How Do I Start a Food Truck Business? (Podcast) | Ep. #084

Elizabeth Larkin, Michael Kelly, and Eric Dollinger

Have you always dreamed of running your own food truck business, but weren’t sure where to begin? While it might take several months or even years before you fully establish yourself, you can still increase your chances of succeeding through proper research and preparation. In episode #84, Elizabeth Larkin and Gene Marks guide you through all the necessary steps you to take before opening your own food truck business.

Executive Summary

3:10—Today’s Topic: How Do I Start a Food Truck Business?

4:40—Research whether any licensing or certification will be necessary.

4:47—Start out small with minimal inventory and modest expectations for the first season; use this time as a learning experience.

6:27—Make sure you have the capacity to accept all forms of payment in order to increase your potential for profits.

8:20—Really consider whether your business is viable before making any large investments.

10:50—Gene encourages business owners to take risks and reveal their humanity to their employees for better connection.

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Transcript

Gene: So, I got a dog.

Elizabeth: I heard about this.

Gene: Yeah. Just a one week ago, we finally got a new little dog. Our dog we had to put down a couple weeks ago, and it was …

Elizabeth: So sad.

Gene: The worst. Although for anybody listening, that is in a situation putting down their dog, we used a little service called Lap of Love. They were in Philadelphia, and they sent around like a resident from Penn Vet and it was beautiful. They did it very, very nicely.

This dog, though, we got from petfinders.org, or petfinder …

Elizabeth: I think it’s petfinder.com.

Gene: Dotcom, petfinder.com. Yeah, and they are amazing. And this little terrier, 12 pound terrier. And we love him, so we’re very very excited.

Elizabeth: And does bark? Is he a barker?

Gene: Barks a tiny bit, but not that much.

Elizabeth: Okay.

Gene: And …

Elizabeth: Yeah. It is petfinder.com, I just checked.

Gene: Yeah, great great service. Wonderful organization, and so we’re really excited to have a little doggy.

Elizabeth: And what’s his name?

Gene: His name is Churchill. Big name, little dog. We have high expectations for this dog to become a leader.

Elizabeth: And how old is he?

Gene: He is 18 months. And he is like a terrier, so I think he could live to like 12-13 years.

Elizabeth: Oh, yeah, yeah, yeah.

Gene: And we’ll actually have a dog that lives a long time.

Elizabeth: Yeah.

Gene: And he’s healthy, and he likes the dog park, and … My only … The thing I don’t like about this dog, is that he’s a little too social, do you know? Like I’ll be … I walk him in the square and I don’t really feel like talking to anybody.

Elizabeth: Yeah.

Gene: This dog wants to talk anybody that …

Elizabeth: He likes to runs up, runs up to people.

Gene: Oh my god. And then you have to have these awkward like, “Hey, hello. How are you?”

Elizabeth: Yep. Yep. I …

Gene: Alright, that’s fine, he’s social.

Elizabeth: Yeah. I think we’ve covered this before, that Gene …

Gene: Very anti-social.

Elizabeth: Seems like an extrovert, but actually doesn’t like people. Likes to stay home and watch Netflix shows.

Gene: I’m a good conversationalist when I feel like it. But no, we … Yeah, you’re right. I would like … We like to watch TV and be on our …

Elizabeth: Yeah, yeah, yeah. Relax.

Gene: We go to the square, and walk the dog. And the dog wants to say hello to everybody. I’m like, “Listen, no offense, but I really have nothing to say to you.”

Elizabeth: “I’m just hanging out with my dog right now. And see you so …”

Gene: Yeah. You’re the opposite. You’re a social person. You would talk, you would chat.

Elizabeth: Yeah, I mean … Yes, like 50/50. Sometimes I’m like, “Oh, I just want to go home.”

Gene: Yeah, of course.

Elizabeth: But, half the time, yeah. I’m good being on my own, not talking to people for a while. And then I kind of go crazy.

Gene: My biggest fear with our dog is that we … He wants to go up and say hello to every dog. And my other dog was the opposite.

Elizabeth: Yeah.

Gene: Like, avoided those. And I do get a little worried that what if another dog takes a snap at him? Or isn’t as friendly. People are generally really good about that, don’t yeah …

Elizabeth: Yeah.

Gene: But I’m just concerned that somebody might miss that. Or not be paying attention.

Elizabeth: I think … As the dog owner, I think you’re supposed to say, “Is it okay if my dog says hi?”

Gene: We do. We do. We do. But then sometimes people just aren’t paying attention, or whatever. I don’t know.

Elizabeth: Yeah, yeah, yeah.

Gene: Stuff happens.

