale to international small business operators who cannot attend.
Darrel Suderman Darrel Suderman, Ph.D., is president of Food Technical Consulting and founder of Food Innovation Institute. He has held senior R&D/QA leadership positions at KFC, Boston Market, Church's Chicken and Quiznos and led KFCs development team of Popcorn Chicken, now a $1B international product invented by Gene Gagliardi. www