Business Idea: A Mobile Food Truck Business
Aretha Ribeiro Monteiro Pereira
Southern States University
BU 522 Managerial Finance
Instructor Dr Gustavo Del Rivero
July 22, 2021
Business Idea: A Mobile Food Truck Business
Projects are a common and elemental part of society. They can be carried out for various reasons by several different parties such as individuals, groups or organizations, among others. For this project, the business idea of choice falls in the food truck industry due to personal interest and liking for food, particularly healthy ones. While the desire and liking for food is a crucial part of all individuals’ lives, the need for healthy nutrition is essential because of all the benefits that come with it. In a world where processed foods have taken up a majority of meal options at restaurants or in our homes, the need and demand for healthy alternatives have been steadily on the rise for a while now. Due to all these factors, my business idea of choice was framed. For this project, the idea then became a mobile food truck.
The mobile food truck falls under the NAICS code 722330-Mobile Food Services grouping. The mobile food truck industry comprises establishments primarily engaged in the preparation and service of meals and snacks from motorized or non-motorized vehicles and carts. Examples of food providing services that fall in this category include ice cream truck vendors, mobile food concession stands, mobile refreshment stands, mobile food carts, and portable snack stands.
Food is normally stored, prepared, and cooked in the truck in this industry, which may or may not use the same location every day. The competitive landscape demand is driven primarily by consumer tastes, food quality, effective marketing, local demographics, and personal income and location selection. The main competition in this industry is with the traditional brick and mortar restaurants, grocery and convenience stores, and specialty eateries (Alfiero, Giudice & Bonadonna, 2017).
For this project, the specific objective will be the development of a mobile food truck that prepares a wide range of foods and specialties, including but not limited to non-alcoholic drinks, hamburgers, chicken, tacos, among others. However, this specific brand is dedicated to healthy living and the preparation of nutritious foods, which is the one element that makes it unique. While food trucks are a common phenomenon across various regions and business districts, the idea and business plan behind this truck is one that aims to integrate healthy and nutritious ingredients to widely favorite and popular cuisines, both native and exotic. As such, the food will be prepared using some of the major healthy food groups, namely vegetables, lean meats, whole grains and many others options. These ingredients will be used to develop a healthy yet enjoyable menu with a wide range of nutritious foods and drinks.
The target market will include essential businesses and rest stops, residential neighborhoods and hospital lots. Because it is a mobile motorized vehicle, movement will be easily conducted and planned per a particular schedule, allowing for consumer convenience. Since the business will begin with one truck before progressing to two or more trucks, a schedule allows the truck to plan its specific stops, where customers can access it conveniently on indicated days. In order to ensure that the business meets the standards of healthy living, a nutritionist and a chef are part of the team that helps create the overall business plan and menu.
The legal structure applied to this business will be a formal partnership between three parties who will operate the business and share its profits. A partnership is defined as an arrangement between two or more people who oversee the operations, share the profits and liabilities (Veit et al., 2014). Thus, this is why the business will benefit from having a three partnership program. This is so because there will be sharing of liabilities, capital investment, and the party will have a specific task that is essential to day-to-day operations.
Part 4: The Food Truck Industry Evaluation
The Food Truck or Mobile Cuisine industry has managed to engrave itself across the United States of America as part of a food culture that is constantly booming and being welcomed by many more across the nation. Considering that this is somewhat of a new industry, the leading industry ratios to review are the growth and profit, and revenue generation ratios. These are essential in understanding the industry’s current, past, and future positions to determine the feasibility of investing in the business.
According to a report on the smallbizgenius blog, the current number of food truck businesses across the US is around 24,000 (Milenkovic, 2021, January 18). This is a clear indication that the Food Truck industry is growing at a very fast pace. Taking a closer look at the growth rate ratio of the industry within the US alone, it is estimated that the industry has experienced a 7.5% growth since 2015 (IBISWorld). Not only this, but the industry also happens to be active in over 300 US cities as of 2017. Trends such as health-conscious fast food, affordability, a broad range of cuisine, media influence, among other trends, have pushed economists to believe that the industry is going to face an annual growth rate of 7.5% (IBISWorld).
As of 2017, the industry’s value rose to $2.7 billion in revenue from an initial $650 million from prior years has not had an industrial revenue rating before 2010/11 (Food Truck Nation report, 2018). This financial ratio report by the Food Track Nation Annual report is very motivating and does prove that this is a fast-rising industry considering that it has experienced a 300% revenue increase in the past 3 years alone (Food Truck Nation report, 2018).
The reports attained in this evaluation, the data, and information presented prove that this is a fast-growing industry with unique trends supporting its growth. Not only this, but it is also becoming a profitable business. It is rapidly overwhelming the restaurant industry especially considering the difference in start-up costs and exposure risk due to branding. The report also shows that the mobility of this business also makes it possible to enhance awareness and cost-free marketing.
Alfiero, S., Giudice, A. L., & Bonadonna, A. (2017). Street food and innovation: the food truck phenomenon. British Food Journal. https://doi.org/10.1108/BFJ-03-2017-0179
Food Truck Nation report. (2018). Food Truck Nation. https://www.foodtrucknation.us/.
IBISWorld. (n.d.). Industry Market Research, Reports, and Statistics. IBISWorld. https://www.ibisworld.com/united-states/market-research-reports/food-trucks-industry/.
Milenkovic, M. (2021, January 18). 20+ Food Truck Industry Statistics: What’s Cooking In 2021? SmallBizGenius. https://www.smallbizgenius.net/by-the-numbers/food-truck-industry-stats/#gref.
Veit, D., Clemons, E., Benlian, A., Buxmann, P., Hess, T., Kundisch, D. … & Spann, M. (2014). Business models. Business & Information Systems Engineering, 6(1), 45-53. https://doi.org/10.1007/s12599-013-0308-y