Elizabeth: Yeah.

Gene: You know what I mean? So that’s my only issue.

Elizabeth: You know what I would say with a dog like that? Don’t use a retractable leash.

Gene: We don’t. That’s the all … We have a regular leash, and I wrap it around.

Elizabeth: Yeah.

Gene: We keep him close. He’s still learning how to walk in a city.

Elizabeth: Yeah.

Gene: Because he came from Arkansas.

Elizabeth: Yeah.

Gene: So he’s not used to being in a city.

Elizabeth: Yeah. He’s a country boy.

Gene: He’s a country dog.

Elizabeth: So this question … Gene, you’re gonna like this because she gives us her name, her location, and a lot of information …

Gene: Okay.

Elizabeth: About her business. This is from Clarice in Michigan.

Gene: Clarice.

Elizabeth: And she writes … I know, it made me think of Silence of the Lambs. So …

Gene: That’s exactly what I was thinking of.

Elizabeth: She writes:

“Hello, Gene and Elizabeth. I’m 52 years old and I have been a stay at home mom since I was 28. My husband and I have two kids, but now that both kids are in college, I want to start a small weekend business. I’d like to run a food cart at tailgates, and sell my own food.”

Gene: At tailgates?

Elizabeth: Yep.

“I want to bring a tailgate theme to gourmet meals.”

And …

Gene: By the way, are you allowed to do that?

Elizabeth: I don’t know.

Gene: No, seriously. Like tailgates? Can you run like … Whenever I went … I went to the Eagles tailgate … An Eagles/Giants tailgate …

Elizabeth: Yeah.

Gene: Just last weekend. And everybody doing tailgates are fans. Nobody … I didn’t notice anybody selling … Maybe I’m wrong. Maybe you can.

Elizabeth: Maybe on the route there. I mean, I’m sure she’s checked it out.

Gene: I guess, well Clarice make sure you get a permit.

Elizabeth: Yeah.

Gene: That’s the first bit of advice, here. Go ahead.

Elizabeth: So she writes:

“I want to bring a tailgate theme to gourmet meals. Think deep fried lobster and cheese ravioli on top of truffle fries. Or duck confit nachos. I’ve got the cooking skills, but neither my husband, nor I, have business skills. I’m not planning on the business changing my lifestyle, or being a million dollar idea. I just want to stay busy, and maybe bring in some extra cash, to take the husband on a vacation. How do I get started without breaking the bank, or betting the farm?”

So I think your first piece of advice was right. She’s gotta make sure she … Does she need licenses for this? Like …

Gene: Yeah, she definitely wants to make sure she has a permit to be able to do this, right?

Elizabeth: Yes.

Gene: And then secondly, my advice to you Clarice, is just start small. Right?

Elizabeth: Yeah.

Gene: I mean like, this is … You’re a young lady at 52, you got plenty of years to grow this and build this.

Elizabeth: He says that because he’s also 52. So …

Gene: Exactly right. So we’re just getting started here. And what you want to do is, go to … Assuming you get the permits. Make up your food. Go price it so that you are making a profit.

Elizabeth: So …

Gene: Come up with your best pricing.

Elizabeth: What would you shoot for?

Gene: See, I don’t know. And that’s what … That’s my point. I would be going there with what you think is a reasonable price that you would pay, where you’re still making a profit. You know, Clarice. And I would go to the next game, whatever, set up a table. Again, minimal inventory, and minimal … Create a demand.

Elizabeth: Yeah.

Gene: I mean, for all you know, you sell out in 10 minutes, and people … There’s a buzz. People can’t wait for you to come back …

Elizabeth: Yeah, that’s a win.

Gene: To the next tailgate. But just learn. And I would take … I mean, right now you and I are recording this. It’s like the beginning of October, so I don’t know when this will air, but … Every time we hire a new employee, I always know that for the first six months, we’re not gonna make any money off that employee. Because that person’s gotta get to whatever.

Elizabeth: Yeah, get up to speed.

Gene: So your attitude has to be for the first football season, “I’m not gonna … My goal is to break even, or even just show a small profit. My bigger objective here is to learn, to get an education.”

Elizabeth: Yeah.

Gene: So take the first season. Now, what is it, a half a dozen home games? During the whole season or whatever?

Elizabeth: Yeah.

Gene: And really get your education, knowing what to do. So that your next season, season number two, that’s gonna be your profit making season.

Elizabeth: Now would you …

Gene: Then you’ll know what’s selling, and what’s not selling. And what to price.

Elizabeth: I would just find this whole thing so daunting. Like, would you suggest that she only accepts cash the first year?

