Should You Start a Food Truck or a Restaurant?

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 Should You Start a Food Truck or a Restaurant?

Before you hit the road and roll out your food creations, I want to go over the pros and cons of each option. Food trucks are an exciting and affordable option if you’re a new restaurant entrepreneur wanting to follow your dreams. However, opening a  restaurant has its set of exciting and attractive benefits!

Food Trucks

The growing popularity of food trucks today makes it very appealing to people who want to make their culinary dreams come true.

Pros

~Food trucks have the benefit of being mobile and moving to where the customers are.

~It’s a lower initial investment and operating costs.

~Starting a food truck is cheaper and faster than opening a restaurant.

~It’s a great starting point for first-time entrepreneurs entering the food industry and provides invaluable experience that can be beneficial for a future brick and mortar restaurant.

~Trying new recipes and modifying menus are also much easier for food trucks.

~Food truck menus are designed to be uncomplicated but delicious, which makes the ability to offer new items quicker giving food trucks an edge over non-mobile restaurants.

~Food trucks can participate in events like concerts or festivals that can be very profitable to mobile food businesses, a revenue stream most restaurants don’t have available. 

  • Low start-up costs 
  • Fewer permits and operational expenses 
  • No property tax 
  • Lower maintenance costs
The most successful food trucks create menus that can be easily eaten while standing up, without the need for separate plates and extensive cutlery.
*Starting small and building up your food truck business can be the best way to become a better business owner.
*Not only will you experience running a business on a smaller scale, but a successful food truck relies on creating a strong brand and customer base, which will make it easier to translate into a fixed-location in the future if you wish.

Cons

~Getting a bank loan for a food truck business started through a bank can be tough. Banks are skeptical lending money because some believe that the food truck is just a fad and may suddenly vanish.

~When your kitchen is on wheels you’re working within a smaller space which physically limits the equipment you can carry and the amount of space to prepare your menu.

~If your menu requires a lot of different types or large pieces of equipment, many food trucks choose to prepare their food off site at commercial kitchens which can become an expense that affects your profit and income in a negative way.

~ Regulations challenges in states and municipalities have clear rules regarding mobile food businesses while others do not.  It’s so important you research and contact agencies on individual locations you plan to operate or sell at and obtain business requirements.

~ Local restaurants may lobby against food trucks due to the increased competition and unclear regulations or not know the laws, can make starting a food truck business a bit more challenging.

~In some cities and municipalities where cooking in the truck is not allowed, food must be prepared and packaged in a commercial kitchen.

~The weather can affect your revenue because customers will be out in the open when buying from your food truck. Food truck operations can be seasonal in places with cold climates while even in warmer locations, unexpected rain can put a dent on sales.

*The most successful food trucks create menus that can be easily eaten while standing up, without the need for separate plates and extensive cutlery.
*Starting small and building up your food truck business can be the best way to become a better business owner.
*Not only will you experience running a business on a smaller scale, but a successful food truck relies on creating a strong brand and customer base, which will make it easier to translate into a fixed-location in the future if you wish.

Restaurants

The right restaurant at the right location can be a lucrative enterprise. Many successful restaurateurs often become popular landmarks in the local community.

Pros

~A restaurants is a “people” business, if you enjoy meeting with the public, you can thrive in this business.

~Restaurants are in huge demand. A good restaurant is always filled with customers. People have to eat and in the U.S. and around the world is something we all enjoy to do.

~Restaurant owners always get a chance to meet with the high-profile people. 

~Owning a restaurant is like raising a child. When you get compliments on your restaurant, whether it is about the food or the service,  hearing how people enjoy coming to your restaurant is an awesome feeling. I think there are few jobs that can offer as much personal joy, as a successful restaurant business.

Cons

~Low margins – The food industry is very price sensitive, more so in the world of fast food chains. This leaves you with a very fine line to walk with the cost of goods, labor and to make a profit. It’s true that food franchises often see high revenues, but the net margins are often overlooked. You are also susceptible to food spoilage and theft along with other issues only found in the food industry. I’ve seen anywhere from 4%-11% depending on rent, food and labor cost.

~Expensive initial investment – A restaurant will require a substantial investment from you in order to get started. You need to pay for many items up front to run the business. Not only do you need to pay for the food and labor, but also ovens, grease disposal, venting, furniture, the point of sale system, and maintenance among many other expenses.

You’ll need to ask yourself if you have what it takes to run your own restaurant business before you decide to open one.

Running your own restaurant business is different from running any other type of business. There are many things that you need to be able to manage if your restaurant is going to be successful.

Some of the things that are specific to the food industry that you’ll need to be aware of include:

  • Managing your restaurant staff
  • Government regulations
  • Taxes
  • Safety concerns
  • Recipe costing
  • Menu cost and pricing
  • Vendor item pricing
  • Ordering food and other inventory supplies

The choice between starting a food truck or starting your own restaurant comes down to your skill and strength sets, budget, and personal preferences.

Both avenues will require planning, determination, and a clear vision to succeed.

“Find something you’re passionate about
and keep tremendously interested in it.”
– Julia Child

If you need more information and help to decide which one you should open, startyourrestaurantbusiness.com can coach and consult with you. It’s always important to have your questions answered by people who have been in the trenches and had the experience. 

If you’re interested in owning a restaurant or changing your career to become a restaurant entrepreneur, this website is the right place to start.

 

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