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Running Head: KARMA TRUCK BUSINESS PLAN
The Karma Truck: A Business Plan
2012 Capstone Project
Kristin McGinnis
Marylhurst...
KARMA TRUCK BUSINESS PLAN 3
Table of Contents
Copyright page.................................................................
KARMA TRUCK BUSINESS PLAN 4
Products & Services Offered .....................................................................
KARMA TRUCK BUSINESS PLAN 5
Proposed timeline................................................................................
KARMA TRUCK BUSINESS PLAN 6
List of Tables
Table 1: Business Model Canvas....................................................
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List of Figures
Figure 1: Karma Truck with Tag Line .............................................
KARMA TRUCK BUSINESS PLAN 8
Acknowledgements
First and foremost, I would like to acknowledge the fellow students who have ...
KARMA TRUCK BUSINESS PLAN 9
The Karma Truck
Food with Flavor & Flair
That is good for YOU and the PLANET!
Figure 1: Karma ...
KARMA TRUCK BUSINESS PLAN 10
Executive Summary
Research shows that consumers are demanding healthy food that is affordable...
KARMA TRUCK BUSINESS PLAN 11
margin is expected. The Karma Truck expects a net income of $20,000 in year two and three,
$4...
KARMA TRUCK BUSINESS PLAN 12
Karma Truck Business Plan
Food trucks are a hot trend in the United States. Over the last fiv...
KARMA TRUCK BUSINESS PLAN 13
Vending, n.d.). Trendy food trucks are now seen all over the country with modern, delicious
c...
KARMA TRUCK BUSINESS PLAN 14
scanning of local, regional, and national food trucks, business and consumer trends will ensu...
KARMA TRUCK BUSINESS PLAN 15
Business Model Canvas
Table 1: Business Model Canvas
Key Partners
 Managing Partner
 Chef P...
FOOD TRUCK BUSINESS PLAN 16
Customer Segments
The Karma Truck caters to a niche market: the health conscious consumer. Mor...
FOOD TRUCK BUSINESS PLAN 17
Retail items will also be for sale at the food truck, such as: reusable bags, reusable water
b...
FOOD TRUCK BUSINESS PLAN 18
braking the system recharges itself” (Eaton Corporation, 2102, para. 2). See Appendix A for
de...
FOOD TRUCK BUSINESS PLAN 19
Stakeholders
Table 2: Internal & External Stakeholders
Internal Stakeholders
Stakeholder Organ...
FOOD TRUCK BUSINESS PLAN 20
Consumer Preference
When running a food establishment, business owners and marketing directors...
FOOD TRUCK BUSINESS PLAN 21
One conclusion drawn from Thilmany, et al. (2008) is that certification programs, such as
the ...
FOOD TRUCK BUSINESS PLAN 22
using marketing and branding to depict a picture that shows happy workers and well-cared for
a...
FOOD TRUCK BUSINESS PLAN 23
2050, continued solutions for sustainable food production must be found (IFAD, 2011; GWP,
2010...
FOOD TRUCK BUSINESS PLAN 24
 Baby boomers remaining as the largest food influencers and purchasers
 Farm to fork awarene...
FOOD TRUCK BUSINESS PLAN 25
business: the truck. Tanyeri explains that the truck will be out operating in the elements, wh...
FOOD TRUCK BUSINESS PLAN 26
Denver is known as one of the “thinnest” cities in the United States. Although many
cities rep...
FOOD TRUCK BUSINESS PLAN 27
Figure 3: Industry Statistics on Employee Size (Author's Image)
Most establishments are run wi...
FOOD TRUCK BUSINESS PLAN 28
that it is difficult to track down where the food trucks are currently operating. Only some fo...
FOOD TRUCK BUSINESS PLAN 29
they are a direct competitor, as they also serve breakfast. This truck only does private event...
FOOD TRUCK BUSINESS PLAN 30
Figure 4: Value Proposition
Sustainability
The Karma Truck has the potential of having signifi...
FOOD TRUCK BUSINESS PLAN 31
Figure 5: Sustainable Value Proposition
Key Activities
This section will provide details of al...
FOOD TRUCK BUSINESS PLAN 32
can legally operate in Denver County. The daily and weekly schedule will be revised based on
s...
FOOD TRUCK BUSINESS PLAN 33
A kitchen will be rented for the majority of the food preparation (prep). The remainder
of the...
FOOD TRUCK BUSINESS PLAN 34
be parked in approved zoning areas. If operating for less than 30 minutes a zoning permit is n...
FOOD TRUCK BUSINESS PLAN 35
V. Evans & Monaco (SE 097)
W. Yale & I25 (SE 104)
X. Yale & Colorado Blvd, University Hills (S...
FOOD TRUCK BUSINESS PLAN 36
author April Davila tracked her daily life by eating no food containing GMOs and using no
prod...
FOOD TRUCK BUSINESS PLAN 37
found in Appendix G, Table A2-A7. The Karma Truck logo will be fixed on each of the items
show...
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Sustainable Food Truck Business Plan

