Crowd fund your food truck startup
Crowd fund to finance a food truck start-up
Gourmet food trucks are popular, affordable and profitable—a perfect business opportunity for the crowdfunding platform.
What is FundMeFundyou crowdfunding?
The new JOBS ACT created favorable laws to raise money via crowdfunding. Crowd funding or Crowd sourcing is the collective cooperation, attention and trust by people who network and pool their money together, usually via the Internet, in order to support efforts initiated by other people or organizations. (source: Wikipedia).
FundMeFundYou is a new crowdfunding site that allows people to raise money through multiple contributions using the crowdfunding model. Crowdfundiing is a popular non-traditional method of acquiring funds. Unlike traditional funding methods, e.g., venture capital and bank loans, crowd sourcing leverages the mass-market power of social media to achieve a unified financial goal. Even the modest cash donations from numerous–hundreds or thousands of contributors–can quickly add up to a substantial amount of money.
Benefits of crowdfunding:
Crowdfunding is a powerful tool for launching and marketing a new business such as a mobile restaurant. An established business can crowd-fund for their financial needs as well. For example, to open another location, launch another food truck, purchase new equipment, or launch a new product. The key benefits of crowdfunding for individuals and organizations are as follows:
- Create the Buzz. A crowdfunding campaign creates immediate exposure for your idea and creates awareness of your product, service, or cause.
- Test market your idea. Crowdfuning campaign can also serve as a litmus test to evaluate whether an idea is viable, or popular and / or whether your social media marketing efforts are effective.
- Grow your market. Create a new customer base or increase your existing fan following. People who contribute to your campaign are your most enthusiastic fans. These loyal super fans will help grow your customer bases, promoting your project to their friends and associates.
- The free cash infusion. The extra income from the funds you’ve raised is the ultimate benefit; with the extra money you can achieve your desired funding goal.
- You are always in control. You retain 100% ownership and control. You don’t have to sell any equity in you company or part with your invention or idea.
Crowd Funding Made Simple is a low cost $2.99 ebook that contains all the important information you need to succeed and raise money with crowdfunding.
Would be restaurateur turn mobile restaurant owners realize the practical sense of opening a food truck verses a real estate based restaurant. A food truck entrepreneur can successfully raise start-up money crowd funding by offering discounted food deals to backers. Offer supporters great value for their contribution—thru rewards and gifts—this is key to creating a crowd funding frenzy which can lead to successful funding. Many mobile food ventures raised money through crowdfunding web sites. Some of these startups enticed funders by offering hard-to-resist discounted food and other perks in trade for funding.
The perfect storm for the food truck movement
The sluggish economic condition squeezed the core customer for casual dining establishments. Not wanting to do without good eats, these consumers have traded down to fast service operations and food trucks. This condition has created the perfect storm for the gourmet quick service food trucks to thrive. True people don’t have the budget to dine out often at the finer restaurants, however, they still desire to eat well prepared, delicious foods.
Today’s enlighten food connoisseur have realized that you don’t need a celebrity chef, fancy décor, and table service to enjoy good eats. All that is necessary is the GRUB. The commonplace communist-style hotplate on wheels have come a long way. Do you remember breakfast trucks’ mock-Kaiser roll egg sandwiches and harsh tasting, burnt coffee; the lunch truck’s bland, low end salty hot dogs, flinty sandwiches, institutional doughnuts and Danishes and no frills sodas? Now just horrible things of the past.
Who would have imagined that the old roach coaches, mom & pop mobile canteens, and grandpa’s snack truck would morph into a hip, multi-million dollar emerging market. Today’s gourmet food trucks are eclectic, creative, tasty, additive, and affordable. Gourmet food trucks are literally eating everyone’s lunch.
Food trucks are all the rage for obvious reasons:
- The economic down turn created a real need for affordable, high quality food.
- Low startup cost and fast time frame—be up and running quick… for less!
- Lower operating costs than a traditional restaurant.
- Flexibility—take off when you need to.
- You have the ability to go where the money is. If one location is flat, just drive to another.
Not wanting to be left out of the party, fast food operators like Subway and Taco Bell have launched wheeled ambassadors to the street. Established restaurants can cash in on this trend too. Why wait for a food street fair?
Food truck advantage to established restaurant:
- Easy to implement—not nearly as difficult as opening a new location.
- Leverage your established brand to expand your reach to increase market share.
- Generate excitement and buzz to keep your brand in the forefront of customers.
- Economies of scale—use your current resources (employees, equipment, inventory, knowledge-base) and marketing to absorb some of the costs associated.
- Best of all you will be adding a new revenue source to your bottom line.
- If you don’t, your main competitor will!
A survey done by NRA (National Restaurant Association) indicate that age and family situation influences interest in food trucks: Adults with children (70 percent) were more likely than those without children (52 percent) to patronize a food truck if their favorite restaurant offered it. Younger consumers … The NRA poll also found that two-thirds of those ages 18-44 would patronize a food truck offered by a restaurant, compared with only 38 percent of those 65 or older.
Although the costs associated with starting a food truck are relatively low compared to a fixed restaurant, be prepared to work just as hard, if not more. Additionally, you will have expenses unique to food trucks:
- Mobile food permit—mobile food vending permits $200 to $1,000 depending on your city and state. Popular places will like New York City have 1-2 year waiting lists. In areas where the permit wait is long, you can try to obtain a permit from a secondary seller $$$.
- Vending license—all employees must have mobile vending licenses.
- Insurance—you will also need general liability insurance for the food service business.
- Vehicle expenses—maintenance, gas, and commercial parking to dock your truck.
- General business expenses—taxes, bookkeeping, staffing, and marketing.
As with everything good, crowdfunding also has disadvantages. There is no guarantee that you will raise your targeted funds. Also, if you do reach your funding goal there is no guarantee that your business will succeed. If you are launching a new product you lose the element of surprise, since your information will be public for all to see, including the competition. All things considered, the benefits outweigh the disadvantages, especially when you consider the other funding alternatives, e.g., bank loans, venture capitals, and no alternative.
Surprisingly, despite the current tough capital markets, according to a September 2012 survey sponsored by credit agency Experian, 69 percent of the 300 businesses surveyed never heard of crowdfunding.
We don’t see Crowdfunding replacing traditional forms of financing. Established companies, businesses, and individuals with good credit scores will always have access to bank loans. Venture capitalists too will have the pick from the litter amongst unique, and highly sort after business models. We believe as crowd funding continues to evolve, it will play a vital role in the financing mix, especially for seeding startups that would otherwise not have a chance to exist.
Author David Weber, a food truck advocate and entrepreneur himself, is here to offer his practical, step-by-step advice to achieving your mobile food mogul dreams in The Food Truck Handbook.
© Copyright 2012, FundMeFundYou, by PRJ Ventures