Complete Guide On How To Open A Food Truck In India 2020

A Complete Guide On How To Open A Food Truck In India 2020

Food trucks have become quite a rage lately in the evolving restaurant space. According to the National Restaurant Association report, by 2017 food trucks will generate about $2.7 billion in revenue. The advantage of mobility in the Food Truck format gives owners access to multiple locations at an initial capital that is lower than that needed in opening a restaurant of any other format.

Thus, it is no wonder that small restaurant owners are looking to invest in a Food Truck instead of an individual stationary restaurant. This article will tell you why it is a better idea to open a Food Truck instead of a Standalone Restaurant. In this article, we will take you through every step of starting your own food truck business in India.

How To Start A Food Truck Business In India

First of all, you should create a food truck business plan which would act as a roadmap to the future growth of your food truck. It is natural to have doubts when you are starting a big or small restaurant business, which is why you must Learn how you can create a business plan for your food truck here.

Although it may seem daunting to start a food business in India, the following points will guide you thoroughly through the process of opening a Food Truck Business in India:

• Choosing the right Food Truck or Commercial Vehicle
• Get the kitchen equipment and raw materials required in a food truck
• Apply for licenses and permits needed to start a food truck business in India
• Look for the workforce required to run the food truck smoothly
• Install POS software for your food truck
• Decide on the staff uniform for your food truck employees
• Market your business
• Decide on the total investment required to start a food truck business in India
• Other miscellaneous things required to keep your food truck business in India, on the mark

Now, let’s dive in deeper so that you can gain a comprehensive understanding of how you can execute these points mentioned above in the most effective ways that will bolster your food truck business in India.

1. Choose The Right Food Truck Or Commercial Vehicle

The first thing to do is to choose the right truck or commercial vehicle. Based on the given menu which is Italian and Continental, you need a commercial vehicle which is at least 18-feet long, and a new one would cost around Rs 7-8 lakhs. There are various trucks available in the market from Tata, Mahindra & Mahindra and Ashok Leyland.

But to save costs, you can start with an old truck which would cost half the price of the new one. However, when buying an old commercial vehicle or truck one should check for proper fitness certificate, registration, road tax receipt, and insurance. Also, it should not be more than five years old, as due to pollution problems various state governments and environmental bodies are considering to ban 10-year-old commercial vehicles in different cities.

The old vehicle can further be modified and designed based on the requirement with an additional cost of Rs 1 lakh from the various bodybuilder shops. So, the total cost of the final truck (old) without kitchen equipment is Rs 5 lakhs. This cost seems to very high from the 450 sq ft shop for QSR whose rent is somewhere around Rs 40,000, but in the long run, the food truck cost would be negligible as there is no or very less rent or fees to pay depending upon the vicinity.

Tips To Choose The Right Location For Your Food Truck

Choose a street that doesn’t have too many similar food vendors around, has a regular flow of traffic for inviting large footfalls, and has establishments with young professionals and students in the surrounding area. Also, the parking of trucks should be such that it does not pose any hassle to commuters, yet should be visible to the people. Also, it is advisable to buy a light commercial vehicle rather than going for a big size heavy commercial vehicle because in certain cities including Delhi big size trucks are not allowed before 9:00 pm.

2. Kitchen Equipment And Raw Materials Required To Start a Food Truck

The total cost of kitchen equipment comes to around Rs 3 lakhs which includes Microwave, juicer mixer, freezer, refrigerators, griller, steamer, working tables, one burner, exhaust equipment, generator or big batteries with an inverter. It is advisable going for new equipment as they are mostly electronic items. Since you get a one year warranty on new ones, you would be relieved of the daily maintenance cost of the equipment. However, if you choose the equipment carefully and determine which can be bought old, this can save you a lot of money which can be used for other essential activities. Apart from the kitchen equipment, you can store raw material for the first week which would cost somewhere around Rs 30,000. Further, it is advisable to keep the raw material less for the first few weeks to keep the stock fresh and to study the pattern of sale and then procure more.

3. Licenses & Permits Required For Starting a Food Truck/ Business in India

Since there are no clear-cut laws pertaining to food trucks/restaurant business plan in India, the defined set of documents required are not present anywhere specifically. However, it is essential to procure the following set of licenses for your food truck in India, which will permit you to carry on with your restaurant business legally in this territory:

• Fire Safety Certificate
• Shop and Establishment License
• NOC from RTO
• NOC from Municipal Corporation
• FSSAI Mobile Vendor’s License
• Kitchen Insurance

The combined paper and licensing work can cost you around Rs 50,000. There are a lot of consultancies which can help you to get the licensing and other permits.

Additionally, here’s a list of all the licenses required to open a restaurant business in India, and the steps to procure them.

4. Manpower Required For Your Food Truck

In the food truck format, a maximum of two chefs and one helper are required who can take care of the operations of the entire food truck. The average salary of Chefs can be somewhere around Rs 13k-15k while the helper’s salary can go up to a maximum of Rs 8000. If you want to set up a delivery model for the truck, you can hire two delivery boys or can tie-up with third-party logistics companies that charge somewhere around Rs 40-50 per delivery. However, to keep the service level up to the mark and if you are looking to create an identity in the foodservice market, we would like to advise you to hire at least one delivery boy who will also help you to procure raw materials in the case of emergencies rather than depending upon the third party logistics.

