Why Do Food Truck Businesses Fail?

Take a look at your food truck or food cart business and make sure you avoid these mistakes.

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Although the food truck industry has been growing exponentially over the past few years, some food truck businesses fail. 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.

We have put together the top 10 reasons why food truck or food cart vendors in the industry have failed (outside of local legislation which in many cases is out of your hands). Take a look at your food truck or food cart business and make sure you avoid these mistakes, to maintain a flourishing business.

Why Food Truck Businesses Fail

1. Constrained by Your Vision

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A savvy food truck owner knows it’s all about the customer, not his or her personal tastes and opinions. Don’t be self-possessed or overly self-confident and be open to opinions other than your own. As important as vision is, it must be able to adapt quickly to feedback.

2. No Identity

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Lack of identity is the opposite of being constrained by your vision. A food truck’s success depends on its ability to establish a brand and stick to it, so develop an identity and focus on perfecting it. Most food trucks that succeeded had something in common. They focused on their strengths whether it’s providing meals below RM6 or specializing in a unique dish/recipe/trend.

3. A Bad Opening

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“You never get a second chance to make a good first impression” is as accurate as ever in the food truck industry business. A soft opening is a great tactic that can lead to an infinitely more successful grand opening of your new food truck. Creating that hype at the beginning will save you a lot of frustrations (and marketing budgets) in the long run. Ever wondered why movies launch teaser trailers ? Imagine what would happen if they didn’t.

4. Hiring & Training

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Just like a bad opening, bad service will kill your business quickly. If your vision isn’t executed properly, the damage to your current and future customers is unavoidable. Most food truck owners lack formalized training, procedural and operational processes. Learn from an experienced owner or hire a consultant for expert advice. A few bad reviews regarding the same mistake that staff makes can have a huge negative impact on your business.

5. No Formal Recipes

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How can your food truck kitchen staff maintain consistency without formal recipes? This step is critical to controlling costs, controlling waste, and providing effective staff training. Weighing, measuring and ensuring every batch of food is consistent in terms of taste, quality and quantity is utmost important as this is what your customer will base your food truck on. Put yourself in your customer’s shoes; would you return to an eatery which has dropped in terms of food standards?

6. Poor Inventory Management

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Outside of the initial capital required to purchase your truck, the cost of food is the single biggest expense and, unless the financial control systems are in place, you are vulnerable to a drain on your cash. Reducing inventory means a reduction in food cost, so manage your resources carefully and plan your events wisely. The last thing you want is having your finances stuck in stockpiled food when its greatly needed elsewhere.

7. Under-capitalization


Unexpected and unforeseen events happen all the time, especially in a food truck business. In many instances, incorrect budgeting is the culprit. Don’t get caught up in the dream of being profitable from Day 1. Make sure you’ve got money left in the bank to help you ride out the difficult days when your truck needs a new generator, or even a new engine.

8. Poor Ownership

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Don’t be an absentee owner. If you want to own a food truck, expect to work. Otherwise, don’t expect to get paid. If you wish to have the chance to step away from day-to-day operations, the key is to have proper systems in place first. Ensuring  staff have enough authority and are able to perform under minimal supervision while maintaining the standard of food produced. Without these, you’ve haven’t bought yourself a business; you’ve bought yourself a job with a misleading title.

9. Insufficient Market Analysis.

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Knowing your market and examining locations is vital as this will determine if your business is viable or not. Picking a over-saturated food truck location where there are multiple food trucks having the same menu is definitely not the way to go, especially if the other food trucks are already well established and can easily outsell you. Seeking help from experienced owners, marketers or consultants can help in this area.

10. Lack of a Business Plan.

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And finally, one of the most important and crucial part where most food trucks fail, the Business Plan. All the above points MUST be address in your business plan and it MUST be done right the first time. The business plan is everything your food truck will be based on and it will rarely get a second chance to rethink and redo. Here are a few key points to touch on:

  • Force yourself to plan ahead; you can’t predict what can go wrong but at least you can plan for it.
  • Think about the competition; else they will put you out of business, and fast
  • Formulate a marketing strategy; market your brand until its well known and never stop
  • Define your management structure; without it you can’t operate systematically
  • Plan your financing; cut losses but not corners

This business plan is your road-map to success. DO NOT proceed without a solid business plan. As they say, “failing to plan is planning to fail”.

Adopted from: Mobile-cuisine.com

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