Food truck

Investor type: Small
Profit from Investment: Slow
Risk: High Risk Investment
Capital: High Capital Investment

Before we start, many would say that It's a lot cheaper than running a restaurant where rental at 3000-4000 is nowhere close to having a 150k vehicle on loan for 9 years (about 1600+ a month) where additional profits and savings can be used to speed up the repayment and heck, it's an investment into a motor-vehicle and not a lost (Finally, vehicle that is worth buying where the loss of value is compensated... right? .Hmm Maybe)

This is the deal. Although it's a lot less maintenance, less manpower, less utility cost, less capital ... less everything when it comes to F&B compared to a fixed location, it is not a silver bullet for everyone hoping to jump into F&B.

Taking an example from truckers that I know, their operation hours may very between 10-12 hours depends on the days and weekends is something they need to extend up to 14 hours if they would like to hit some sales target.

At a meal that cost between 5-10 per set (lets average out to 7.5), he makes about 100-200 sales per day with an average monthly of 35,000 (nice number huh...). Well, that's gross. 40-50% goes to CGS (cost of food) and it's almost impossible to run a truck with such high sales number alone and thus, when you're hitting this kind of momentum, 2 assistance is common (and that's about 10%). Why is it so high? Well, they're not just working 12 hours a day during run-time, cause preparations takes a couple of hours sometimes, and with all the OT, it can be pretty high. 5% goes to the monthly repayment, 5% for the utilities, 5% for the petrol, 5% for the maintenance and if there is no misc cost to add up, from a 35k profit, you'll be lucky to walk away with 7-10k a month. Pay yourself a salary, it'll be much less profit to re-roll into the business.

How much room do we have for error?
- Well lets see, in layman (let's not go deep into actual calculations). You have about 3 days worth of room to spare before you hit break-even. Unless on certain days where sales exceed expectations, it may compensate for a much larger breathing space. But it's just too risky.
- So, in general. Lose 3 days and you break even. Lose 6 days and you lose your salary. Anything more, will hit directly into your business sustainability.

Depends on how you look at it, there's too many dependencies that may hurt the business.

1. Competitive pricing
- Too expansive and you lose the crowd. Too low, well .... This act of juggling is something we all love to do. Unless you hit the right spot, with the right crowd (luxury, upper class areas). Price may not really be the issue. Always keep in mind that 20% larger in portion and how you present your food may gives the impression of "worth it" to the customers. If you juggle this correctly, it may only cost you 5% more in CGS and offsetting that against the number of sales you make. This trick might just work.
2. New menu(s) to constantly please the audience and keep up with trends.
- This is something you cannot avoid. And with very little time at hand, this act of juggling what turns most food-trucks into scrap. The moment you get tired or decide to lock into a certain menu so you can have more time for other things to focus on, you start loosing the race and customers may dwindle. That is when most of them thought it would be brilliant to adopt hopping-policies and move around to keep things interesting. Well .... the numbers doesn't seem to favor the majority. To some that I know, if only they have the capital to sustain... they will surely hit into losses for the few months before gaining audience with regulars. And to those that manage to sustain with reserves, they bounce back into equilibrium. It may buy them longer time before loosing out or having to scout for a new area.
3. High-turn over rate (staffing)
- People come and go and depending on where you work and how you work, it is a very personalized industry. Your entire kitchen is open to public. Socials nowadays are very particular when it comes to selective hypocrisy. With a job that provide less rest, unless they're passionate about it, there's a chance they may not be in their best form and be prepared for replacement and retraining. This is always a headache.
4. Falling sick?
- With working over 14-16 hours a day. With not much time for family (unless your style of socializing is with your customers), chances of downtime is highly possible.
5. Locations
- You may want to move around until hitting the right spot and even so, once the hype in the area cools down, you will need to start hopping. It is this transition that shaken most investors and owners. Cause the margin for error is tight. And finding a sweet spot again, may hit you a week before actual sales can occur.
6. Authorities
- To some, this is still a hostile business where authorities are on the lookout. Although they may no longer tow your trucks unless it's illegally squatting on the wrong spot... but sometimes, the place they allocate is just not attractive enough. People doesn't go there much and the place that could make your sales is just to risky. Paying them, will hit your bottom-line further.

Future directions
What best to do after months of sales and securing a possible fixed/secure location, you should want to partner with a small landed business. Vape shops is an excellent partner to work with. Find a landed ones, and position your trucks there. Expand your food/drinks for their customers and workout a partnership with them (give something back since customer may use their facilities without vaping). The more crowd hangs around there, it'll be beneficial for both. Get in some gigs or live bands along the way. Get some trends or coverage for exposure. Call in the bloggers. Throw in discounts, packages for the regulars. Keep things interesting.

OR

Keep things cheap and simple, then float around constructions or factory areas. Target the masses. Even simple Nasi-lemak can be sold in the hundreds (taste good, or die). Just be prepared for competition.
Conclusion

Seriously, this is no longer about the business. It's passion, when you come to think about the commitment of time involved and the risk you faced when you decide to slack.The last thing anyone should do is jumping into this line thinking it's a quick fix to your pocket or something to fill in the blanks. If you do not persevere and doesn't have the passion for it, don't bother.