The Dream and Reality of running a Food-Truck

The contours of street food have drastically shifted with the growth of India’s food industry. Our street-food is globally acclaimed for its flavors, variety, and ingredients. But more than its diverse palate, Indian street food plays a crucial role in the economy. To the middle classes, street food is a thing to relish and enjoy, while for the weaker sections of the society, street food is about sustenance. Contrary to popular belief Indian streets have been bustling with street vendors and food-carts for ages. With the advent of technology and globalization however, the ball-game has changed significantly and it is no surprise that the ‘food-truck’ model has made momentous strides in the road-side food business. From ice-creams and churros to biryani and shawarmas, Indian food trucks have covered a wide range of cuisines.

If you have a boring 9 to 5 job with a knack for cooking and are reading this article, you have probably dreamt of opening a food truck. The romance and reality of owning and running one is filled with lots of challenges and requires your full-time attention. So to start with, food-truck business like any other venture is a full-time commitment in terms of resources and research.

The foremost thing one needs to note is the limitation of space. In the context of Indian street-food, we do see a lot of food trucks offering numerous items, but for a resounding impact on your customer base, it is important that your food is not only delicious but also efficiently served. Food trucks usually have menus that are limited to specific food items. This allows for perfection within a limited menu and also forces innovation with limited ingredients. There are several upsides to running a food truck business in India.

“Since early 2012, India has seen a silent underground movement in the food truck space. Mobile Food Trucks now have a presence in most metro cities in India, albeit a subdued one.”

– Business India

The Indian demography is already well acquainted with the idea of street food. And when this street food comes out of a clean-organized food van it elevates the perception and experience of the customer. From an operator’s point of view, a food truck business could be your gateway to future projects like restaurants or cafes. Also, Food trucks can change their menus and innovate on a weekly basis as they do not have the constraints of a fully functioning restaurant. So you could also use the limitation of space to your benefit. One of the most important qualities of running a food truck is mobility. In case the business does not run well in a particular area, the operator has the option of shifting the kitchen. This gives the food truck business an edge over fixed competitors.

Getting Started

Menu and Concept

Menu is at the heart of all matters concerned with creating a food joint. Even more so with a mobile kitchen. The food-truck business relies largely on the selection and feasibility of food items being offered. Your food truck menu will practically dictate interior layout and kitchen plans alongside resource management. The menu of a food-truck should be designed in a way that that making and managing the food is feasible. Interestingly, you might have observed that as a customer, you expect the food truck to churn out quick meals. Regardless of the cuisine, your menu should not take too long to prepare which is why deciding the menu is crucial. A food-outlet with a well-defined concept and a well-crafted menu have always had a positive impact on the costumers.

Usually, a food-truck menu has limited options given its space and kitchen module. And some food-truck ventures make the most of this limited menu by diversifying the items and given ‘ADD-ONs’ just like this one serving french breakfast meals in Banglore.

Selecting the Right Vehicle

Based on the given menu, you need a commercial vehicle which fits your requirements and ensures smooth operations. So deciding the size of your food truck is the first step. There are a lot of vendors selling customized, refurbished and newly-made food trucks across India. Apart from diesel-fueled van, there are a lot of e-vehicles on the market as well. Considering the fact that food trucks are only found in urban cities and establishments, buying an e-vehicle could be even more beneficial in terms of getting government subsidies for your business.
To save costs, you could start with a refurbished truck or an old van which would typically cost less than the new one. However, one should check for proper fitness certificates, registration, road tax receipt, and insurance. Make sure it’s not older than 5 years. Due to pollution problems, various state governments and environmental bodies are considering to ban 10-year-old commercial vehicles in different cities.

Finding the Right Spot

Location is the most important aspect of a mobile kitchen. One should always choose a place that doesn’t have too many similar food vendors around. You must also ensure the place you choose has a regular flow of traffic so that managing and catering to large footfalls is easier. Areas with corporate offices and students are the known hot-spots for pitching a food-truck. With growing food-truck culture, food-truck parks have grown rapidly, especially due to land permits and space constraints in metro cities. Shared spaces have become necessary to an extent. Shared space and shared resources will always be beneficial to your food-truck in one way or another.