5. POS Software For Your Food Truck

It is always advisable to have a good point of sale software which can keep your data safe and give detailed information about your inventory and sales. A good POS can make or break your restaurant business in today’s competitive environment as a lot of restaurants including QSRs and other food businesses use customer data to get repeat orders and take customer feedback. An excellent point of sale software can cost somewhere around Rs 24,000 per annum, i.e., Rs 2000 monthly.

6. Staff Uniform For Your Food Truck Employees

The staff uniform gives an overall brand feel to the restaurant business which will in return help you gain more trust among your customers. A standard collar t-shirt will cost somewhere around Rs 120, and since you have only five employees in this particular format, two chefs coats (2 each) which will cost around Rs 300 while rest of the employees can have a t-shirt and a cap. The combined cost of all the uniforms would not be more than Rs 6000-7000.

7. How To Do Marketing Of Your Food Truck

Unlike QSR, Food Trucks require less number of menu pamphlets for distribution since the primary business of food truck is based on the footfall rather than delivery. Still to create the initial buzz, one can go for 15000 Pamphlets which will cost around Rs 20000 and some billboards and banners in the nearby catchment area which will cost around Rs 10000. However, in the new digital age creating offline buzz is not enough.

Having a presence on Social Media is a must, and as it would keep your customers and followers informed about the location of a food truck on any given day to build a regular flow of customers and build brand connect. Also, it can be used to leverage existing followers to spread the word about the food truck, offering discounts, choosing new food items for the menu, etc. Find out how to do digital marketing for your restaurant the right way here.

Apart from that, keep a note of events and community gatherings in the local area and park the food truck around. Tie-ups with event planners, personal contacts with customers, and free goodies like t-shirts and mugs carrying the food truck logo, can go a long way in spreading and expanding the restaurant business.

8. Cost Of Opening A Food Truck In India

The average cost of starting a food truck business in India is around 10 Lakhs. It varies mainly according to the type of vehicle you are opting for and the kitchen equipment. Here is the overall cost distribution for a food truck business in India:

9. Other Things Required To Start A Food Truck Business In India

Apart from the things mentioned above, while starting the food truck, you require things like two mobile phones, a calculator, an attendance register, a daily book, 2-3 big dustbins to keep the area clean, etc.

Unlike other food business formats, the food truck business has its pros and cons, such as the location which is a problem for other formats but here the owner of the food truck can decide the site based on the market information and research, with no rent to be paid, no electricity bills, less capital required and low operational costs.

On the flip side, the food truck business is quite uncertain as there are no proper framework or guidelines to operate, but if things are done carefully and responsibly, this format can be rated as the best food format in terms of returns in comparison to the investments made. The investments made in the food truck business is slightly higher than the QSR format, but the good thing is that the overall operational cost is much less than a QSR or a small restaurant in the long run.

Apart from the regular business which has a minimum Rs 8000-9000 sales per day, a food truck can also make money from various events and catering. A single event or catering can generate earnings up to Rs 30,000 in a day.

Inputs are taken from Karan Malik, Owner of Supersuckers Food Truck.

Food truck business or a restaurant on wheels has been gaining popularity as a concept in India, among entrepreneurs and consumers alike. In this article, we will take you through everything you need to know about starting a food truck in India.

Let’s start with these things:

• Costs involved
• Licenses needed
• Benefits you can get
• Points to keep in mind
• Food truck marketing

What is the cost of opening a Food Truck in India?

An average food truck can cost anywhere between INR 8-10 lakhs in India. On the upper end of the spectrum, a fully equipped food truck can even cost up to 20 lakhs.

Here is a complete breakdown of all the costs involved:

• Vehicle: To start things off you will need a truck – you can use a second hand one or you could buy a new truck. Typically a truck will cost you a minimum of INR 4 lakhs.
• Equipment: You will also need to invest in essential kitchen equipment as a one-time investment for your truck. This will include stove, utensils, cooking vessels, cutlery. You may want to put a few tables and chairs so that people would have the option to sit if they’d like (although this isn’t mandatory). All the equipment put together would cost you around INR 2 lakhs.
• Raw Material: You will need a stock of inventory or raw materials to prepare the meals. That would cost you about INR 20-30K.
• POS: Your POS is much more than a standalone piece of technology that takes care of your billing and technology. It is linked to several key business functions including CRM, analytics, and inventory. A good POS will cost you around INR 25-30K (6-month pack).
• Staff: You will need to hire a few resources to handle the key everyday operations of your business, Luckily in India, costs of hiring staff are not that much. You can leave aside around 13-15K per month per person.
• Marketing:  Like any other business, sales will come in only if you are promoting and advertising your business the right way. Marketing would include both offline and online promotions and can cost you a lot of money. You should keep aside at least 20K a month for your marketing.

What licenses are needed to open a Food Truck in India?

Just like any other restaurant, a food truck needs all the valid licenses. In India, the government has already started clamping down on “illegal” food trucks (sans licenses). Here is how it happened in Gurgaon.

