Comprehensive business plan for a sustainable food truck. I created this plan for my MBA in Sustainable Business. While the business never came to fruition, I hope it may inspire some of you to venture to start your own food truck business. Just make sure it is sustainable! :)
1. Running Head: KARMA TRUCK BUSINESS PLAN
The Karma Truck: A Business Plan
2012 Capstone Project
Kristin McGinnis
Marylhurst University
Prepared for SUS 598: Integrated Capstone Project
Instructor: Gregory Worden
March 18, 2012
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Table of Contents
Acknowledgements.......................................................................................................................................7
Executive Summary.......................................................................................................................................9
Karma Truck Business Plan .........................................................................................................................11
History of Food Trucks............................................................................................................. 11
Modern Food Trucks................................................................................................................. 11
Detailed Description of the Karma Truck Business ................................................................. 12
Vision Statement....................................................................................................................... 12
Mission Statement..................................................................................................................... 12
SWOT Analysis ........................................................................................................................ 12
Business Model Canvas ............................................................................................................ 14
Customer Segments .................................................................................................................. 16
Key Activities ........................................................................................................................... 16
Key Resources .......................................................................................................................... 17
The Truck.............................................................................................................................. 17
Key Partners.............................................................................................................................. 18
Stakeholders.............................................................................................................................. 19
Market Definition........................................................................................................................................19
Consumer Preference................................................................................................................ 20
Healthy & Local Food .............................................................................................................. 21
Food Truck Trends.................................................................................................................... 23
Starting a Food Truck Business................................................................................................ 24
Demographics & Psychographics of Customer Segments........................................................ 25
Food Truck Market Size & Location........................................................................................ 26
Current, Emerging, and Potential Competitors......................................................................... 27
Value Proposition........................................................................................................................................29
Value Proposition...................................................................................................................... 29
Sustainability............................................................................................................................. 30
Key Activities...............................................................................................................................................31
Daily Management of Food Truck............................................................................................ 31
Sample Weekly Schedule. .................................................................................................... 32
Delivery of Products & Services............................................................................................... 33
Products & Services Offered .................................................................................................... 35
Menu ..................................................................................................................................... 36
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Branded items. ...................................................................................................................... 36
Composting services. ............................................................................................................ 37
Disposable serviceware......................................................................................................... 38
Composting truck-side.......................................................................................................... 40
Customer Relationships & Channels...........................................................................................................41
Marketing Four C’s................................................................................................................... 41
Customer Solution .................................................................................................................... 42
Customer Cost........................................................................................................................... 43
Convenience for Customer ....................................................................................................... 43
Channels & Communication with Customer............................................................................ 43
Advertising and marketing strategy...................................................................................... 44
Marketing Three P’s ................................................................................................................. 46
People........................................................................................................................................ 47
Procedures for maintaining accounting records.................................................................... 47
Hiring and personnel policies. .............................................................................................. 48
Process: ..................................................................................................................................... 49
Physical Evidence ..................................................................................................................... 50
Environmental effects. .......................................................................................................... 50
Social effects......................................................................................................................... 50
Financial Forecast .......................................................................................................................................52
Pricing Strategy/Cost Structure................................................................................................. 52
Revenue Streams....................................................................................................................... 52
Projected Break Even Point ...................................................................................................... 53
Start-Up Funds Requested from Bank or Investor.................................................................... 54
Monthly Operating Expenses.................................................................................................... 54
Fixed expenses...................................................................................................................... 54
Facility and truck expenses................................................................................................... 55
Commissary expenses........................................................................................................... 56
Salaries & wages................................................................................................................... 56
Workers compensation.......................................................................................................... 57
Variable Expenses..................................................................................................................... 57
Projected Income Statement ..................................................................................................... 58
Proposed timeline.................................................................................................................. 59
Monitoring, Evaluating, and Revising .........................................................................................................60
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Conclusion, Reflection, and Implications for Further Study .......................................................................62
References ..................................................................................................................................................63
Appendices..................................................................................................................................................70
Appendix A: Food Truck Features & Details........................................................................... 70
Appendix B: Food Truck Picture.............................................................................................. 71
Appendix C: Current, Emerging, and Potential Competitors ................................................... 72
Appendix D: Colorado Crop Calendar ..................................................................................... 73
Appendix E: Sample Breakfast Menu....................................................................................... 74
Appendix F: Sample Lunch Menu............................................................................................ 75
Appendix G: Branding Item Expenses per Year....................................................................... 76
Appendix H: Disposable Serviceware Comparison.................................................................. 78
Appendix I: Disposable Serviceware from Eco Products, Inc.................................................. 80
Appendix J: Unit Cost.............................................................................................................. 81
Appendix K: Break-Even Analysis........................................................................................... 82
Appendix L: Start Up Costs...................................................................................................... 83
Appendix M: Usage Calculation of Disposable Serviceware................................................... 84
Appendix N: Income Statement Year One, 2013 ..................................................................... 85
Appendix O: Income Statement Years Two through Five (2-5), 2014 through 2017 .............. 86
Appendix P: Sales Increases by Year & Through Business Life Cycle ................................... 88
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List of Tables
Table 1: Business Model Canvas............................................................................................................14
Table 2: Internal & External Stakeholders .............................................................................................19
Table 3: Sample Weekly Schedule.........................................................................................................32
Table 4: Marketing Branding Sales, Year 1 ...........................................................................................53
Table 5: Monthly Fixed Expenses, Year 1 .............................................................................................55
Table 6: Monthly Variable Expenses, Year 1.........................................................................................57
Table 7: Karma Truck Launch Timeline ................................................................................................59
Table A 1: Current, Emerging & Potential Competitors ........................................................................72
Table A 2: Branding Items, Start-Up Needs & Costing .........................................................................76
Table A 3: Year One Branding Items; Estimated Amount to be Sold & "Cost of Goods Sold"............76
Table A 4: Year Two Branding Items; Estimated Amount to be Sold & "Cost of Goods Sold" ...........76
Table A 5: Year Three Branding Items; Estimated Amount to be Sold & "Cost of Goods Sold" .........77
Table A 6: Year Four Branding Items; Estimated Amount to be Sold & "Cost of Goods Sold" ...........77
Table A 7: Year Five Branding Items; Estimated Amount to be Sold & "Cost of Goods Sold"............77
Table A 8: Recycled Content Cutlery Costing .......................................................................................78
Table A 9: Plant Starch Cutlery Costing ................................................................................................78
Table A 10: Plantware Cutlery Costing..................................................................................................79
Table A 11: Disposable Serviceware from Eco Products, Inc................................................................80
Table A 12: Unit Cost Calculations........................................................................................................81
Table A 13: Average Menu Cost............................................................................................................82
Table A 14: Cost Breakdown for Break-Even Analysis.........................................................................82
Table A 15: Details on Break Even-Analysis, including Contribution Margin & Margin of Safety .....82
Table A 16: Start-Up Costs ....................................................................................................................83
Table A 17: Usage Calculation of Disposable Serviceware...................................................................84
Table A 18: Income Statement Year One, 2013.....................................................................................85
Table A 19: Income Statement Years Two through Five (2-5), 2014 through 2017..............................86
Table A 20: Sales Increases by Year & Through Business Life Cycle ..................................................88
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List of Figures
Figure 1: Karma Truck with Tag Line......................................................................................................8
Figure 2: SWOT Analysis ......................................................................................................................13
Figure 3: Industry Statistics on Employee Size (Author's Image)..........................................................27
Figure 4: Value Proposition....................................................................................................................30
Figure 5: Sustainable Value Proposition ................................................................................................31
Figure 6: Karma Truck Daily Activity Breakdown................................................................................33
Figure 7: Branded Marketing Items........................................................................................................37
Figure 8: Marketing 4-Cs .......................................................................................................................42
Figure 9: Marketing Mediums................................................................................................................44
Figure 11: Marketing Strategy................................................................................................................46
Figure 12: Marketing 3-Ps......................................................................................................................46
Figure 13: Karma Truck Employee Breakdown.....................................................................................47
Figure 14: Employee Benefits ................................................................................................................48
Figure 15: Life Cycle Process of Food...................................................................................................49
Figure 16: Life Cycle Process of Non-Food...........................................................................................49
Figure 17: Karma Truck Business Footprint (Author’s Image) .............................................................51
Figure A 1: Truck Features (Author's Image).........................................................................................70
Figure A 2: #16 Mobile Kitchen Step.....................................................................................................71
Figure A 3: Colorado Crop Calendar......................................................................................................73
Figure A 4: Sample Breakfast Menu ......................................................................................................74
Figure A 5: Sample Lunch Menu ...........................................................................................................75
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Acknowledgements
First and foremost, I would like to acknowledge the fellow students who have been of the
utmost help to me throughout my graduate school journey at Marylhurst University: Julia Hall,
Keith Logan, and Kelsey Pauxtis-Thomas. My learning throughout the majority of my classes
was enhanced and maximized because of these three wonderful individuals. I would also like to
acknowledge the students who assisted in the peer review process for this business plan: Kerry
Mohondro, Westley Paxton, and Bann Mattson.
Secondly, I would like to thank the wonderful professors who aided in my learning
throughout my career at Marylhurst University, namely Darrel Burrell, John Cusack, and Greg
Worden.
Finally, I would like to thank my client, Rich Sabatowski, for providing valuable
feedback and guidance throughout the final process of completing this capstone.
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The Karma Truck
Food with Flavor & Flair
That is good for YOU and the PLANET!
Figure 1: Karma Truck with Tag Line
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Executive Summary
Research shows that consumers are demanding healthy food that is affordable, accessible,
and convenient. The Karma Truck will fill the needs of working professionals by providing a
food truck that is mobile and can travel to different parts of the Denver Metro Area. The Karma
Truck will provide attractive and flavorful food that not only satisfies the palate, but also
provides healthy and sustainable alternatives to what can be found elsewhere at other quick-
service restaurants (QSRs) or fast food establishments. Additionally, the service is quick,
convenient, and friendly.
