A food truck business is trending nowadays. To start a food truck business, you need to select a unique theme, arrange funds, buy a raw truck, customize it, design menu & brand logo, hire a chef, take necessary government licenses and registration.
Here we guide you in detail how to begin a food truck business in India.
We all have seen mobile food outlets since our childhood. Be it a street food hawker, an ice-cream parlor or the pedlar selling candy floss, all these have a great appeal and temptation for anyone. No doubt, we all have been foodies since our childhood. And as kids, these street food pedlars have appealed to us much more than the posh restaurants and hotels. Nowadays, food truck business in India become more popular among the food lover.
In fact, the deluxe and classy hotels are a thing of upper strata. An ordinary person is more attracted to such mobile food outlets right from his childhood.
So how about running a food truck business?
It can surely be an instant hit. If you are on the way to begin a startup that can give a hype at comparatively lesser outlay than food-trucking is the idea you can count on.
Food truck business scope in India
Evidently, there’s a lot of scope for a cool business idea like food trucking. In fact, in the overcrowded metros of India, food trucks are the most in-thing today.
Food trucking is not something evolved just yesterday. The concept of Food truck business has grown from the petty road stalls and kiosks operating at every nook & corner of the cities.
There’s no doubt that a business idea like food truck business has immense potential which can be easily tapped with the desired action plan. The reason why I’m saying this is that the dual advantage of versatility and mobility in a food truck business in India can give you much easier access to a vast customer base, than an ordinary brick & mortar restaurant business.
Indian food-service industry stats
- As per the report by IBEF, Indian food service industry had reached US$ 78 billion in 2018. Besides, the Indian food market is presently growing at a CAGR of 20%.
- As per FICCI, this is expected to reach US$ 7.94 trillion by 2022.
- Adding to it, the food industry of India is valued at US$ 64.7 billion currently and is growing substantially.
- Out of this, food delivery market alone is valued at US$ 15 billion in 2018.
Tapping this immense potential of the Indian food industry can definitely give a food business an overnight success.
And mind it! Food truck business is one such concept where you can easily tap the maximum potential of the ever-growing Indian food market, owing to the benefit of mobility and versatility.
Is Food truck business profitable in India?
Food truck business is indeed an evergreen profitable business. The gross profit margin is quite high. Food is a daily essential. Hence, turnaround ratio probability will always be high once customers start loving your delicious food.
No doubt, the beginning of a food truck journey on Indian roads can be a mix of a joyride as well as a roller coaster. However, you can surely be on a safe track if you embark on this journey with a smart food truck business plan.
We have drafted a financial projection considering India’s current food industry trend which helps you to assess the profitability of the food truck business in India:
|Particular||Basis||Amount in INR|
|Average Selling Price per unit||The Selling Price of food item shall vary as per the quantity, quality, and cuisine. |
Understanding the current trend of burger, milk-shake, pizza, etc we have taken an average figure of Rs.150/-
|Gross Margin (%)||Gross margin is a profit after deduction of the cost of raw material* used from selling price. |
*Raw Material includes vegetables, flour, sauces and other food ingredients etc.
|Gross Profit per unit||Avg Selling Price X Gross Margin %||105/-|
|No. of items sold in a month||No. of food items sold completely depends upon the location of food trucks and customer footfalls. |
Let's assume, truck operates 25 days in a month and truck make sales of 100 units each day.
(In other terms, daily sales amt. to Rs.15,000/- i.e. 100 units X Rs.150)
|Gross Profit||GP per Unit X No. of Item Sold||2,62,500/-|
|Salary & Overheads|
|Salary||Chef, Chef Helper, Server, Cashier, Driver||70,000/-|
|Packaging & Disposable||Plates, spoons, glass and cardboard package||25,000/-|
|Marketing||Digital, social and conventional marketing||20,000/-|
|Diesel||For Truck and Power Supply||25,000/-|
|Contingency Expenses||Truck Maintenance, etc||5,000/-|
|Monthly Net Profit||Gross Profit - Overheads||1,17,500/-|
Note: The above projection does not include one-time cost such license fee, purchase of fixed assets, etc.
Although the above is a rough calculation on estimation, you can assure the monthly surplus shall be in 5 digit figure.
I guess the profit figures will surely incite you to take a step ahead to kickstart your dream food truck business.
How to start a food truck business in 14 easy steps?
Steps to set up a food truck business
The first essential step to kickstart a food truck is to choose a unique theme. When we talk about the theme it includes-
- How your truck will look like?
- What aura will it create? and
- What kind of food dishes customers can expect from your food truck?
It is an undisputed fact that India is the food paradise on the earth. Being home to different communities, religions, and ethnicities, India has an all-inclusive and diversified culture, which is very much apparent from the wide-ranging Indian cuisine.
