6 Reasons why you should take your food business on the road
To grow a food and beverage business, the stress of operating a business can be tricky. Unless you’ve figured it out it, your growth will be limited to the foot traffic of your current location. In some cases, restaurant failures are due to a lack of capital and repeat customers. Small businesses can benefit from packing up and break free from the four corners of their brick-and-mortar establishment as they travel to new markets.
The United States of America is a large, diverse country that spans 50 states and 3.7 million square miles. The offered variety of products can create a larger market for food trucks in the U.S. by reaching customers in various States. Food trucks can serve customers anywhere they please. It makes more flexible options than static physical restaurants can provide: the ability to move around.
Food trucks have become a popular business model. These mobile restaurants offer the ability to serve customers anywhere. It makes it more appealing to investors than a traditional restaurant confined to one location. This mobility makes food trucks a competitive option! If your site is not producing profits, it’s easy to relocate and try again somewhere else.
Although operating a static restaurant is fun and profitable, there are some drawbacks. One drawback is the fact that you have to wait long hours for potential customers to come in. With your truck, this will be a thing of the past as you will be able to go where the people are! Through this, you can take full advantage of your truck’s capabilities.
Low Initial Investment
Banks are likely to give you a loan if you have collateral. You can use that as security against the loan and lower your interest rate. Brick-and-mortar stores do not offer financing options, but food trucks do! The truck itself serves as collateral, so financing is more flexible.
You may often get a better deal for your mortgage with lower interest rates and more extended mortgage payments. It’s ideal if you have a good credit score. Pay as little as possible with your mortgage, but pay off the balance over time as your business takes off. It will allow you to spend as little cash as possible early on and improve cash flow in the first few months of operation.
A large bulk of your required investment will come from purchasing the food truck. Since that is taken care of, it will leave you with a smaller amount of funds to raise for other start-up costs. On average, the cost of your food truck will account for approximately 75%-90% of your initial investment, leaving you about 25%-10% of cash to raise.
Low operational costs
Food trucks solve the problem over the fear of losing money on rental payments. If your business is expanding quickly, food trucks can help.
Rental rates are the most significant expense for restaurants. High rental rates make it difficult for physical restaurants to remain profitable. However, if you compare restaurants to food trucks, the operational costs are much lower due to the absence of rent.
In the case of food trucks, besides paying the mortgage (if you’ve taken a loan to finance it), you don’t have to be burdened by rental costs! All you have to consider are parking fees and commissary expenses on top of your everyday operational costs. These costs are dramatically less than rental payments!
In the early stages of practically any business, you should be careful how much money you’re spending. The objective is to spend less so that your COGS (cost of goods sold) won’t eat up your gross income. It will give you a higher net profit!
Unlike restaurants, food trucks only require a few kitchen crews. As such, you will not need extra guys to maintain the establishment. Fewer employees mean more net income!
Properties of food trucks are either static or dynamic Primarily because they can move to different locations, which can contribute to the growth of your business. For traditional restaurants, growth opportunities are limited to the market potential within a circular radius around it.
Not only is being mobile a great way to test different locations, but it also makes you more visible to potential customers. Imagine how many people would see your truck?
Easier to liquidate
Let’s hope that this doesn’t happen, but if it does, you won’t have any trouble getting your money back. Some people buy used food trucks, and you can sell yours in no time.
The main problem with physical restaurants is this: exiting is a nightmare! You can sell your tools and equipment, but there’s one thing you cannot liquidate: the rental payments you’ve paid through the years!
It’s still possible to sell a food truck for more than $50,000 despite depreciation. Due to the burgeoning popularity of the food truck business, along with a greater demand for used food trucks on the market, your investment is still bound to pay off one way or another! Of course, that would still depend on how well your vehicle is maintained.
Social media has taken over the world and is still doing so! Food trucks have become a trend that everyone is getting at. Social media has made food truck businesses more popular than ever before, especially since it brings people together through food.
Social media has had a very positive impact on the growth of food trucks. The power and appeal of social media set food trucks apart and give them an almost viral quality. As a business owner, you can take on the world with your novel ideas!
Sometimes, all you need is an excellent old-fashioned rebrand. Let’s face it; not all restaurants are created equal. Some stay around for years, and some are fleeting. If your concept loses traction, don’t fret! Re-invent! One of the main reasons that make food trucks so popular these days. It is no secret that companies love to go back to the drawing board and rebrand their stores. It allows them to look fresh and up-to-date like they are on top of trends. But it’s not only about looking trendy; it’s also about making customers feel like they are walking into an entirely different place.
As the economy began to change, an investment in food trucks became a good one. Restaurateurs reacted to the Coronavirus pandemic by finding ways to beat the system and survive with social distancing protocols in place.
The world has seen the spread of a major flu pandemic. It’s essential to be open-minded about how we approach the situation, even if it seems scary. As business owners, we need to welcome change. If you close your physical restaurant in exchange for life on the road, you might find that it’s worth it!
The mental toll of being a business owner is evident. Stress and difficulties are always present, but we can manage them by downsizing. Many restaurateurs have reduced their businesses and embraced the nomadic lifestyle on the road. It may not always be necessary to pack your bags and constantly move literally. But, you should at least explore different options for surviving.
At Venture Food Trucks, we have been helping businesses design and acquire the food truck of their dreams. As an industry expert for over 30 years, we are confident in our expertise. Call us now! We can help you with your planning as well as the fabrication of your food truck.