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If You've Ever Wanted to Have Your Own Food Truck, Here Are Some Costs to Consider!

Updated 18 Dec 2018 – By Contributor - Dropee


It’s easy to picture yourself running a food truck business when you see your favourite makcik nasi campur (you know, the one you always go to at lunch time) sell out her massive trays of food day in, day out. Sold out everyday, wah she must be making a s**t tonne of money!

But do you think it’s easy to be in the makcik’s shoes, selling food from her truck everyday? Before you get all excited and quit your job to join the makcik, let’s take a look at what it takes to start your very own food truck business.

In this article, we’ll discuss the legal requirements that you need to fulfill before you can operate your business without having to run away from the DBKL, the right methods to come up with your menu and theme, how you can market your menu to stay on top of the competition, and how you should calculate your costs before you roll out your food truck. 

So, what are we waiting for? Let’s begin your food truck journey!
 

Calculate your costs right

1) How much is the one-time start-up cost?



Like any other businesses out there, you’re going to need a decent amount of capital to kickstart your food truck business. How much you’re able to pump in will determine the size and capacity of your business. 

Then there’s also the legal costs and how much you’d need to actually buy a food truck, which you can learn more about in our Part 1 article of the same topic.

But if you’re in a hurry, check out the cost breakdown below that's just a basic guideline in order to properly kick-start your food truck business, courtesy of our friends at the SME Corporation Malaysia:
 
Item Cost
Register with SSM (compulsory) RM100
Register with bank (compulsory) RM200
Good Driving Licence (GDL) (compulsory) RM500
Local business permit from local authorities RM500/year
Working capital RM3,000 (minimum)
Food truck deposit (minimum 10% from total price, for eg: RM55,000) RM5,500
Food truck installment RM600/month
Sign boards and bunting RM300
Food truck sticker (basic) RM500
Equipment (kitchenette, gas, freezer, etc) RM4,000
Typhoid immunisation injection (compulsory) RM40 - RM80
Food serving course (compulsory) RM100 - RM200
Preparation of raw materials RM4,000 - RM8,000/month
Maintenance RM300

Of course, the amounts stated above are just a ballpark figure, your start-up costs will vary depending on things like:
  1. If you offer there are any add-on services.
  2. The type and brand of appliances used.
  3. If you have any connections that will allow you to get your marketing materials and raw  materials at a cheaper cost.
 

2. What about the raw materials and ingredients?



You didn’t think the foods you’re going to sell will magically appear like in the Harry Potter movies, did you? Running a food business means that you MUST stock up on your raw materials on a daily basis. The two categories under raw materials would be the dry (spices, rice, flour, grains, etc.) and fresh produce (poultry, meat, fish, eggs, vegetables, etc.).

One tip to avoid your costs adding-up rapidly is by stocking smart - especially for fresh produce. Not only do you need to be mindful of the expiry date to avoid unnecessary wastage, you’d also need to shop at the right locations for cheaper prices without compromising on the quality.

For example, if you need to buy beef, you can buy it at any Tesco store for RM30.99 per kg OR you can wake up at the crack of dawn to head to your local farmer’s market (aka pasar tani). According to this Malaysian blogger, she managed to get a kilogramme of fresh sirloin for only RM22 per kg! 

She also advised to make friends with the sellers in the markets and pasar borong; not only will you enjoy more discounts without having to haggle in the long-run, they’ll also reserve choice cuts and parts for you without you needing to ask!

EXTRA TIPS: Sign up with Dropee to know how it can help you to stock up smart.
 

3. How much do I need to pay for labour costs?



In a traditional brick-and-mortar setting, the cost of labour could take up a huge portion of your budget depending on the number of staff your business needs. Luckily for you, when it comes to food truck businesses, the number of employees can be drastically reduced - sometimes even down to only 2 people at a time! 

You don’t even need to hire full-time assistants (unless you have the money for it lah), just hire part-timers instead. But, just because they’re part-timers, don’t lah be so kedekut and pay them peanuts. Legally speaking, you need to pay a minimum of RM5.05 per hour to your workers, but if the workload is massive and you’re earning well, pay them more a bit lah. 

If we go with the minimum wage of RM5.05 per hour though, it’s not going to be a lot at all - it’s not like you’re going to operate 24/7 like the femes McDonalds kan? So for example, if you choose to run your business from 7pm - 12am on Mondays to Saturdays (peak hours for makan yo!), then it would compute to an affordable cost of RM151.50 per week.

Still too much for your budget? Ask your family members to help you out for free instead. Family kan, so kira halal lah right? You can also ask your friends to help you out when they can, maybe offer them a free meal as gratitude? Just remember to pay them for their kindness when your food truck business takes off!
 

4. Will there be any overhead costs?



Food truck businesses in general can save you quite a bit on overhead costs. Overhead costs here refer to the expenses that you’d need to keep your business running such as repairs, insurance, electricity and water bills, as well as advertising.

A quick example: You can eliminate the payment of hefty monthly shop rentals since you’d have already bought your own food truck. Other than that, you’re able to save in terms of electricity and water bills, considering a food truck is usually equipped with its own generator and water tank. 

According to the tariff booklet provided by Tenaga Nasional Berhad (TNB) Malaysia, a regular medium-voltage business would, on average, spend AT LEAST RM600 a month on electricity alone.

As  a food truck owner though, you do need to allocate some budget specifically for fuel by taking into account the consumption and distance travelled in your daily operations.
 

Coming up with a winning business plan

“If you fail to plan, you are planning to fail” - Benjamin Franklin


Just like what the quote says, planning is a crucial part of your business. Proper planning will not only guarantee a long-term success for your business, but will also allow you a more organised business operation with clear direction towards becoming a profitable venture.

Here are the important segments that you must include:
  • Business description - define the food truck industry in your region, the current outlook, future potential, the concept and theme, other markets and industries that may affect your business.
  • Market analysis - identify the market’s trend, set a target market, analyse the competition. Avoid having a similar menu to a competitor operating in the same area as you.
  • Organisation and management - explain in detail how you plan to run your business, establish standard operating procedures for both employees and yourself, as well as their responsibilities on a daily basis.
  • Product line - list out a detailed description of your menu, ingredients, procedures, cooking and food preparation processes, including the quantity intended for sale.
  • Marketing plan - lay down the details of how you plan to market your food truck business. Be it online marketing such as social media, paid advertising, influencer marketing, etc. or offline marketing such as flyers, radio commercial, etc.
  • Funding request and proposal - for this, you need to clarify how much funding you need to start your food truck business and exactly how you plan to get it. Let's say you decided to sign up for a personal loan or a government/private sponsored fund, specify the exact amount you want to borrow.
  • Financial projection - create a breakdown of your predicted expenses, as well as profits and losses for your first 3 years to give you a realistic expectation of the path you’re about to embark on.

Again, a strong foundation is important for any businesses, that’s why a well thought out business plan is essential. Other than that, a good business plan that is properly done will also create a better impression for your potential investors and sponsors.
 

Starting a food truck business doesn’t have to be such a headache!

We hope that this article has helped you have a better picture on how to first set foot into the food truck business. While there are many major points to consider, the main takeaway point here is to have your goals in clear focus and set a solid plan towards those goals. With lots of determination, plenty of hard work and a dash of good luck, your food truck business will soon soar!

And if ever you’re at a loss as to where to find your materials, why not drop by Dropee and get them at wholesale prices today!
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