How profitable are food trucks?

My answer to How profitable are food trucks?

Answer by Desmond Last:

Food Trucks can make or break you. When I took over Matilda’s in Sydney it was on its knees. Westpac the Bank was about to close the doors. The opposition Quick Snax were walking all over Matildas. 7 years later we sold it for several $millions to Spotless Catering in Melbourne. I took it from 25 Food Trucks to 40.

You will need to keep a tight rein on costs. You will also need to know what your break-even is all the way up through the supply chain. Because there are so many component parts to the system; Food Manufacture, Supply and Distribution, a loss in each one of them soon adds up.

I knew the cost breakdown of every Sandwich. Even to how much a slice of tomato cost. I knew what I was spending per truck on maintenance and I knew the break-even of each Truck.

It is a high volume business that works on economies of scale both in purchasing and labour.

You can add 10 cents to a fast-moving product and increase your profit. But that same 10 cents can also destroy your sales. You have to know what the market will bear and where it is.

The number of Trucks you are able to operate at the optimum cost and efficiency is where the money is.

A new run can take a long time to become profitable. It is not just a case of turning up and waiting for people to come out and buy. A new run has to be canvassed and permissions obtained.

Managed correctly it is a Cash Business that it is possible to return 10 – 15 per cent on investment. But to obtain that sort of return you will need to have an accounting system that meters every cent.

Purchasing power is a big plus. But to get the scale you will need at least 10 Trucks.

Food wastage and spoilage can be a runaway cost. You are not going to sell all your daily prepared food everyday. You have to have food for the last call.

Stocktakes are critical. We were setting up barcoding. I would advise any operator to do the same.

Matilda Operator’s were paid a wage plus commission. They worked hard for it. The first Truck would roll out of the Yard at about 6.30 am and not return till 12.30 p.m. They had to load their trucks and unpack them either side of that.

There are spin-offs. We ran the Sydney Casino and Sydney Olympic Building Site Canteens and we had vending machines. We also catered for weekend events.

It is not a business for the faint-hearted. It is a sleeves rolled up type of business.

We also had Eftpos on the Trucks. Giving credit will increase sales by up to 20 per cent. But you must have an approval and retrieval system.

I have read other answrs that give offer professional advice. Take it. It is not a business to wear a blindfold in.

How profitable are food trucks?

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