What Is the Average Food Truck Success Rate?
Small businesses in the United States have the odds against them, with 50% of small businesses closing within five years of opening.
So, what is the average food truck success rate? Since food truck-specific data is still sparse, most people use the restaurant industry failure rate as a similar measure. In this case, 60% of restaurants close within three years of opening.
Using this data, we can assume 40% of food trucks succeed after three years.
But what affects this rate and how can food truck owners maximize their chances of success?
Why some food trucks fail
In the food truck industry, competition is fierce and demand can change rapidly. For example, unlike traditional restaurants that can serve customers year-round in snow, sleet, or hail, food trucks are most productive when the weather is good. Customers don’t want to stand around in the wind and rain to eat their taco when they can dine indoors nearby.
Because of unique demands like these, entrepreneurs need to think carefully before starting a food truck business. Understanding what factors lead to failure is an important task during this thinking stage.
Food trucks typically fail due to one of these reasons.
Poor planning
All food trucks need a business plan to understand the market, mission, and strategy. Failing to set measurable goals and analyze your market will set your business up for failure. It may be doomed from the start, but you won’t know that without a plan.
Learn how to write a business plan with this guide from the Small Business Administration.
Bad finances
Food truck margins are very low, and business owners need to track their finances very closely. Without a budget or detailed accounting, you may seem to be making money when you’re actually operating in the red.
Luckily, technology makes it very easy to keep track of your financial state. With modern point of sale software, you can set the margin on all menu items, ensuring each sale generates profit. Likewise, you can track all refunds or lost inventory, to track down unseen costs.
Best of all, you can connect your POS with software like QuickBooks to easily export financial data to your accounting software.
Ineffective management
While owner-operators should be the face of the business, they should not do everything. Without help, you will struggle to manage all aspects of your food truck, leading to poor performance. Likewise, hiring too many people will cut into profits and cause problems.
Bad customer service
When starting a business, nothing is more powerful than building a good reputation. By providing excellent customer service, diners will happily share photos on social media or tell their friends about your food truck. Through this word-of-mouth marketing, you will attract more customers and grow naturally.
However, all it takes is just one poor experience to alienate a customer permanently. Likewise, if this customer shares this experience online with others, you can damage your reputation tremendously. For example, look at how one viral TikTok post gained a restaurant a torrent of negative reviews.
Lackluster advertising
How do you plan to attract customers?
Many food trucks park in major hubs of foot traffic in the hope of finding hungry passersby. However, this cannot be your main marketing tactic. After all, someone might stop by, love your food, but completely forget your name. When they want to buy from you again or tell friends about your truck, they won’t know what to do.
Your food truck, like any service industry business, needs to be memorable and brandable. Customers need to know what you provide and form associations with your brand to become loyal. Even if your advertising cannot lead to immediate sales, it will create brand awareness and boost interest.
At the very least, your marketing strategy should include the following:
- Google My Business page: With GMB, you can collect online reviews, share contact details, and help customers interact with your business.
- Website: No matter how small your business is, it needs a website. You can create one for under $30 and use it for nothing more than social proof. Without a website, customers will see your business as unprofessional or not know how to contact you.
- Social media: You should create an Instagram account to show off your delicious menu items. While you can also create a Facebook and TikTok account, don’t stretch yourself too thin. Having inactive accounts confuses customers and makes them wonder if your business is closed.
- Email marketing: Use a platform like Mailchimp to share coupons, updates, or tell customers about upcoming events you will be attending.
- Sidewalks signs: Lastly, place a folding sign or flags near your truck to capture the attention of pedestrians.
Maximize your chances of success with Epos Now
As you can see, running a food truck carries some risk. You cannot guarantee that your mobile food business will succeed, but you can take certain steps to reduce your odds of failure. One of the most important steps is choosing the right technology to power your business.
Epos Now offers point of sale systems that help food trucks sell fast and operate efficiently. With our software and hardware, your staff can quickly collect payments, track orders, and print receipts. However, our POS systems have many more capabilities than that.
With Epos Now, you can:
- Track employee hours and activities
- Generate reports to analyze sales, profit, costs, and more
- Take online orders with Epos Now Order & Pay
- Connect with dozens of apps to simplify accounting, marketing, and loyalty
Speak with one of our POS consultants today to learn more about Epos Now.