The food truck trend has gained nationwide attention and popularity over the past five
years and predictions show a growing trend. Due to the dismal competition of food trucks in the
Denver Metro Area, the economic potential for the Karma Truck is great. Combine this with the
exceptional food of admired Chef Raul Salazar and the creative and well-managed marketing
strategies; the return on investment for the Karma Truck is impressive.
The founder of “The Karma Truck” created this five-year business plan to secure start-up
funding and to educate stakeholders and employees of the company’s vision, plans, and
processes. The company is still in the planning phase and intends to launch by Spring 2013. The
Karma Truck is not only concerned with the traditional bottom line, but the triple bottom line
(3BL) as well, which includes economic, social, and environmental concerns.
The Karma Truck anticipates year one sales of $200,987. In year one pre-bonus earnings
before interest, tax, depreciation and amortization (EBITDA) of 10% is expected. During the
growth stages of the business, years two through four, the profit margin is expected to increase to
27% in year two, 16% in year three, and 19% in year four (these are all percentages pre-bonus
and pre-EBITDA). Through the maturity stage, years four through ten, a steady 19% profit
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margin is expected. The Karma Truck expects a net income of $20,000 in year two and three,
$40,000 in year four, and $30,000 each year after. In order to help finance start-up costs and the
first year's operating, marketing, and payroll expenses, the Karma Truck owners are looking to
secure a one-time investment of $115,000.
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Karma Truck Business Plan
Food trucks are a hot trend in the United States. Over the last five years the food truck
industry has gained national consumer attention and research shows that the trend will continue
to grow. Food trucks have evolved over the past few centuries to what we see driving the streets
today.
History of Food Trucks
Mobile food, street food, street vending, and mobile street vending are all words to
describe the food truck industry. Loose terms used to describe food trucks are roach coach or
taco truck, but professional literature does not use these terms. Although only becoming a
mainstream industry in the last five years, mobile food has been around for centuries. In the
United States (U.S.) in the late 1800s, the “chuck wagon” was where cowboys gathered,
transported, prepared, and served their meals (Thompson, 2012). The wagons were fitted with
special compartments that helped to preserve food and keep it fresh for longer. The tail-end of
the chuck wagon had a flap that was lowered over a fire to cook food (Thompson, 2012; The
Food Truck Market, 2011).
Mobile food continued its journey to urban cities and military bases, where carts fed
hungry workers or military personnel. Since the 1960s, food vendors have been found in busy
cities selling hot dogs or tacos, and residential areas have come to know and love the sound of an
ice cream truck (The Food Truck Market, 2011).
Modern Food Trucks
Savvy food trucks, as they are seen today, have been transformed to implement the latest
in kitchen technologies combined with the convenience of a motorized truck (Mobile Food
12. KARMA TRUCK BUSINESS PLAN 12
Vending, n.d.). Trendy food trucks are now seen all over the country with modern, delicious
cuisines that are comparable to the best restaurants.
As this report will demonstrate, the Denver market shows a strong demand and consumer
interest for food trucks. At the current time the competition is minimal and there is strong
opportunity for emerging food truck businesses.
Detailed Description of the Karma Truck Business
The Karma Truck is a mobile food business that provides a food service to customers by
driving to and parking in given locations where the consumer can then walk up to the truck’s
window to order the food, wait for it to be prepared, and then enjoy the meal. Only food that is
good for the body and the planet will be served at the Karma Truck, but always with flavor and
flair.
Vision Statement
The Karma truck helps the working people of the Denver Metro Area live more
productive, happier, and healthier lives by providing quick, healthy, delicious and well prepared
food, served with good karma and a smile. The Karma Truck aspires to teach the community
that eating healthy and sustainably is both simple and affordable.
Mission Statement
To become the most popular food truck in the Denver Metro Area by providing quality
customer service and by serving the tastiest, healthiest, and most sustainable food available on
wheels, all for a reasonable price.
SWOT Analysis
It is the responsibility of the Karma Truck owners to understand and utilize all its
strengths within the market to capitalize on as many opportunities as possible. Environmental
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scanning of local, regional, and national food trucks, business and consumer trends will ensure
that the Karma Truck stays ahead of the competition. At the same time, the Karma Truck must
also be conscious that internal weaknesses and external threats exist. Working proactively and
monitoring the variables in a timely manner will ensure that challenges to business operations are
met and surpassed with efficiency and effectiveness.
Figure 2: SWOT Analysis
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Business Model Canvas
Table 1: Business Model Canvas
Key Partners
Managing Partner
Chef Partner
Joint ventures
Eco Products
Inc…paper and
plastic, silverware, etc
Organic food supplier
Collaborations with
Sustainable Food
Denver, Metro Denver
Farmers Market and
Colorado Fresh
Markets
organizations.
Key Activities
Food Preparation
Food Service
Marketing
Retail
Value Propositions
Convenience; speed of
service
High Quality Healthy Food
Accessibility
Consistency
Price
Sustainable
Offering your clients
consistently high quality
sustainable food, at a
reasonable price with
maximum convenience.
Customer Relationships
Personal Assistance with providing a sense of community.
Conduit for creating a sense of community surrounding the
truck
Medium customized, consumer, customer based
business….retail client and relationship driven.
“Friends….” Anti-McDonalds
Customer Segments
Niche Market: Health-conscious
consumer; LOHAS
Health conscious, good food
wanting, office workers who
desire speed, friendliness,
convenience and health.
Geographic specificity: North
Denver Highlands area,
Downtown Denver, Uptown
Denver, and the Denver Tech
Center in Greenwood Village,
CO.
Key Resources
Physical: Truck, High
Quality Food
Human: Key Chef;
Key Marketing
Manager
Intellectual: Internet
marketing platform
Intellectual: Brand
Channels
Communication: Blog, website, social media, flyer,
advertisement in papers, farmers market coalition
Distribution
Singular vehicular distribution truck
Sales: Face to face at the truck.
Cost Structure
Value Driven
High quality ingredients, quality & personal service
Revenue Streams
Income from sale of food on the truck
Income from sale of branding items
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High fixed costs, vehicle costs Fixed Menu pricing
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Customer Segments
The Karma Truck caters to a niche market: the health conscious consumer. More
specifically, the market segment that is used to describe these individuals is known as LOHAS,
which is an acronym for Lifestyles of Health and Sustainability. This market segment is
“focused on health and fitness, the environment, personal development, sustainable living, and
social justice” (LOHAS, 2010, para. 1).
The Karma Truck also targets customers that wish to have a healthier diet but claim they
do not or cannot due to affordability and accessibility. The service and product provided by the
Karma Truck are tailored to the health conscious consumer who is looking for a meal that is
accessible, convenient, and prepared quickly. The service times and location for the food truck
have been designed to serve primarily the traditional 8am-5pm business person. Providing
breakfast and lunch service, the menu and service style meets the needs of working people that
have limited time to grab a healthy meal. The geographic location of the target customer is the
North Denver Highlands area, Downtown Denver, Uptown Denver, and the Denver Tech Center
in Greenwood Village, CO.
Key Activities
The key activities for a food truck business involve the food preparation, food service,
and marketing. Marketing falls into a few areas of the business model canvas, but it is primarily
a vital key activity because unlike a business with a traditional store-front, the food truck is
mobile and does not stay in the same place. Daily marketing is an absolute necessity to
communicate to the customer where they can find the truck at any time. Without robust
marketing strategies, there would be limited food sales and food preparation would go to waste.
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Retail items will also be for sale at the food truck, such as: reusable bags, reusable water
bottles, and t-shirts. These items not only promote sustainability, but promote the Karma Truck
as well. Customers who bring their Karma Truck-branded reusable bag or water bottle when
they purchase a meal will receive a discount.
Key Resources
The food truck business plan includes physical, intellectual, and human elements. The
physical elements include the truck itself, complete with the kitchen equipment: refrigeration,
holding, and cooking equipment. High quality food is another physical element that is
imperative to running the business. Intellectual elements include the Karma Truck brand
strength and an Internet marketing platform with connections to customers. All elements of the
Internet marketing platform will be used on a daily basis to connect with current customers and
to gain new customers. The owners, who will run the operations of the truck, are the key
resources that fall under the human element. The President/Marketing Director and the Vice-
President/Chef have 25 years combined experience which demonstrates the valuable intellectual
element vital to a successful business.
The Truck.
The truck will be designed and built from All A Cart Manufacturing, Inc. in Columbus,
OH. The price of the truck will be $69,890. The truck is a hybrid-electric vehicle. According
to Easton Corporation, a leader in hybrid technologies for commercial vehicles, the definition of
a hybrid is “a vehicle that uses two or more distinct power sources to move” (Eaton Corporation,
2102, para. 2). Eaton Corporation explains that the creation of a hybrid commercial vehicle
involves “[combining] a vehicle’s traditional internal combustion engine with an electric motor
or a hydraulic launch assist system to move the vehicle forward and then through regenerative
18. FOOD TRUCK BUSINESS PLAN 18
braking the system recharges itself” (Eaton Corporation, 2102, para. 2). See Appendix A for
details on the truck’s features and Appendix B for a picture of the actual food truck.
Key Partners
The business will have two partners: the President who will manage all business and
marketing, and the Vice-President, who is also the Executive Chef. Raul Salazar, the Vice
President/Chef, has 15 years of management and culinary experience in all types of cuisine,
including upscale fine-dining. The local Denver Westword Paper has recognized the
extraordinary talents of Chef Raul Salazar. Chef Salazar brings forward world-class culinary
skills, as well as exceptional management, organization, and communication skills.
The managing partner, Kristin McGinnis, has 10 years of front of the house (FOH)
restaurant management experience, ranging from catering to quick service to fine dining.
