Whether you’re looking to raise funding from private investors or to get a loan from a bank (like a SBA loan) for your food truck, you will need to prepare a solid business plan.
In this article we go through, step-by-step, all the different sections you need in the business plan of your food truck. Use this template to create a complete, clear and solid business plan that get you funded.
For more information on food trucks, make sure to read our guides below: How Much Does It Cost To Start a Food Truck? How to Start a Food Truck in 9 Steps How To Build a Financial Model For a Food Truck? 12 Strategies To Increase Food Truck Sales & Profits
1. Food Truck Executive Summary
The executive summary of a business plan gives a sneak peek of the information about your business plan to lenders and/or investors.
If the information you provide here is not concise, informative, and scannable, potential lenders and investors will lose interest.
Though the executive summary is the first and the most important section, it should normally be the last section you write because it will have the summary of different sections included in the entire plan.
Why do you need a business plan for a food truck?
The purpose of a business plan is to secure funding through one of the following channels:
- Obtain bank financing or secure a loan from other lenders (such as a SBA loan)
- Obtain private investments from investment funds, angel investors, etc.
- Obtain a public or a private grant
How to write your food truck’s executive summary?
Provide a precise and high-level summary of every section that you have included in the business plan of your food truck. The information and the data you include in this segment should grab the attention of potential investors and lenders immediately.
Also make sure that the executive summary doesn’t exceed 2 pages in total: it’s supposed to be a summary for investors and lenders who don’t have time to scroll through 40-50 pages, so keep it short and brief.
The executive summary usually consists of 5 major sub-sections:
- Business overview: start by introducing your food truck, its concept, menu and prices. Also add here where the food truck will be located (if static vs. mobile ; events vs. next to business / corporate centers) and the type of customers you will serve such as working individuals, teens, etc.
- Market analysis: summarise the market where you will operate and provide a brief about the target audience, market size, competitors, etc. No need to provide granular data here, save it for the Market Overview section later on (or the appendix). You must provide only scannable data points to keep potential investors and/or lenders hooked.
- People: introduce your food truck’s management and employee structure. Provide a brief (no more than a couple of sentences each) of the knowledge and experience of the team. Also, speak about your hiring plans.
- Financial plan: how much profit and revenue do you expect in the next 5 years? When will you reach the break-even point and start making profits? You can include here a chart depicting your key financials such as revenue, gross profits, and net profit
- Funding ask: what loan/investment/grant are you seeking? How much do you need? How long will this last?
2. Food Truck Business Overview
In this section, you will provide additional details about your food truck and explain why you chose the specific food truck idea.
Your aim must be to answer some of the most important questions that your potential investors and/or lenders will ask.
Here is a small list of such questions that you must address in the business overview segment:
- What is the rationale behind you opening a food truck today?
- What’s the food truck’s concept / menu and why did you select that one?
- What made you select that specific food truck idea?
- Who is your target audience?
- Where will the food truck be located? Will it be mobile or static?
- Will you cater events (e.g. concerts, festivals) or will it be a street food truck instead (next to offices for example)?
- What will be the legal structure of your company?
Let’s look at different subsections that you must include:
a) History of the Project
Any business must have two components:
- Passion & experience of the business owner
- Rationale behind starting this type of business today
Passion & experience
It is not necessary to have any prior experience with a food truck. As long as you are passionate about it and you know your market, you are good to go.
However, if you have any experience, make sure that you are mentioning that. For example, you may have been a server or an operator in a food truck for 7 years and now you want to open your own food truck business.
No matter what, ensure that you demonstrate not just passion but also some industry knowledge that you must garner through thorough research.
Every business has a rationale behind its existence. What’s yours? Are you going to solve some problems that exist in the current food truck business scene?
For example, there may be a rising demand for Thai food in your proposed area of operation but there are no food trucks offering Thai food. Thus, opening a Pad Thai Truck will allow you to cater to the rising demand.
You must also ensure that the market is conducive for the business to exist. For instance, if you are trying to sell expensive items to people who usually buy affordable food from food trucks, it doesn’t make sense. Thus, all your offerings must serve the existing needs.
b) Business Model
This is where you will talk about the business model and the type of food truck you want to open. Some points that you need to briefly describe include:
- Will you buy a new food truck, or will you buy an old one and remodel it?
- Will you open a food truck, a food cart, or a food trailer?
- What equipment, technologies, and tools will you need to operate your food truck?
What are the different types of food trucks?
There are three types of food trucks that you can open:
- Food Trailer: These are the largest of all and they can be up to 53 feet long. Food trailers can house full-sized restaurant equipment, cooking staff, and cleaning equipment.
- Food Cart: These are the smallest types of food trucks and usually have very few appliances. The appliances are usually small. They can house 1-2 staff members.
