See 8 of the most common mistakes that food trucks make and how to avoid them
Food truck businesses are like many other types of business in the sense that some go on to succeed, whilst others fail and the reasons why are often the same.
Some common reasons for food truck business failure include choosing the wrong product, not having a clear brand identity, poor presentation, and taking on too much.
These are not the only reasons however and there are a few more that can determine food truck business success or failure. After all, only 40% of food trucks manage to get past 3 years of business before they fail.
In this article, I have put together 8 reasons why food trucks fail along with some tips for avoiding these mistakes for anyone looking to start their own mobile catering business.
1. Choosing the wrong product
Market research is the foundation for the success of any business and choosing the wrong product can make or break new startups.
Some mistakes food trucks make include choosing a product that does not have a high demand; is unfamiliar to the general public, or the profit margins on the base ingredients are too low.
Another reason that food trucks fail is selling low-quality products which discourages repeat customers.
How to avoid
Choose a product that people are familiar with, has a high demand and a high profit margin on the base ingredients (meat or vegan).
A good way to tell which products are popular is to see where the queues are at other food trucks or stalls.
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2. Not having a clear identity
Have you ever wandered down a high street or amongst food stalls at a festival, looked up at a sign, and wondered what it is that particular business does?
Well if you do it often means the business has a weak identity and is not conveying very clearly what it is.
This puts an invisible barrier between the business and the customer which means people are less likely to come and make a purchase.
How to avoid:
Have a clear message in terms of your name and strapline. For example, you know that “The Boston Burger Co.” is in the Boston area and sells burgers.
You don’t have to guess what they do and you can easily make a decision on whether to make a purchase or not.
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3. Poor presentation
Before people get to see the price and even buy a product they make an evaluation of the presentation of a food truck.
If it looks shabby, unclean, and generally unprofessional customers will be reluctant to proceed any further which is one of the main reasons food trucks fail.
How to avoid
A good rule of thumb is to follow the “three P’s”- Presentation, Price, and Product.
If you get the first one right (presentation) then customers will come and look at your food menu.
If the price is right people will then make a purchase. And if you have a good product people will tell their friends and come back for more.
4. Running before you can walk
It’s good to be optimistic but a lot of new food truck business that fails tend to take on more than they can chew initially and overreach.
This could be things like overspending on the initial start-up equipment which means there is none left for cash flow and the actual running of the business.
Or spending money on large events such as festivals that run into the thousands.
How to avoid
With any new start-up, the product is untested so it’s wise to start small.
Food trucks can cost a lot of money but are not the only way to get started in the mobile catering industry.
Start with a relatively cheap set-up like a street food stall and attend smaller markets or events where the pitch fees are lower.
You can also pick up a lot of second-hand catering equipment from Facebook groups and eBay.
5. Choosing the wrong events
And this leads nicely to another reason food trucks fail.
There are thousands of food and music events or festivals around the world and some, food truck businesses tend to grab at everything and expect to make money as a given.
However, this is often not the reality and the longer you are around in this industry the more you find out that not all events are created equal and that some will be more successful than others.
They are also very costly and one or two bad events can ruin a food truck business.
How to avoid
Start small and allocate a proportion of start-up money solely for events and attending local food markets and festivals where pitch fees are lower and you can afford to take the hit.
6. Poor money management
Food truck businesses often run into trouble and fail as a result of poor money management.
Balancing the books can be quite the art and overspending on equipment, and general supplies or not allocating the profits made from other events to a contingency account to act as a buffer can lead to problems.
How to avoid
Allocate some of the profits made from other events into a “Cashflow Account” for day-to-day operations and unforeseen circumstances like equipment breaking down.
You can also negotiate with suppliers on things like disposables or ingredients to get the best price.
7. Not sticking with it
Like any business, it takes time to develop, build your customer base, perfect processes, and just become better at the work you do and therefore see results.
However, some new food truck business makes the mistake of thinking that they will earn huge sums of money straight away.
Don’t get me wrong it can be done but it often takes a while to see significant results.
This leads people to get disheartened and give up after just a few months or a season.
How to avoid
If you have done your research and gotten the basics right there is no reason not to succeed.
Set yourself a time limit of 2-3 years so you can judge results more accurately. It also might be worth considering having another source of income whilst starting out as a bridge whilst the food business is being established.
This is quite a common reason why more established food truck businesses fail.
The mobile catering industry can be hard work and a day in the life of a food vendor includes getting stock, traveling to an event, setting up at the event and cooking food all day, and then packing away and traveling back again.
This can lead to burnout when doing this for long periods which results in the quality and standard of the business declining and food vendors just giving up.
How to avoid
To avoid food truck business failure it’s useful to have a well-trained and reliable team on board to whom you can delegate a lot of the day-to-day operations.
Another strategy is to limit the number of events and have a space or break between events instead of multiple back-to-back gigs.
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There is often no single reason why a food truck business fails but more of an accumulation of mistakes.
But If I had to highlight one, in particular, I would say it is choosing the wrong product.
This is because if you have a product nobody wants then sales will be lacking and the long-term viability of the business will be unsustainable.
However, a wise person learns from their mistakes but an even wiser one learns from others (I borrowed this saying).
So if you do your research and get the basics right there is no reason why your mobile catering business can’t succeed, especially in a continually growing market.