Food Truck Business Plan

Executive Summary

Overview: The Go-Go Truck is a mobile food truck that serves locally produced, farm-fresh fare. Our food truck has meticulously designed a menu consisting of San Diego’s freshest dishes, serving breakfast and lunch meals that go above and beyond traditional food truck cuisine. Ari and Liam met at a catering firm in San Francisco and formed a bond focused on food, laughter, and travel. The Go-Go Truck was created to fulfill a lifelong goal. We promise Fresh Food Fast to individuals in San Diego searching for a great and locally sourced dinner, combining Liam’s vast expertise as a chef of numerous cuisines with Ari’s comprehensive understanding of food systems’ sustainability and agriculture from across the globe.

Mission: To provide excellent, fresh cuisine for breakfast, lunch, or your next event and high-quality, genuine cuisine conveniently and affordably.

Vision: To become the most well-known mobile food truck brand in Los Angeles and throughout the United States and Canada.

Industry Overview: Between 2016 and 2021, the food truck sector grew at an annualized pace of 12.1%. The food truck industry in the United States has expanded consistently over the previous decade, and it has continued to grow rapidly in the last five years, with annual growth of 12.1%. The food truck sector grew at an annual pace of 8.6% from 2016 to 2021. Except for a short drop from 2016 to 2017, the pace of growth has been steadily increasing. The rate was already at 8% in 2021. Between 2016 and 2021, the market for food trucks grew by an average of 6.6 percent every year. The industry’s market value is $1.16 billion in 2021, up from $1.1 billion in 2020. The market continuously increased from 2016 to 2019, reaching $1.21 billion in 2019, before declining in 2020 and rising again in 2021.

Financial Overview

Financial Highlights

Liquidity	2020A	2021A	2022F	2023F	2024F
Current ratio	6	12	23	32	42
Quick ratio	6	11	22	31	40
DSO	8	8	8	8	8
Solvency
Interest coverage ratio			8.2	11.1	14.2
Debt to asset ratio	0.01	0.01	0.2	0.18	0.16
Profitability
Gross profit margin	51%	51%	53%	53%	53%
EBITDA margin	12%	14%	21%	22%	22%
Return on asset	5%	6%	13%	14%	14%
Return on equity	5%	6%	16%	17%	17%

Fund Usage

Industry Analysis

The increasing popularity of the food truck sector has transformed the public’s impression of food trucks from inexpensive eats to intriguing local – or foreign – meal stops. Food trucks have evolved into full-fledged restaurants, providing anything from burgers to ice cream to cupcakes to exotic cuisine. This shift is reflected in the industry’s patterns, indicating an increase in truck numbers and revenue.

Food truck growth was first slowed by COVID-19. Most people are working from home; several of the most successful pre-pandemic customer-gathering areas, such as parking lots near business hubs, were temporarily unprofitable. However, unlike conventional eateries, this business is more mobile and has had fewer losses and closures. Indeed, despite epidemic limitations and social distancing measures, the food truck sector continued to thrive, letting individuals “eat out.”

Instead of conventional direct mailing marketing tactics, food truck owners use specialized websites, social media campaigns, and geolocation capabilities to contact their consumers. They also use social media marketing to promote engagement by engaging with their local audience, hosting events, and spreading the word.

Food truck fans are mostly millennials (47%), and many are repeat customers. Food truck clients aged 18 to 34 are the most likely, followed by those aged 35 to 44. Over 80% of food truck eaters go there for a thrilling, new, and unusual experience. The food truck industry’s success is fueled by customer happiness. More than 90% of customers say their experience was outstanding.

Food Trucks have seen a growth in popularity in the five years leading up to 2021, owing to an increase in gastronomy in the United States. During this time, the industry has outperformed the rest of the foodservice industry. On city streets and parking lots, in parks, and during festivals, the industry comprises operators who cook and sell a wide variety of cuisine from mobile food trucks. Since its inception, the business has developed swiftly. Many new food truck operators are joining the market to meet shifting customer expectations for gourmet fare and creative culinary ideas. Industry revenue is predicted to increase by 6.6 percent annually to $1.2 billion after five years due to these developments.

The COVID-19 (coronavirus) epidemic has impacted foot traffic in commercial district locations, where a big portion of the Food Truck sector operates. Many individuals have moved to work remotely, putting industry operators in a difficult situation. Food truck operators have changed their focus to residential areas, important businesses, and rest spots in response. Some food trucks have entered into parking agreements with hospitals and enterprises. Amid the epidemic, some food trucks have switched to selling groceries. Most tiny, independently owned food trucks, unlike brick-and-mortar businesses, do not qualify for the Economic Injury Disaster Loan (EIDL) or the Paycheck Protection Program (PPP)funds, causing some to leave the sector permanently.

Since the 2008 recession, food trucks have become as popular as family dining or fast food as a restaurant concept. Because of the cheap cost, many would-be restaurateurs choose to establish food truck enterprises, which are increasingly considered legitimate places to start a career in the food industry. Food trucks now serve anything from cupcakes to grilled cheese to taco-waffle hybrids and anything else you can think of. Food trucks now provide gourmet, locally produced, artisan menu items beyond street food cuisine.

The target market for food truck enterprises is millennials in the middle class between the ages of 25 to 44 account for 43 percent of monthly food truck expenditure, with people under the age of 25 accounting for another 20 percent. The trendy nature of food trucks and the social aspect, convenience, and potential to support local companies frequently attract this group. Furthermore, although purchasing food from a food truck usually necessitates some discretionary cash, it also lets consumers taste new, high-quality foods without making a significant commitment, making them popular among middle-class clients.

According to IBISWorld, more than 24,000 food trucks will be operating in the United States by 2021, generating roughly $1 billion in revenue. Meanwhile, growth is expected to reach 7.5 percent between 2015 and 2020. Food trucks may be more popular in certain locations than others because of state and municipal restrictions that differ by state. Cuisine trucks have long been linked with quick-to-prepare dishes like hot dogs and ethnic street food prevalent in congested metropolitan areas. Food trucks are now seen in more places than merely busy street corners in heavily populated cities, as their menus have expanded and their popularity has risen.

Some food trucks originated as low-cost alternatives to traditional eateries, while others are run as extensions of existing businesses. Popular restaurants sometimes add a food truck to their business to bring their meals to huge gatherings or other special occasions. Customers may discover about a restaurant by ordering meals from its food truck during an outdoor event. It may also be used as a marketing tactic to bring attention to a brand.