Dreaming of owning a food truck?

How to open a successful food truck 
By Christine Lagorio updated 6/1/2010 7:31:24 AM ET You're not exactly ahead of the curve if you think vending specialty food out of a van could be your big meal ticket. But that doesn't mean you can't make it big by betting on a banh mi bus or a churro cart.
Street food in New York and Los Angeles took a decidedly foodie turn in 2008, when gourmet trucks such as Rickshaw Dumpling Bar and The Dessert Truck, founded by a former Le Cirque pastry sous chef, started parking on the Manhattan streets. Formerly, lunch from a to-go cart might entail a greasy, mixed-meat kabob, a shriveled hot dog, or a stale pretzel. Today, the state of the cart is healthy, and increasingly high-end.
Call it a coast-to-coast surge of mobilized chefs, taking street eats to the next level.
The most successful are super-social-media savvy, with a loyal following that will meet them at any urban curb. Still, if you think you've got what it takes to serve meals on wheels, there are plenty of factors to consider first, the least of which should not be geography. While New York has no available vendor permits and Portland's food-truck market is already quite crowded (Multnomah County has nearly 400 food carts, according to the Portland Oregonian), other mid-sized cities look ripe for entrepreneurs.
When Scott Baitinger opened Streetza Pizza in Milwaukee, Wisconsin, last year with Steve Mai, the pair was virtually alone as street vendors – so much so that a local insurance agent had to create a policy to cover their previously unheard-of business. This year, Milwaukeeans seem to expect a snack truck to be parked outside Water Street bars late nights. Things are going so well, in fact, that Streetza is expanding via a partnership to Cleveland, where at least six new pizza trucks were slated to be in working order by Memorial Day.
Does sliding hand-tossed pizza topped with veggies grown by friends into and out of a mobile pizza oven all day sound like a dream? Well, Baitinger still has a 60-hour-a week day job, and no plans to leave it. New vendors cite considerable start-up hurdles, such as getting proper licensing, funding a kitchen and truck, mastering social networking, and staying profitable through poor weather and off seasons.
Ready to confront those obstacles and give a culinary venture a go? We've compiled stories and advice from entrepreneurs who have pioneered successful food carts.
So, you have a killer idea for a food truck. If you're thinking something fresh and hearty, something already sold on the streets of another country, or something sweet, it's likely you're on the right track.
As with almost any entrepreneurial endeavor, securing financing should be one of your first goals. Online forums and sales sites can help you determine your costs. If you want to start small, a standard, used hot dog style cart costs about $2,000 to buy, while refurbished trucks for driving and vending can run more than $40,000. That high price tag is usually due to local health department specifications, which any truck that serves food must comply with and be refurbished to meet.
Before you buy, though, assess your needs. The less you need your truck to do, and the smaller it can be, the cheaper it will be. Cody Fields, a former engineer who built wastewater treatment plants, launched his Austin empanada truck, Mmmpanadas, in early 2008. He started small by cooking his empanadas at home and selling a few dozen at a time to local bars and coffee shops. But he found serious expenses involved in expanding to a truck.
"You can spend $20,000 in buying your initial truck," he says. "I would recommend people think about going with a smaller cart — something that's not a full mobile truck, and not a full mobile kitchen.
" In New York or Los Angeles, where food carts are most popular, it might be possible to purchase a truck previously used by a vendor. Used is advisable, especially because acquiring and retrofitting a new truck can cost $75,000 to $100,000, according to a food-truck analysis by New York Magazine. Vending windows, lined walls and floors, electricity, hot running water and a retail payment system are all necessary, so even if you find, say, an appropriate-sized old DHL step van for sale for $10,000, the retrofitting will be a significant expense. Food carts generally have the same health and safety requirements as restaurants, so you can expect regular inspections for fire and health issues.
In designing the truck, you'll have to decide whether you'll be cooking most of the food on-scene, or simply using the truck as a retail and storage space. Empanadas, for instance, take considerable prep work, but can be easily stored and sold. Same goes for cupcakes or pastries. Tacos and pizza, on the other hand, need to be freshly assembled at the point of sale.
For Baitinger and Mai, fitting their truck with a functional pizza oven was the most difficult part of starting Streetza. They had purchased electric appliances for the truck, including a full-service pizza oven, before realizing that a generator to run it all wouldn't even fit in the truck. "We went through a comedy of errors, and still have an extra pizza oven we purchased sitting in my garage," Baltinger says.
A mobile restaurant doesn't have the same permitting process as a brick-and-mortar establishment. Nor does it have to pay traditional rent. But there are some other costs and logistics to consider.
Insurance This shouldn't run you much more than regular vehicle insurance, but do make clear to your underwriter any additional risks your truck might pose. For example, you might want to mention that you carry five propane tanks or have an open flame in your vehicle.