Bringing forth well-rounded experience and expertise in administration, marketing, finance, and
management, Ms. McGinnis is a valuable human asset to the business. Furthermore, she is
obtaining a Masters of Business Administration degree in Sustainable Development from
Marylhurst University in June 2012.
Further key partners include collaborations with suppliers, local sustainable
organizations, and competitors. Collaboration goes hand in hand with sustainability, yet requires
more long-term focus (Rosen, 2011). Networking and collaborations are relationships that must
be valued, nurtured, and grown. Karma Truck will collaborate with as many local sustainable
organizations, for-profit or non-profit, as possible. For instance, Sustainable Food Denver,
Metro Denver Farmers Market and Colorado Fresh Markets organizations are key connections
and collaborators.
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Stakeholders
Table 2: Internal & External Stakeholders
Internal Stakeholders
Stakeholder Organizational Impact Priority
Kristin McGinnis Stakeholder/President/Marketing Director 1
Raul Salazar Stakeholder /Vice-President/Chef 2
To Be Determined (TBD) Investor/Bank 3
External Stakeholders
All A Cart, Inc. Food Truck Manufacturer 1
TBD Local & Organic Food Supplier 2
TBD Commissary 3
Eco Products, Inc. Disposables Supplier 4
TBD Hourly Staff 5
Alpine Waste & Recycling Composting Service 6
Factory Direct Promos Branding Items 7
Market Definition
The literature review for this business plan is focused on customer motivators and drivers
for how they make food purchasing decisions. The objective of the research obtained and
analyzed is to support the environmental scan of the market and competition, ensuring that the
Karma Truck is strategically positioned in the marketplace for success. The literature review
will touch on consumer preference, willingness to pay, healthy and local food, food truck trends,
starting a food truck business, the demographics and psychographics of customer segments, the
market size of the food truck industry, and current and emerging competitors.
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Consumer Preference
When running a food establishment, business owners and marketing directors must
understand what drives their consumers purchasing habits’. Even beyond price, “each consumer
must choose a) where to shop and b) what to purchase once there,” states Thilmany, Bond, &
Bond (2008, p. 1303). In recent years, increasing interests in sustainability have begun altering
food purchasing trends. The word “Locavores” even became the New Oxford American
Dictionary’s word of the year in 2007 (Thilmany et al., 2008). The definition from Oxford
Dictionary online reads: “a person whose diet consists only or principally of locally grown or
produced food” (Oxford University Press, 2012, para.1). Consumers are now thinking and
inquiring more about what they put into their bodies; eating locally or organically are only two
examples.
The psychological theory examining this behavior is known as perceived consumer
effectiveness (PCE) and is analyzed in the report by Thilmany, Bond, & Bond (2008). PCE
seeks to measure the extent to which a consumer believes his/her actions alone will achieve a
given goal. Thilmany et al. carried out studies on PCE and grouped the survey respondents by
their shopping preferences: direct occasionally, direct always, or no preference. This was
determined by where the respondents conducted their primary, secondary and seasonal purchases
and whether they purchased their food direct from the source occasionally, always, or had no
preference. More than 50% of survey respondents fell into the ‘direct occasionally’ category,
whereas 30% were classified as ‘direct always’ and 20% had no preference (p.1305). The survey
summarizes that ‘direct always’ respondents were motivated by supporting local businesses, as
well as the marginal impact of nutrition and freshness of the food products.
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One conclusion drawn from Thilmany, et al. (2008) is that certification programs, such as
the United States Department of Agriculture (USDA) organic program, are less effective than
buying direct from the source, especially with ‘direct always’ consumers. This is due to the
complex food and purchasing chain and the perceived trust of the product.
Similar literature by Blake, Mellor, & Crane (2010) explain that “place” is an important
part of the food system, or food chain. Place “helps to define what foods are consumed and how
people value and engage with these foods” (Blake, et al., 2010, p.412). This report also analyzes
the effects of convenience on consumers’ food purchasing, referencing Retail Restructuring and
Consumer Choice by Jackson and his colleague. The research concluded that consumers view
convenience as an important component of a shopping experience. The consumes surveyed
stated that convenience meant “being able to purchase everything at one time, being able to park
easily, being close to home, or being on the way to or from some destination where they must be
for some other activity” (Blake, et al., 2010, p.413). Although the people surveyed for this
article are from the United Kingdom, the data is nonetheless relevant to purchasing habits of
consumers in the United States.
Healthy & Local Food
The healthy food movement has gained attraction in the last decade thanks to such
documentaries as Food, Inc. and books such as In Defense of Food by Michael Pollan (Kenner,
2008; Michael Pollan, 2010). Michael Pollan’s mantra is to eat real food, “the sort of food our
great grandmothers would recognize as food” (Michael Pollan, 2010, para. 2).
The documentary Food, Inc., in particular, has lifted the veil on the production of many
of the food produced in the United States (U.S.). Food, Inc. touches on three main U.S. food
production companies: Monsanto, Smithfield, and Tyson. These companies are notorious for
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using marketing and branding to depict a picture that shows happy workers and well-cared for
animals that are treated humanely and are fed meals as nature intended (i.e. grass for cows).
Marketing of companies such as Monsanto, Smithfield, and Tyson creates a picture of a
company who is doing its part to take care of the environment. Food, Inc. showed the public that
this could not be further from the truth. In the film, journalist and author Eric Schlosser states
that there is a “world deliberately hidden from us” (Kenner, 2008).
Through the documentary, Americans were encouraged to vote with their forks every
time they sat down for a meal. Meaning, if Americans continue to demand healthy food that has
been produced responsibly, socially and environmentally, then food producers will be forced to
listen or they will be pushed out of the marketplace.
Eating trends among Americans have already changed for the better. Food trends for
2012 show that American’s are increasing their demand to know where their food comes from –
the farm to fork journey, as it is also referred – and are demanding food that contains less sugar
(Lempert, 2011).
Time Magazine states that, “[among] food purists, ‘local’ is the new ‘organic,’ the new
ideal that promises healthier bodies and a healthier planet” (Cloud, 2007, para. 3). With
increasing knowledge of sustainability, consumers are starting to think more about what they put
into their bodies and how their food purchasing decisions affect the planet.
Water and food scarcity issues have gathered global attention. Vast amounts of water
and land are required to grow food and raise livestock. Agriculture alone demands 100 times
more water than a human requires for personal use (Lenntech, 2009). Chronic hunger is
currently affecting 15% of the worlds’ population and with the population to reach 9.1 billion by
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2050, continued solutions for sustainable food production must be found (IFAD, 2011; GWP,
2010). Eating locally is just one way to help ease the pressures of commercial agriculture.
Food Truck Trends
Studies and reports reveal that the food truck trend is one that is here to stay. The food
truck movement was hottest in the year 2010. The trend was highlighted by emerging television
shows, such as The Great Food Truck Race on Food Network. In 2012, food trucks will remain
a strong trend according to Barclay (2011) from NPR online. According to the article by
Barclay, “Here comes the food trend lists,” 59% of the customers surveyed in a recent National
Restaurant Association survey stated that they would likely visit a food truck.
Likewise, Barker (2011) from USA Today also supports the hypothesis that food trucks
will likely continue to be a hot trend in 2012. Upscale, trendy food trucks will be the ones to
survive, not “construction-site coffee wagons and roach coaches,” states Barker (para. 4).
Lempert (2011) of Supermarket news concurs with the trend of food trucks continuing strong.
Lempert explains that food trucks are a solid business, not just because of convenience, but
because they provide a sense of community. With more than 30% of the U.S. workforce
consisting of independents, Lempert explains that they are looking for a “shared food
experience” and do not want to eat alone. A food truck fills this void, as customers gather to eat
and talk in a casual and convenient setting. Social communities such as Yelp, Foursquare, and
GoWalla show that individuals are enjoying joining in on “groups.” Combine this with an
activity that everyone must partake in every day – eating – and you have a successful
combination. Lempert also presents that ethnic food trucks are a top trend for 2012. Additional
trends are also presented that will be incorporated into this business model. The trends include:
Rising food costs
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Baby boomers remaining as the largest food influencers and purchasers
Farm to fork awareness increasing with emphasis on a personal connection with
the farmer
Consumers are looking for products that contain less sugar (Lempert, 2011).
Furthermore, Barclay (2011) indicates another trend for 2012 is vegetable desserts, which is
incorporated into the food truck menu.
Starting a Food Truck Business
Tanyeri (2011) offers many tips on opening up a successful food truck business. The tips
include:
Do not go cheap on the truck or the equipment inside
Focus on one or two key menu items that differentiate the brand and do not get
too carried away with offering too many items
Ensure that the food meets the clientele, meaning it should be “tasty, simple,
filling, and affordable”
Do not rip-off another business’ idea
Make sure to play fair when choosing where to park the food truck as to not
tarnish the business name
Rely heavily on social media as a means to communicate to consumers (p. 29).
Conversely, Flandez (2009) suggests that new food truck business owners buy a used
truck rather than forking out a lot of capital on a new truck. This Wall Street Journal article does
not discuss the pros and cons of spending money on a new truck, as Tanyeri (2011) explains
when details are given that in the long run it is wiser to not be cheap on the main asset of the
25. FOOD TRUCK BUSINESS PLAN 25
business: the truck. Tanyeri explains that the truck will be out operating in the elements, where a
flat tire, car accident, or a propane tank going down can happen at any time. Unlike a restaurant
that has other means of operating if one component breaks down, if the food truck breaks down
in any one way, it has to be closed for business part or all of that day. Flandez offers additional
advice for starting up a food truck business. Similar to Tanyeri, Flandez also advises that
location is key, expanding further to explain that some food truck owners even purchase a
parking lot so that they are guaranteed their “real estate” for operating the business. This way,
no one can “steal” your parking spot and customers always know where you are. Lastly, both
Flandez and Tanyeri explain that social media is an absolute must for any food truck operator.
