Stay In Your Lane

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exclusively at nespresso.com today we're going to talk about some content that I

see all the time spatted around Facebook you guys know the post it's a big

headline says real talk what most food truck owners get wrong in their first

year and then there's a whole list of lessons that sound solid whole bunch of

comments that are full of facts and then so true and then fire emojis and I

want to tell you right now some of it's correct problem is most of it's wrong

it's very thin it's very generic it's missing the parts that actually keep you

alive so we're gonna talk about that today. Hi my name is Bill Moore on the executive

director of the National Street Food Vintage Association and welcome to the

Tim Minifu truck training podcast today we're gonna talk about good advice bad

advice I don't know what you're gonna call it but basically it's like someone

says drive safe without explaining what breaks do what the weather does what the

following distance is between the car in front of you or even just how to avoid

a wreck hey drive safe would you tell your 12-year-old that would you tell your

16-year-old that are you gonna spend some time training so we're gonna break

down the weaknesses of the advice of real talk for a food truck owner I hate to

break this to you but there's somebody that's spending a whole bunch of

money running ads on Facebook that are filled with nothing but AI generated

garbage so let's break down some of these things being open doesn't mean

you're making money well yep that's true but guess what it's also incomplete

busy does not equal profitable but here's the weaknesses the things that are

left out of that statement it tells people to track cost per item ticket

average break even point like that's a simple weekend project and that's the

advice is AI generated nonsense is suggesting and a food truck builder is

putting out as if it's the gospel truth most new owners don't fail because they

don't care about profit they fail because they don't know what numbers matter in

the first place and they don't understand how to make decisions based on the

results they're getting so here's what's missing out of that being open doesn't

mean you're making money you gotta ask yourself what is your prime cost prime

cost is that nonsensical accountant or executive suite terminology but prime

cost is simply how much money you putting into food and labor what's your

contribution margin on top sellers again another nonsensical number we don't

talk about in the restaurant industry people in the executive suites do

because that's what they talk about they have nothing else to do they don't have

to wrap sandwiches or cook but you do the contribution margin is how much money

after you've paid for the food and labor is left over for each individual item

and the top sellers that money helps pay the bills you got to know what that

number is for your top sellers now here's something I'll talk about what's your

capacity limit you are limited as a food truck you either have a service capacity

which is how many human beings you can put through the line or you have a cooking

capacity which is how much food can you cook per hour or you have a storage

capacity you can only store so much food before you run out you have those three

capacities to deal with you don't understand what they are or you never max

them out what you have is a marketing problem you need to be able to at least

come close to maxing out your service if that's 60 people an hour then it's

60 people an hour can you take and produce 60 orders an hour that's the

minimum I want people to work towards most people are happy with four or five

orders an hour what's your true operating cost per hour so including the prep

time the cleanup time the travel time the shopping time what is that

operational cost telling somebody to count your hours is cute advice but it

doesn't help because it doesn't cover the simple things like when you prep

sitting in your driveway at home when you have to drive to three different

storage locations and then all of a sudden that two-hour event turns into a

nine-hour day if you want that point to be useful food truck builder this

posting all this AI nonsense your profit is decided before you ever open the

window now there's a statement that you can get behind because if you're menu

pricing and your processes don't work together selling more just makes you

tired and it makes you tired faster all of this stuff has to work hand in hand if it

doesn't all you're going to do is be frustrated and you may not understand why

here's another point that they put in there cheap pricing attracts the wrong

customers well sometimes but that's not the real issue and I'm going to say

something is really unpopular cheap pricing doesn't just attract the wrong

customer the wrong guest it also attracts the wrong math new owners under price

because they don't know what their break even point is not because they're

being cowards it's not because they're looking through the filter of their

menu through their own cheap skate personality although some do the problem is

they don't even know the break even point before they start to consider what's

too expensive for a hot dog then that AI generated nonsense says the only exception

is low item high volume trucks okay who is that actually what are you talking

about high volume isn't a personality trait it's location strategy it's speed

of service it's equipment set up for flow it's menu design for ease of ordering it's

staffing it's operational procedures it's ordering systems that make sense to the guest

it's production discipline so if you're going to talk pricing the real message should be

you don't raise your prices to be fancy you raise your prices to survive and stay consistent

that survival has to make sense to your business to your bottom line so when that price gets raised

it has an impact typically people raise prices when they figure out they're not making any money

that's not the problem your price structure most likely is not your problem the problem is you're

not managing any of your expenses so raising prices only gives you more money to waste and you will

waste it because you don't have the discipline to control your expenses already you raise your prices

based on your costs going up your capacity being pushed because if you if your capacity is being

pushed now we're into supply and demand the higher the demand which is your capacity being pushed

the higher you can raise your prices to do what lower the demand so that you can stay within

that not disappointing people envelope you need to stay in we don't run the food we don't exceed

our capacities so people aren't disappointed but you've raised a price so you're actually

making more money and you continue to raise a price until you see the demand go down economics 101

something you would think AI would know you also raise your prices based on your market things

happen in your market that could justify a price increase your brand promise if you position yourself

as being a gourmet burger truck people already expect it to cost more and you also base your prices

on your guest experience that you're able to repeat so it's not just good food equals pricing

it's also great service friendly service and the overall guest experience adds to that value

that increases your menu one of the things that you've been saying this is you are the commodity

and that's just a weird line no your offer is the commodity how you execute that offer is the

differentiator so when AI says you're the commodity you ain't for sale what's for sale is your food

and your service and your guest experience your menu should be smaller than you think oh my goodness

