Did you know there are currently 26,228 food truck businesses in the United States? According to IBISWorld, the number of food truck businesses has increased by 7.5% from 2020 to 2021. These mobile spots are the perfect place to pick up a bite to eat on the go. The combination of mobility and pursuing a passion for delicious food is an appealing reason to start a food truck business.
However, starting a food truck business is a pretty intensive process. There are many licenses and permits necessary to run a food truck. In addition, food trucks must remain in compliance with county, city, and state laws while building buzz for their emerging brand.
Ready to start a food truck business? These tips will guide you towards obtaining the necessary documentation and keep your business in compliance.
1. Determine Menu Offerings
Before you can begin looking into buying a food truck or applying for permits, you need to know what’s on the menu. Will you be scooping up gelato or wrapping up burritos? Is Italian or Thai food your specialty? Do you plan to serve breakfast, lunch, and dinner, or stick to a select menu?
Determine menu offerings by picking a niche. You may do this depending on your area of cooking expertise or explore concepts that you are in the process of learning and mastering.
2. Understand Food Truck State Laws
The laws for a food truck business vary from state to state. As such, they also vary depending on the county or city you plan to conduct business.
For example, let’s say your food truck sells burgers. The truck happens to be located one street over from a well-known burger joint. There may be a proximity ban in the area for how close your truck can be to a business that sells the same or similar menu items.
Proximity bans are just one of the many food regulations entrepreneurs should know about if they operate a food truck business. Reach out to the local Secretary of State to determine business licenses and permits necessary for your truck. In addition, you’ll need to contact the local health department. This will help you to understand what your truck needs for food safety reasons and health code procedures.
3. Find a Food Truck
Finding a food truck is similar to finding a truck to start a trucking business. The truck must be able to meet your needs. For example, many food trucks come equipped with a full onboard kitchen. This is necessary if you plan to prepare food and store inventory in the truck. (Pro tip: make sure you set aside a budget for purchasing or renting cooking equipment and supplies.)
You’ll need to determine if you will buy or lease a food truck. This choice often depends on the entrepreneur’s financial situation and the food truck’s operational model, which may be roaming or based in a specific residence. Additional factors to consider making sure you have a vehicle license and insurance to insure the truck.
4. Learn About Parking Regulations
You must also check in with the county or city clerk about parking regulations for your food truck business.
Most cities and counties have zoning and ordinance regulations that designate food trucks to park in a specific area. Make sure you know where you can and cannot park, how long you may park there, if you may park overnight, and the distance between your food truck and the curb. In some cases, you may need to obtain a zoning and parking permit.
5. Draft a Business Plan
The food truck business needs a written business plan.
A business plan allows you to set goals for your food truck and establish timelines to meet each goal. You may use a business plan to take a deep dive into your menu and offerings to determine what keeps customers coming back to your food truck. Conduct an in-depth market analysis on your customer base. Detail information on health department inspections and keep this section up-to-date. If you need funding, such as for purchasing the food truck, inventory, or equipment, you may create a financing request for investors to review.
6. Trademark the Business Name
What will you name your food truck business? A business name should be unique. Customers should be able to easily identify the food truck and its offerings simply by its name.
Once you pick a business name, it’s important to conduct a name search. This allows you to check if the trademark is available or if the mark is already pending elsewhere. If the trademark is available, file to register the trademark. Registering the trademark gives the owner exclusive rights and ensures nobody plagiarizes the mark.
7. Incorporate the Business
One of the best ways to protect a food truck business is to form an LLC. This gives the business limited liability protection, which separates personal and professional assets.
Liabilities often abound within a food truck. A sudden slip on the floor could lead to a lawsuit. However, if you form an LLC limited liability protects the owner’s personal assets to ensure there is no impact by unforeseen circumstances.
8. Obtain Licenses and Permits
Food trucks need a wide variety of business licenses and permits in order to safely operate. Some of these may include, but are not limited to, the following:
- Seller’s permit
- State sales tax permit
- Doing business as name (DBA)
- Health permit
- Mobile food facility permit
- Food handler permit
- Workers’ compensation insurance
- Food safety certification
- Fire certificate
- Employee health permit
Not sure if you have all the licenses and permits necessary to run your food truck? Check in with your local Chamber of Commerce to ensure you have the proper paperwork.
9. Obtain a Tax ID
Another important document to obtain for a food truck is an employer identification number (EIN).
An EIN is a federal tax ID. The IRS issues this nine-digit number to businesses to legally identify the business and ensure it remains in compliance paying federal and payroll taxes. In addition to being a hiring requirement, an EIN is also required when opening a business bank account and establishing business credit.
10. Choose a POS System
A few examples of a POS system you may use for your food truck include a mobile POS system, mobile processing, or a cash box. The POS system you choose will depend on the needs of your business.
11. Obtain Business Insurance
It is critical to protect your food truck with business insurance. This type of insurance should be able to protect the food truck as well as employees, equipment, and food.
12. Prepare to Open!
As you start cooking up the menu offerings, get cooking on your food truck’s digital presence!
Set up social media handles, build a website, design a great logo, and craft an eye-catching menu board. You may even decide to offer merchandise, like t-shirts and water bottles, for sale at your food truck. Bon appetit!
Additional Food Truck Startup Information
Let’s help incorporate your food truck business today! Visit us at mycorporation.com or call us at 877-692-6772.