Gene: No, I wouldn’t. That’s another really good question. No, it’s very inexpensive to set up mobile payments.

Elizabeth: Okay.

Gene: Use Square for example. Square will give you the reader for free. And then, yeah. You do pay a little bit, as a fee, or month … A transactional fee to have it, but then you can … You absolutely want to accept credit cards.

Elizabeth: Okay, but …

Gene: And not just cash. Very important.

Elizabeth: Here’s a wrinkle in that, though. I just went to a University of Michigan football game, and there were a 111,000 people in the stadium. Which is a lot of people. And the data towers must have just been getting hammered. Because I didn’t have a signal the entire game. So, if you’re accepting credit card payments, through Square, isn’t that gonna interfere?

Gene: Perfect example of why you want to be testing things out that first season.

Elizabeth: Okay.

Gene: I don’t know, Clarice. For all I know, you live in an area where there … The data reception is bad. And then you’re gonna learn in that first season, like, “I guess I can’t be accepting credit cards, or I have to come up with a better solution than that.”

Elizabeth: So you should do both.

Gene: And by the way, if I could just say … If your one other solution, your data signal. If there’s no wifi around, is Verizon, T-Mobile, are you using the right network … These are all problems …

Elizabeth: Yeah.

Gene: That you’re gonna have to resolve. Here’s a … You don’t know all those things right now, until you give it a shot. So, remember, most businesses when they start up, they go through a period of start up before they start turning a profit.

Elizabeth: Yeah.

Gene: That’s natural. So you’re talking about opening up a stand in tailgates, it’s not a continuous, every day thing. So you’re gonna give yourself a half a dozen chances to figure things out, and get things right, and … Your hope is that you are … You’ll walk away with it, hopefully break even. And with a lot of knowledge, that you can then apply to next football season. That’s what I would do.

Elizabeth: Even thinking about … I mean, she’s saying food truck. But, you gonna go out and buy a truck?

Gene: Great example. That’s a great … I didn’t actually pick that up. Did she actually say food truck?

Elizabeth: Yeah.

Gene: Okay, so yeah. So Clarice … Listen, Elizabeth is paying attention, here. Right? She is …

Elizabeth: It’s my job.

Gene: She picked up on this. So, because … I don’t even think … When I meet people that have food trucks, it’s generally people that started out selling on the streets.

Elizabeth: Yeah.

Gene: Or selling at stands before they then got enough capital to buy the food truck. You know? You want to really conserve your outlays, right? Your investments. Until you are really sure that it’s going to pay off. So, for all I know, you create the greatest … What, lobster, macaroni and cheese? And it’s …

Elizabeth: It was fried lobster and cheese ravioli …

Gene: Oh my god.

Elizabeth: On top of truffle fries.

Gene: So that’s awesome, right? So you make it’s …

Elizabeth: Thank god we already ate. I’d be like, “Alright, Gene. Later.”

Gene: That is awesome. So you make this stuff in advance, you go there, you have hot burners underneath to keep it warm, or whatever. You set up a table and a stand to do that. And here’s what I’ve … What if you go there and your concept stinks? And nobody wants lobster truffles, whatever. They want hotdogs, because they’re at a football game.

Elizabeth: Yeah.

Gene: And you’re sitting there … Well, how would you feel if you had invested in a food truck and nobody came?

Elizabeth: Yeah.

Gene: So, what … But if you do go, and the people are lining around the corner to buy your stuff, you can hone that down in the first season, and then boy, people will be looking forward to you coming back the next season. And by the way, you could judge your demand as well. You keep track of information. If you are turning people away, try and get your arms around how many people you’re turning away.

Because that will tell you, “Listen if I want to invest in a food truck, based on the numbers from my … That last football season. I could probably be getting a couple hundred people …”

Elizabeth: Yeah.

Gene: “Customers during the game, based on what I saw. And therefore at a certain price, we’ll pay for that truck and also leave me with a profit.” So …

Elizabeth: Okay. So, Gene …

Gene: Great advice about the food truck. I’m glad you picked up.

Elizabeth: Take away is then, you want to first make sure you have all the licenses made …

Gene: Yeah, make sure you got the permits and the licenses down. And the big take away is this first season, this is your trial season.

Elizabeth: Yep.

Gene: Okay? So, come away … Try and come away, break even if you can. But you don’t want to earn … You want to earn knowledge, more so than money, this first season. Then you want to apply that knowledge to making some money next season.

Elizabeth: Yep. Great advice. All right, we’ll be right back with Gene’s Word of Brilliance.

