Every entrepreneur wants to be a success. No one starts out hoping to be a business bomb. But many great cooks and budding tycoons have pulled the plug on their food truck operation after the business failed to take off. Here are common reasons that food truck owners go bust. If you are considering an investment in the food truck industry, take these issues into consideration before you write that first check.
- Undercapitalization: This is probably the biggest reason that new ventures fail.Unexpected events and extra expenses are a normal part of doing business, and a business owner must be prepared for most anything. Be sure you have some cash on hand for those difficult days (broken appliances, new truck transmission) which are sure to come.
- Lack of a brand: Look at the food trucks making headlines today. They have a logo, consistent look and an identity that customers have come to know. Often they have a catchy name that is difficult to forget. Your food truck will need the same things in order to attract attention and be remembered by customers.
- No HR skills or policies. Every business operator must establish policies for employees and train them to do their jobs properly. For example, if employees don’t offer good customer service, your business is bound to founder.
- No written, consistent recipes. It’s great that you can cook and that your best recipes are right up there in your brain somewhere. But in business, that won’t cut it. You must put your recipes down in writing and follow them exactly. If you don’t, it will be impossible to establish price points, order ingredients, manage waste and control costs.
- Absentee ownership: If you plan to get the business up and running and then head home to count your profits, you’re already in trouble. As the owner, you are the engine that runs the machine, and you need to be on hand to ensure that everything functions.
- Unaware of your market: Do you know exactly your customers want? Where is the best place to park in order to sell your products? You must know these things before rolling your food truck out of the garage.
The food truck industry is trendy and attractive, but not every food truck lover should become an owner. If you want to learn the secrets of running a successful food truck business, talk to an experienced consultant. Mike Mikhail, owner of LA food trucks and restaurants, regularly consults with new and potential food truck operators to help prepare them for their new careers. His experience can help newbies avoid painful, expensive mistakes. To reach Mikhail and discuss his consulting services, contact him at one of his food truck operations:
Hang 10 Tacos – 855-5-Hang-10
Greenz on Wheelz -855-6Greenz
The Hungry Nomad -877-NOMAD-10