What is a food truck?
Advantages of owning a food truck
1. The cost
We all agree on this. The first and most important advantage is that the cost of establishing a food truck is lower than that of a traditional restaurant. Whereas you may need between $30,000 and over $250,000 to set up a food truck, you might need up to $500,000 to start a brick-and-mortar food business. The most significant difference is the rent and outgoings, which range between $30,000 and over $100,000 annually, depending on your location and foot traffic.
In contrast, food truckers can prep food in their homes or warehouses (within the commercial kitchen), drive to a location for a few hours to set up and sell, and return to their base to wait for another opportunity. This minimises costs that brick-and-mortar stores cannot avoid.
The following is a cost breakdown of building a custom-made gourmet food truck with Bills Trailers in Australian dollars. Although time has passed, the costs remain relatively the same. This is not a recommendation of any businesses mentioned here; none has paid for this article and any contact is at your own risk.
- Iveco cab chassis: $65,000 from Van World on Sydney Road.
- Kitchen fittings: $60,000
- Generator:$6000. Specifically, I bought a top-of-the-range quiet and environmentally friendly Cummins Onan generator from MacFarlane Generators in Clayton South.
- Operations: $30,000 (this covers initial costs of miscellaneous equipment, Council fees, fire inspection, food, drinks and promotional fees.
- Total: 161,000
2. Freedom
For me this is personal – my freedom comes first, everything else second. It is probably because I spent my teenage years away from home. So, when I established a food truck business in 2013 it was not because I was unskilled and unable to find work, but rather because I wanted freedom from a highly structured and controlled organisation.
When I started Afrofeast, I was working with a leading Australian Bank as a project analyst.
At work in Docklands, 2013.
The food truck was a great option to get me out of Melbourne’s dull financial district – Docklands, into the messy, unpredictable, but exciting streets. I wanted action and found it, be it with some risks.
3. Popularity
Your popularity in the community will rise rapidly as a food truck vendor. When the Herald Sun first wrote about us in 2014, almost 40,000 visitors visited our website to learn about Afrofeast.
Shortly after, our Facebook page ballooned, and we started receiving vending offers and contracts with big festivals. Most importantly, we had other media agencies contact and make films and write articles about Afrofeast.
From oblivion, we grew and assumed a national status we wouldn’t have had had we not started Afrofeast.
Disadvantages of owning a food truck
1. Competition
2. Long, long hours
If you have never worked in a food truck, you should not try to establish one. This is even worse if you have a young family that needs constant attention and support.
As a solopreneur, you will wear the following hats concurrently or at different times.
- Owner/CEO: Planning and daily operations to ensure profitability.
- Cleaner: Clean, clean and clean. A commercial kitchen must always be clean to attract customers and ensure proper hygiene.
- Compliance officer: With food safety laws, Council laws and regulations, traffic laws and intellectual property laws.
- Social media marketer: To improve the image of your business and obtain more followers and business. This is critical because most potential clients look at the strength of your social media and how they will benefit from your popularity before they can hire you. So, food trucks with a big media following will constantly have offers from festival and event organisers.
- Cook/chef: This is the most exhausting part, as you constantly worry about a client’s satisfaction (or dissatisfaction). Any minor mistake can result in negative reviews and a loss of image and business.
- Book-keeper: Whether you are a sole proprietor or limited liability company, you must comply with Australian taxation laws. A failure to keep proper books of accounts is not only prone to penalisation by the Australia Tax Office but is a weakness to your business as you will not be able to determine its profitability and valuation.
- Driver: A food truck is huge – 3.7m high, 4.5-6m long (with a trailer or fridge – 6m), approximately 3m wide and weighing over 3 to 4 tonnes. You must ensure you comply with all laws, otherwise, you might be fined. You must be an excellent driver ready to tow trailers, mobile coolrooms and heavy items. You must have the skills to manoeuvre within the CBD, reverse, park in narrow alleys, and travel long distances locally and interstate. Once I drove under that 3.5m limit bridge in South Melbourne and my rangehood was damaged. Good enough no one was hurt. I hate driving in South Melbourne.
3. Seasonal factors
In Australia and probably other parts of the world, food businesses perform best during summer and very poorly during winter. This is because most families stay indoors when it is cold and only enjoy the outdoors when is it warmer.
So, from around May to September in Melbourne and other parts of Australia, business is very slow. In fact, during that period, there is hardly any festivals apart from a few winter events.
However, from around October to April, it is jam-packed with many music festivals, markets, and events, and you can make over $30,000 – $40,000 in a single weekend event or celebration.
Unless you have a brick-and-mortar store where clients can find you during winter, you will earn less during that period.
General tips/best practices
- Spend some time working in a food truck or busy commercial kitchen before venturing into a food truck business.
- Keep proper books of accounts to monitor sales and profitability. Use an accounting software such as Intuit or MYOB, depending on which is affordable to you.
- Build a strong media presence and goodwill.
- Employ other staff to help and support your food truck business.
- Ensure you comply with food safety, traffic and ATO reporting requirements.
- Have both a physical and mobile business if you can afford it. A mobile business will help to promote your brick-and-mortar store. You can also share inventory between the two businesses to reduce waste.
- Collaborate with other food truck vendors, following them on social media, shouting out, sharing food and physical space like rent.
- Establish excellent relationships with event organisers, from local markets to big music festivals, to ensure you participate in their events yearly.
Conclusion
Owning a food truck is highly rewarding but has significant disadvantages. Do I recommend starting one? No. The amount of work, stress, compliance requirements, and cost are way too high. I would instead focus on running an online business rather than a physical one.
Do I regret founding one? NO. Afrofeast catapulted me into the messy world of the streets, forming the foundation upon which the current business is built. Without the Afrofeast food truck, I would still be stuck in the bank.
So yeah. Get out there and do it if you want to. Why not?
