Written by: Mthokozisi Nkosi (CEO and founder of ASC Consultants)
Food truck businesses in South Africa have gained a lot of popularity in recent years. Most people have explored this type of business as a form of additional income or hobby. In recent months, a lot of people have enquired how they should go about starting a food truck business. This is not surprising considering the Covid-19 impacts on the economy. It is not an exaggeration that Covid-19 left many of us jobless and without income and life has become unaffordable for many.
Several successful businesses have been started by emerging food business entrepreneurs without any background in food businesses. One of the easiest businesses to start is a Food Truck Business.
I also started this business at some point, and it was worth every minute. I must be honest; it required much hard work and perseverance than I had anticipated. A bit of background, I started this business with a friend who was a very good cook (traditional Xhosa food); we named our business Xhosa Xulture. I was mostly responsible for operations and financial management as I am not much of a cook. It was quite an experience! In this article, I would like to share what I learned from our business and some tips!
Below are the steps one could follow to succeed with this kind of business. To start, we made contact with event organisers in Port Elizabeth / Gqebera. In our case, we contacted the Baakens Valley Food Truck Friday organisers, who then asked us to bring a sample of our food to a tasting panel. Our advantage was that we were selling food that no one was selling at the time. We were selling traditional Xhosa food. Fortunately, they were impressed with the food and approved us to be part of the market. Once that was ticked off, we then went back to real work. I have outlined below the steps one can follow based on my experience.
Step 1: Determine Your Target Market – Decide who your target market is
It is important to outline your target market and check if anyone else is doing what you are doing. After that, if you have competitors, visit them, taste their food (preferably go with someone you are sure will give you an honest opinion), and make notes. This is important! You do not want to enter a saturated market and be worse than the businesses already trading. We learned quite a lot from this exercise. We saw how our competitors package their food, portions, present their food and most importantly, TASTE! Once this is done, compare your notes and discuss how you can improve.
Step 2: Cook Up a Storm and Formulate a Recipe!
Our second step was to cook up a storm! Here we experimented with different recipes so that we could create the best and the cheapest.
Suppose you are used to cooking with expensive ingredients; you may want to use substitutes provided the taste and quality of food will be similar. This is perhaps one of the most important things to do because it directly impacts your operational costs. Once this is done, compare the different recipes and choose the best possible. It is important to limit the menu. You do not want to have 50 items on your menu, it is very difficult to control quality if there are too many selections, and besides, you must be known for something.
Our clients knew our dumplings, tripe, and samp were to die for, and they only wanted that. We tried to introduce items such as pap, rice, and chicken stew, but we noticed they were not selling, so we had to get rid of them. It was not worth spending money on items that were not selling. One item we introduced at a later stage was traditional African beer, UMQOMBOTHI.
Step 3: Draw Up a Menu for Your Food Truck Business
Once you are satisfied with what you sell, it helps to draw up a recipe that everyone will follow. This helps prevent varied tastes of your product and the quantities of each ingredient you will use. This is important as it will inform how much money you will be spending on each of the ingredients, obviously depending on scale, and also it will inform your budget and the amount of money you will charge for each product. Your menu should appear appetising as possible. Use words that will make your potential customers salivate! If you can add images, that’s even better!
Step 4: Source Quotations For Hiring a Food Truck and Trading in Markets/Events
Source quotes for hiring a food truck and also trading in different events. This is important preliminary work because it will inform your budget. I would not advise buying a food truck outright unless you have the funds. We hired our food truck and branded it before we traded, then removed our branding after trading. It worked quite well for us.
Step 5: Comply With Relevant Laws And Regulations
We have written extensively on food regulations. The first and foremost is the regulation R638:2018, which allows you to get a certificate of acceptability or what most people refer to as a food business licence or permit. You will need a kitchen and a food truck for the Environmental Health Practitioner to inspect.
What will they check for in your kitchen?
- Cleanliness of your kitchen
- Space and ventilation where you prepare the food
- Pest activity (cockroaches, rats, flies or any other pests including signs of activity)
- Waste management practices in your kitchen
- Raw materials storage (including packaging)
- Utensils and equipment you are using (they will be focusing primarily on the cleanliness and suitability)
- Water availability in your kitchen
In your food truck, they will check the following:
- Water availability (normally, the food truck will come with a water container at the top)
- Space for food preparation
- Waste control measures (normally, the waste bin will be outside but still close to your food truck)
- Pest Activity (The inspector may even request proof of pest treatment certificate from the contractor).