- Food Truck: These are the standard trucks that can be up to 26 feet long. They can house 1-3 cooking staff and usually require space-saving storage, countertop cooking equipment, etc.
The type of food truck you want to use will depend on the type of food you want to sell.
One thing that you must remember is that the type of food truck that you want to open must have enough target audience.
For example, if people in your operational area prefer to buy hot dogs and donuts from food trucks, trying to introduce a food trailer offering community kitchen dishes will not appeal to people.
c) Products & Services
Of course, the food items that you will sell through your food truck will depend on the concept of your food truck and the relevant demand in the area.
Here are a few popular food truck concepts that you can consider:
- Vegan Food Truck: These trucks sell plant-based food items.
- Street Food Truck: These trucks sell food that is eaten right away. Some examples include pierogi, sliders, bahn mi, etc.
- Donut Truck: Well, they sell donuts and are more popular during breakfast hours.
- Pork Truck: They sell a wide range of food products made of pork such as pork ribs, pork sliders, bacon, etc.
- Fried Chicken Truck: Chicken legs, tenders, wings, etc. are common stuff sold through these trucks.
- Seafood Truck: These food trucks are more popular in the coastal regions where they can offer fresh catch. Of course, the menu can be massive or offer just a few items.
Thus, the food items you will sell will depend on the food truck concept. Since food trucks’ menus are typically rather limited (a few options only), it’s good practice to simply add here the menu list to your potential investors or lenders so they get a pretty good idea of your menu and concept.
d) Pricing Strategy
Your pricing strategy will depend on various factors like the type of food you will sell, the type of raw materials you will source, the special modifications you make, the packaging and serving material you will use, etc.
While it is possible to have a significant variation in your prices compared to your competitors, you must still ensure that the price variation is not significant.
If you are charging more for similar products than your competing food trucks charge, there must be a proper justification.
Present a pricing chart for all the menu items that you intend to sell. Yes, it is possible to list all items with their prices because a food truck usually doesn’t sell too many products.
Offering a pricing table is important here as it will allow investors to tie your pricing strategy with your financial projections later on (see “Financial Plan” below).
e) Legal Structure
Finally, your business overview section should specify what type of business structure you want. Is this a corporation or a partnership (LLC)? Who are the investors? How much equity percentage do they own? Is there a Board of Directors? If so, whom? Do they have experience in the industry?
3. Food Truck Market Overview
A complete understanding of the market where you want to operate is important for the success of your business.
For example, if you intend to open a vegan food truck and partner with breweries & wineries to supply food to their guests, you will most likely fail: indeed, a Danish study found that people usually prefer non-vegetarian food along with alcohol.
It is vital to understand your target market and audience, your competitors, growth potential, etc. before you start a business. A food truck business is in no way different.
Therefore, you must cover 3 important areas here:
- Market trends: how big is the food truck industry in your area? What is its growth rate (or decline rate) and what are the factors contributing to its growth or decline?
- Competition overview: how many competitors are there? How do they compare vs. your business? How can you differentiate yourself from them?
- Customer analysis: who is your target audience? What type of food trucks do they prefer? When do they usually buy from food trucks? Do they display any seasonal behavior towards food preferences? What is their average spending on food trucks? Do your potential customers really want the food you intend to sell?
a) Food Truck Industry Status Quo
How big is the food truck industry in the US?
As per IBISWorld, the food truck industry in the US stands at $1.2 billion in 2022.
The industry is quite recent and has been literally exploding over the past 10 years: the industry grew on average at 6.4% per year from 2017 to 2022. In other words, the food truck industry doubled from $600 million to $1.2 billion in just 10 years..!
Also, there are 35,000 active food trucks in the US.
On average, food trucks generates sales of about $250,000 to $500,000 per year, or $20,000 – $42,000 per month. Another recent US study from FoodTruckEmpire was a bit less optimistic and showed that only 50% of food trucks generated more than $100,000 in sales per year.
How big is the food truck industry in your area?
Once you provide the overall picture of the US, divert your attention to the area where you want to operate. It might not be possible to find region or area-specific studies, and hence, you must estimate the size. Read our article on how to estimate TAM, SAM and SOM for your startup.
For example, based on the data above we can assume that on average food trucks generates around $250,000 in sales per year.
Therefore, if there are 20 food trucks in the location where you want to operate, you can assume that the food truck industry in your area is worth approximately $5 million.
How fast is the food truck industry growing in the area?
You must show the expected growth rate of the food truck industry in your area. Whilst, this information may not be available online you can easily assess your area’s food truck industry growth rate.
Indeed, you can use the number of food trucks as a proxy. For instance, if there were 17 food trucks in 2020 and 20 food trucks in 2022, the average annual growth rate is ~8%, not too far from the US national average (6.4%).
