Food Van Business Plan: Complete Guide + Free Template
It’s a dream of many people to be their own boss. If you’ve worked in hospitality or the catering industry before, then a food van might be one business that you’ve considered opening on your own.
It’s an attractive option for many. Low overheads, independence, and the ability to dish up the food you love, from tasty street food to sizzling burgers.
Despite the straightforward nature of a food van, to find true success, you need a business plan. That’s why we put together this guide, to give you the key ingredients so you can cook up success.
Below, you can download a template food van business plan, as well as gain a deeper insight into the key parts of it. We also look at legal requirements surrounding food and catering vans, and share our best tips on making it a profitable venture.
Let’s dive in with the basics.
What Is a Food Van Business Plan?
A food van business plan is a technical and structured document that provides a framework and structure for everything that you do. Specifically, it sets out:
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- What your business will sell
- Who you will sell to
- Where you will operate
- How much it will cost
- How much you expect to earn
- How you will grow
By mapping out the above, you gain clarity about the venture. In other words, will you make money, and how much? With clear targets and figures in mind, you can work out if you need funding or not, and it also helps to give you direction so that you can forecast your business’s growth over time.
A business plan is not an infallible document, however. You must account for undesirable outcomes. For example, your food van could break down and need costly repairs. You could run into bad weather and see lower footfalls. As much as you can, prepare for the unexpected.
Food Van Business Plan Template (Free Download)
To help you on your way, you can click the button below to download our free food van business plan template (PDF format).
Breaking Down The Business Plan
If you’ve downloaded and opened the template document, you may find a few unfamiliar phrases. Below, you can find more detailed information on the key aspects of a food van business plan.
Executive Summary for a Food Van (Example)
An executive summary is your snapshot or overview of the business. If a person picks up your plan and reads it, they should understand what the business is all about and what’s at stake.
A good executive summary usually hits these points:
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- What you sell
- Where you operate
- How much you need
- Expected revenue
- Why it will work
Let’s take a look at a fictitious example, based on a van that sells coffee:
StreetFuel Coffee is a mobile speciality coffee van operating in New York City and at regional weekend events. We aim to serve high-quality artisan coffee and pastries to commuters and event visitors. Startup costs total $38,000. We project monthly revenue of $12,000 within six months, with net profit margins of 18%. We are seeking $20,000 in startup funding to support vehicle purchase and equipment installation.
Sometimes these short summaries are the hardest bits of all to write, so it can help to write it at the very end, when you’ve defined everything, despite it going at the very beginning of your plan.
Business Description and Concept
The purpose of a business description and concept is to define your company on a specific level. Defining your business as simply as a food van in your plan isn’t enough. What kind of food will you sell? Gourmet burgers, vegan street food, poutine, desserts?
The better you can define your operation and what it does, the easier you will find the actual running of the enterprise. In particular, it’s important to define your target customer. There’s no point taking your spicy burger van to an event for pensioners, for example.
At this point, it helps to set out your unique selling point (USP) too. This is the one thing, or several things, that sets you apart from the rest of the market.
For example, you might sell gourmet burgers like lots of other food vans, but you may offer exotic items, like ostrich burgers.
Defining all of these things can help you place yourself in the right locations and target your business at the right people.
Market Research and Competitor Analysis
One of the most vital parts of not just your business plan but running a business is competitor analysis and market research. It can quite literally make or break you.
For example, if you’ve decided to make a food van business centred around gluten-free hot dogs, you may find after a bit of digging that there are very few gluten-free people in your town. That means basing a whole business around it could see you make too few sales to succeed.
When it comes to researching competitors, it helps to think about these types of things:
- What food vans are already doing well in your area?
- What is it that people like about them?
- What are they weak on?
- Are there any gaps?
You may find that all of the hot dog vans in the area don’t offer any gluten-free options, so simply adding that to your menu, as well as regular hot dogs, could help position you in the market.
Food Van Menu and Pricing Strategy
Getting your pricing strategy right is another vital part of the plan. If you don’t charge enough, you may operate at a loss. Charge too much, and you may price yourself out of the market.
When it comes to food, you must think about the simplicity of the menu and the speed at which you can serve people. Complex items can slow service, and that limits the amount of money you can make.
Keeping these things in mind, it’s also important to cost individual items up properly. The cost of a hot dog, for example, isn’t just the sausage and bun. It’s the garnish, the sauce, the packaging, the card fees, the pitch fees, the staff costs. All of these expenditures must be accounted for in your price.
By the end of this process, you should know your profit margin on each item, how many items you can feasibly sell in a shift, and how much you can hopefully make.
Marketing Plan for a Food Van
With the day-to-day running defined, you can begin to think of growth ideas and ways of reaching customers.
This is where we come back to defining your target audience. Knowing who likes your gluten-free hot dogs is going to be vital to finding success. For example, targeting gluten-free food festivals, or food festivals as a whole (giving people an accessible option) will likely see you generate much more money.
For quick and easy exposure, social media is your best friend. Show off your food and lovely new van to the world with mouth-watering shots or clips of people trying your food. If you want to invest a bit more, you could look to work with influencers.
You can also look to take advantage of simple opportunities to build your brand and get it out there, like having a clearly-branded van and offering the likes of loyalty cards.
Understanding where the money can be made is key to a solid marketing plan.
Operations Plan
Another key component of a food van business plan is defining your operations. This relates to the practical side of the business, like staffing, your opening times, event schedule, food preparation processes, stock purchases, and cleaning procedures.
Legal Requirements and Licences
If you’re looking to set up a food van business, it’s important to be aware of the regulations in your area or state, as they can vary.
On a basic level, food van businesses will have to register with the state government, obtain an EIN, and will also need to apply for a mobile food vendor permit. This is usually obtained through the local health department.
On top of this, you may need to obtain a food safety certificate and comply with regular hygiene inspections.
Depending on the setup of your food van, you may need to arrange for fire safety inspections, especially if you use propane gas for cooking.
Another key legal requirement may be insurance, especially commercial auto cover.
The best thing to do is to check with your local government body and ask them to confirm everything that you need.
Startup Costs for a Food Van Business
One of the most important considerations when making a food van business plan are the startup costs involved.
In the US, a modern food van business can cost between $40k and $100k to kickstart. This includes major expenses like the food van itself, installing kitchen equipment, and buying stock and other bits, like insurance, licenses and permits.
Other costs can include a point-of-sale system for taking payments, and staff costs too.
The more accurately you can work out your start-up costs, the better.
How Profitable Is a Food Van Business?
Perhaps the biggest and most important question to ask yourself is whether or not your food van business will be profitable.
The last thing you want is a money pit on wheels. It’s therefore vital to work out your operating costs and how much money you need to make to hit profit. From there, it’s a matter of working out what you need to do to make a good living.
Successful food van businesses can look to bring in $5k to $20k a month in revenue. Net profit margins usually fall within the 10 to 20% range, which is about standard for most companies.
In time, with greater brand awareness and customer loyalty, your profit margin should increase.
You’re the key ingredient here, as well as your research. Many make a fantastic living with a food van business, but you have to approach it like any other business.
You can find more business plans, insights and information on the Business Route website.