Below we have listed the key licenses you’ll need when opening a food truck.

FSSAI License: A food truck and for that matter, any food business with gross revenue of more than 12 lakh INR needs to have the FSSAI license. It is essentially a 14 digit number. Here is a complete guide on how you can acquire your FSSAI license.

NOC from the Chief Fire Officer:  As food trucks deal with a lot of gas appliances, having a NOC certificate from the Chief Fire Officer is mandatory.  

Permission letter from the local municipal body: When you will zero in on a location for your business premises, you would need to get a written document, stamped by the local municipal body to start setting up.

Vehicle license: As you will be operating out of a commercial vehicle, a license for the same must be issued by the RTO of commercial vehicles.

Here’s the complete guide to navigating licenses and taxes for your restaurant/food brand in India 

Benefits of opening a Food Truck

1. Low investment, low risk: A food truck would not cost you more than INR 10 lakhs if you spend carefully.
2. Fewer resources required: One big advantage of a food truck is that you have a low dependency on resources. You can even get started with 1-2 resources (costing you around 4-8K INR per person).
3. Learning experience: If you wish to learn fast about the various activities involved in running a food business, this is a great starting point. You can gauge processes of analysing data, get a better grip on customer tastes and preferences, do important operational activities, manage marketing, promotions and so on.
4. Catering at events: Besides your everyday operations, you should consider building a few partnerships and cater at events, corporate festivals and more. The Curry Up Now food truck, for instance, sells excellent Indian street food and caters to a large number of tests and corporate events.

Top things to keep in mind while starting a Food Truck

Location

Your food truck will run well only if the location is good. Keep these factors in mind:

1. Vehicle Parking:  A truck would need a considerable amount of open space. Also, you need to ensure that you are allowed to park a vehicle in a specific area. You could check up with the local municipal authorities about this.
2. Visibility: You should choose an area which is frequently visited by people. Good areas might be outside popular parks, movie halls, and universities.
3. Competitor mapping:  Check out where your competition is stationed. Plan your location accordingly.

Your brand

A restaurant is as good as how it clicks with people. And above everything else, people love a good story. Your brand must have a unique story that people can associate with.

How do you build a strong brand?

1. Finalise a target audience: Decide whether you want to cater to a young crowd or families. That will help you with your content marketing and social media strategy.
2. Do competitor research: Find out how your competition is faring, the food they sell. Their promotion channels, their unique selling proposition, Everything you can dig up about your competition will be useful when you go about building your brand.
3. Build differentiators:  What makes you stand out and why should people buy from you? To stand out from the crowd, you must have a clear answer to this question. 
4. Finalise a name:  Choose a name that clicks with the target audience you finalised. One that resonates with them and one that they can relate to. Here are a few names for your inspiration: What the Truck, Eat and Run, Oh Buoy, What the Fork. Check out this resource if you need help finalising a name for your restaurant.
5. Finalise a logo and a theme: A logo is an important piece of your branding It will show up on all your designs, on your food truck, on your banners and promotions and all your online platforms and promotions. Make sure it speaks to your brand.

Quick example: Southish Food Truck based out of Chennai, India has been positioned as a strong South India food selling truck. Note the name, the images used on the truck, the leaf as part of the company logo all scream out South Indian food.

 

Health and Hygiene

Food trucks usually operate (cooking and selling) in very small areas. Business owners must be very mindful of kitchen hygiene, air pollution levels, and food waste management. 

Environmental pollution has had a drastic impact on the food truck business. For example, food trucks in Gurgaon have seen a dip in the business of about 40% owing to high levels of smog. 

News: Air pollution puts a break on Food trucks in Gurgaon

Here is a small checklist of health and hygiene pointers:

1. Make use of chimneys to control air pollution.
2. Conduct a check on the food waste twice a day and keep the cooking area clean.
3. Ensure that your staff maintains good sanitation.
4. Keep a few dustbins near the food truck. 

Marketing a Food Truck

Needless to say, good marketing and promotions will decide the success of your business. Keeping this in mind, we will point out some ways you could promote your food truck, both online and offline. 

Online Promotion Ideas

There are a large number of things you can do digitally. We have listed down a few of the key points here:

• Have your own website and app.  Build a brand, tell your story loud and clear on the website. Make use of attractive images and discounts.
• Tie up with the large Indian online food ordering aggregators like Swiggy and Zomato. Here’s the complete guide to get you started.
• Build a strong Social Media presence. Restaurants and food trucks make use of Instagram and Facebook to build their brand. Ensure that you are visible and active on social media channels.
• Search Engine Optimization: Shortlist keywords around your niche and build all your content around it. Be mindful of page load times, site meta-tagging, directory listing so that you could be found on Google.
• Run online ads: You could run advertisements on search engines and social to either increase online orders or build your brand awareness. Both ways, you must set aside some money and target audiences. You can also add custom audience sets and run your ads on them.
• Run CRM campaigns: Punch in customer details using POS and use customer data to run your restaurant CRM campaigns via SMS and Email.
• For a complete list of marketing ideas, check out this list.