A right choice of cuisine is very important to make your food truck famous in the market.
Trending food cuisines in India are
- South Indian
- Or Mix of all
A Unique food concept plays a key role to make your food truck stand out among the competitors and can attract more crowd.
An attractive customized truck design based on a unique theme can help you create an instant hype among local residents and attract foodies just like the Pied Piper of Hamelin.
How to start a food truck business with no money?
Amazingly, I found the above phrase frequently searched over Google. We are not here to show you pie in the sky. Trust me! You can’t even think of starting a food truck business with no money.
Money is the lifeblood for any business and food truck is not an exception.
To kickstart your food truck business you need to invest 2 digit lakh rupees. Still, if you have limited fund resources, you can go with a cost-effective idea such as a food-van or a food tempo.
There can be several ways to arrange funds for the food truck business-
The easiest source to raise your funds is from your own savings or borrowing from your family and friends. It does not require any sort of legal documentation or mortgage of assets such as property. All you need is to gain the trust of your lenders that you’ll timely repay them.
You can get a loan from your bank or financial institutions by showing your financial credibility records such as CIBIL rating, previous income tax returns, current bank statement, past salary slips and balance sheet of an existing business if any.
For arranging a business loan from the bank, you have to prepare a detailed project report [DPR] containing forecasted profitability of next 5 years along with cash flow statement. This is an essential requirement for any bank to sanction a business loan.
Equity funding is nowadays trending among startups. Raising equity funds from investors is almost a tricky thing. You must have a unique business model to impress your investors. Generally, Investors do not have much time to validate your business idea. To grab the eyes of your investors you must have a comprehensive pitch deck.
The best thing about equity funding is, you do not carry any obligation to repay the funded money.
If you’re of the view that great taste is the only “feel good factor” for making food business success, then you’re certainly wrong. You must understand that the fundamental asset of your dream food-truck business is the truck itself.
A Food Truck is not a ready-made product available at the automobile showroom. The food truck has to be handcrafted by an eye-catching theme and food cuisine you are about to serve.
Based on our own experience, we have laid down easy steps to get your dream food truck ready:
Buy Raw Truck
Firstly, you need to buy a raw truck considering the type & size of your menu.
Based on Menu! Really?
Yes, of course! The bigger your menu is, the more interior space you’ll need to carry your stuff, equipment, and the kitchen staff. Simple math isn’t it!
My advice might seem awful to you, but trust me, you’ll acknowledge it later on.
A truck is indeed a one-time investment. You can modify the interior or exterior from time to time but can’t replace an entire truck. So take the decision to buy the truck very wisely.
You can buy a big truck, mini truck or a van model based on your requirement. Several automobile companies (such as Tata, Eicher, Ashok Leyland, BharatBenz, Mahindra, etc.) offers multiple trucks variants. Cost of raw truck ranges 7-10 Lakhs.
“Hunt a good food truck manufacturer. Take his advice to choose the best truck variant that suits your requirements.”
Get a vehicle insurance policy. The insurance agent available at automobile showroom can help you out easily to get vehicle insurance done.
For running a food truck business, your truck requires to be registered as a commercial vehicle. The registration shall be done from the Regional Transport Officer [RTO]. After successful registration, you will receive Registration of Certificate aka RC.
Truck Driver must carry RC all the time with him while operating a food truck business to avoid unwanted interruption from traffic or police officers.
Customize Food Truck
This is the most important part of your plan. Get your raw truck to customize based on your theme and food cuisine.
Find out the best truck manufacturers in your city. Discuss your plan with him and finalize the deal.
Most of the people, make slip-ups while choosing a good truck customizer. Here we laid down some points to be considered before opting food truck manufacturer in India:-
Choose a garage in your locality.
You must ensure that the garage is near to you so that you can pay frequent visits from time to time and ensure customization execution are based on your specific requirements. It is generally observed that vendor usually ignore executing changes at the last stage of the customization. They will even ask you to pay more money for last minute changes. So, avoid this situation.
Take Quotation on letterhead.
Apart from the cost of customization, quotation will ensure the list of accessories to be installed along with equipment specification, brand, and other relevant information. On obtaining a detailed quotation from food truck manufacturer at an initial deal stage will ensure the implementation of exact types of equipment you want in your food truck.
GST: Inclusive or Exclusive?
While negotiating the price, you must inquire whether prices are inclusive or exclusive of GST. Because GST will increase your final price by 18%.
Timeline of customization completion.
Take double confirmation from food truck manufacturer about the expected date of delivery of the final food truck. This is very important. Having an expected date of delivery you can work on your food truck business launching plan, date of staff joining and fix materials supply dates.