At the same time, there are many opt for ‘stand-alone’ spots as well. In that case, the competition of a food-truck park gets eliminated. However, that also means that ‘stand-alone’ food-trucks have to spend more money on sourcing water and other amenities along with marketing and establishing their brand. Eventually, when you finalize, ensure that the location you select is visible and easily accessible on Google Maps.

Interior Layout & Kitchen Equipment

The kitchen is where all the magic happens! And it’s layout is where the planning gets real. The interior layout of your food-truck will have the biggest impact on your staff, customer-service and business alike. Ergonomics is the number one consideration in the design of kitchen space.

Your kitchen should be designed for maximum labor efficiency, safety, and functionality. Make sure that there is plenty of room to move about freely when carrying hot pots and bulky supplies. If employees do not have to waste time and extra movement completing a task, efficiency is increased. Fatigue and workplace injuries will also be reduced.

For making a working drawing of your kitchen you will require the following:

  1. Electrical wiring schematics.
  2. Fire suppression equipment installation drawings.
  3. Plumbing plans.
  4. Electrical installation plans.
  5. Complete list of all building materials used

Kitchen Equipment practically dictates the operational efficiency of the kitchen as well as the quality and safety of a food-truck menu.

Licenses & Permits

There are no clear-cut laws pertaining to food-truck ventures in India. So, the required set of documents is not clearly outlined. Since state laws are different in India the permit cost etc. may also vary from region to region. However, it is incumbent to procure the following set of licenses for your food truck in India, the following pre-requisites will permit you to carry on with your restaurant business legally:

  1. Fire Safety Certificate
  2. Shop and Establishment License
  3. NOC from RTO
  4. NOC from Municipal Corporation
  5. FSSAI Mobile Vendor’s License
  6. Kitchen Insurance

The combined paper and licensing work can cost you around Rs 50,000. There are a lot of consultancies that can help you to get the licensing and other permits.

Billing & Inventory Management

Billing and inventory management are crucial not only to the food truck’s operations but the impact its sales and profits. A good point of sale (POS) software is highly recommended in this new-age of the food business. It makes your billing process smoother, keeps your data safe and gives detailed information about inventory and sales. An efficient kitchen is one where the in-flow and out-flow of resources are well managed. Several studies have proved the inventory management has a huge impact on restaurant sales and overall service. Managing your inventory also reduces food waste making your business more sustainable.

A lot of restaurants including QSRs and other food businesses use customer data to get repeat orders and take customer feedback. POS software can immensely benefit your business; particularly in today’s competitive environment.  It can cost somewhere between Rs 10k-14k along with added maintenance charges on a monthly or yearly basis.

Marketing

Above everything else, people love a good story. Your food and your brand has to click with people. Traditional tools of marketing such as pamphlets and banners can be used to increase your brand’s physical presence in terms of visibility.

  1. Tie up with local sellers and event planners
  2. Have contests, reward a few lucky customers
  3. Provide free WiFi at the truck
  4. Get food reviewers and bloggers to your truck
  5. Keep an eye out for all food events and fests.

Having a presence on Social Media is a must, and as it would keep your customers and followers informed about new additions to the menu or change in the location, etc. Also, it can be used to leverage existing followers to spread the word about the food truck, offering discounts, choosing new food items for the menu, etc.

Here are a few things to keep in mind when you are planning your marketing strategy.