Permits Although necessary permits vary based on locality, in New York, a vendor needs a Mobile Food Vendor License and any vending vehicle needs to be equipped with a Mobile Food Vending Unit Permit. Securing a truck permit can be tough; certain cities, including New York, have a cap on the number of permits in existence at one time. It's not unlike the market for liquor licenses, experts say, with a waiting list that can run more than 10 years, according to the Street Vendor Project. While renting or buying a permit on the black market is illegal, inspectors have been known to turn a blind eye once a permit is in a vendor's hands.
Preparation facilities Even though plenty of mobile restaurants and bakeries can be started out of a home kitchen, consider the possible future need for extra facilities. When Lev Ekster launched his CupcakeStop truck last year, he hired a baker and rented a Brooklyn kitchen space only for evenings, which kept costs down. Since then, he's expanded to a full baking facility, which he's combining with an office and storefront in New Jersey.
Truck storage and security Some cities' departments of health require that vending vehicles be stored in approved commissary locations when not on duty. Expect to pay for this parking, including electricity and refrigeration costs.
Parking If you're planning on parking — anywhere, really — you'll need permission. Baitinger recommends befriending local city council representatives and establishment owners before choosing regular spots. In metropolitan areas, neighborhood associations can be helpful partners. For special events or privately owned areas, though, you might have to pay for a good location. For Ekster's second CupcakeStop vehicle, for instance, he's planning on parking daily at New York's South Street Seaport, and is paying a few thousand dollars a month for that prime tourist-heavy locale.
Buzz is a huge part of what makes a food-truck launch successful. With social media allowing vendors to distribute exclusive-feeling information about their location or daily specials, the best newly launched trucks strike a fine balance between elusiveness and consistency.
That is to say, not everyone who might want a burger is following the tweets of New York vendor Frites 'n' Meats. But if they know the truck usually serves dinner at a particular corner in TriBeCa, they can find it. When choosing a location, vendors should pay special attention to exceptions to vending rules on local park property, and be careful to stay away from competing brick-and-mortar establishments (at least until they know and love you). Milwaukee's Streetza truck, for example, had trouble gaining acceptance from local bars and restaurants due to fear it might drive business away. Now, they know the truck draws a regular social-media crowd to an area.
"In the last year, everything has taken a 180-degree turn," Baltinger says. "At first, people were trying to keep us away from their brick-and-mortar establishments, and now they want us. Still, we will never park within 500 feet of a pizza restaurant, because just ethically that doesn't seem right."
In addition to Tweeting locations and specials, Streetza crowdsources menu ideas, and held a Twitter vote on their truck design. And Baitinger is thankful for the synergy: "As much as Twitter has given to us, I try to give back to it. I give plenty of praise, and I even found my accountant on Twitter!"
Every city seems to have a distinct vibe. In L.A., there's more of a swoop-in-and-serve-em-up-quickly feel. Take the famed Kogi Korean BBQ truck, which will tweet a new location, be met by a swarm of 40 hungry fans, serve, and then take off for a new spot. In New York, vendors tend to make a schedule and stick to it. In Austin, Texas, and Madison, Wisconsin, carts and trucks gravitate to the same area, forming something of an outdoor food court, or maybe a trailer park that happens to vend cheap lunch.
If you make the decision to be a highly mobile vendor, you'll want to use Facebook and Twitter early to cultivate a loyal customer base. Baitinger says Twitter is a key to his business success, estimating that 70 percent of his sales can be directly tied to social media. "It's not always someone who's on Twitter," he says, "but it's someone who is who said something to a friend." "At a core level, we use Twitter to broadcast our location. But also, we try to push the stories about the people who eat our pizza. And photos of them. It's building a community,"
Baitinger says. Even at the most modest outset of your fledgling business, think about what you really want to create for yourself. "Creating a food truck, and a job for yourself is fairly easy to do," says Fields of Mmmpanadas. "Creating a business is much more difficult."
Ekster's CupcakeStop truck is available for events, and he does a lot of corporate store openings, such as Victoria's Secret, and bar/bat mitzvahs. He tends to book the truck on evenings, so after it is done selling to the workday crowd in Manhattan, it can head out to Long Island for a party. And that income helps make the business model sustainable. "You can make more money selling cupcakes outside than at an event, only an event is guaranteed," Ekster says. "You sign a contract and, rain or shine, you get paid."
Events are a reliable source of income for many new street vendors, and so is catering. The Streetza partners discovered this when offices started ordering their pizzas for lunch, because there weren't fresh-out-of-the-oven pizza choices readily available in downtown Milwaukee.
Online sales are another promising arena for less-perishable food products, as well as t-shirts, and other novelty products. Distribution to coffee shops, grocery stores, and other vendors is another option. That's exactly where Mmmpanadas is going. The company is already distributing empanadas, and is beginning to supply them to Whole Foods locally this month. "We're trying to create our wholesale business, but the truck only helps with that. It's a moving, 20-foot-long billboard for us, that increases visibility," Fields says. Copyright © 2012 Mansueto Ventures LLC.