Introduction to Food Truck Business
A food truck business is comprised of a food truck with a legal permit to park, cook food on the vehicle, and serve people while moving at different locations. You must have come across some food trucks parked outside of shopping malls or office buildings.
A food truck business is a bit different than regular hotels and restaurants, where it has to visit specific locations at different times of the day on its route. Secondly, you don’t wait for the customers to come to you; instead, you go to them. When it comes to serving and preparing food, it’s still the same as other hotels.
According to a study conducted by IBISWorld that there are approximately 23873 food trucks in the US, and it has employed over 28916 people in 2020. According to an estimate, the food truck business is growing at 5.4% vs 4.3%. Compared to its performance in 2019, it has grown roundabout 20% in one year. According to Forbes, the total revenue food truck business generated in 2019 was 985 million US dollars.
It’s time to discuss swot analysis of food truck business and have a close look at its various operations in terms of strengths, weaknesses, opportunities, and threats. Here it follows;
Strengths of Food Truck Business
Some of the strengths of the food truck business are as follows;
Well experienced staff means skilled drivers and flexible cook. Since it’s a mobile food business, therefore, the cook must be flexible to prepare food in a small and moveable kitchen without compromising the quality and taste of the food. The truck driver must be familiar with the route and know various public business location points that could generate more sales.
If you already have a hotel and a restaurant, and your market budget is lower to reach more audience and build trust among. A food truck is a great opportunity for you to establish a reputation for your brand, and build trust among people. It’s difficult for some people to trust any brand online, but when they meet you in person and taste your food. They might change their views about you.
The prices of the food menu are very high in luxury hotels and restaurants. Compare to them, food trucks offer the meal at a very low price to ordinary workers earning minimum wages. When you offer them a quality service at a low price, then you can easily attract a great market share.
Fresh and Innovative Food
The food truck doesn’t have much space to store food. Therefore, they cook and serve food at the same time without leaving room for storing. People have an opportunity to taste freshly cooked food. Since people won’t be able to wait for hours for the preparation of food, you have to come up with innovative ways to cook and present food at a minimum time.
As we know that it’s a food truck, a moving vehicle with the flexibility to park anywhere if it’s allowed. Some hotels and restaurants near office buildings or at the tourist locations either rely on the employees or the tourist for their business. On the weekend or some special days, they’re usually out of business because people aren’t there.
On the other hand, food trucks have the flexibility to move around and take the business in crowded places. Wherever customers are, take the business there.
Sometimes, you have to make reservation days before visiting it, especially at the fancy hotels. On the other hand, food trucks provide you the flexibility to move around, buy the food, and eat it wherever you like.
Saves Renting Cost
Starting a hotel or a restaurant is very costly and the rents are very high in crowded places. A food truck saves you from the trouble of high renting costs. All you need is a permit, once you have, and then you start it from anywhere you like.
Weaknesses of Food Truck Business
Some of the weaknesses of the food truck business are as follows;
Limited Capital for a Food Truck
Starting a food truck business is cheaper than any hotel or restaurant. But it doesn’t mean that it would be penniless. Of course, you need a reasonable capital to buy a truck and other legal fees to fulfill basic permit requirements. These costs vary from country to country and state to state.
Costly Food Ingredients
The basic food ingredients are becoming costly, and food truckers have to offer the meal at a lower price so that they could differentiate themselves from the competitors and attract the price-conscious market. If they do that, it would barely meet their expenses.
If you’re new in the food truck business, then you would have less experience how to handle day to day issues. Because it’s a moving food business, you would face all kinds of people ranging from rich to poor and humble to rude people. How to handle them and keep generating profit is an art that would take you some time to learn.
Lack of Information
There are things about the market, cooking style and method in the moving food truck, and information about the route and timing at different places. No one would provide you with such information; you have to learn these things by yourself by staying active in the market. Your competitors have this information edge over you, and they would keep using it against you as long as you don’t learn it.
Opportunities for Food Truck Business
Some of the opportunities available to the food truck business are as follows;
The food truck business falls in the category of recently emerging businesses. The market is competitive, but it hasn’t become overcrowded with the competition. There’s enough share in the market for the newcomers to enjoy. If they provide quality service and perform well, then they can attract a good chunk of market share.
Partnership with Local Bars and Clubs
The clubs and local bars offer only drinks. If you make deals with them that you would provide the meal in the evening or at night by staying standby behind their club. It’s a great opportunity for the bars and clubs to expand their menu and attract new customers. If you present it well, it’s highly probable that they would take your deal and become partners with you.
New Product and Taste
In the end, it all comes down to the quality of food and its taste. If you have the ability and talent to experiment with new ideas by adding new flavors and tastes to your food. If customers like it, then you win the market share as long as you keep on providing quality service.
Mobile App & Website
Since we’re living in the era of technology, having a website of your brand and offering a mobile application to your customers would be a plus. However, it would benefit you when you open up your restaurant or start a delivery service during the weekends. If the taste of your food is good, then people would leave good reviews, and they would attract more new customers.
The food market is big and we all have to eat to live. In the era of capitalism and technology, people are busy in their lives doing their jobs and they don’t have much time to visit fancy restaurants, except the wealthy people. However, the target market for food truckers is the majority of ordinary workers. If you offer them quality service at a low price, then they would buy food from you every day.
The lockdown because of Coronavirus (COVID-19) presents a new opportunity for the food truckers. Since people are stuck at home, and all the hotels and restaurants are closed. The food trucks are like a delivery service, they can provide food to people in their doorsteps
Threats to Food Truck Business
Some of the threats that the food truck business has to face are as follows;
Some countries and states don’t allow permits to food trucks easily. In fact, their legal requirements are a bit difficult to comply and they vary from state to state. Moving around the city in the food truck offering food to everyone without acquiring a permit could result in a serious lawsuit from the government. Therefore, it’s necessary to have a license before moving around.
Easy to duplicate
Since there are no copyrights involved. A competitor can come into the market, steal your recipe, and offer the same product and taste but under a different brand name. This competitor would steal your market share, and you won’t be able to do anything.
Hygiene Conscious People
Some people are very hygiene conscious and you have to be very careful about the cleanliness of food and your truck. If they see anything unhygienic, then they would spoil the minds of others and you lose your business as a result. The cleaner you are in terms of food, clothes, and your truck, the more customers you would attract.
After carefully studying the swot analysis, we have realized that the food truck business is a very profitable venture if you fulfill all the basic legal requirements. Of course, the quality food, taste, and clean service are also essential parts of it.
Photo by Brett Sayles