Why Food Trucks Fail – Part 1

In many of America’s cities, food trucks can be found on almost every street corner. For each food truck out there, many more exist in the minds of creative food-lovers hoping to find their financial freedom while pursuing their passion. But why do food trucks fail sometimes?

People dream of opening food trucks for numerous reasons, among them a love of cooking, the flexibility and excitement of an ever-changing locale, the desire to share great food with the world, and the notion that a food truck is the ideal vessel to achieve all of this through.

Opening a food truck is much cheaper than opening a restaurant, and therefore a much more tangible goal for those wishing to serve their culinary works to their community. With a comparably low initial investment, people can see their financial freedom just a few years down the road. Once they break even and pay off any loans, as long as their food truck continues to make a profit, they will have gained financial freedom doing what they love.

However, achieving success in the food truck world is much more complex than is often perceived. Just like restaurants, food trucks have a very high rate of failure with 60% going under within three years of opening.

Various factors can contribute to food truck failure, but the main reason is likely oversimplification. People thinking with their hearts decide they can easily reach their goals by opening a food truck and overlook many important details. Dreamers believe simply offering amazing food and acquiring funds to buy a truck and cover overhead will pave the way to success.

Just because starting a food truck is less expensive than many small businesses doesn’t mean opening one is a guaranteed way to achieve financial freedom. Breaking into the food truck world requires extremely hard work, a solid financial plan, and patient, persistent pursuit.

Reasons Food Trucks Fail and How to Prevent Them

To understand more about why food trucks fail, it is best to look specifically at what areas of the business have the potential to weigh it down. The sections below discuss different reasons that food trucks typically fail and all fall under the umbrella of oversimplification. With accurate, realistic, and detailed planning, all of the following mishaps can be avoided.

Lack of Business and Financial Knowledge

A food truck is, above all else, a business. As with any business, a detailed, viable business plan needs to be developed to provide a solid foundation upon which the business can be built. It may be easy to get lost in planning innovative menu items, but food isn’t the only component needing thorough consideration before opening a food truck.

Without a specified layout of costs, operational processes, marketing and branding plans, and research into industry specific issues, any food truck may be bound to fail.

Details covering the necessary licenses, permits, and insurance to cover all food truck specific laws and regulations are sometimes overlooked by people planning to open food trucks. Every state, county, and city has its own laws regarding food trucks and not having the correct licenses and permits can lead to hefty fines.

Non-compliance with ever-changing health department standards can lead to problems. Insurance also necessitates prior planning. Some people hoping to start a food truck underestimate the cost of having insurance covering their business, as well as their physical truck.

High expenses are a common reason food trucks fail. Not only are certain costs sometimes underestimated, some can be completely overlooked. Opening a mobile business can carry many unforeseen expenses like those related to truck and equipment maintenance, fuel, and parking tickets.

Proper investigation into the worst that could possibly happen is necessary when starting a food truck. Solely basing a financial plan on a set growth timeline may not be effective. A large number of food truck owners end up spending more money on their business than they initially expected. With one too many unwanted surprises, a food truck business can fold.