There are many reasons why a food trucks fail. The first things that come to mind are the menu, bad locations, poor marketing and branding, problems with employees and staffing, or not have enough dough (and we don’t mean the bakery kind).
Darrell Suderman recently wrote an article for Fast Casual where he posits the main reason food trucks fail is for another reason entirely…and one that is within your power to control.
Darrell argues that failure to write an appropriate business plan — or failure to even write a business plan – is the leading cause of why food trucks fail (and many other small businesses).
From Fast Casual: “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.”
Thank you Darrell for the helpful and informative article. The street is littered with carcasses of failed food trucks, figuratively speaking. If anyone reading this is thinking of starting a food truck, or any other small business, make sure you have a well thought out and detailed business plan that covers as many contingencies as you can possibly imagine.
