Why Choose a Food Truck Business in India: A Step-by-Step Guide Food trucks have gained immense popularity in the ever-evolving restaurant industry. With their mobility advantage, food truck owners can reach customers in various locations, requiring a lower initial capital than traditional brick-and-mortar restaurants. Unsurprisingly, small restaurant owners are increasingly opting for food trucks over stationary establishments.
In this article, we will explore the advantages of opening a food truck instead of a standalone restaurant and provide a comprehensive step-by-step guide to starting your own food truck business in India.
How To Start A Food Truck Business In India
Creating a well-thought-out food truck business plan is the first step towards building a successful venture.
To help you navigate through the process of starting a food truck business in India, the following points will serve as a comprehensive guide:
- Choose the right food truck or commercial vehicle that suits your business requirements.
- Acquire the necessary kitchen equipment and raw materials to ensure smooth operations in your food truck.
- Apply for the required licenses and permits as mandated by the authorities to legally operate your food truck business.
- Build a capable workforce to run your food truck efficiently, ensuring you have the right team in place.
- Implement a reliable POS (Point of Sale) software system to streamline sales and track business transactions.
- Decide on a suitable staff uniform to create a professional and cohesive image for your food truck employees.
- Develop a robust marketing strategy to promote your food truck business and attract customers.
- Determine the total investment required to start your food truck business in India and explore potential funding sources.
- To keep your food truck business thriving, pay attention to other miscellaneous aspects, such as proper maintenance, hygiene standards, and customer service.
By delving deeper into each of these points, you will understand how to execute them effectively and ensure the success of your food truck business in India.
1. Choose The Right Food Truck Or Commercial Vehicle
The first step is to carefully select the appropriate truck or commercial vehicle for your food truck business. Given that your menu consists of Italian and Continental cuisines, you would require a commercial vehicle with a minimum length of 18 feet. A new vehicle of this size typically costs around Rs 7-8 lakhs and various brands like Tata, Mahindra & Mahindra, and Ashok Leyland offer suitable options.
To save on costs, you can consider starting with a used truck, which would be approximately half the price of a new one. However, when purchasing a used commercial vehicle, it is essential to ensure that it possesses a valid fitness certificate, proper registration, road tax receipt, and insurance. Additionally, it should not exceed five years of age, as several state governments and environmental bodies are considering restrictions on 10-year-old commercial vehicles in certain cities.
To meet your specific requirements, the chosen vehicle can be modified and customized at bodybuilder shops, incurring an additional cost of approximately Rs 1 lakh. Therefore, the total cost of the final truck (used), excluding kitchen equipment, would amount to approximately Rs 5 lakhs. While this cost may initially appear high compared to the rent of a 450 sq ft shop for a Quick-Service Restaurant (QSR), which is typically around Rs 40,000, in the long run, the expenses associated with the food truck would be minimal as there would be little to no rent or fees to pay, depending on the chosen location.
2. Choose The Right Location For Your Food Truck
Select a street for your food truck business that meets certain criteria. Look for a location that doesn’t already have too many similar food vendors, ensuring you have less competition. It’s important to choose a street with a steady flow of traffic to attract a large number of potential customers. Consider the surrounding area and aim for a location near establishments frequented by young professionals and students.
When selecting a parking spot for your truck, ensure it doesn’t cause any inconvenience to commuters. Find a visible parking area that allows people to easily spot your food truck.
Additionally, it is advisable to opt for a light commercial vehicle rather than a heavy commercial vehicle. This is particularly important in cities like Delhi, where large trucks are not allowed on the roads before 9:00 pm. By choosing a light commercial vehicle, you can avoid any restrictions and operate your food truck smoothly within the designated hours.
3. Source Raw Materials And Kitchen Equipment
The cost of kitchen equipment for your food truck business amounts to approximately Rs 3 lakhs. This includes essential items such as a microwave, juicer mixer, freezer, refrigerators, griller, steamer, working tables, one burner, exhaust equipment, and a generator or big batteries with an inverter. It is recommended to invest in new equipment, especially for electronic items, as they often come with a one-year warranty, relieving you of daily maintenance costs. However, if you carefully evaluate the equipment and determine which items can be purchased second-hand, you can save a significant amount of money that can be allocated towards other essential activities.
In addition to the kitchen equipment, you should also allocate funds for storing raw materials for the first week, which would amount to approximately Rs 30,000. It is advisable to initially keep the stock of raw materials relatively low to ensure freshness and observe sales patterns. This will allow you to study the demand and adjust your procurement accordingly.
