In a country like India where diverse culinary cravings meet bustling streets, venturing into the world of food trucks can be an exciting and lucrative endeavor. Food trucks are like moving restaurants that have a kitchen-like setting inside them. Therefore, they can be parked or set up anywhere unlike conventional restaurants. However, one needs to strategically design the business plan for a food truck that includes decision-making regarding vehicle, location, funding, etc. In this article, we will understand how to start a food truck business in India and what is the cost required for the same.
What is a Food Truck?
A food truck is like a moving restaurant, serving a variety of foods and drinks to customers across various locations. These trucks are equipped with cooking appliances and kitchen amenities, allowing you to prepare and serve food directly from the vehicle, wherever it’s parked or set up.
Read More: Food Truck Business in India: Meaning, Benefits, Ideas and Challenges
Food Truck Business Plan
It is crucial for entrepreneurs who are willing to start their food truck business to conduct thorough market research and analysis specific to their target locations, customer preferences, and competitive landscape. This enables them to make informed decisions and capitalize on the potential of the food truck business.
A food truck business plan should include the following considerations –
Market Research
Conducting market research is the first step that you need to take before starting any business. Therefore, if you are willing to start a food truck business, conduct market research and identify the opportunities and threats in the market. Also, find out the market size and the demographics that play an important role like age group, income level, preference of customers, etc.
Accordingly, decide your target market i.e., the section of the market that you will serve with your products.
Concept and Cuisine
This is one of the most important considerations of a food truck business plan. Once you have decided on your target market, you need to develop a unique concept to best serve the needs of the customers. For example, you can start a food truck that offers seasonal food to customers, this will also ensure that you have customers all around the year.
It also includes decisions regarding the cuisine of food that you will serve like Indian, Chinese, Mexican, etc.
Selection of Vehicle
The vehicle that you should select for your food truck business depends on several factors. Primarily, it depends on the variety of food that you are offering. If you are planning to serve different cuisines together on your food truck, then you should buy a big vehicle, otherwise medium-sized vehicle can be used. The cost of such trucks ranges between Rs. 8 – 10 lakhs.
However, if you want to save costs, you can use an old truck. In that case, you must incur repair charges and fit in the necessary equipment. It will cost around Rs. 4-5 lakhs. In any case, the built-up area of the truck should be suitable for the cooking set-up.
Appropriate Location
The location of the food truck can be the deciding factor for the success of your business. Therefore, you should carefully select the location considering the local permissions required, the presence of competitors in the area (if any), consumer footfall, surroundings, etc.
In simple words, the location of the food truck should be a place that is visited by lots of people during the day.
Business Structure
There is no ‘one-size-fits-all’ business structure. You have to choose the most suitable one out of various options like Sole Proprietorship, Partnership, Limited Liability Partnership (LLP), Company, etc. based on the scale of operations on which you are planning to do business, the control that you are willing to share, etc.
For instance, if you want to do a food truck business on a small scale without sharing the control with anyone, then you can operate as a sole proprietor. However, if you want to collaborate with someone, then you can open a partnership firm or a company.
Branding
The success of your food truck business depends heavily on its branding. Apart from having a logo, you need to develop an identity of your brand in the customer’s mind. Your branding should appeal to your target audience, from a catchy and memorable truck name to a visually appealing design that matches your cuisine and style.
Building consumer loyalty and awareness through consistent branding across menus, and social media will ultimately fuel the expansion of your food truck business.
Funding
Arranging finances is another important consideration for any business. Therefore, consider the different sources from where you can raise funds like you can obtain loan from banks and financial institutions, borrow money from family or friends, and can opt for crowdfunding, etc.
Moreover, if your business idea or concept is unique, you can get funds from venture capitalists or angel investors as well. Also, consider the cost of obtaining such funds.
