Food trucks have become quite a rage lately in the evolving restaurant space. The advantage of mobility in the food truck format gives owners access to multiple locations at an initial capital that is lower than that needed in opening a restaurant of any other format. Thus, it is no wonder that small restaurant owners are looking to invest in a food truck instead of an individual stationary restaurant. This article will tell you why it is a better idea to open a food truck instead of a standalone restaurant. In this article, we will take you through every step of starting your own food truck business in India.
How To Start A Food Truck Business In India
First of all, you should create a food truck business plan that would act as a roadmap to the future growth of your food truck. It is natural to have doubts when you are starting a big or small restaurant business, which is why you must learn how you can create a business plan for your food truck here.
Although it may seem daunting to start a food business in India, the following points will guide you thoroughly through the process of opening a food truck business in India:
- Choosing the right food truck or commercial vehicle
- Get the kitchen equipment and raw materials required in a food truck
- Apply for licenses and permits needed to start a food truck business in India
- Look for the workforce required to run the food truck smoothly
- Install POS software for your food truck
- Decide on the staff uniform for your food truck employees
- Market your business
- Decide on the total investment required to start a food truck business in India
- Finalize the sources of funding
- Other miscellaneous things required to keep your food truck business in India, on the mark
Now, let’s dive in deeper so that you can gain a comprehensive understanding of how you can execute these points mentioned above in the most effective ways that will bolster your food truck business in India.
1. Choose The Right Food Truck Or Commercial Vehicle
The first thing to do is to choose the right truck or commercial vehicle. Based on the given menu which is Italian and Continental, you need a commercial vehicle that is at least 18 feet long, and a new one would cost around Rs 7-8 lakhs. There are various trucks available in the market from Tata, Mahindra & Mahindra, and Ashok Leyland.
But to save costs, you can start with an old truck which would cost half the price of the new one. However, when buying an old commercial vehicle or truck one should check for a proper fitness certificate, registration, road tax receipt, and insurance. Also, it should not be more than five years old, as due to pollution problems various state governments and environmental bodies are considering banning 10-year-old commercial vehicles in different cities.
The old vehicle can further be modified and designed based on the requirement with an additional cost of Rs 1 lakh from the various bodybuilder shops. So, the total cost of the final truck (old) without kitchen equipment is Rs 5 lakhs. This cost seems to be very high from the 450 sq ft shop for QSR whose rent is somewhere around Rs 40,000, but in the long run, the food truck cost would be negligible as there is no or very less rent or fees to pay depending upon the vicinity.
2. Choose The Right Location For Your Food Truck
Choose a street that doesn’t have too many similar food vendors around, has a regular flow of traffic for inviting large footfalls, and has establishments with young professionals and students in the surrounding area. Also, the parking of trucks should be such that it does not pose any hassle to commuters, yet should be visible to the people. Also, it is advisable to buy a light commercial vehicle rather than going for a big size heavy commercial vehicle because in certain cities including Delhi big size trucks are not allowed before 9:00 pm.
3. Source Raw Materials And Kitchen Equipment
The total cost of kitchen equipment comes to around Rs 3 lakhs which includes a Microwave, juicer mixer, freezer, refrigerators, griller, steamer, working tables, one burner, exhaust equipment, generator or big batteries with an inverter. It is advisable to go for new equipment as they are mostly electronic items. Since you get a one year warranty on new ones, you would be relieved of the daily maintenance cost of the equipment. However, if you choose the equipment carefully and determine which can be bought old, this can save you a lot of money which can be used for other essential activities. Apart from the kitchen equipment, you can store raw material for the first week which would cost somewhere around Rs 30,000. Further, it is advisable to keep the raw material less for the first few weeks to keep the stock fresh and to study the pattern of sale and then procure more.
4. Get The Licenses & Permits Required To Start A Food Truck Business In India
Since there are no clear-cut laws pertaining to food trucks/restaurant business plans in India, the defined set of documents required are not present anywhere specifically. However, it is essential to procure the following set of licenses for your food truck in India, which will permit you to carry on with your restaurant business legally in this territory:
- Fire Safety Certificate
- Shop and Establishment License
- NOC from RTO
- NOC from Municipal Corporation
- FSSAI Mobile Vendor’s License
- 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.
Additionally, here’s a list of all the licenses required to open a restaurant business in India, and the steps to procure them.