- Health and Safety (Fire extinguisher is a must, especially if you are using gas and a griller)
- Temperature control (bain-maries if you are using them and how you control temperature)
- Protective Clothing (mostly a headgear to cover your hair)
If your food truck does not have a certificate of acceptability, you will need one, and they will follow the same inspection criteria outlined above. In addition to the above, they will want to ensure you have received the necessary accredited food safety training as the person in charge. Our training is accredited by the Health Professions Council of South Africa and FoodBeverages SETA.
Zoning is not necessarily an issue here if no one comes to your premises and you are only just preparing food to trade somewhere. Zoning for your kitchen will only be required if your business activities could impact the area where you are located. It is important to contact your local authority to confirm their requirements as some municipal by-laws differ. Zoning for a food truck location is not normally required as the premises are mobile. Your municipality should inform you where is it you are allowed to trade and where you are not permitted to trade.
Step 6: Contact Event Organisers and Hire the Food Truck
Contact your local event organisers, universities, schools, or businesses and see if you can get yourself space to trade. They will tell you their requirements, the cost associated with trade at their premises and whatever requirements you need to meet. You will need to make a list and ensure you comply. It helps to visit the organisers after you have attended the necessary training and complied with minimum regulatory requirements. Make sure you go there with your portfolio (pictures of your food, including the menu) and all business documentation (Certificate of Acceptability and your training). If you have staff that you have trained, include that, too!
Step 7: Decide on Portions, packaging and presentation.
We made the mistake of serving large portions at a considerable loss the first few months we traded until we realised we were barely breaking even. We then decided to reduce our amounts by smartly packing our products. We primarily wanted our clients to enjoy the food while it was hot, but for those who wanted to take it home, we provided packaging for that too. TIP: never use packaging that is too big for the food you serve. It is important to present the food in a way that will entice customers. Add some parsley there and garnish ?.
Step 8: Budget And Cost Analysis For Your Food Truck Business
Now that you know how much each ingredient will cost you, how much hiring a food truck will cost, and how much you will pay for trading at the different markets or events, you can draw up a budget. Three things will inform your budget; production costs and expected sales. Production costs include electricity, fuel, ingredients, food truck hiring, processing aids, packaging, labour, etc. This must be fully accounted for because if not, you will make a loss. It is important to do a thorough cost analysis; you will need to look at how much it takes to produce each food item and what you expect to make out of it, including how many units you need to break even and ultimately make a profit.
Step 9: Marketing Of Your Food Truck Business
Social media was our only marketing tool and proved very effective. But before our social media pages, we decided on our logo and branding. We ensured that we sought second opinions in everything we did, including presentations. After we were satisfied with the feedback, we started marketing our products on social media from preparation to the final product. This proved very effective as we showed our clients how clean our kitchen was and how nicely we prepared our food. It is important to market well in advance before you start serving. In this case, it could be weeks before your first event. See this as a build-up!
Step 10: Start Trading As A Food Truck Business
In the last step, the 10th step, go on trade and have a lot of fun. It is important to arrive at least 2 hours before trading starts. A lot can happen today, for example, forgetting a dish, utensils, etc. It would be best if you also prepared a plan of action, for example, who will be collecting money, who will be serving, who will be responsible for cleaning, who is responsible for greeting customers, etc.
I have found that for your operations to be effective, you need at least two people to be involved. Also, ensure your food truck is clean, wear something that identifies who you are as a brand (it makes your customers curious about you), and most importantly, be clean.
Also, when you serve, be neat. This is so very important. Serve the food hot! It also helps to have something to write your menu on. We used chalkboards and did some decorations, as you can see below. It proved to be very effective.
Starting a food truck business takes a lot of work and commitment, like any other business. Although this list of steps is comprehensive, there are many other things you will have to do in between as a food business owner. It would help if you were prepared to dedicate a lot of time to ensure your business succeeds. You can sell many products but not make money if you have not properly done a cost analysis. So, please do not fall into the same trap! I only learnt later how to do this properly. It is also prudent to note that food can be harmful if not properly handled; whatever you do, you must prioritise consumer health.