Due to the fact that the business is mobile and can literally move anywhere, it is vital to keep
consumers updated frequently (on a daily basis, or more) on where they can find the truck.
Although the inception of the mobile food business in the U.S. began with cowboys, it
has been transformed over the last century. The food truck in the 21st
century is now a complex,
well-respected business model. All of the literature reviewed for this business plan supports the
background, design, and implementation of a solid food truck business plan.
Demographics & Psychographics of Customer Segments
Based on surveys of the 215 million adult population in the United States, the LOHAS
market is estimated at 41 million adults, or one out of four adults (LOHAS, 2010). The City and
County of Denver, not including surrounding suburban areas, has a population of 554,636. Of
this population, 24.5% are 19 years and younger, bringing the total adult population to 418,750
(Area Connect, LLC, 2012). Using the LOHAS statistics, this deduces the LOHAS population in
Denver to 104,687 adults.
26. FOOD TRUCK BUSINESS PLAN 26
Denver is known as one of the “thinnest” cities in the United States. Although many
cities report that their adults have weight issues, less than 20% of adults in Denver are reported
as being overweight. Denver also has one of the highest populations of baby boomers in the
nation, only less than two cities: Anchorage, AK and Santa Fe, NM (Home to Denver, LLC,
2011). Both of these demographics show an affinity towards eating healthy. The median
income of the Denver population is $39,910 and the number of men is almost exactly equal to
the number of women (Home to Denver, LLC, 2011).
Food Truck Market Size & Location
The U.S. Census Bureau codes the industry statistics for mobile food services as NAICS
722330. The most recent census conducted on this industry was in 2007 (US Census Bureau,
2011).
According to the 2007 U.S. census, there were 1,930 mobile food service establishments
which generated $570,063,000. Of these establishments, the annual payroll was $113,654,000
for 6,706 paid employees, which yields an average of $16,948 per employee. Of the 1,930
mobile food service establishments, only 1,143 are operated for the entire year, generating
$121,922,000 of the $570M (US Census Bureau, 2011). See Figure 3 below for a pie chart of
the industry statistics on employee size.
27. FOOD TRUCK BUSINESS PLAN 27
Figure 3: Industry Statistics on Employee Size (Author's Image)
Most establishments are run with a single employee, 42.1% to be exact, whereas 16.4%
operate with two employees, 15.2% with three to four employees, 7.8% operate with five to six
employees, and the trend continues to decrease as the number of employees goes up. These
percentages are based upon only the establishments that operate year round (US Census Bureau,
2011).
Current, Emerging, and Potential Competitors
There are approximately eighteen (18) competitors in the local Denver food truck market.
The majority of food trucks in the Denver are all very new to the marketplace, most being
established after the year 2009. Of these, only seven (7) are direct competitors of the Karma
Truck. The trucks that are considered indirect competitors are trucks that operate solely for
private events or that their concepts do not match that of the Karma Truck. The price average for
most food trucks ranges from $2 to $7, and some trucks menu items go as high as $9. The main
issue found with the majority of food trucks, regardless of their level of competition threat, is
Industry Statistics on Employee Size
One Employee
Two Employees
3-4 Employees
5-6 Emplyees
7-8 Employees
10-14 Employees
15-19 Employees
20-49 Employees
50-99 Employees
100+ Employees
28. FOOD TRUCK BUSINESS PLAN 28
that it is difficult to track down where the food trucks are currently operating. Only some food
trucks have websites and Facebook pages, of which most are only occasionally kept up to date.
This is a major concern, yet an advantage for the Karma Truck, because even if the brand name
of the truck is well known, tracking down where to locate and buy their products is a challenge.
As a consumer, if the product cannot be located in a reasonable amount of time, they will go
elsewhere. Additionally, only some trucks have links to other pages, such as Yelp (see Appendix
C for specific details per truck).
The direct competitors of the Karma Truck include: Steubens, Biscuit Bus, Pince Tacos,
and Biker Jims, The Denver Cupcake Truck, and Pizza on the Platte Mobile. The concepts of
each of these food trucks is geared around comfort food. Surprisingly, the strongest competition
is the food trucks that have emerged most recently. Steubens and Biker Jims both entered the
marketplace in 2011 and have solid marketing and brand recognition. This is in part due to their
sister brick-and-mortar restaurants also located within the Denver metro area. This is also true
for the Biscuit Bus, which also has a restaurant under the same name. Even though the name
says “dessert”, the The Denver Cupcake Truck is a direct competitor because they also sell
sandwiched and salads, target working business people, and have well-organized marketing
strategies using their website, Facebook, Twitter, and other means.
The indirect competitors are: Gastro Cart, Brava Pizzeria della Strada, Sugar Lips Mini
Donuts, The Crepe Crusaders, and Walnut A-Go-Go. The Gastro Cart and Brava Pizzeria della
Strada are not mobile trucks, rather they are mobile food carts that move around the downtown
Denver area during the week. Sugar Lips Mini Donuts sells only donuts and although Walnut A-
Go-Go is listed on the Denver Food Trucks Website there were not any other reference as to
where the business can be found. From the name, The Crepe Crusaders, it would appear that
29. FOOD TRUCK BUSINESS PLAN 29
they are a direct competitor, as they also serve breakfast. This truck only does private events,
however, so this would not threaten the market of the Karma Truck.
There is one emerging competitors that the Karma Truck should be mindful of: Blue
Bear. This truck serves sustainable food that is also comfort food, such as locally-sourced bison
lamb-sliders, and chicken drumettes. They also have a lower price point than the Karma Truck,
with prices averaging $3 to $4.
Value Proposition
By offering healthy and sustainable food at a competitive price, the Karma Truck
provides the solution of convenience to consumers in the Denver area. The value proposition
also reaches beyond the consumer, providing sustainable solutions to many of the environmental
and social problems that are present on a local, national, and global level.
Value Proposition
The Karma Truck is a value-driven business that provides convenience, accessibility, and
consistently high quality sustainable food at a reasonable and competitive price. The Karma
Truck provides convenience and accessibility to the customer in two ways: by driving directly to
their place of work and by providing healthy meals prepared quickly that can be eaten with the
community surrounding the truck or taken with them back to their workplace or home. The food
truck will also provide food that is consistent in quality and price. Consumers can rely on the
Karma Truck to provide food that is affordable, fresh, high quality, trendy, delicious, and
sustainable.
30. FOOD TRUCK BUSINESS PLAN 30
Figure 4: Value Proposition
Sustainability
The Karma Truck has the potential of having significant positive social and
environmental impacts in and around the Denver area. The Karma truck will help reduce
automobile emissions on the consumer end, by reducing how many consumers have to drive to
pick up their morning or afternoon meal. The Karma Truck, using a hybrid engine, will also use
fewer emissions to bring the product to the consumer.
Providing sustainable food options, sustainable disposable serviceware, eco-friendly
branded items, and composting will educate consumers and promote sustainable habits within
the Denver area.
Value
Convenience
Accessibility
Friendly
Sense of
Community
Resonable
Price
Quality Food
31. FOOD TRUCK BUSINESS PLAN 31
Figure 5: Sustainable Value Proposition
Key Activities
This section will provide details of all key activities of the Karma Truck. Each key
activity has been strategically planned to meet the demands of consumers, sustainability
demands, demographics, and trends within the food market and food truck market. Furthermore,
the President has strategically planned activities to optimize on competitors’ weaknesses and to
be more attractive than the strengths of competitors.
Daily Management of Food Truck
The Karma Truck will operate for breakfast and lunch service every day but Sunday. The
truck will operate in rotating locations Monday through Saturday. The location for breakfast will
vary from the location for lunch every day to maximize the potential customers and sales for the
day. Each week will not be the same, as there are 35 different locations where the Karma Truck
Sustainability
Sustainable
Food
Hybrid Truck
Composting
Compostable
& Post-
Consumer
Serviceware
Eco-Friendly
Branded
Items
32. FOOD TRUCK BUSINESS PLAN 32
can legally operate in Denver County. The daily and weekly schedule will be revised based on
sales and consumer demand.
It will take approximately three to six months for the President to determine and weigh
out the best operating locations for the truck. After this time, the Karma Truck will make a set
two-week schedule for customer ease and revenue maximization.
Sample Weekly Schedule.
Table 3: Sample Weekly Schedule
Day Breakfast Location Lunch Location
Monday Tamarac & I25 (SW 163) Yale & Colorado Blvd, University Hills
(SE 115)
Tuesday 18th
& Downing, adjacent to St.
Joseph’s Hospital (NE 002)
52nd
& Federal, adjacent to Regis
University (NW 046)
Wednesday Exposition & Colorado Blvd.,
Belcaro Shopping Center (SE 062)
Cherry Creek South & Colorado Blvd,
Cherry Creek Shopping Center (SE 049)
Thursday 1st
& Lowry, East Lowry (SE 032) Mississippi & Havana (SE 199)
Friday University & I25, adjacent to
Denver University (SE 086)
Broadway & Alameda (SW 029)
Saturday Colfax & I25, East (SW 004) 26th
& Zuni, South Highlands and adjacent
to Mile High Stadium (NW 011)
The Karma Truck will maximize customers and sales by strategically choosing parking
locations that pair with popular Denver events, such as the Taste of Colorado, concerts, Bronco’s
games at Mile High Stadium, Rockies’ games at Coors Field, and so forth. The Karma Truck
will also work private events, upon request.
33. FOOD TRUCK BUSINESS PLAN 33
A kitchen will be rented for the majority of the food preparation (prep). The remainder
of the food prep will be done on the truck during operating hours. Breakfast operating hours are
from 8am-10am and lunch from 12pm-2pm.
Immediately following lunch service, clean-up will be conducted and the truck will be
refilled with gas. After the truck has been parked for the night, administrative items will be
taken care of, this includes: food purchasing by the chef and marketing duties and supplies
purchasing by the manager.