AI got something right but it's missing the big why smaller menus win the post makes it sound like

the only benefit is efficiency beats variety and that's not the main reason the main reason is this

a big menu destroys your prep system it destroys your inventory discipline and it's very hard to train

smaller menu means it's easier for guests to order from they don't have 30 choices to look at and

read they can only remember four to five things before they forget the first one they read so reading

a 30 item menu means they've forgotten 25 of the things have on there all you did was waste your time

smaller menus reduce ingredients that you're carrying it increases repeatability it improves speed

it stabilizes your food cost and like I said it makes ordering easy for your guests that you

want to know what else is missing your menu should be designed around what you can produce at peak

if you got 30 items on your menu you can't produce them when you get busy something breaks

so what are you doing you're either slowing down and disappointing a whole bunch of people or

you're running out and disappointing several people either way that's not a good business model

and if you're designing it around you being slow why are you opening to begin with if the space

for your grill your fryer cooking capacity your cold storage says six items and you list 18 you've

already built chaos into your business you're not gonna be able to train you're not gonna be able to

survive you are going to be frustrated you are not denies you are not the cheesecake factory you are

not a sit down restaurant you are not a full kitchen as much as builders want to talk about yeah it's

a kitchen all wheels know it ain't it's a production line a very fine production line go into a

real kitchen you're going to have jacket and steam kettles you're going to have tip grittles you're

going to have big things that produce a menu you're going to have stand up mixers you're going to have

all kinds of equipment but it's not on a food truck you are the production line typically a kitchen

restaurant sit down restaurant is going to have two areas are going to have a huge prep area again

counter space lots of countertop equipment lots of stand up floor equipment big ovens they're

going to have all the things to produce the food that is then what carried to the production line

and then assembled and served from the production line you are not a full kitchen don't

mean act like you're a full kitchen keep it simple social media does not replace location strategy

well I asked correct on that but their event math was ridiculous they're giving rules like

number one the rules and they're not if the event is not food focused 20% will eat if the

event is food focused 80% will eat oh my god just stop that kind of math wrecks people stick to

being a food truck builder build the best product you can and quit trying to teach people something

you are clueless about food focused can mean what it's really cook off where people are eating

samples a beer festival where people snack lightly a concert where the line surges for 45

minutes and then die a holiday market where half of people are sipping cocoa and cookie the

percentages are never universal never universal if it's food focused which it could be food truck

Friday guess what 100% of people show up they're eating if there are some people that show up and

don't eat y'all disappointed them because they went there to eat if it's not food focused only

20% eat what world are you living in could be 10% eat depends on what the events about how long it is

could be 35 or 40% eat if you go to magic kingdom that's an event huge event yes it's a theme part

but you don't go there just to hang out that's an event 365 day a year event guess what 100%

of the people eat especially the ones that are not annual path holders because as an annual

path holder you can leave the park and come back as much as you want but the people that are there

for vacation they're eating because they don't want to leave the park which takes up time from all

the rides and all the other stuff they want to do to go find a cheaper meal so they eat on site so

please understand what you're getting yourself into and don't listen to this is how we recommend

you do it and I generated garbage from a food truck builder what actually matters to you is a

time of day an event is the dwell time which is how long to take people to decide event rules

do they let food from the outside in are there competing options nearby is there a cheap restaurant

across the street from the fairgrounds that people will just walk to and eat and then come back

and get in the fair later in the day what about weather is there alcohol present that changes

everything on how people eat what's a demographic if you lean towards kids and the demographic is

going to be old people guess what you ain't selling much well it's going to be the layout in the

foot traffic flow if they stick you by the dumpsters or by the the port of parties you might be dead

all day long whereas someone else who's in a more centralized location is flat out busy what's

their promotion strength of the event where's the truck placement again whether you can serve fast

enough when the rush hit so location strategy matters within an event it matters if you're not in

an event but you can't take fake certainty with 20% 80% give me a break build a solid food truck

that's what I would love to see out of most builders especially the ones that resort to AI

generated garbage I know they would not build their food truck off an AI generated blueprint they

expect you to run your business off their AI generated business plan stop accepting events

without a sales forecast and an exit plan that's what I recommend I can teach you how to do a sales

forecast for every single event we'll get it pretty darn close to don't wing it that's a great

message but again it's too vague now here's the advice they give under the don't wing it banner

track numbers weekly you systems make decisions on data okay which systems which decisions with

