Creating a financial plan for your food truck business is one of the most important steps you can take in order to get it off the ground. This document will outline your estimated income and expenses, and will help potential investors or lenders see that your business is viable and has a good chance of being successful. In this article, we’ll discuss the importance of the financial plan, how to make proper financial assumptions and projections, and what items you’ll need to include in your own food truck financial plan.
Food Truck Financial Plan
The financial plan is a critical part of any food truck business plan, but it’s especially important for food truck businesses. This is because most food trucks require a significant amount of up-front capital investment, and potential lenders or investors will want to see a detailed financial plan before they provide any funding.
When creating your food truck financial plan, it’s important to make realistic assumptions and projections. This means being honest about the potential costs of running your business, as well as the revenue you realistically expect to generate. It’s also important to include a contingency plan in your financial plan, in case your business doesn’t perform as well as you expect it to.
What To Include in a Food Truck Financial Plan
Some of the items you’ll need to include in your food truck financial plan are:
– start-up costs (e.g. vehicle purchase, equipment, permits, etc.)
– ongoing costs (e.g. fuel, employee salaries, etc.)
– income projections (e.g. from sales of food and drinks)
– expense projections (e.g. cost of goods sold, operating expenses)
What Investors Want to Know
When looking at a food truck financial plan, investors are primarily interested in two things: whether or not the business is likely to be profitable, and how much money they can expect to make from it. In order to assess these things, investors will look at the income and expense projections in the financial plan, as well as the start-up costs and ongoing costs of running the business. They will also want to see that there is a solid marketing plan in place to generate customers, and that the food truck is located in a high-traffic area.
By taking the time to create a detailed and realistic financial plan for your food truck business, you’ll be in a much better position to attract the funding you need to get it off the ground. And, if you’re able to successfully execute your business plan and generate profits, you’ll be well on your way to success.
Financial Plan Guide
Financial Plan
Here you will include a summary of your complete and detailed financial plan (your full financial projections go in the Appendix).
This includes the following three financial statements:
Income Statement
Your income statement should include:
- Revenue: how much revenue you generate.
- Cost of Goods Sold: These are your direct costs associated with generating revenue. This includes labor costs, as well as the cost of any equipment and supplies used to deliver the product/service offering.
- Net Income (or loss): Once expenses and revenue are totaled and deducted from each other, this is the net income or loss
Sample Income Statement for a Startup Food Truck Firm
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
Revenue | $100,000 | $120,000 | $145,600 | $164,160 | $185,230 | |
Expenses | ||||||
Salaries | $50,000 | $60,000 | $70,600 | $82,160 | $95,230 | |
Rent | $10,000 | $12,000 | $14,000 | $16,000 | $18,000 | |
Utilities | $2,000 | $2,400 | $2,800 | $3,200 | $3,600 | |
Marketing | $3,000 | $4,500 | $6,000 | $7,500 | $9,000 | |
Total Expenses | $67,000 | $83,900 | $101,400 | $120,260 | $139,860 | |
Net Profit | $33,000 | $36,100 | $44,200 | $52,960 | $61,680 |
Balance Sheet
Include a balance sheet that shows your assets, liabilities, and equity. Your balance sheet should include:
- Assets: All of the things you own (including cash).
- Liabilities: This is what you owe against your company’s assets, such as accounts payable or loans.
- Equity: The worth of your business after all liabilities and assets are totaled and deducted from each other.
Sample Balance Sheet for a Startup Food Truck Firm
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
ASSETS | ||||||
Cash | $10,000 | $10,000 | $15,000 | $20,000 | $25,000 | |
Accounts Receivable | $3,000 | $5,500 | $6,500 | $8,500 | $10,500 | |
Prepaid Insurance | $100 | $200 | $300 | $400 | $500 | |
Office Space & Furniture | $5,000 | $6,000 | $8,000 | $10,000 | $12,000 | |
TOTAL ASSETS | $18,100 | $22,700 | $31,800 | $41,900 | $51,100 | |
LIABILITIES & EQUITY | ||||||
LIABILITIES | ||||||
Loans Payable | $35,000 | $30,000 | $25,000 | $20,000 | $15,000 | |
Credit Card Debt Owed | $1,500 | $2,000 | $3,000 | $4,000 | $5,000 | |
Accounts Payable | $2,000 | $3,500 | $5,500 | $8,500 | $11,500 | |
Unearned Revenue | $100 | $100 | $100 | $100 | $100 | |
TOTAL LIABILITIES | $38,600 | $36,100 | $36,600 | $34,600 | $31,600 | |
EQUITY | ||||||
Owner Equity / Capital | $18,100 | $22,700 | $31,800 | $41,900 | $51,100 | |
Retained Earnings | $61,680 | $74,680 | $99,680 | $135,680 | $181,680 | |
TOTAL EQUITY | $79,780 | $110,380 | $136,380 | $170,490 | $222,790 |
Cash Flow Statement
Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include:
- Cash Flow From Operations
- Cash Flow From Investments
- Cash Flow From Financing
Below is a sample of a projected cash flow statement for a startup food truck business.
Sample Cash Flow Statement for a Startup Food Truck Firm
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
CASH FLOW FROM OPERATIONS | |||||
Net Income (Loss) | $83,530 | $144,020 | $216,112 | $306,933 | $420,293 |
Change in Working Capital | ($34,300) | ($12,600) | ($15,200) | ($11,100) | ($21,600) |
Plus Depreciation | $5,200 | $5,200 | $5,200 | $5,200 | $4,200 |
Plus Amortization | $0 | $0 | $0 | $0 | $0 |
Plus Preliminary exp written off | $0 | $0 | $0 | $0 | $0 |
Net Cash Flow from Operations | $54,430 | $136,620 | $206,112 | $301,033 | $402,893 |
CASH FLOW FROM INVESTMENTS | |||||
Fixed Assets | ($25,000) | $0 | $0 | $0 | $0 |
Intangible Assets | $0 | $0 | $0 | $0 | $0 |
Net Cash Flow from Investments | ($25,000) | $0 | $0 | $0 | $0 |
CASH FLOW FROM FINANCING | |||||
Cash from Equity | $0 | $0 | $0 | $0 | $0 |
Cash from Debt financing | $154,662 | $0 | $0 | $0 | ($154,662) |
Net Cash Flow from Financing | $154,662 | $0 | $0 | $0 | ($154,662) |
Net Cash Flow | $184,092 | $136,620 | $206,112 | $301,033 | $248,231 |
Cash at Beginning of Period | $0 | $184,092 | $320,712 | $526,824 | $827,857 |
Cash at End of Period | $184,092 | $320,712 | $526,824 | $827,857 | $1,076,089 |
Appendix
You will also want to include an appendix section which will include:
- Your complete financial projections
- A complete list of your company’s business policies and procedures related to the rest of the business plan (marketing, operations, etc.)
- Any other documentation which supports what you included in the body of your business plan.
Conclusion
Creating a detailed and realistic financial plan is an essential step in getting your food truck business off the ground. By being honest about your expected costs and revenue, you’ll give potential investors or lenders the confidence they need to provide the funding you need to get started.