Figure 6: Karma Truck Daily Activity Breakdown
Delivery of Products & Services
The Food Truck Guide by the City & County of Denver (2011) provides specific rules
and regulations to operating a food truck in Denver. Within City and County limits of Denver, a
food truck can be parked a) on the street, b) on private property, c) in a public park, or d) as part
of a large public event. A business license is required for each of these areas and a zoning permit
is required if operating at any location more than 30 minutes. Furthermore, the truck may only
5am-
7am
• Food
Prep/
Travel to
Location
8am-
10am
• Breakfast
Service
10am-
11am
• Food
Prep/
Travel to
location
12pm -
2pm
• Lunch
Service
2pm-
3pm
•Clean
Up/Drive to
Overnight
Park
3pm-
4pm
• Admin/
Marketing
34. FOOD TRUCK BUSINESS PLAN 34
be parked in approved zoning areas. If operating for less than 30 minutes a zoning permit is not
required and the truck can be parked in any area, regardless of zoning.
The approved zoning areas for Denver include: all downtown areas except “Golden
Triangle, Arapahoe Square and Civic Zone Districts (D-GT, D-AS, D-CV)”, and other locations
throughout the city in zones “S-CC, S-MX, E-RX, E-CC, E-MX, and C-MX, industrial, and OS-
B” (City & County of Denver, 2011, p.3). Zoning areas do not include residential areas. The
complete list of approved zoning sections where the Karma Truck will operate are:
A. 18th
& Sherman, Uptown (NE 001)
B. 18th
& Downing, adjacent to St. Joseph’s Hospital (NE 002)
C. 17th
& York, adjacent to City Park (NE 003)
D. 26th
& Welton, Five Points (NE 024)
E. 26th
& Zuni, South Highlands and adjacent to Mile High Stadium (NW 011)
F. Interstate I-25 (I25) & 32nd
, East Highlands (NW 017)
G. 29th
& Speer, West Highlands (NW 018)
H. Pecos & 52nd
(NW 045)
I. 52nd
& Federal, adjacent to Regis University (NW 046)
J. Colfax & Monaco (SE 008)
K. 8th
& Monaco (SE 015)
L. 6th
& Broadway (SE 023)
M. 1st
& Lowry, East Lowry (SE 032)
N. 6th
& Yosemite, West Lowry (SW 033)
O. Cherry Creek North & Colorado Blvd, Cherry Creek Shopping Center (SE
040)
P. Cherry Creek South & Colorado Blvd, Cherry Creek Shopping Center (SE
049)
Q. Leetsdale & Monaco (SE 058)
R. Leetsdale & Quebec (SE 058)
S. Exposition & Colorado Blvd., Belcaro Shopping Center (SE 062)
T. University & I25, adjacent to Denver University (SE 086)
U. Colorado & I25 (SE 094)
35. FOOD TRUCK BUSINESS PLAN 35
V. Evans & Monaco (SE 097)
W. Yale & I25 (SE 104)
X. Yale & Colorado Blvd, University Hills (SE 115)
Y. Hampden & Monaco (SE 122)
Z. Hampden & I25 (SE 124)
AA. Hampden & Happy Canyon (SE 124)
BB. Tamarac & I25 (SW 163)
CC. Alameda & Havana (SE 190)
DD. Mississippi & Havana (SE 199)
EE. Colfax & I25, East (SW 004)
FF. Colfax & I25, West (SW 005)
GG. 10th
& Osage (SW 013)
HH. Broadway & Alameda (SW 029)
II. Morrison Road between Sheridan & Federal (SW 036)
The complete zoning map for each of these areas can be found in the attached appendices. The
folder labeled “Appendices: Zoning Maps” contains the relevant PDF files.
Furthermore, city and county regulations state that the food truck may operate for a
maximum of four consecutive hours in one location, and only between the hours of 8am and
9pm. In addition, only one mobile food operation may be in one zoning area at a time and it
must be at least 200 feet away from any other food or drinking establishment, which includes
other food trucks (City & County of Denver, 2011).
Products & Services Offered
The Karma Truck will provide fresh, high quality, sustainably produced and sourced
produce and meat products. The Karma Truck will make every effort to limit any food that was
produced using Genetically Modified Organisms (GMOs). Eating food that contains absolutely
zero GMOs is no easy task, as shown by the popular blog A Month without Monsanto, where
36. FOOD TRUCK BUSINESS PLAN 36
author April Davila tracked her daily life by eating no food containing GMOs and using no
products using GMOs (Davila, 2010).
Produce will be sourced from all local Colorado farms. Additionally, the menu will be
geared around the seasonality of local produce (see Appendix D for the Colorado Crop
Calendar). Meat will be limited on the menu. Any meat that on the menu will be locally
produced, humanely raised, and ensured that the animals are not fed any artificial hormones or
antibiotics.
Menu
There will be two tiers of menu pricing: “Green” and “Greener”. “Greener” items will be
less expensive as they have a lower carbon footprint than menu items on the “green” menu. As
shown by Appendix E, for breakfast, the price of menu items under the green menu will be $6.00
and menu items that are greener will be priced at $4.00. The greener menu for lunch will be
$7.00 and the green menu will be two dollars more at $9.00 (see Appendix F). While customers
are inherently programmed to make many of their food purchasing decisions due to price,
through the Karma Truck’s menu offerings, the consumer is given a price incentive to eat
“greener.” Reference Appendices E and F for sample breakfast and lunch menus.
Branded items.
The Karma truck will sell eco-branded products, as part of the marketing strategy and to
increase awareness of sustainability. The eco-branded products include: reusable canvas bags,
stainless steel reusable water bottles, and t-shirts. Factory Direct Promos will provide these
products; the company is Global Organic Textile Standard (GOTS), Fair Trade, and ISO 9001
certified (Factory Direct Promos, 2012; International Working Group on Global Organic Textile
Standard, 2010). Purchasing price details and estimated usage for the branded items can be
37. FOOD TRUCK BUSINESS PLAN 37
found in Appendix G, Table A2-A7. The Karma Truck logo will be fixed on each of the items
shown below.
Bamboo
Biodegradable
Bags
25 oz.
Stainless Steel
Bottle with
Carabineer
Eco Shirts
Figure 7: Branded Marketing Items
Composting services.
To support, encourage, and teach more sustainable habits, composting services will be
available at the Karma Truck. The services are not only for the customer to dispose of food
waste and other compostable materials, but also for the kitchen’s use and reducing the overall
carbon footprint of the Karma Truck.
Mojo (2001) noted that approximately 26.9 million tons of food waste is sent to landfills
annually, according to the U.S. Environmental Protection Agency’s (EPA) 2003 Municipal Solid
Waste Characterization (p.291). Additionally, over 15 million tons of paper packaging and over
10 million tons of plastic packaging are sent to landfills each year (Mojo, 2001, p.291).
Through eight years of research and testing, the American Society for Testing and
Materials (ASTM) developed criteria and labeling standards for compostable products. The
criteria are as follows:
Disintegration: Materials must disintegrate rapidly under composting conditions,
so that they are not visible in the finished piles, nor do they wind up on the
screens.
38. FOOD TRUCK BUSINESS PLAN 38
Biodegradation/mineralization: Materials must biodegrade quickly and
completely during composting or shortly after the finished product is used.
Rate: Both of these processes must occur at an acceptable rate, one that is
consistent with the other materials and the composter’s expectations.
Safety: The disintegration and biodegradation must not generate any toxic
compounds that will destroy the utility of the compost. Nor must the products
contain high levels of regulated metals (Mojo, 2007, p. 291-292)
The Biodegradable Products Institute (BPI), in collaboration with the U.S. Compostable
Council, regulates the “Compostable Logo” (Mojo, 2007, p. 293). Any products desiring to use
the logo must be tested in approved third-party laboratories to ensure compliance with the ASTM
criteria.
Disposable serviceware.
Plastic knives, forks, and spoons; paper or Styrofoam plates; plastic or Styrofoam cups;
and paper napkins are common among quick-service restaurants (QSRs). Many QSRs use
disposable service-ware due to its convenience and low cost. The environmental impacts of
using non-sustainable service-ware are immense.
Petroleum is used to make plastic and approximately 4% of the world’s oil production is
used solely for plastic production. Chemicals in traditional plastics, such as bisphenol A (BPA)
which are known to cause adverse reproductive health effects, are absorbed by the human body
through direct exposure and through indirect exposure when food or beverages absorb the
chemicals from the plastic food packaging. Nearly 93% of American’s have “detectable levels
of BPA in their urine”, as reported by the United States Center for Disease Control (CDC)
(Knoblauch & Environmental Health News, 2009, para. 15).
39. FOOD TRUCK BUSINESS PLAN 39
Traditional plastic not only poses health risks to humans, it also puts undue stress on the
environment. Plastics dumped into landfills are known to emit dangerous chemicals into the
groundwater. If the plastic is not disposed of properly it tarnishes the natural landscape, and
threatens animal and marine life, as they can be harmed or killed from ingesting plastic or from
becoming tangled or trapped by it (Knoblauch & Environmental Health News, 2009).
Styrofoam, or polystyrene foam, is another form of plastic that is widely used in the food
industry due to its quality insulation properties. Styrene, the basic chemical building block of
polystyrene, is known to cause severe environmental health concerns. The Environmental
Protection Agency (EPA) and the International Agency for Research on Cancer (IARC), have
classified styrene as a possible carcinogen. Research shows that chronic exposure to styrene
causes damage to the central nervous system and acute exposure causes skin irritation,
respiratory issues, and gastrointestinal issues. Just like BPA, the toxic chemicals in Styrofoam
leach into the food or beverage they are holding and the environment suffers the same effects, as
from plastics, when sent to landfills or when disposed of improperly (Earth Resource
Foundation, n.d.)