4. Get The Licenses & Permits Required To Start A Food Truck Business In India
While there is no specific set of laws regarding food trucks and restaurant business plans in India, it is important to obtain certain licenses to operate your food truck legally. These licenses will ensure that you can run your restaurant business smoothly and in compliance with the regulations in the country. Here are the essential licenses you need to acquire for your food truck in India:
- Fire Safety Certificate: This certificate ensures that your food truck meets the necessary fire safety standards and precautions.
- Shop and Establishment License: This license is obtained from the local municipal corporation or respective authorities and validates your food truck as a legitimate business.
- NOC from RTO: You need to obtain a No Objection Certificate (NOC) from the Regional Transport Office (RTO) to operate your food truck on public roads.
- NOC from Municipal Corporation: This NOC is issued by the Municipal Corporation and is required to confirm that your food truck complies with health and sanitation regulations.
- FSSAI Mobile Vendor’s License: The Food Safety and Standards Authority of India (FSSAI) license is mandatory for any food business, including food trucks. It ensures that you maintain proper hygiene and follow food safety guidelines.
- Kitchen Insurance: It is crucial to have insurance coverage for your food truck’s kitchen equipment and operations to protect against any unforeseen damages or liabilities.
The paperwork and licensing process can cost around Rs 50,000. Many consultancies specialize in helping businesses obtain the necessary licenses and permits, making the process smoother and more efficient.
It is important to note that in addition to these licenses, you may also need to comply with local regulations and specific requirements of the state or city where you plan to operate your food truck. It is advisable to consult with legal and licensing experts to ensure that you have obtained all the necessary licenses and permits for your food truck business in India.
5. Manpower Required For Your Food Truck
In the food truck business, typically two chefs and one helper are sufficient to manage the operations. The chefs’ average salary can range from Rs 13,000 to Rs 15,000, while the helper’s salary can be up to a maximum of Rs 8,000. If you plan to offer delivery services, you can hire two dedicated delivery boys or partner with third-party logistics companies that charge around Rs 40-50 per delivery.
However, to ensure excellent service quality and establish a strong brand presence in the foodservice market, we recommend hiring at least one dedicated delivery boy. This individual can also assist in procuring raw materials during emergencies, reducing dependence on third-party logistics providers. This approach will help maintain a higher level of control and efficiency in your food truck operations.
6. Investing in a reliable Point of Sale (POS) software for your food truck is highly recommended.
A robust POS system not only ensures the security of your data but also provides valuable insights into your inventory and sales. In today’s competitive environment, a good POS software can play a crucial role in the success of your restaurant business by leveraging customer data for repeat orders and gathering customer feedback.
While the cost may vary, an excellent POS software typically ranges around Rs 24,000 per annum or Rs 2,000 per month. Consider it as a worthwhile investment that will streamline your operations, enhance customer experience, and contribute to the growth of your food truck business.
7. Staff uniform for your food truck employees.
Having a staff uniform for your food truck employees can contribute to building a strong brand identity and earning trust from your customers. For a standard collar t-shirt, the cost would be approximately Rs 120 per piece. Since you have a team of five employees, you will need two chef coats (2 each) which would cost around Rs 300. The remaining employees can wear a t-shirt and a cap.
Considering these numbers, the total cost for all the uniforms would not exceed Rs 6,000-7,000. This investment will not only create a cohesive and professional appearance for your staff but also enhance the overall customer experience and reinforce your brand image.
8. To market your food truck effectively.
a combination of offline and online strategies can be employed. While distributing menu pamphlets and using billboards and banners in the nearby catchment area can create initial buzz, it is essential to establish a strong online presence in today’s digital age.
Having a presence on social media platforms is crucial as it allows you to inform your customers and followers about the food truck’s location on any given day, build a regular flow of customers, and establish a strong brand connection. Social media can also be utilized to engage with your audience, offer discounts, gather feedback, and introduce new menu items. Implementing digital marketing techniques specific to the restaurant industry can help you maximize your online reach and engagement.
Additionally, it is beneficial to stay updated on local events and community gatherings and park your food truck in these locations. Collaborating with event planners and food influencers, fostering personal connections with customers, and offering free goodies like t-shirts and mugs carrying your food truck logo can greatly contribute to spreading the word and expanding your restaurant business.
By employing a well-rounded marketing approach that combines offline and online strategies, you can effectively promote your food truck and attract a loyal customer base.
9. The cost of opening a food truck business in India
The cost of opening a food truck business in India can vary depending on several factors, including the type of vehicle chosen and the kitchen equipment required. On average, it can range around 10 Lakhs. Here is a breakdown of the overall cost distribution for a food truck business in India:
- Commercial Vehicle: The cost of the commercial vehicle can range from 5 Lakhs for a used truck to 7-8 Lakhs for a new truck.
