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Is the No. 1 food truck failure cause menu, location, marketing, branding, employees, team enthusiasm, or undercapitalization? No. Many small business experts believe that it is the failure to write an appropriate business plan — or failure to even write a business plan!

Food truck business failure reason No. 1

Richard Myrick, editor-in-chief and founder of Mobile Cuisine Magazine, recently wrote that "although the mobile food industry has been growing exponentially over the past few years, there are still some food trucks and carts that have not been able to succeed during the industry's rapid expansion. Owning a restaurant on wheels in a good economy can be a challenge, but owning one in a down economy can be even more difficult."

He further states that a business plan MUST be right the first time. "The business plan is what everything your mobile restaurant will do is based on. It will force you to plan ahead, think about the competition, formulate a marketing strategy, define your management structure and plan your financing, among other things. It is your roadmap to success. Do not proceed without a solid business plan."

Another recent article published online (www.allbusiness.com) lists "The Top 10 Reasons Why Small Businesses Fail" — and one of those reasons is "an inadequate business plan. It further states that "A well thought-out business plan forces you to think about the future and challenges you'll face. It also forces you to consider your financial needs. Your marketing and management plans, your competition and your overall strategy."

Laura Scott, Demand Media on www.smallbusiness.chron.com, recently listed "The Four Major Reasons for New Business Failure" as:

  1. Lack of planning,
  2. Insufficient funding,
  3. Overreaching and
  4. Personal spending.

She states entrepreneurs often start small businesses centered on a product or service they know and love, and many brush off advice to write a detailed business plan, figuring their enthusiasm and creativity are the most important prerequisites. But business plans aren't like classroom busy work. A business plan helps entrepreneurs understand the market, where they fit in, how they compete and how many customers they need to succeed.

Food truck business plan requirements

Because food trucks are a unique business niche, I believe they require a unique business plan based on the following business requirements:

  • A Business Strategy: Year 1 through Year 3;
  • Competitive Landscape Analysis: That includes competitive food trucks, QSR restaurants, convenience stores and food carts;
  • Menu Fit to Consumer Demographics; That still allows for "menu innovation;"
  • Single Thread Brand Marketing Strategy that supports your menu: For example, the brand identity permeates all aspects of the business;
  • Financial Performance and Growth Metrics;
  • Management Roles and Responsibilities;
  • Employee Qualifications, in addition to an "All In" mentality;
  • Food Truck Overhead Analysis: Lease or buy;
  • Community Connections;
  • Plan B Response Strategy: If Plan A hits some snags.

For more information on implementing a "New Product Innovation Culture in your company, Food Technical Consulting (www.foodbevbiz.com) is providing on-site hands-on corporate 2-day workshops and coaching sessions – and a yearly 3-day industry workshop in Denver, Colorado on "How To Start & Maintain A Food Business", March 13-15. Please contact me at dsuderman@foodbevbiz.com or 303-471-1443. A course manual will be available for sale to international small business operators who cannot attend.

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User Comments – Give us your opinion!
  • L Prima
    40345262
    Cooking in a taco truck SOUNDS attractive at first but could be costly for young/inexperienced entrepreneurs. Skilled labor will likely not want to dedicate a career to toiling away in this service sector. Facts: Food trucks are expensive, challenging to maintain, and lobbying restaurants are naturally working to get laws passed that will limit where they are able to park. The window of profit can be very narrow as a business model but I admit that it could be profitable for a select few in the right situation. Aside from that, its nice short term advertising/promo for a restaurant startup. In a city where this trend took root, i've heard countless customers complain that its not cheap and eating outside has its ups/downs depending on the weather. Generally speaking, the guest expectation is that it will be cheap and lots of variety which can be a pitfall for efficient foodservice operations.
  • Rudy Miick
    40013936
    Great reiteration in this story on food trucks, that in most cases, business is business is business. Do right things right, win; wrong things right or worse, wrong things wrong, lose. The real question then is what does "right" look, feel (and taste) like? Thanks for reminder!
  • turgut kagitci
    38819766
    We're in 2013, business plan is so outdated, a business model canvas could help you see things clearly just as a guide, since things change so rapidly in today's world, it is unnecessary to waste time writing a business plan, follow you basic instincts. If you write a business plan, you are gonna have to update it every other day
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Food & Beverage Innovation

Latest posts by Darrel Suderman
Darrel Suderman
Darrel Suderman, Ph.D., is president of Food Technical Consulting and founder of Food Innovation Institute. He has held senior R&D/QA leadership positions at KFC, Boston Market, Church's Chicken and Quiznos and led KFC’s development team of “Popcorn Chicken”, now a $1B international product –invented by Gene Gagliardi.
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