Eco Products, Inc., a company based in Boulder, CO, makes disposable products that are
sustainable, as well as approved by the ASTM and BPI. If the plastic or paper disposable is not
compostable by ASTM standards, the product is made from post-consumer products. All
disposable products to be used by the Karma Truck will be purchased from the local company
Eco Products, Inc. (Eco-Products, Inc., 2011b).
The plastic utensils to be used are “plant starch cutlery,” which is made from “70%
renewable materials”, as “compared to traditional cutlery that is made from 100% virgin
plastics” (Eco-Products, Inc., 2011b, para.1). Eco Products, Inc. also offers “recycled content
40. FOOD TRUCK BUSINESS PLAN 40
cutlery” and “plantware cutlery,” however the “plantware starch cutlery” was chosen due to a
balance of cost and sustainability (see Appendix H, Table A8-A10 for cost breakdown by type).
The plantware napkins are made from 100% post-consumer recycled materials. Soup
bowls are made with 24% post-consumer recycled materials and are fitted with EcoLids® that
are made from 25% post-consumer recycled materials. Square sugarcane plates will be used for
the majority of menu items. These plates are made from 100% reclaimed and sugarcane, a
rapidly renewable resource. They are also compostable by ASTM standards. For beverages, the
GreenStripe® cold cup will be used, which, just like the fitted lid, are made with a plant-based
plastic and are certified compostable. The unwrapped green straws that will be used are also
made from PLA corn plastic and are certified compostable (Eco-Products, Inc., 2011b). For
pictures of the disposable serviceware and additional details reference Appendix I.
Composting truck-side.
Composting will be provided to customers “truck-side” and be used by the Karma
Truck’s staff for food waste and other compostable items. The vendor that will be used for this
service is Alpine Waste & Recycling. The following items are accepted by this composting
program:
Food Waste
Coffee Grinds & Filters
Cardboard (including waxed)
Produce
Plants & Flowers
Paper Napkins/Paper Towels
Pizza Boxes/Paper Board
Wooden Stir Sticks
Compostable Dinnerware
Paper Bags
Waxed Paper
Compostable Trash Bags (Alpine Waste & Recycling, 2012, para. 2)
41. FOOD TRUCK BUSINESS PLAN 41
Alpine Waste & Recycling will provide three 68-gallon totes with lids and will provide
weekly pick-up services. Alpine Waste & Recycling takes the compost pick up to large
composting facilities located in Bennett, CO (McCoy, 2012).
Customer Relationships & Channels
Anyone can sell a product, but what does it take to effectively market a product? The
basic functions of selling are marketing functions of the past, which include: product, price,
place, and promotion. These functions of selling are simply trying to get a product off the
shelves and the needs or preferences of the customer are not taken into consideration.
Marketing Four C’s
A strong marketing plan contains the seven revised components of the marketing mix:
customer solution, customer cost, convenience for the customer, communication with the
customer, people, process, and physical evidence. These seven components delve into the needs
and wants of the consumer, using the customer to guide the process of designing the product,
advertising, ensuring satisfaction, and continually looking for feedback from the consumer on
how to improve (Marcus, n.d.).
42. FOOD TRUCK BUSINESS PLAN 42
Figure 8: Marketing 4-Cs
Customer Solution
The Karma Truck provides healthy and sustainable meals to working people who do not
have the time to drive to get breakfast or lunch. By parking directly next to office buildings and
in other prime locations, customers must simply walk down the stairs of their workplace, or at
most, walk a few blocks to reach the truck. From there, it takes only minutes to order and have
the meal prepared fresh to enjoy at the truck or taking the packaged meal elsewhere.
The Karma Truck will provide personal assistance to customers by providing convenient
and accessible service face-to-face at the truck. The truck is the conduit for providing a sense of
community, which has been defined as a strong food trend for 2012 (Lempert, 2011). The
service and food is customized in a sense. If there is a large demand for the food truck to be in a
specific location on specific days or more often than other locations, this will be taken into
consideration. Customization will also be provided to meet food allergy or preference requests.
•What solution does your
product or service provide?
Consumer
Solution
•what is the total cost to the
user (as opposed to the
price you set)?
Customer Cost •what is involved in
accessing the solution?
Convenience
•how will you interact with
your current and proposed
customers? Include
messages, prototype ads,
surveys, and visual aids
where possible.
Communication
with Customer
43. FOOD TRUCK BUSINESS PLAN 43
In addition to the relationships that will be generated and maintained through Facebook
and Twitter, an informative blog with information on sustainable eating and green living will
personalize and add value to the service the Karma Truck provides. Furthermore, trivia and
other marketing incentives will personalize the food truck experience and encourage a sense of
fun and community around the truck.
Customer Cost
There is little cost to the customer when they visit the Karma Truck. Unlike having to
travel to a brick and mortar food establishment and the time and transportation costs associated,
the Karma Truck comes straight to the customer.
Convenience for Customer
Convenience is a primary value proposition of the Karma Truck. Customer convenience
will be maximized by strategic planning and structured marketing. If the location of the food
truck is convenient, more customers will come.
Channels & Communication with Customer
The Internet will provide the main channel platform. Daily “tweets” via Twitter and
posts via Facebook will communicate to the customer where the Karma Truck will be each day,
including if the truck will be in multiple locations in one given day.
A weekly newsletter will be sent out via email, as well, to inform customers where the
truck will be located all week. Many working class people do not have a Facebook or Twitter
account, so not providing information to them in another way would be limiting the customer
base. The email database will be built through people entering their email addresses (consenting
to be sent a weekly basis) on 1) the Karma Truck website, 2) Facebook, 3) Twitter, or 4) though
a sign-up sheet at the physical truck.
44. FOOD TRUCK BUSINESS PLAN 44
Many cities, such as Columbus, OH, have Facebook pages that connect multiple food
trucks together on one page. Denver does not have such a page. Karma Truck’s owners will
start and administer this page to encourage all food truck business owners to work together to
fuel the food truck industry in the Denver area. Karma Truck customers and other businesses
will be encouraged to join this joint food truck Facebook page.
The channel in which the food is physically served to the customer is through the singular
vehicle truck. Sales will be made face-to-face at the truck window.
Advertising and marketing strategy
The Karma Truck will be highly differentiated from competitors by its marketing
strategy. The Internet will be the primary marketing platform; not only will this save the
company money but will also save on the natural resources of using paper. The Karma Truck
will have a website, blog, Facebook Page, Twitter account, Yelp page with check-in offers, and
tags on Pinterest.
Figure 9: Marketing Mediums
For the first year, paper flyers must be utilized to spread the awareness of the new
business and gain first-time customers. Simple paper flyers will be dropped off at businesses in
Website
Blog
Twitter
FacebookPinterest
Yelp
45. FOOD TRUCK BUSINESS PLAN 45
target Denver neighborhoods and businesses. The flyers will be created by the
President/Marketing Director and printed with the local printing company Same Day Office
Supplies. Initial customers will also be gained through using Yelp check-in offers. Yelp is a site
that offers reviews of current businesses, but additionally, through the mobile application, when
you are close to the physical location of the truck you are able to “check-in”. Not only does this
show up on the customer’s social network pages to tell their friends, they will also receive a free
drink for showing their check-in to the Karma Truck cashier.
The marketing strategy will gain further strength and be differentiated from competitors
with the sale of branded Karma Truck retail items. Customers that bring or wear their branded
Karma Truck sustainable items will receive a 10% discount on their meal for that day or a free
drink.
Further promotions will be offered to repeat customers. Customers will be encouraged to
keep up with the Facebook (FB) site, Twitter, and the blog as a means to get a discount on their
meal. In addition to checking Facebook for the location of the truck, the page will feature a daily
trivia question on sustainability. Those that come to the Karma Truck and answer the question
correctly will receive 20% off their meal.
Community support promotions will also be featured as a marketing strategy, during the
winter months especially. Customers that bring a canned food donation for local charities, which
the Karma Truck will distribute, will receive 10% off their meal.
46. FOOD TRUCK BUSINESS PLAN 46
Figure 10: Marketing Strategy
Marketing Three P’s
The 3-P’s include people, process, and physical evidence. These strategic marketing
components are important to sustainability positioning within the marketplace. Understanding
the triple bottom line of social, environmental, and economic elements will strengthen the brand
and attract customers.
Figure 11: Marketing 3-Ps
Branded Items
Daily FB Quizzes
Community
Support
•10% discount on Meal or free drink
with purchase of meal
•*Valid anytime. Offer good for
discount on one meal only. cannot be
combined with other offers
•Answer trivia to get 20% off one meal
•*cannot be combined with other offers
•Promotional times only
•Receive 10% off meal
•having the right ones;
in a broader sense,
the social impact on
stakeholders
People
•a systemic view that
includes all major
aspects of the value
chain
Process
•the environmental
impact of the process
Physical
Evidence
47. FOOD TRUCK BUSINESS PLAN 47
People
The first year, the Karma Truck will employ three people: the President/Marketing
Director, the Vice President/Executive Chef, and one hourly employee. The President/Marketing
Director will be responsible for all marketing activities, including all daily marketing and
administrative duties. The President/Marketing Director will also assist with operations at the
food truck for all services, assisting with taking orders, collecting payment, and preparing orders.
Figure 12: Karma Truck Employee Breakdown
Procedures for maintaining accounting records.
The President/Marketing Director will perform all daily accounting duties. This includes
management of the cash drawer and payments received by credit card. Daily record keeping will
include tracking of sales, purchases, inventory, and maintenance of a rolling cash flow statement
and rolling balance sheet. An accountant will be hired as contractor to handle the payroll and
•Marketing
•Service Operations
•Pre and Post-Service Operations
•Basic Accounting
President / Marketing Director (Full Time)
•Food Prep before and during service
•Management of Hourly Staff
•Assisting with Marketing
•Inventory
Vice-President/ Chef (Full Time)
•Food prep before and during service
•Assist with clean up after service
Hourly Employee (Part Time)
48. FOOD TRUCK BUSINESS PLAN 48
official maintenance of financial records. The accountant is projected to work 20 hours per
month.
