With a quite low entry cost and ultra-high demand, the food truck sector has grown to a $1 billion industry in the U.S., according to Statista. Probably everyone who has been in Denver, knows that the city is totally ingrained in the food truck scene.
The Mile High City was even appointed as Food Truck Nation’s 2nd best city for food trucks, right after Portland. The ranking was based on starting and operating costs, the number of food trucks in the city, the business sector, and population analysis.
If you’ve had the idea of opening your own food truck for a while, we recommend going through the steps below to make sure you’re ready to start your own food truck business.
Create A Business Plan And Form An Organization
Creating a business plan might seem like a waste of time, but creating even one that’s short will push you to consider significant business factors and get organized. At the minimum, starting an llc is the next step and it will help you identify your startup costs like the cost of the truck itself, licenses and permitting costs, industrial kitchen renting costs, etc.
You should identify your target audience at the beginning and establish a feasible marketing plan. Further on, choose a cool business name and file your business documents with the Colorado Secretary of State.
Know that an attorney or accountant can do that instead of you for a very reasonable flat rate. Food trucks are generally formed as LLCs. However, the entity type that works for you the most depends on your specific case.
Insurance policy for your food trucks is mandatory, and particular cities have certain coverage amount requirements. So, check those requirements and get a proper Colorado business insurance policy. In most cases, a policy for $1 million is enough. Also, consider general liability insurance and product liability insurance to protect yourself against lawsuits and some other food business risks. Some cities in Colorado require product liability insurance for permitting.
Get Federal Tax ID Number And State Tax License
You need to have an Employer Identification Number or EIN. You can apply for this number at the IRS. Bear in mind, this number is very important for the completion of your Food Truck Licensing applications. Furthermore, you must get a Colorado Sales Tax License as well from the Colorado Department of Revenue. That’s something that is required for all retail food businesses.
Start Looking For Locations
Determining the best locations is the difference between failing and succeeding. So, begin early with identifying the best locations to park your food truck. Cities govern when and where a food truck can park, so study the rules for every city that you plan to work in.
For example, the majority of the cities demand food trucks to park nearby a restroom customers can use. In order to park on private property, you’ll have to arrange a written agreement with the landlord first. Finally, find out if you need permits to park in certain locations. Permitting and licensing rules differ by city, so get in touch with the city to understand the requirements.
Purchase A Truck
You can buy a new or used vehicle. If you buy a used truck, follow the statutory requirements for buying a used truck and acquiring an official transfer of title. Have your mechanic inspect your truck to confirm it’s in good shape. If you plan to buy a new vehicle, get one that best suits your build-out requirements.
Prior to buying a truck define what kind of space you’ll need to operate and cook. If you purchase a truck that cannot accommodate your needs, you’ll certainly be in deep water. Also, consider the maintenance costs, gas, and repair costs before choosing which truck you’ll get.
If your used vehicle is continually in the shop, you won’t be making as many sales. Furthermore, consider how easy it will be to get replacement parts for your vehicle. Consult with a professional food truck builder and do a comprehensive research before proceeding with your big purchase.
Build Out Your Truck
The gear your truck will need is determined by your food menu and regulations. Once you know exactly what you need, establish a good plan for your food truck interior. Your builder will improve your plan, but the more you’ve considered, the easier the build will be. There are amazing food truck builders in Colorado, so get in touch with several of them to determine who will meet your needs the best.
Operating a food truck is an amazing business idea, and we hope you found all of the above helpful and resourceful. So, we wish you luck on your food entrepreneur’s journey.