Necessary equipment which can’t be ignored in a good food truck
Select Catchy Brand Name
Name of a food truck should be unique. In addition to uniqueness, you must ensure that the name should be catchy enough to give a jazzy vibe while pronouncing it.
Mouth marketing is a powerful tool where people start talking your name among their close ones. A catchy name never lets anyone forget your food truck name.
Believe me! A catchy name will work as an eye-catcher whenever anyone hears the name for the first time. It will urge them to try your food at least once.
Design Unique Logo
- Get Design your logo from an experienced designer
- Use truck theme color in the logo
- Add slogan
I personally took the 50+ logo design service from rdkocreative on Fiverr, a freelancer platform. He is awesome in understanding client requirement and commitment to deliver the revised logo until it satisfies you. You can search by typing “rdkocreative” on Fiverr and chat with him even before hiring. He normally charges $10 for logo design and delivers you with vector file.
Get T-Shirts for staff
We recommend you to design Polo T-Shirts for kitchen staff and servers embroidered with your logo. Its give a professional impression over your customers about your whole food truck concept.
Trademark ® your logo
Building a brand is tough. An entrepreneur spent tons of money, energy and time to create a brand value of the product.
Most of the businessmen not much aware that they can protect their brand through trademark registration.
Trademark in India is protected for 10 years once applied. After that, you can renew for every 5 years. Food truck business falls under the Class 43 of the Trademark.
So, apply a trademark of food truck logo before it is misused by others. You can use ™ mark above your logo once you applied it before intellectual property rights authority.
Every city has its own idea of taste. A food truck can exploit this characteristic to blend their specialties with the hot favorites of the city. But, this should be done in a way that your food stands out from the customary dishes of the town.
- Add food items based on your cuisine.
- Do not miss the popular foods of the city.
- Must add beverages, shakes (high-profit margin products)
Price & Taxes
- Evaluate the cost of ingredients of each food item and add 60-70% margin to come out with the final price.
- Consider 5% GST taxes. Every sale shall be chargeable to GST @ 5% on selling price.
- Compare each food item final price with competitor menu and re-tune final price accordingly.
- Also, ensure the final price should be user-friendly to the customers pocket.
- Design attractive Menu Card with the help of designers.
- Give a unique name to your signature dishes.
- Mention ingredients used below each food item. It will help the customer to choose the desired flavor before ordering it.
- Clearly display the prices exclusive or inclusive of taxes.
- Add Brand Logo on the front page of the menu.
Food truck business in India need several permits and licensing in order to operate a truck business legally compliant.
- Every food business required to get FSSAI registration and obtain 14 digit license number from their respective jurisdiction FSSAI Department.
- Fssai license divided into three categories fssai registration, fssai state license and fssai central license.
- Learn how to obtain FSSAI License number.
NOC from RTO
- If you wish to open a food truck business, you will require a No Objection Certificate (NOC) from RTO. NOC is a legal document issued from the regional RTO that certifies that there is no tax due on the vehicle.
Fire Safety License
- After having all the safety equipment in place, you must invite the Chief Fire Officer for inspection and get the NOC. There is no fee required for NOC as of now.
- If you’re annual turnover supposed to exceed ₹40 Lakhs in a year, then GST Certificate is mandatory.
- Further, You need to charge a 5% tax on the gross amount of monthly sales.
- Easily obtain GST Registration Online
- Apart from that, you are required to obtain a trade license aka Shop Establishment certificate. This is necessary as every shop in India requires registration under the Labour Department of the state in which it is operating.
In today’s digital era, you cannot survive on cash payment mode only. You must accept the online payment to boost your quick sales.
For this we recommend you to purchase a swipe machine, obtain QR code from Paytm or PhonePe.
This will help you accept the instant payment from the customers. And can avoid unwanted penny change situation.
We strongly recommend you to take subscription of any POS billing software if you want better management of your food truck business from day one.
Its allow you to work remotely even when you’re not available on cash counter at peak hours. The software will compute daily sales for you. You can ask your cashier to deposit the cash collection at the end of the day based on the sales report. It will help you to avoid revenue leakage.
Apart from just billing, POS Invoice Software will benefit you in numerous ways.
- Sales report analyzing the sale of your each food item. You can get analytics which food item sales a most.
- GST report for tax payments and GST return filing.
- Profitability Report,
- Inventory management and many more.
Additionally, billing software will prove to be a goldmine for you in the long run. We will unveil the secret sauce at the end of the article.
Hey, do not scroll down to the bottom now. Let’s keep the climax for the end. The secret sauce won’t slip out of your hand.