  • Finalize your target audience: Know the people you choose to cater to. Understanding your audience will be to help market your brand. For example, comfort foods and pocket meals are most suitable for the student and working-class population.
  • Tie up with online food delivery agency: Food Delivery systems alone account for major restaurant sales these days. Apps like Zomato and Swiggy are heavily used in India. Your presence on such platforms will significantly boost sales of the food-truck as well as market its presence.
  • Research on your potential competitors: Find out how your competition is faring, the food they sell. Their promotion channels, their unique selling proposition, Everything you can dig up about your competition will be useful when you go about building your brand.
  • Build differentiators: Note down the unique features of your food-truck. What sets your menu apart from others? If you are serving something similar to other competitors, you should compare the pricing to get a better hold of the market. Even a 10 rupee difference could shift your customer’s perception.
  • Your Brand and Logo: Logo is the face of your brand and hence using it in creative ways to imprint its image in people’s minds is one of the most effective marketing tools. The reason why you see the letter ‘M’ when someone mentions McDonald’s is because of its iconic logo. When you are starting a new venture especially, your Logo could spread faster than your service itself!

Food Truck Festivals see size-able participation from many players around India and are visited by foodies from all around. India hosts a variety of local and national food truck festivals. If you are new to the street food business, food festivals are perhaps the best opportunity to market and test your venture.

Employee Management

An average food-truck must have 3 employees depending on the menu-size and operational space. Human resource is crucial for any business to thrive. So, employee management should be your top priority. Usually, 2 chefs and a helper will suffice your food-trucks operations. The average salary of Chefs could be somewhere around Rs 13k-15k, while the helper’s salary can go up to a maximum of Rs 8k. However, to keep the service level up to the mark, it is advised you to hire at least one individual for logistical support.

Since there are no holidays in the food-service industry, managing leaves for your staff and finding a suitable replacement to serve for the buffer period is a major challenge and needs to be given prior thought when you are hiring. There are several recruitment agencies and manpower suppliers in cities across India that could help you with finding staff.

The Real Cost

The initial cost of an average food truck can come up to INR 8-10 lakhs in India. On the upper end of the spectrum, the cost of a fully equipped food truck could be a little over 15 lakhs. Your investment largely depends on your concept and the cuisine you plan to serve.

Here’s a complete breakdown of all the costs involved:

Your financial planning will also include the operational cost and additional expenses of the food truck. The rent for your spot, kitchen maintenance, staff salary, and hygiene accessories, inventory and raw materials as well as other miscellaneous expenses like kitchen cutlery and food truck maintenance fall under operational costs.

Sound’s exhausting, right? Well, any venture has several challenges and requires utmost commitment. There are several challenges when it comes to opening a food-truck and financial planning is the foremost. But compared to fixed restaurants, food trucks have lower operational costs which are why many are venturing into the idea of opening a food truck.

Challenges

For the food truck business to truly flourish, its limitations and challenges need to be addressed. The first challenge is obtaining the license. Most food trucks start out under the radar and function within the existing system of laws. A lot of cities especially highly populated ones have strict laws for parking in order to maintain traffic and other commotion factors. Hence, obtaining permits can be tough and sometimes the food-truck owners end up paying extra maintenance fees for their operations.

The financial planning of the business model, particularly the Operational Expenses of running a food truck need to be calculated prior. They tend to differ from place to place. Hence, it is very important to gauge your investment capacity.   

Another crucial challenge is Managing Your Staff. Your employees are literally and metaphorically at the heart of your operations. As you know, the food-service industry runs seven days a week. So, managing your staff not only in terms of their work-shifts and leaves but their health and safety too. Providing service with a smile is often undervalued but it makes all the difference in the subconscious experience of the customer.

Maintaining health and hygiene is a vital challenge for street food business because even though kitchens might be clean the garbage disposal, cleanliness of the surrounding area, etc. make a huge impact on your food sales and customer review. Ensure that your kitchen equipment is replaced as and when required. Using old utensils or grills could impact the taste and quality of food.

From an operational point of view, Quick Service is a major challenge. If you plan to have a diverse menu with more than 20 items, you need to dry run the process of creating all the items in a given frame time within the limitations of your mobile kitchen. For example, if you are planning to open a burger joint you might want to make your coleslaw and vegetable cuts beforehand to ensure a smooth outflow.