In the food truck format, a maximum of two chefs and one helper are required who can take care of the operations of the entire food truck. The average salary of chefs can be somewhere around Rs 13k-15k while the helper’s salary can go up to a maximum of Rs 8000. If you want to set up a delivery model for the truck, you can hire two delivery boys or tie up with third-party logistics companies that charge somewhere around Rs 40-50 per delivery.
However, to keep the service level up to the mark and create an identity in the food service market, we would like to advise you to hire at least one delivery boy who will also help you procure raw materials in the case of emergencies rather than depending upon the third party logistics.
6. POS Software For Your Food Truck
It is always advisable to have a good point of sale software that can keep your data safe and give detailed information about your inventory and sales. A good POS can make or break your restaurant business in today’s competitive environment as a lot of restaurants including QSRs and other food businesses use customer data to get repeat orders and take customer feedback. An excellent point of sale software can cost somewhere around Rs 24,000 per annum, i.e., Rs 2000 monthly.
7. Staff Uniform For Your Food Truck Employees
The staff uniform gives an overall brand feel to the restaurant business which in return helps you gain more trust among your customers. A standard collar t-shirt will cost somewhere around Rs 120, and since you have only five employees in this particular format, two chefs coats (2 each) which will cost around Rs 300 while the rest of the employees can have a t-shirt and a cap. The combined cost of all the uniforms would not be more than Rs 6000-7000.
8. Market Your Food Truck
Unlike QSR, food trucks require fewer menu pamphlets for distribution since the primary business of food trucks is based on footfall rather than delivery. Still, to create the initial buzz, one can go for 15000 Pamphlets which will cost around Rs 20000 and some billboards and banners in the nearby catchment area which will cost around Rs 10000. However, in the new digital age creating an offline buzz is not enough.
Having a presence on social media is a must, as it would keep your customers and followers informed about the location of a food truck on any given day to build a regular flow of customers and build brand connections. 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. Find out how to do digital marketing for your restaurant the right way here.
Apart from that, keep a note of events and community gatherings in the local area and park the food truck around. Tie-ups with event planners and food influencers, personal contacts with customers, and free goodies like t-shirts and mugs carrying the food truck logo, can go a long way in spreading and expanding the restaurant business.
9. Calculate The Cost Of Opening A Food Truck Business In India
The average cost of starting a food truck business in India is around 10 Lakhs. It varies mainly according to the type of vehicle you are opting for and the kitchen equipment. Here is the overall cost distribution for a food truck business in India:
10. Source Funding For Your Business
With a business plan in place, it is now time for you to zero in on the sources that you can tap into for the funding of your food truck business. There are multiple avenues to choose from:
- Personal savings – Over 50% of food trucks are financed from personal funds because of low capital requirements.
- Borrowings from family and friends.
- Community Sponsors.
- Microfinance Institutions/Banks that provide business loans.
- Pre-approved Credit Cards that can be used for meeting working capital requirements.
- Crowdfunding platforms, such as Kickstarter, GoFundMe, and Indiegogo.
- Business partner/Co-founder who can bring in additional financing.
- Financing from a Venture Capital Fund if funding from loans falls short of the requirement.
11. Other Things Required To Start A Food Truck Business In India
Apart from the things mentioned above, while starting the food truck, you require things like two mobile phones, a calculator, an attendance register, a daily book, 2-3 big dustbins to keep the area clean, etc.
Unlike other food business formats, the food truck business has its pros and cons, such as the location which is a problem for other formats but here the owner of the food truck can decide on the site based on the market information and research, with no rent to be paid, no electricity bills, less capital required and low operational costs.
On the flip side, the food truck business is quite uncertain as there are no proper framework or guidelines to operate, but if things are done carefully and responsibly, this format can be rated as the best food format in terms of returns in comparison to the investments made. The investments made in the food truck business are slightly higher than the QSR format, but the good thing is that the overall operational cost is much less than a QSR or a small restaurant in the long run.
Apart from the regular business which has a minimum of Rs 8000-9000 sales per day, a food truck can also make money from various events and catering. A single event or catering can generate earnings of up to Rs 30,000 in a day.
Keep the aforementioned tips in mind when you decide to start up a food truck business. Effective execution of all these ideas will generate more profits for your food truck and keep the customers coming back.
Inputs are taken from Karan Malik, owner of Supersuckers Food Truck.