Note: if you area’s market growth rate is significantly lower or higher than the national average, try to check your assumptions and calculations first. Then, if all is correct, try to find an explanation: a growth higher than the US average might imply, for example, that your area was/is currently underserved by food trucks, and there is a lot of demand (customers) in comparison.
What are the current food truck market trends in your area?
It is vital to understand the trends of the food truck industry in your area. Understanding trends will allow you to devise marketing strategies.
Understanding trends won’t be easy. You must conduct research and talk with your target audience. Additionally, you must also study your competitors to understand their target audience, the products they sell, etc.
Some common questions you may ask the target audience include:
- What type of food trucks do they prefer?
- At what time of the day do they prefer to visit a food truck (breakfast, lunch, dinner)?
- How frequently do they visit food trucks?
- What type of foods do they usually order?
You can ask as many questions as you need to understand the evolving trends.
b) Competition Overview
Studying your competitors’ business models is vital. You need to understand what makes them successful or why they fail. A clear understanding of their food offerings, marketing strategies, etc., will allow you to provide a better service.
If your competitors are offering nearly the same products & services, then what is their market share and how do they market their products & services to attract new customers?
It is always a good idea to do some research (if necessary, physically visit your competitors without revealing your business intentions) and create a comparative table summarizing their product & service offerings, marketing strategies, target audience, etc.
Here is a sample table that you can use as a reference:
|Competitor #1||Competitor #2||Competitor #3|
|Location||Adjacent to a brewery||Close to office locations||Near a college campus|
|Business model||Food truck||Food trailer||Food cart|
|Products offered||Non-vegetarian food only||Non-vegetarian & vegetarian with non-alcoholic drinks||Burgers, sandwiches, donuts, and hotdogs|
|Marketing strategy||Social media content|
Food truck directories
|Social media content|
Food truck directories
Food truck directories
|Google Rating||4.7 (748+)||4.4 (1,266+)||4.2 (938+)|
SWOT Analysis for a Food Truck
SWOT stands for Strength, Weakness, Opportunities, and Threats. It should be a summary of your business’ strengths and weaknesses along with opportunities and threats. It also helps potential investors to assess the risk and reward profile of your business.
Here is a sample that you can use as a reference:
- Strengths: Collective experience of 8 years as sous chef in 4 restaurants and a bachelor’s degree in culinary arts
- Weaknesses: Startup cost, zero reputation
- Opportunities: Growing number of local breweries and wineries looking to form a partnership with food trucks to supply food to their in-house guests
- Threats: Increasing cost of raw materials and increase in new food truck businesses in the area
c) Customer Analysis
This is the sub-section where you will provide a detailed analysis of your target audience. Some important points that you must include in your customer analysis include:
- Age and gender distribution (you can get local demographic data from census.gov)
- Frequency of food truck visits
- Average monthly income and disposable income
- Average spend (per order or per month)
- Average yearly or monthly spending on food at food trucks
- Type of food and food trucks preferred
- The expected price range for food
- Things they dislike about existing food trucks and what they expect to be improved
- Locations where the target audience is found more (wineries & breweries, corporate workplaces, farmer’s markets, annual events such as parades, fairs, car shows, etc.)
You can add as many data points as required to validate your business decision. The idea here is to display your deep understanding of the target audience and their needs, preferences, and expectations. This knowledge can help you to tailor your products & services to attract new customers.
4. Sales & Marketing Strategy
This is the section of your food truck business plan where you outline your customer acquisition strategy. You must answer here the questions below:
- What is your USP?
- What are the different marketing strategies you will use?
- How do you intend to track the success of your marketing strategy?
- What is your CAC or customer acquisition cost?
- What is your marketing budget?
- What promotions and offers do you intend to provide for attracting new customers at the beginning?
Let’s expand a bit on a few questions below:
What marketing channels do food truck businesses use?
A few marketing channels that food truck businesses typically use are:
- Online food truck listings and apps (see here a full list for the US)
- Online reviews (e.g. Google reviews)
- Social media content and ads
- Partnerships with other businesses (e.g. corporates, events, etc.)
- Print media (newspaper ads, flyers, etc.)
- Word-of-mouth, recommendations, etc.
It is not necessary to use all channels. You can start by focusing on a few of them. You can include other marketing strategies later.
Also, you must have a fair and nearly accurate estimate of your marketing budget. Failure to display a well-planned and adequate cash flow for advertising and marketing can lead to investors losing confidence. That’s because investors are fully aware that if adequate funds are not allocated for marketing, the business will be derailed before becoming a success.
What is your unique selling proposition (USP)?
In other words, how do you differentiate yourself vs. competitors? This is very important as you might need to win customers from competitors.
