You are wondering whether it is worthwhile to have your own food truck and whether you can make a good living from it? Will you be able to generate enough sales with a street food truck, which will not only cover all your costs but also generate good profits?
There are risks with every start-up business. But by calculating the profitability of a mobile kitchen before you start, you can reduce the risk of failure. In this article we show you how to calculate your turnover, which factors influence it and which tricks you can use to increase your turnover.
Be realistic in your food truck sales forecasts!
Turnover planning is an important part of your food truck business plan. It serves as a basis for your financial planning and is relevant for you and/or potential investors you want to convince with your concept. It is important that you realistically plan all expenses and income right from the start in order to get an exact idea of your profitability.
At best, you should not plan your revenues too optimistically or too carefully. If you plan your future sales and income too rosy, you may find that your liquidity comes under pressure later on. On the other hand, if you are too cautious in your calculations, you may take out too much credit for your business, for which you will have to pay interest.
This is how you succeed in planning your street food turnover step by step:
Within the framework of your sales forecasts, you determine how many dishes you are likely to sell and at what price. In a classic business plan, a sales forecast is made for the next three to five years. Of course it is not an easy task to predict the future! But if you follow the following points, you will succeed in making your food truck turnover forecast.
1. Calculate your private costs
On the one hand, your dream of owning your own street food trailer can prove profitable if the expected turnover from the sale of your food and drinks covers your private costs in addition to your start-up costs, initial investment and running costs.
By getting an overview of your private expenses such as rent, cost of living, liabilities (for example to banks or insurance companies), leisure time and others, you can calculate what average monthly turnover you should generate in order to generate sufficient profit or entrepreneurial salary.
2. Calculate your profit per customer
In addition to your private costs, your turnover must of course also cover the operating costs. In the previous article you learned how to calculate your street food sales prices in such a way that not only your costs, but also a share of the profit is covered.
You calculate the profit you make from the sale of your food by deducting from your turnover the costs of buying your food and all other costs incurred, such as electricity and petrol costs, stand rental, staff costs and all other additional costs. The remaining sum is the profit you earn with your professional independence as a food truck owner.
3. Calculate the minimum turnover
Think about how high your sales and earnings should be. How many of your street food creations would you have to sell to recoup your investment costs and live off your self-employment? How much food and how many drinks should you sell at least per day or month?
This simple calculation example shows you a calculation where your living and operating costs are exactly covered by the following. This also corresponds to your minimum turnover.
Covering costs vs. working for profit:
1. Priority: Cover your costs
If your turnover and your costs are the same, you will neither make a surplus nor a loss with your food trailer. You are on the verge of making a profit, so to speak. Making no losses is of course very good and it should definitely be your priority to cover your costs. But if you want to achieve surpluses, you have to cross the threshold. This is done by making your turnover higher than your costs.
But to reach the break-even point, you would have to earn 4.000€ per month, if we stay with the example above. So how many plates would you have to sell to make that amount?
For example, if you had a turnover of 4€ per customer, you would have to sell 1.000 dishes a month. If you assume that you have an output of 100 dishes per day at lunchtime in an industrial area, you would have to offer a lunch menu 2 or 3 times a week.
Depending on your required income, you can estimate whether it is sufficient to offer your food only for lunch or whether you should extend your offer to catering or other larger events.
2. Priority: Make surpluses
In the first few years when your food truck business starts up, you will probably not yet achieve a high turnover – if at all, you will cover your costs. In the financial plan of your business plan you can plan your turnover for the first two years without a surplus. From the third year onwards, you should plan for a surplus in order to recoup your investment over time and develop your food truck business.
Which monthly surplus you plan to generate naturally depends on your personal preferences and your business model. The higher your monthly operating costs are, the more generous you should plan your extra profit.
Example for planning the surplus for the first three years:
3. Do some field studies
The income you can expect as a food truck owner is also shown in industry reports that you can find online or get from your bank or a start-up platform. From these reports you can see the usual prices and how much turnover the food truck industry has made in recent years.
A German statistic from the year 2016 shows:
4. Take a closer look at the food truck market
Of course, you cannot apply the values from the industry reports 1:1 to yourself. In order to be able to make realistic street food turnover forecasts, you should know the market exactly. For example, talk to entrepreneurs who also have a sales vehicle.
Find out about sales figures in the various sectors such as lunch, events & catering, festivals, which you can include in your own sales forecast. And take this opportunity to get a tip or two for your entry into the food truck business 😉 Perhaps you are not asking direct competitors, but entrepreneurs from other cities.
5. Consider the following variables in your food truck sales forecasts
It is impossible to say in general how many customers come to your food trailer in one day. It can be 100 customers or even 300. Then again, there are days when only 50 customers visit you. To be able to estimate how many hungry passers-by you can expect, you should do some market research.
How much you sell depends mainly on whether you offer your food for lunch, at events & catering, weekly markets or festivals and how often you are booked. Also keep in mind that sales during the week may differ from weekends.
Include in your sales forecasts your days off and seasonal fluctuations that can affect your sales (e.g. winter time). In your forecast, estimate your sales as detailed as possible, ideally for each month.
Tips on how you can increase your Street Food turnover
You probably know something about preparing delicious dishes, but is that enough to scale sales?
Besides well-prepared street food, there are other things that are important: Service, ambience, location and cleanliness must also be right. Because the competition never sleeps! To be able to assert yourself, your offer should be different from others.
Listen to your customers: This is the easiest way to find out how you can improve your food truck business. Ask your customers if they liked the food and also ask for their opinion and suggestions on how to improve your business.
Marketing and advertising: With online marketing and advertising you can attract more customers to your street food offer. Advertising in social media, flyers, gift vouchers, prepaid cards and cooperations are just a few examples that can help you to win new customers and make them your regular customers.
What else you should consider when planning your turnover
When you calculate your approximate sales figures for your food trailer, keep in mind that you may start your food truck career with lower sales. Your street food business needs time to gain recognition and build a customer base. Think about where the capital will come from until then and whether or how much outside capital you will need. Also consider including your private expenses in your capital requirements.
On the basis of your turnover calculation you can now assess whether starting up a business in the food truck industry is economically profitable for you or whether you should refine your idea a little more. By the way, you will find a number of spreadsheets for free download on the internet that will help you to make professional sales forecasts.