data new owners need a starter operating system which would include things like country

inventory weekly have recipe costing sheets prep bars that tells you how much to prep based on sales

daily sales buy location if you move around event recaps if you do big events labor hours how much

are you putting in compared to your employees to your closers to your openers to your cleanup crew

to your prep people a truck checklist a maintenance log a weekly cash review systems become another

word people agree with and they never do because they don't know what a system is they don't know

what they need to system a ties single transactions are fragile the AI generated garbage says seek clients

not sales okay what the heck does that mean single transactions are fragile what you should be seeking

instead of clients is building relationships you can survive a winner if you have repeat

corporate lunches you can have recurring stops where you are the favored food truck and people

are excited when you show up there you can have contracted catering if that's what they mean by

clients then they need to say it otherwise you're eating and shaking your head going yeah it makes

sense but you have no idea what to do bad leads are a business risk also true but doesn't explain

how to vet something to make it not be a bad business risk bad leads just where you down bad leads

also waste your product your labor your time your fuel and take away an opportunity you could have

had to do something bigger and better the post says to investigate leads but it doesn't explain

how what to look for you need a vetting checklist things like what's he expected attendance and how

did you get that number last year's vendor average sales if you don't know why don't you know it

the fee structure and what it includes exclusivity promises and if those are real or fake power access

load in logistic what's the rain plan what's the refund plan what's the number of vendors what's

the promotional plan the marketing plan and do they guarantee a minimum new owners need to know

those things otherwise investigate leads is useless it becomes ask a couple of questions and hope

they're telling the truth the AI generated downloadable PDF define success okay yes define your

own success but how find the minimum level you're willing to work for well yeah that's actually

strong but it's missing boundaries it's missing a decision rule define your success like this what's

a minimum revenue you need per hour what's the minimum net profit goal you have per week what's

a minimum guarantee for those private events what's the maximum hours you'll work per week what's

the top three event times you will actively pursue and what's the bottom three you know to

just ignore and stop chasing those dead ends and then you know what is stick to it that's a plan

to define your success new owners say yes to everything because they're scared fear creates a

random schedule it creates a random menu and it creates random pricing you can't build a business

and you certainly can't build success on randomness now this particular post it was done about two

weeks ago it doesn't mention two things that actually kill year number one food trucks now you're

ready most year one food trucks don't fail because they don't know that profit matters they fail

because they have no cash reserve they have little to no cash flow second reason they fail they don't

understand their own capacity and their own speed of service i talk about these things consistently

if you are opening today and generating sales and using all of those sales to pay a bill that

was due yesterday you're living off cash flow and you can't do that very long because something's

going to interrupt the cash flow to where those past due bills now start to tack on late fees start

to tack on interest you're doing credit cards so now you're taking a bill that was two hundred

dollars and turned it into two twenty five you've got to stay on top of things you've got to plan

out and know when you need to be operational if you're opening today and doing six hundred dollars

and all six hundred dollars is to pay past due bills what are you doing for inventory tomorrow

today sales has to have many set aside to buy inventory for tomorrow if not all you're doing is

digging a hole and quite efficiently digging a hole you have to understand your capacity and your

speed of service if your sales require you to hit fifteen hundred dollars an hour what does

that look like guess count wise what does that look like as far as getting the food out of the

kitchen is it even possible you have a limit you need to know what that limit is a slow food truck

isn't a busy food truck it's a food truck with a long line in slow output people post pictures

all the time look at the line you see people deep no one cares what we care about is how quick did

you get them through is that guess this number sixty if they stuck around and you're producing

an order out every minute and taking an order every minute they're still in line sixty minute

they weren't really hungry when they got in line were they because I know I'd have done left and

got some food somewhere else I hate generic advice it annoys me to death it skips operational

bottlenecks and tells people what they already know they just haven't really fought through so here's

my takeaway that real talk post it ain't real it's evil and it's not enough advice within that

nonsense to keep you alive it feels motivational it feels broad it feels like it's going to help

but it's missing the hardcore disciplines that you need you need a cash flow discipline need to

understand how many moves that your business need to understand what your capacities are which is

service cooking and storage you need to understand how to vet a real event you need to understand

what menu engineering is and you need to understand repeatable sales pipelines like corporate caterings

private gigs recurring popular stops I want you to stop collecting advice I want you to commit

to something that's going to build your food truck business moving forward if you don't know what

that commitment is join our association the national street food vendors association in sfva.org

we have 30 hours of detailed classes already available you can download and watch them all right

now two day well in the next day is it'll take you 30 hours to go through we have weekly 30 minute

or longer mini classes we have two hours of coaching group coaching every single week 19 dollars a

month if you're not willing to spend 19 dollars a month when you're paying a teenager 25 dollars

an hour your priorities are messed up stop collecting advice start building systems thank you

guys so much for listening to the Tim Miniputra training podcast if you're finding everything

helpful that we do please do two things for me number one hit the like subscribe follow whatever

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