- Kitchen Equipment: The cost of kitchen equipment, including items like microwaves, juicer mixers, freezers, refrigerators, grills, steamers, working tables, burners, exhaust equipment, generators, or batteries with an inverter, can amount to approximately 3 Lakhs.
- Raw Materials: It is advisable to start with a minimal stock of raw materials, which may cost around 30,000 initially. As you study the sales pattern and demand, you can gradually increase the stock.
- Licenses and Permits: The combined cost of procuring licenses and permits for your food truck can be around 50,000. This includes licenses such as fire safety certificate, shop and establishment license, NOC from RTO, NOC from Municipal Corporation, FSSAI Mobile Vendor’s License, and kitchen insurance.
- Staff and Uniform: The cost of staff salaries and uniforms may vary, but on average, it can be around 20,000 for monthly wages and approximately 6,000-7,000 for uniforms.
- Marketing Expenses: Marketing expenses, including pamphlets, billboards, banners, and digital marketing efforts, can be estimated at around 30,000.
It is important to note that these figures are approximate and can vary based on individual circumstances and location. Conducting thorough research, obtaining multiple quotes, and creating a detailed budget will help you plan your finances accurately for starting a food truck business in India.
10. When it comes to sourcing funding for your food truck business
there are several avenues you can explore. Consider the following options:
- Personal savings: Many food truck owners finance their business using personal savings, as the initial capital requirements are often relatively low.
- Borrowings from family and friends: Reach out to your personal network for potential loans or investments to kickstart your food truck venture.
- Community sponsors: Seek support from local businesses or organizations that may be interested in sponsoring or partnering with your food truck business.
- Microfinance institutions/banks: Explore business loan options offered by microfinance institutions or traditional banks to secure the necessary funding.
- Pre-approved credit cards: Utilize pre-approved credit cards to cover working capital requirements and manage day-to-day expenses.
- Crowdfunding platforms: Consider launching a crowdfunding campaign on platforms like Kickstarter, GoFundMe, or Indiegogo to engage the community and raise funds for your food truck.
- Business partner/co-founder: Collaborate with a business partner or co-founder who can contribute additional financing to support the growth of your food truck business.
- Venture capital funding: If traditional loans fall short of meeting your funding needs, you may explore the option of securing financing from venture capital funds that specialize in supporting startup businesses.
Remember to thoroughly research and analyze each funding option, considering the terms, interest rates, repayment schedules, and potential impact on your business. Develop a solid financial plan and be prepared to present it to potential investors or lenders to increase your chances of securing funding for your food truck business.
11. Importaint Things Required To Start A Food Truck Business In India
Based on insights from Karan Malik, owner of Supersuckers Food Truck, here are some key tips to consider when starting a food truck business. Implementing these strategies effectively can help increase profitability and foster customer loyalty:
- Stand out with a unique concept: Differentiate your food truck by offering a unique and enticing menu that sets you apart from competitors. Consider incorporating innovative flavors, fusion cuisine, or a specific culinary theme that appeals to your target audience.
- Focus on quality and consistency: Maintain high standards of food quality and ensure consistency in taste, presentation, and portion sizes. This will help build a loyal customer base and positive word-of-mouth recommendations.
- Optimize your menu: Keep your menu simple, focusing on a few signature dishes that you can execute exceptionally well. This will streamline operations and reduce ingredient costs, leading to better efficiency and profitability.
- Embrace social media and online presence: Leverage the power of social media platforms to create an online presence for your food truck. Regularly update your followers about your location, menu specials, and upcoming events. Engage with your audience, respond to reviews, and run promotional campaigns to expand your customer base.
- Collaborate with local businesses and events: Form partnerships with local businesses, event organizers, and community gatherings to increase your visibility and attract new customers. Consider participating in food festivals, markets, and other events to showcase your offerings.
- Provide exceptional customer service: Deliver outstanding customer service to create a memorable dining experience for your patrons. Train your staff to be friendly, efficient, and attentive, fostering a positive and welcoming atmosphere.
- Prioritize cleanliness and hygiene: Maintain a clean and hygienic environment in your food truck at all times. Adhere to food safety regulations, regularly sanitize cooking equipment, and ensure proper handling and storage of ingredients.
- Monitor and analyze financial performance: Keep a close eye on your financials, including costs, revenues, and profit margins. Regularly analyze sales data, track expenses, and identify areas for cost optimization to maximize profitability.
By implementing these tips and continuously adapting to market trends and customer preferences, you can establish a successful and profitable food truck business. Remember to stay passionate, stay connected with your customers, and constantly innovate to stay ahead in the competitive food truck industry.