Hiring and personnel policies.
Due to the fact that there will only be one hourly employee who will be assisting with
food preparation, the Chef Partner will interview and be the one to select this individual. The
Managing Partner will also meet any potential employees before final decisions are made on
hiring.
The personnel plan for The Karma Truck is an integrated system, which addresses
employee rights and benefits and conditions of employment. The plan includes the President and
the Vice President who will be the primary marketing, sales, and production force. They will
receive a base salary and their pro-rata share of the net profits after taxes. The Karma Truck’s
personnel plan will also include worker’s compensation. Benefits will not be provided to any
salaried, full time, or part time employee’s year one of operations. Starting year two, benefits
will be offered to eligible employees. Eligible employees are those that work a minimum of 30
hours per week and have been employed at least six months. Benefits will include: medical,
401k, quarterly bonuses if profits allow, accrued sick time, and paid vacation.
Figure 13: Employee Benefits
Medical Benefits
401K
Quarterly Bonuses, based on performance, if profits allow
Accrued Sick Time
Paid Vacation Time
49. FOOD TRUCK BUSINESS PLAN 49
Process:
The process includes a systemic view that includes all major aspects of the value chain.
The Karma Truck looks at the value chain of the product from every angle, for both food and
non-food products. The President and Vice president will ensure that responsible processes are
in place for purchasing, preparation, and disposal of all products.
For all food purchased for the Karma Truck,
the best quality food is found through local vendors
and farms. From there, the food is prepared in a way
that minimizes nutritional loss through cooking
techniques. Lastly, processes ensure that waste is
minimized and that any waste generated is discarded
in a responsible manner, primarily by composting.
For non-food products, the process begins with
the responsible vendor Eco Products, Inc. The
next step in the process ensures that loss and
wastage is reduced by making sure customers do
not take more disposable silverware than they
need and that the inventory is managed
responsibly. Used disposable serviceware will be
discarded in a responsible manner, either by
composting or recycling.
Food Sourcing:
Local Farms
Food
Preparation:
Minimize
Nutritional
Loss
Food
Discarding:
Composting
Responsible
Vendor:
Eco
Products, Inc
Minimize
Loss
Discarding:
Composting
or Recyling
Figure 14: Life Cycle Process of Food
Figure 15: Life Cycle Process of Non-Food
50. FOOD TRUCK BUSINESS PLAN 50
Physical Evidence
The business practices of Karma Truck will have positive environmental and social
impacts on the local community. By providing only sustainably produced food, the Karma
Truck will have a lower carbon footprint of comparable food establishments that serve
conventionally produced food. The food will travel less, meaning that fewer emissions are
released into the atmosphere to get the food from the farm to the consumer. By serving produce
and other foods that are organically produced, this is enhancing the market for the organic
produce market, which has many positive environmental effects.
Environmental effects.
Conventional farms in the United States use large amounts of pesticides, herbicides, and
fertilizers, which are seeping into our ground water at alarming rates and stripping the soil of its
natural, vital nutrients (Natural Resources Defense Council, 2009). By stripping the soil of vital
nutrients, the overuse of chemicals in conventional farming is permanently damaging the soil and
producing fruits and vegetables that have a lower nutritional content.
As the demand for the organic food market grows the market for conventionally grown
food will decrease. By converting farms from conventional to organic, the soil will slowly but
surely respond and regain its health and nutrients (Moulton, 2010). Consumer support for
organic food is what will drive this. Through the Karma Truck showing customers that eating
organic food tastes better, makes the body feel better, and is comparable in price, this goal will
be achieved.
Social effects.
Supporting the organic food market also has social impacts. Social impact is defined as
“effect[s] of an activity on the social fabric of the community and well-being of the individuals
and families” (Business Dictionary, 2012). By providing local and organic food, the Karma
51. FOOD TRUCK BUSINESS PLAN 51
Truck is helping to improve the health of the consumers in the community. The chemicals used
in conventional farming have been proven dangerous to human health. In contrast, research
shows that produce that is grown organically has more flavor and nutritional value (Moulton,
2010).
“Businesses that look ahead and actively manage their ecological risks and opportunities
can gain a strong competitive advantage”, explains the Global Footprint Network (2012, para. 1).
The following figure shows the business footprint for the Karma Truck. Truck emissions account
for the majority of the Karma Truck business footprint, followed by emissions of food
transportation, natural gas use, and electricity use. Paper and plastic use, as well as trash account
for the smallest percentage of the business footprint. Recycling and composting are shown as
negative on the chart, as these activities do not add to the effects of the environment in a negative
manner; rather they help reverse environmental impacts.
Figure 16: Karma Truck Business Footprint (Author’s Image)
-20%
-10%
0%
10%
20%
30%
40%
50%
Environmental Effect
EffectbyPercentage
Karma Truck Business Footprint
52. FOOD TRUCK BUSINESS PLAN 52
Financial Forecast
The following section will provide an overview of the pricing and cost strategy that will
be implemented for the Karma Truck and an overview of revenue streams. The section will also
provide a breakdown of all of the financial projections for the Karma Truck, including the
projected monthly break-even point, start-up funding requested, monthly operating expenses, and
projections of income statements for five years. Please note that some of these financial
statements are included in the appendix section.
Pricing Strategy/Cost Structure
The Karma Truck is a value driven business. Even though the prices are reasonable and
competitive, the main driver for customers will be the high quality sustainable food, personal
service, and convenience that the truck provides.
On the expenses side, the business has high fixed costs. The high costs include the cost
of the vehicle fitted with quality kitchen equipment, which includes not only the lease payment
but also commissary costs (overnight parking, trash collection, refrigeration, heating, and
composting), vehicle insurance, and gasoline costs.
Menu costs will also have a slightly higher cost than competitors due to the per-unit cost
of paper and plastic-ware served with each meal. Because these are post-consumer recycled
plastics and compostable papers, rather than conventional products made from petroleum based
plastics, the cost is higher.
Revenue Streams
Revenue will be generated from the food and beverage sales on the truck, as well as from
the sale of the branded eco-friendly products. The anticipated menu check average is $9.00 per
customer; this is based on an anticipated check average at lunch of $11.00 and a $7.00 check
53. FOOD TRUCK BUSINESS PLAN 53
average for breakfast. The cost of branding items will range from $5.00 for a reusable
biodegradable bag to $15.00 for the reusable stainless steel water bottle and the eco-T-shirt.
Table 4: Marketing Branding Sales, Year 1
Projected Break Even Point
For the Karma Truck to break-even, it must sell 58 meals per day or 1,767 meals per
month. This is based on a fixed cost per meal of $4.99 and a variable cost per meal of $2.80, or
total monthly operating expenses of $14,217. To match this break even, the menu cost, or unit
cost, was calculated at $8.00 (Reference Appendix J). To increase the contribution margin per
check, the final break-even analysis was calculated at $9.00 per customer. The break-even
analysis was based off the average of the anticipated average check for breakfast and lunch, plus
with consideration of add-on beverages, sides, and dessert (see Appendix K, Table A13-A15 for
detailed breakdown and analysis). .
The Karma Truck anticipates to break-even year one, selling an average of 60 meals per
day. Of this, the goal is for Karma Truck to sell 35 meals for lunch and 25 for breakfast daily.
Based on the check average of $9.00, the anticipated monthly sales revenue is $16,349. The
monthly operating expenses are estimated at $14,871.
If the Karma Truck sells less than 58 meals per day or less than 1,767 meals per month, it
will not be able to cover operating costs. The sale of branded items will help cover operating
Marketing Branding Sales Mk Mix Est sold/mo Price Total/mo
50% 20 5.00$ 100.00$
25% 10 15.00$ 150.00$
25% 10 15.00$ 150.00$
Monthly 40 400$
Annual 480 4,800$
Bamboo Biodegradable Bags
Stainless Steel Bottle
Eco Shirts
54. FOOD TRUCK BUSINESS PLAN 54
costs as well, but has not been included in the break-even analysis. The anticipated monthly
sales are $400 per month for branded items.
Start-Up Funds Requested from Bank or Investor
The Karma Truck is requesting $115,000 for initial start-up funding. This one-time
capital investment will cover the following: physical truck, truck insurance coverage for one
year, business licensing fees, zoning permit fees, marketing expenses (including website
development, miscellaneous marketing fees, advertising flyers, and a two-year inventory of
branded items), operating expenses including a two month supply of disposable serviceware,
essential cooking utensils, and three months payroll expenses. The cost of the truck is the
majority of what the investment cost will cover, the remaining $42,000 is for marketing and
operating costs to allow the business to get a running start (see Appendix L for a breakdown of
start-up costs).
Monthly Operating Expenses
The total monthly operating expenses for the Karma Truck in year one are $14,871. Of
this 64% are fixed expenses and 36% are variable expenses. The fixed cost expense per meal is
$4.99 and the variable cost per meal is $2.80 per meal. The total expense per meal is $7.79.
Fixed expenses.
The fixed expenses include: kitchen rental, insurance on the truck, gasoline for the truck,
maintenance for the truck, commissary fees, and composting service fees. The expenses for
these items are listed below:
55. FOOD TRUCK BUSINESS PLAN 55
Table 5: Monthly Fixed Expenses, Year 1
Facility and truck expenses.
For the kitchen rental, the Vice President has made an agreement with the restaurant
Colore in Englewood, CO. The monthly cost is $500 per month for the first year, and $2,000 per
year every year after (Millette, 2012). The insurance on the truck is based on a quote from the
Vice President of Risk Strategies Company, Matthew D. Carlson. The cost is $3,000 annually
for General Liability and Auto Liability, which works out to $250 per month (Carlson, 2011).