A few examples of USPs are:
- Uniqueness: you may be the first food truck business offering Thai food
- Organic food: We use high-quality and organically farmed products and real ingredients sourced from nearby organic farms
- Price: affordable food & menu for the quality vs. competitors
- Location: the food truck may be located in a busy street
Your USP will depend on your business model, competitor analysis, and target audience. Whatever your USP be, it should appeal to your potential customers and attract them. Plus, The USP you offer should be convincing enough for investors and lenders.
5. Management & People
You must address 2 things here:
- The management team and their experience/track record
- The organizational structure: different team members and who reports to whom?
Small businesses often fail because of managerial weaknesses. Thus, having a strong management team is vital. Highlight the experience and education of senior managers that you intend to hire to oversee your food truck business.
Describe their duties, responsibilities, and roles. Also, highlight their previous experience and explain how they succeeded in their previous roles.
It is also important that you explain how their experiences and qualifications help you in implementing the food truck you are proposing. If they have specialized training, and experience (such as a degree in culinary arts, 8 years of experience as a sous chef working under celebrity chefs, etc.), add that information.
b) Organization Structure
Even if you haven’t already hired a manager, service attendant, driver, and kitchen staff, you must provide a chart of the organizational structure defining the hierarchy of reporting.
6. Financial Plan
The financial plan is perhaps, with the executive summary, the most important section of any business plan for a food truck.
Indeed, a solid financial plan tells lenders that your business is viable and can repay the loan you need from them. If you’re looking to raise equity from private investors, a solid financial plan will prove them your food truck is an attractive investment.
There should be 2 sections to your financial plan section:
- The startup costs of your project (if you plan to open a new food truck, renovate your existing truck, etc.)
- The 5-year financial projections
a) Startup Costs
Before we expand on 5-year financial projections in the following section, it’s always best practice to start with listing the startup costs of your project. For a food truck, startup costs are all the expenses you incur before you open your food truck and start making sales. These expenses typically are: the truck, cooking equipment, licenses and permits.
Logically, the startup costs vary depending on the size of your truck, the quality of the cooking ware, and the permits you must apply for.
On average, it costs $60,000 – $180,000 to start a food truck in the US.
Note that these costs are for illustrative purposes and may not be fully relevant for your business. For more information on how much it costs to open and run a food truck, read our article here.
|Truck||$40,000 (used) – $150,000 (new)|
|Equipment||$0 (new)* – $20,000|
|Permits & Licenses||$600 to $6,000|
|Total||$60,000 – $180,000|
b) Financial Projections
In addition to startup costs, you will now need to build a solid 5-year financial model for your food truck.
Your financial projections should be built using a spreadsheet (e.g. Excel or Google Sheets) and presented in the form of tables and charts in the business plan of your food truck.
As usual, keep it concise here and save details (for example detailed financial statements, financial metrics, key assumptions used for the projections) for the appendix instead.
Your financial projections should answer at least the following questions:
- How much revenue do you expect to generate over the next 5 years?
- When do you expect to break even?
- How much cash will you burn until you get there?
- What’s the impact of a change in pricing (say 15%) on your margins?
- What is your average customer acquisition cost?
You should include here your 3 financial statements (income statement, balance sheet and cash flow statement). This means you must forecast:
- The number of covers (customers or orders) over time ;
- Your expected revenue ;
- Operating costs to run the business ;
- Any other cash flow items (e.g. capex, debt repayment, etc.).
When projecting your revenue, make sure to sensitize pricing, cost of raw materials (food supplies) and your sales volume. Indeed, a small change in these assumptions may have a significant impact on your revenues and profits.
7. Use of Funds
This is the last section of the business plan of your food truck. Now that we have explained what your food truck’s business model and concept are, what is your menu, your marketing strategy, etc., this section must now answer the following questions:
- How much funding do you need?
- What financial instrument(s) do you need: is this equity or debt, or even a free-money public grant?
- How long will this funding last?
- Where else does the money come from? If you apply for a SBA loan for example, where does the other part of the investment come from (your own capital, private investors?)
If you raise debt:
- What percentage of the total funding the loan represents?
- What is the corresponding Debt Service Coverage Ratio?
If you raise equity
- What percentage ownership are you selling as part of this funding round?
- What is the corresponding valuation of your business?
Use of Funds
Any food truck business plan should include a clear use of funds section. This is where you explain how the money will be spent.
Will you spend most of the loan / investment in paying your employees’ salaries? Or will it cover mostly the cost for the lease deposit and the renovation?
Those are very important questions you should be able to answer in the blink of an eye. Don’t worry, this should come straight from your financial projections. If you’ve built solid projections like in our food truck financial model template, you won’t have any issues answering these questions.
For the use of funds, we also recommend using a pie chart like the one we have in our financial model template where we outline the main expenses categories as shown below.