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Food Truck Case Study

Virginia S. Townzen
Columbia Southern University
Introduction to Business BBA 2010
Professor Robert Freeland
June 8, 2021
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Food Truck Case Study

Introduction

Prior to 2008, the food truck industry was almost nonexistent. Food Truck Nation reported the
food truck industry gross revenue for 2008 was $650 Million gross revenue. Then in 2011, the
industry blew up over the next decade. It was reported the industry had a 7.5% growth annually.
In 2017, the food truck industry had a gross revenue of $2.4 Billion. Food Truck Operator
reports a food truck annual gross revenue between $250,00 to $500,00.
I have gathered some important information for anyone prospecting the food truck entrepreneur
business venture. Anyone considering buying a food truck needs to consider these factors prior
to buying into this industry. The key factors to consider are, as follows: 1) What value does the
truck bring to the community? 2) What are the advantages? 3) What are the risks? 4) What
characteristics should the owners possess? 5) What type of entrepreneurship is displayed? 6)
Why additional support is critical? and 7) Recommended suggestions.

Value to the Community

All food truck owners need to establish a positive working relationship with local vendors in the
community, to ensure their inventory needs are met with high quality ingredients, in a cost
efficient and timely manner. Your mission should be to provide quality food to the community in
a convenient and affordable way. Your organization needs to enhance the quality of life in your
customers. If the owner of a food truck wants to be successful, they need to bring value to the
community they serve. Brand loyalty is built if you can deliver consistently, convenience, and
positive customer experiences.

The Advantages

The start-up cost for a food truck can range from $45,000 up to $155,000. That is a fraction of
what a “Brick & Mortar” restaurant. It has been reported they spend a minimum of $375,000 up
to $1+ Million. A fully staffed food truck consists of two, maybe three people, so employee cost
will be drastically cut. The truck is mobile and can easily be relocated, anytime the need or want
may arise.
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The Risks Involved

The food truck industry has seen a rapid growth over the past decade. IBISWorld.com reported
an average growth of 7.9% annually from 2011 to 2016, and 3.9% annually from 2016 to 2021.
With the food truck industry boom, it seems like everyone is trying their luck? Don’t let the
rapid growth of the industry fool you, IBISWorld.com conducted a market research on the
industry and report the main cause for this drastic decrease in revenue is the high competition
combined with unfavorable regulatory conditions. Food Truck Nation report on average a food
truck owner spends $28,276 annually on regulatory fees A food truck owners work is never-
ending, for the most part. Owners of food trucks report working more than 60 hours per week.
Depending on where your food truck business is located, the owner must figure in the changing
seasons, weather conditions, and more.

Characteristics of the Owner

Small business owners must be a people person with a “sky is the limit” type of mind set.
Determination is a must, and a never give up attitude. Good work ethic and hard worker, natural
leadership skills, motivated, and agile, are also important characteristics a business owner needs.
Food truck owners should have excellent customer service skills, creativity would also assist.
The most important characteristic in my opinion is determination. Entrepreneurs should have that
“won’t be stopped” attitude, and a” never quit” mentality.

Type of Entrepreneurship Displayed

Pure entrepreneurship is the type of entrepreneur displayed in the video. A pure entrepreneur is
the individual who brings the business into existence. The definition of a pure entrepreneur is an
individual who is motivated by psychological and economic rewards. He or she take on their
entrepreneurship activity for personal satisfaction.

Additional Support is Critical to Success

Additional support is critical for the success of a food truck. Additional funding is an absolute
must for new business ventures. Most small business owners will tell you expect the unexpected.
It is wise if business owners have additional funds set aside for unforeseen issues, especially if
the business is not operating self-sufficiently. A non- profit organization ECDI, in Columbus, Oh
assist “The Food Truck” owners with a loan for $20,000. The loan is to assist with any final last
minute expenses, unforeseen machinery failures, mechanical issues with the truck, etc.
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Recommended Suggestions

I would suggest to all food truck owners, they want to stand out from all the competition, they
want to be unique, loud, and flashy when it comes to their branding, the truck, and how they
advertise. Social media is a great way to convert customers into brand ambassadors for your
truck. You can also let the community know where you are setting up for the day, and what you
will be serving.

Conclusion

According to Instrucktional.com reports for a food truck to maintain profitability, they need to
serve 1.5 customers per minute on average- or approximately 100 per hour. Food truck industry
business is an extremely risky business, with razor thin margins, and competition is fierce. Keep
in mind, only 40% of the food trucks who start-up will still be in business, after 3 years. Meaning
60% of the new food truck business ventures fail within 36 months. Do you have a unique skill
or capability that gives you an advantage over the competition?

References
ABC News Report Video for Unit VI BBA 2010
https://libraryresources.columbiasouthern.edu/login?
auth=CAS&url=https://fod.infobase.com/PortalPlaylists.aspx?
wID=273866&xtid=54907

Food Truck Nation

https://www.foodtrucknation.us/

IBISWorld.com

Unit VI Study Guide