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WORD OF BRILLIANCE: Ma

Elizabeth: Okay, we’re back with Gene’s Word of Brilliance.

Gene: So my word of brilliance today, is just one word. Because you always …

Elizabeth: Oh my gosh!

Gene: Roast me for … It’s a never ending … “It’s always more than one word, Gene.” Okay, here’s the word, you ready? It’s “ma”.

Elizabeth: Ma? M-A?

Gene: Ma. M-A. Ma.

Elizabeth: Okay.

Gene: Well, okay.

Elizabeth: Are you gonna talk about your mother again?

Gene: No. I’m gonna talk about Jack Ma.

Elizabeth: Okay.

Gene: Who is the CEO of Alibaba. You ever heard of Alibaba?

Elizabeth: You’ve talked about them. For the Amazon of …

Gene: Alibaba.com. The Amazon of China.

Elizabeth: Okay.

Gene: Which basically means they’re a lot bigger than Amazon. Right?

Elizabeth: Yeah.

Gene: And they are now public in the U.S., and they’re making their inroads into the U.S. And Jack Ma is the CEO of Alibaba. And also, if the not the richest man in China, one of the top … One of the most richest men in China. The reason why I bring up Jack Ma in this conversation, Elizabeth, is that a few weeks ago he had an overall employee meeting of everybody at Alibaba. At this arena, that they hired out.

And he dressed up as Michael Jackson, and went on stage, and sang a couple of songs, impersonating Michael Jackson.

Elizabeth: Was he good?

Gene: He was horrible. And besides that, he’s also known for doing stuff like that. I think he dressed up as Justin Beiber once, as well. And did an impersonation.

Elizabeth: Oh my god.

Gene: In front of literally, like 10,000 or 20,000 employees … And by the way, this was being broadcast, also, to other people around the world. The CEO … as like, whatever … And you would think to yourself, “My god, what is … Is this guy nuts? Like, why is he … What is he …”

Elizabeth: Yeah, what is he thinking?

Gene: Well, I’ll tell you what’s he’s thinking. And here’s what you can be thinking, as well. Number one, he loves to sing, and loves Michael Jackson. And he’s not afraid to put himself out there, and take a risk. Right?

Elizabeth: Okay.

Gene: He’s like, “Listen. I’m gonna go up there and sing Michael Jackson, because I love doing it. It’s something I’m passionate about. And I’m gonna take a risk. And I don’t really care what other people think about me.” That’s number one, we should always be thinking that way. If you want to do what you really enjoy doing …

Elizabeth: Yeah.

Gene: You shouldn’t be thinking about what other people are gonna think about it. Just do it and enjoy yourself. Right? Short time here on Earth.

But number two, the thing that Jack Ma, I think that he got across is, he showed all of these employees basically what a doofus he can be. Right? He showed them that he’s just a normal guy, he’s a goofy guy.

Elizabeth: Yep.

Gene: He’s a nice guy. He’s … And he has said in other interviews that when he does this kind of stuff, and then he walks around and visits employees in different locations, a lot of them joke with him. “Oh, I saw you when you did that,” and whatever. And it’s a connection …

Elizabeth: Yeah.

Gene: It makes like a thing. Do you know what I mean? And it humanizes him. And in this world, particularly as you grow companies, sometimes you lose that human … You be getting all wrapped up in yourself, and you’re not connecting with anyone. Put yourself out there, and you’re human with your employees like that. Whatever you decide to do. Maybe you’re flipping burgers at the company barbecue. You know? Or, once a month you go behind the cash register, and deal with customers, and deal with employees that way. Or, you get up on stage at the employee event and you impersonate Michael Jackson.

Elizabeth: Okay, so what are you gonna do?

Gene: I do … I live this every day. I have … Everybody knows my … In fact, you know what I do? I do it through my writing.

Elizabeth: Okay.

Gene: I do it through my writing. Like my employees all read … You can’t avoid the stuff that I write. And I try be really transparent in the stuff that I write about. The good, the bad and the ugly. And they appreciate that. And whenever I’m with people that work with me, contractors and employees. A lot of times they’ll go, “Oh, I saw your … I didn’t realize you screwed that up, or that you made that mistake there,” or whatever. And it’s something to talk about, and it also humanizes you as well.

Elizabeth: So it’s really just making yourself vulnerable to your employees.

Gene: It is. Taking risks, putting yourself out there to do something you enjoy to do, that’s number one. But then number two, is you want to make yourself human to your employees. This is how he does it. What are you doing to make sure that you stay connected to your employees? That you don’t become aloof or arrogant, or disconnected from them.

Elizabeth: Alright, we’ll be back in a couple days with our next episode.

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