Seriously, do not avoid the software subscription. You’ll regret it.
For effective use of POS software, you must ensure the availability of touchscreen monitor, thermal printer and wi-fi connectivity.
A food truck business is not a one-man army show. You need some specialized human resources to make your dream food truck business run smoothly.
So, hire well-experienced staff. Below is the must requirement to operate a food truck.
- Kitchen Helper
- Driver – When truck parked, He can be your second helper in the kitchen or cashier.
Food business requires perishable raw materials to deliver the final product. To cook delicious food, you need several ingredients on a regular basis especially fresh fruits and vegetables. So you’re recommended to tie up with prominent food suppliers for the below supplies
- Fruits & Vegetables
- Food ingredients
- Disposable plates, spoons, forks, etc
- Water Supply
You’re further recommended to arrange one extra vendor well in advance as a backup which will rescue you in emergency cases such as shortage of material from the first vendor.
Location plays a vital role in the success of any food business. Although, a food truck has an additional advantage of exploring multiple locations without investing a single penny.
So, before choosing a perfect location for a parking food truck, you must do proper homework based on customer food habits and their lifestyle.
Most importantly, you need to ensure the availability of sufficient space in your target location for a long duration to park the food truck and serve your customers.
Landmark location is a key factor to get back your loyal customers and buy your signature food dishes again. Here landmark location means where your truck is parked and is available most of the time.
“While searching out the location you must ensure that your food truck has maximum visibility for the nearby footfalls so as to ensure easy customers accessibility to the food truck.”
“Install google app neighbourly where you can ask local residents about their food taste, parking space before experimenting a new location for food truck”
Sad, but true. It is difficult to hit the floor from the first day of launching. We recommend you to onboard your food truck on food-based e-commerce platforms which will help you meet your initial monthly overheads till your food truck become famous in town. Famous food e-commerce giants where you can start selling are
- Food panda
- Uber Eats
For onboarding on the above platform, you must require legal documents such as PAN, Bank details, FSSAI License and GSTIN Number.
In today’s digital era, almost all teenagers and young food lovers are available online not on the road. Social media is the easiest and cheapest way to reach them all. Do not miss an opportunity while doing marketing just traditionally. You do not need to be an expert in doing digital marketing. Below given are some basic digital marketing activities for the food truck business:
Create Facebook & Instagram Page
- Create pages on Facebook, Instagram, Twitter, Pinterest, and Youtube also if good quality videos are available. A regular post on the social network will help stick your audience with you and it will help you gain retaining customers more and more.
- Post can be related to announcing offers, special events, videos, photo of new finger licking dishes in the menu or it can be anything so you do not let them forget about your food truck.
Regularly post serving location & time
- With the help of social media, you can let your customers aware of the current location of a food truck all the time and can also convey upcoming week schedules.
- Although it is not mandatory, you can have a website to tell all about your food truck journey. Can take party and event orders while having a query form over the website. Display feedbacks of customers. Website will also help the media and other stakeholders reach you easily.
- You can develop a single page website on WordPress with no cost.
- Yelp is a crowd-sourced review forum for restaurants and all other kinds of a food business. Public reviews on food truck matters. Good stars on yelp help you bring more customers to your food truck.
Google my business
- It is a google platform where you can register your food truck landmark place. Almost all people search for every and anything on google. Register a food truck on google business make you easily visible on google along with map direction, website URL, call, public reviews, open hours and other details you want to share with your customers.
- Register on Google my business for free.
Announce offers & events
- Remember, I recommend you to get a billing software subscription. So it’s time to unveil the climax.
- If you’re billing customer through software you can easily maintain their contact details database at one place (Goldmine). It will be helpful for you to announce (email & SMS) offers and food truck schedule to your loyal customers in an effective manner so that they can reach you again and again.
- This will help you boost your sales and footfalls as and when you want. Since you have a goldmine.
Though there was no such huge trend of food festivals around 5 years back, we today come across numerous food fests in various parts of India. Several food stalls and food trucks are seen participating in full swing at such events.
The key benefit of participating in food festivals is that you will be able to reach out to a large crowd. If they are convinced with your unique food truck theme and cuisine, they’ll definitely recommend it to others.
Some noteworthy food festivals in India are
- FSSAI Eat Right Mela
- Horn Ok Please food festival
- National Street Food Festival
- Asian Hawkers Market
- Great Indian Food Festival
- The Grub Fest
- Palate Fest
- Goa Food and Cultural Festival
- And many more……
Hope you like our article. We understand executing a business plan not a one day process. You might need a reference to this article from time to time, so bookmark before it lost in a huge web world.
In case you need an answer to a specific query with respect to the food truck business, you may consult our professional.