Procurement of Raw Materials and Equipment
For setting up the kitchen inside the food truck, you need several equipment such as a mixer, microwave, juicer, refrigerator, burner, griller, exhaust, etc. Therefore, you need to make a plan as to how you are going to acquire them, whether you will buy new equipment or acquire old ones. On average, buying all such equipment costs around Rs. 2 lakhs.
In addition, you need to decide the interval for buying raw materials and the stock of raw materials that you will maintain at a time. It is advisable to decide the frequency of raw material ordering based on their nature. For example, if you are planning to serve fruit juices, then you need to buy raw materials frequently to ensure that you serve fresh juices to your customers.
Obtaining License & Permits
There is no specific law that governs the food truck business in India. However, it is advisable to obtain the following licenses and permits for the smooth conduct of business –
- FSSAI License
- Shops & Establishment License
- Vehicle License
- Fire Safety Certificate
- No-Objection Certificate from Municipal Body, etc.
Manpower
A staff of 4-5 persons is sufficient for a food truck. One person is required to take the order from customers and collect the payment. A minimum of two persons shall be engaged in food preparation and if you are planning to give the option of home delivery to customers, then two delivery persons shall be hired.
In addition, you can get a uniform designed for your staff with your brand name and logo on it. It helps in gaining the trust of customers.
Software
To monitor the sales and growth of the business, it is always advisable to maintain records. Therefore, you need to license Point-of-Sales (POS) software that enables you to generate bills and maintain records of transactions. Many companies in the market give licenses to POS software and it costs between Rs. 3,000 – Rs. 40,000.
Pricing
Developing a competitive pricing structure is another important decision in a business plan. In order to maintain profitability without sacrificing quality, take into account the cost of the materials, the cost of preparation, and operational costs.
Further, market analysis, in particular competitive analysis, helps in determining competitive pricing that appeals to the target market.
Marketing & Promotion
For marketing and promotion of your food truck business, you can adopt various strategies. As the customers of a food truck are generally people belonging to a young age group, you should build a digital presence which mainly includes social media marketing. You can run contests on social media and distribute food coupons to attract customers initially.
In addition, you can distribute pamphlets in the nearby area as the majority of the customers who visit food trucks are people who live in the local area around where the food truck is set up.
Insurance
Risk management is essential for all businesses irrespective of their size, nature, type, etc. Therefore, to mitigate the risk of unforeseen circumstances, it is advisable to obtain insurance for food trucks.
Competitor Analysis
A business plan is incomplete without a thorough analysis of what the competitors are doing. Competitor analysis helps in –
- Identifying the gaps in the market;
- Deciding prices of products or services;
- Anticipating risks and challenges, etc.
Therefore, you should first identify your competitors in the market and then assess their strengths and weaknesses to formulate your strategy accordingly.
Hygiene and Environmental Sustainability
Other factors that demand consideration while setting up a food truck business are hygiene and environmental sustainability. It is necessary to maintain hygiene inside and around the food truck. In addition, you should properly plan how you will discharge the waste that is generated so that it does not lead to pollution.
Cost of Starting a Food Truck Business in India
Now that we have understood what are the requirements for starting a food truck, let us find out the total cost of setting up a food truck in India.
The following table shows the estimated cost of starting a food truck business in India –
| S. No. | Particulars | Estimated Cost (in Rs.) |
| 1 | Vehicle | 4 lakhs |
| 2 | Cooking Equipment | 2 lakhs |
| 3 | Raw Material (for 1 week) | 20,000 |
| 4 | Staff Salary & Uniform | 40,000 |
| 5 | License & Permits | 50,000 |
| 6 | POS Software (for a year) | 20,000 |
| 7 | Marketing & Promotion | 25,000 |
| 8 | Miscellaneous | 25,000 |
| Total Estimated Cost | 7,80,000 |
Conclusion
In conclusion, we can say that the combination of culinary passion, strategic planning, and entrepreneurial spirit can pave the way for success in the food truck business. By meticulously crafting your food truck business plan, from conceptualization to execution, you will be well-positioned to successfully handle the ever-changing environment of operating a food truck business.