Cost/meal
Facility
Kitchen Rental 500$
Equipment
Lease on Truck loan
Insurance on Truck 250$
Gasoline for Truck 945$
Maintenance 50$
Permit Fees annual
1,000$
Commisary: Water Inc
Commisary: Electricity Inc
Commisary: Trash Inc
Commisary: Compost 99$
Equipment Expenses 2,844$ 1.56$
Salary & Wages
Manager 1,667$
Chef 2,500$
Hourly Staff 1,200$
Accountant (contract) 600$
Workers Comp 300$
Benefits -$
S&W Expenses 6,267$ 3.43$
Total Fixed Expenses 9,111$ 4.99$
Commisary: Overnight
Parking with Propane,
Water, Electricity, Trash
56. FOOD TRUCK BUSINESS PLAN 56
The gasoline for the truck is based on the price of gas at $3.15 per gallon and a truck that holds
30 gallons with average miles per gallon (MPG) of 10MPG and an average of 100 miles driven
per month. Maintenance expenses are estimated at $50 per month to cover such expenses as oil
changes, fluids for the truck, and any miscellaneous parts that may break or need replaced.
Commissary expenses.
The cost of parking the truck overnight is covered under commissary costs expenses. A
commissary is the lot where the truck is stored overnight. “Commissaries’ service fees cover
water, electricity for plugging in your fridge at night, ice for cooling drinks, waste disposal and,
of course, the rent for your parking space,” explains Fry Smith (2010), and fees “are usually
around $1,000 per month” (para. 6). The commissary does provide trash service, but not
composting service. Composting services will be provided by Alpine Waste & Recycling and
the fee for this service is a flat $99 per month (McCoy, 2012).
Salaries & wages.
The owners, President and Vice President, will both receive a salary. Starting year two,
after all expenses are paid and if profits allow, a bonus of equal value will be given to both
owners. Additionally, the hourly staff will also receive a bonus, based on the results of their
annual performance review and if profits allow. The monthly expense for the salary of the
President/Marketing Director/Manager is based on an annual year one salary of $20,000. The
year one salary for the Vice President/Chef is $30,000. The salaries are low for year one as the
owners understand that the business is in the introductory stage and expenses must be kept as
low as possible until it is proven how the Karma Truck performs in the marketplace.
The expense for the hourly staff is based upon one employee who will work 30 hours per
week for $10.00 per hour. The plan also includes worker’s compensation and benefits to eligible
57. FOOD TRUCK BUSINESS PLAN 57
employees; as well as optional benefits sponsored by the firm but paid for by the employee.
There will be no health benefits or 401k options for employees for year one; this will be
implemented year two.
The accountant will not be an employee of the Karma Truck. The accountant will work
on a contracted basis for $30.00 per hour at an anticipated 20 hours per month.
Workers compensation.
Workers Compensation Insurance will be provided from Pinnacol Assurance and is based
on an annual premium of $3,600 per month. The premium was calculated from the “7380-
Drivers” classification and the 2012 rate of $4.902 per $100 of payroll and a $165 annual fee
(Fuglestad, D, 2011).
Variable Expenses
Table 6 below illustrates the monthly variable expenses. The variable expenses that are
expected are: food costs and disposable serviceware.
Table 6: Monthly Variable Expenses, Year 1
Cost/meal
Food Costs
Food Costs 3,433$
Food Expenses 3,433$ 1.88$
Disposable Serviceware
P&P Expenses 1,673$ 0.92$
Taxes & Fees
Sales Tax -$
Total T&F -$ -$
Total Variable Expenses 5,106$ 2.80$
Total Monthly Expenses 14,217$ 7.79$
Annual Expenses 170,606$
58. FOOD TRUCK BUSINESS PLAN 58
Food cost is based on 21% of estimated monthly sales. Disposable paper and packaging
provided by Eco Products, Inc. is based on estimated monthly customers multiplied by usage
estimates. For example, it is estimated that every person will take a fork and a knife, plus there
must be a cushion for extra, so the usage item per customer estimate is 1.1. For spoons, only half
of the customers should be taking one, so the usage is 0.5. The fork, knife, and napkin kit are
expensive in relation to unpackaged disposable silverware, so these sets will be saved for call-
ahead orders or private events; the usage estimate on these is 0.25 (see Appendix M for usage
calculation of disposable serviceware).
Projected Income Statement
The Income Statement for year one, 2013, can be found in Appendix N. Year one gross
sales calculate to $200,987, which is based on 98% menu food sales and 2% branding item sales.
The “cost of goods sold” (COGS) for year one are $124,192, or 62% of gross sales.
Administrative and marketing expenses are 10% of gross sales, or $21,029. The remainder of
expenses account for 41% of gross sales and include the following expenses: salaries, wages,
business application fees, license to operate, zoning permit fees, facility rental, truck insurance,
truck vehicle licensing, gasoline for the truck, truck maintenance, commissary fees, and
composting costs.
After all expenses paid the pre-bonus earnings before interest, tax, depreciation, and
amortization (EBITDA) is $20,160, or 10% of gross sales. No bonuses will be given out in year
one. The net income after EBITDA calculates to $160, just barely breaking even for the year.
The loan payment is based on the start-up investment needed of $115,000 calculated with an 8%
interest rate at 10 years (Bankrate, Inc, 2012). The depreciation is calculated from a 10 year
depreciation schedule (Small Business Taxes & Management, 2012). It is also important to note
59. FOOD TRUCK BUSINESS PLAN 59
that there are no taxes, as this is a sole proprietorship and sales and income taxes are paid as
accrued.
Income Statements for years two through four, 2014 through 2017, can be found by
referencing Appendix O. Sales are expected to increase to $294, 281 in year two, up to $392,374
in year three, and a steady average of approximately $441,421 year four forward. After expenses
are paid, the earnings before interest, depreciation, taxes, and amortization (EBITDA) and before
any bonuses are paid, year two earnings are $82,568. In year three the earnings are $64,589,
$86,045 in year four, and $85.685 in year five.
Appendix P shows the business growth by year, through the growth and maturity stage of
the business. The sales growth is shown by a percentage of growth, as well as illustrating the
guest increase per year and the increase in branding sales per year.
Proposed timeline.
Table 7 below shows the proposed timeline for the business plan through to the time the
Karma Truck is introduced into the marketplace: The timeline begins with securing an investor
to obtain the start-up funds and then going through the process of setting up the physical side of
the business, as well as the marketing side. The Karma Truck intends to launch to the public
April of 2013.
Table 7: Karma Truck Launch Timeline
Start Date End Date
Secure Investor 06/2012
Complete all Legal Requirements, i.e. Business Applications 07/2012 01/2013
Purchase Truck 07/2012
Website Development 07/2012 10/2012
Blog Development 07/2012 10/2012
Purchase Equipment 01/2013 03/2012
Karma Truck Launch 04/2013
60. FOOD TRUCK BUSINESS PLAN 60
Monitoring, Evaluating, and Revising
The success of the Karma Truck will be measured by guest satisfaction, revenues, and the
bottom line. Guest satisfaction will be monitored through Yelp, feedback via the Karma Truck
website, and with immediate customer feedback at the truck. Issues will be handled at the truck
immediately, ensuring 100% customer satisfaction. Feedback received through the website will
be tracked, specific issues addressed with operations, and the guest will be contacted if
necessary. Through yelp, the reviews and specific comments will be monitored, tracked, and
issues addressed and revised within operations. Success will be measured when the rating score
on yelp increases and comments reflect the changes made from any issues that may have been
previously mentioned.
Sales will be monitored to ensure they are on track with projections. If sales are below
projections, marketing will be readdressed and revised as needed. Furthermore, if sales are
below budget, costs will be reduced as much as possible to ensure expenses do not exceed
revenues.
By providing a product and service that increases the knowledge and demand for
sustainably produced food, the Karma Truck will make positive environmental and social
impacts on the community. Unfortunately, these impacts are difficult to measure, track, and
record.
The Karma Truck business plan will emphasize and use the tool of the carbon footprint.
This sustainability measurement tool will be used internally and externally to help show how the
day-to-day business practices of the truck are affecting the environment. The online carbon
footprint calculator from Carbon Footprint Ltd. will be used to estimate the Karma Truck’s
61. FOOD TRUCK BUSINESS PLAN 61
carbon footprint based on estimated values of meals sold, food purchases, truck miles driven, and
energy used by refrigeration and propane gas for cooking.
The carbon footprint tool is a SMART goal, meaning that it is Specific, Measurable,
Attainable, Relevant, and Timely. The carbon footprint of the business will be monitored and
reevaluated on an annual basis. By reviewing the results annually, operations can be analyzed to
see where cuts can be made to reduce the environmental impact of the business. As explained by
Dr. Kaval in Measuring and valuing environmental impacts: A systematic review of existing
methodologies, the carbon footprint is an appropriate and reliable method for “consumer goods”
and “service” industries (Kaval, 2011, p. 23). The table, presented by Kaval, suggests other
methods for these types of industries, namely: the balanced scorecard approach, ecological
footprint, life cycle analysis, and the responsive business scorecard (2011, p.24).
In deciding which, or all, of these methods to used, it must be taken into consideration
that the Karma Truck business is not already operational. As it is still in the business plan phase,
it is important to use a backcasting approach to find the best tool to best measure, or estimate, the
environmental and social impacts. Unlike forecasting, backcasting starts with a vision and works
backwards, identifying strategic steps to achieve attainment of the vision (Arising, n.d.). One of
the best methods for this is the balanced scorecard method.
The balanced scorecard is a performance management approach that seeks to measure
four outcomes: financial, internal business processes, customer, and learning growth (Foundation
Center, n.d.; Balanced Scorecard Institute, 2011). Designed by Drs. Robert Kaplan and David
Norton, the balanced scorecard approach “provides a clear prescription as to what companies
should measure in order to 'balance' the financial perspective” (Balanced Scorecard Institute,
2011, para. 3).