NO EASY STREET FOR FOOD TRUCKS
Spurred on by the Great Recession and the Food Network, dozens of local mobile restaurateurs believe they stand just one tasty recipe away from success.
Good food helps, but without adequate business knowledge and planning, plenty of food truck operations fail every year in Mesa County.
More than 80 mobile retail food operations were licensed in Mesa County so far this year, including food trucks, trailers and pushcarts, said Monique Mull, manager of the Mesa County Health Department Consumer Protection Program.
That’s up from 54 licensed in 2010 and just 12 licensed in 2008.
Eighty food trucks is far too many for the area’s population to support, said Annalisa Pearson, program manager at The Business Incubator Center.
Dale Dunning of Dale’s Ribs knows this well.
“We’re living the dream, except the dream’s turning into a nightmare,” Dunning said of his mobile restaurant, which offers a variety of savory food items — including smoked jalapeño pork ribs — between 11 a.m. and 2 p.m. on Fridays at the corner of 12th Street and Pitkin Avenue.
After working as many as 60 hours a week for the past year and investing $40,000 in the trailer he designed and built himself, Dunning said he is now prepared to sell his fully equipped mobile unit for $23,000.
“I’m losing my shirt, but what can you do? People around here just aren’t really into food trucks yet,” Dunning said.
Happy, shiny food truck vendors starring on reality television shows make it look easy, but it isn’t, Pearson said.
In truth, reality should look more like a detailed business plan that incorporates a properly configured vehicle, reasonable income projections, and a budget for complying with government regulation, among other costs. The list of potential expenses can be daunting.
Would-be Mesa County food truck operators need cash flow sufficient to service the debt on their vehicle, a significant monthly cost considering the total owed could range from $25,000 for a used mobile unit to $60,000 for one that is custom-made, depending on the number of bells and whistles installed, Pearson said.
Food truck impresarios also need up-front reserves sufficient to cover the cost of complying with 184 pages of state health regulations, especially chapter nine, the one devoted to mobile retail food establishments, Mull said.
And don’t forget insurance: General liability for slips and falls, product liability for tainted food and commercial auto insurance for collisions, to name just a few types of recommended coverage.
“You must have product liability because if somebody gets sick, you’re going to lose your shirt,” Pearson said. “A lot of people just don’t think about that.”
Mobile restaurant owners also need cash flow and reserves adequate to cover the costs of truck maintenance, food, electricity, propane, site fees and sometimes, rental for a portable electric generator when the festival a vendor wishes to attend doesn’t supply an outlet.
A broken-down truck means lost opportunity for the business.
Finally, assuming the owner wants to take an occasional day off, money to pay labor must also be budgeted.
Once all these are covered, payday is just over the horizon — about 18 months after opening, usually more, Pearson said.
Miscalculation in any one of these areas could spell disaster and often does, she said.
EVENT STRATEGY KEY
Only three months in the business, Adam and Shannon Padilla of Phatty’s Burritos, the bright yellow trailer at 320 S. First St., made what Pearson called the single biggest mistake novice vendors make — overestimating potential sales at a festival.
“After three months, we’ve had a lot of trial and error with that because this is tricky,” Shannon Padilla said.
On the one hand, buying and cooking in large quantities bring economies of scale into play. On the other, cooking too much can kill the business.
“We had two bad events and they wiped us out,” Padilla said. “We were told the (Grand Valley Rally) would attract 5,000 people and we cooked enough for 5,000 people. There were maybe 500 people out there over two days.”
Sales at the other disappointing event, Rock Jam, weren’t enough to cover the site fee, labor and food costs, she said.
Figuring out which events to attend, how much food to buy, how much to store, how much to freeze and how much to throw away is essential to a successful festival, Pearson said.
“That’s probably the biggest question and where the biggest mistakes are made,” she said.
“The festival will give you the number of people expected, which may or may not be accurate, it doesn’t matter,” Pearson said. “I tell my people, divide that number in half. Then divide that number by the number of food vendors scheduled to be there. And then, knock it back from there.”
“It’s a tough business,” said Ryan Duncan of Duncan’s Gourmet Street Food, which Pearson considers one of the most business-savvy food trucks operating in Mesa County today.
Duncan said he does not vend at local festivals, preferring instead to build up clientele at a number of established Grand Junction businesses. He uses social media and email to alert customers when he is on site and takes advance orders via texting so the food is ready when the customer steps up to pay.
Thanks to the support of family and friends, Duncan said his business is making money after its first year in operation, but there is plenty of room to grow. Unlike many other local food trucks, Duncan’s plans to stay in Grand Junction through the winter, he said.
The Padillas have been advised to move their operation out of town for the cold season. They are trying to figure out whether they should set up shop in warmer climates like Moab or Phoenix while making arrangements for the care of their four children and two dogs.
“We’re leaving it in God’s hands. God is leading us. He led us to this. And we just believe he’s going to show us where we need to go next and he’ll wind it up if it’s not meant to be. He’ll let us know when it’s time to quit,” Shannon Padilla said.