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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! :)

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Sustainable Food Truck Business Plan

  1. 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 toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  2. 2. KARMA TRUCK BUSINESS PLAN 3 Table of Contents Copyright page................................................................................................................................ 2 Acknowledgements......................................................................................................................... 8 Executive Summary...................................................................................................................... 10 Karma Truck Business Plan.......................................................................................................... 12 History of Food Trucks............................................................................................................. 12 Modern Food Trucks................................................................................................................. 12 Detailed Description of the Karma Truck Business ................................................................. 13 Vision Statement....................................................................................................................... 13 Mission Statement..................................................................................................................... 13 SWOT Analysis ........................................................................................................................ 13 Business Model Canvas............................................................................................................ 15 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 toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  3. 3. KARMA TRUCK BUSINESS PLAN 4 Products & Services Offered .................................................................................................... 35 Menu ..................................................................................................................................... 36 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 toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  4. 4. KARMA TRUCK BUSINESS PLAN 5 Proposed timeline.................................................................................................................. 59 Monitoring, Evaluating, and Revising.......................................................................................... 60 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 toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  5. 5. KARMA TRUCK BUSINESS PLAN 6 List of Tables Table 1: Business Model Canvas.......................................................................................................15 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 toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  6. 6. KARMA TRUCK BUSINESS PLAN 7 List of Figures Figure 1: Karma Truck with Tag Line .................................................................................................9 Figure 2: SWOT Analysis .................................................................................................................14 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 toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  7. 7. KARMA TRUCK BUSINESS PLAN 8 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. toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  8. 8. KARMA TRUCK BUSINESS PLAN 9 The Karma Truck Food with Flavor & Flair That is good for YOU and the PLANET! Figure 1: Karma Truck with Tag Line toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  9. 9. KARMA TRUCK BUSINESS PLAN 10 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 toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  10. 10. KARMA TRUCK BUSINESS PLAN 11 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. toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  11. 11. KARMA TRUCK BUSINESS PLAN 12 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 toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  12. 12. KARMA TRUCK BUSINESS PLAN 13 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 toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  13. 13. KARMA TRUCK BUSINESS PLAN 14 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 toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  14. 14. KARMA TRUCK BUSINESS PLAN 15 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  High fixed costs, vehicle costs Revenue Streams  Income from sale of food on the truck  Income from sale of branding items  Fixed Menu pricing toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D yC oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pypC po y
  15. 15. FOOD TRUCK BUSINESS PLAN 16 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. toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  16. 16. FOOD TRUCK BUSINESS PLAN 17 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 toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  17. 17. 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. toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  18. 18. FOOD TRUCK BUSINESS PLAN 19 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. toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  19. 19. FOOD TRUCK BUSINESS PLAN 20 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. toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  20. 20. FOOD TRUCK BUSINESS PLAN 21 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 toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  21. 21. FOOD TRUCK BUSINESS PLAN 22 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 toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  22. 22. FOOD TRUCK BUSINESS PLAN 23 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 toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  23. 23. FOOD TRUCK BUSINESS PLAN 24  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 toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  24. 24. 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. toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  25. 25. 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. toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  26. 26. 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 toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  27. 27. 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 toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  28. 28. 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. toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  29. 29. 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 toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  30. 30. 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 toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  31. 31. 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. toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  32. 32. 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 toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  33. 33. 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) toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  34. 34. 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 toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  35. 35. 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 toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y
  36. 36. 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. toot D N to o oto tot Copyp o No D t o ott C o y to yp C y oot opy t C y C yp t pyp tot p ototo y yp t y y to Copyp to ppyyp p D o p C y ot C p y py D t ot p to pyyp tto C p o o o o o ot o t p Co p o yp t N t py N t p N C N D o C D y C oto C yp o p t t y y o pyp to N py to p o to o t pp y o D N y o D o D to t p yy D oto op C yp o to y to o y o o yp y yp N N to o o o y to pyyp Do tto o o oN o N t Co y D o No D to oo C yy oo C p o o t p o yp o y o t y D ypy o C D oo Do Noot yyp D No o oppyyp o tto ot y N to yp t C p oD Noot ypy ot to D D N to o o p D o t C D pp No C p y yp o t o to Co yp o N y o yp o y t Cop o p Ct op o y y o t No ypy o C o ot yyp oo y t ppy tto ypyp yp o y oto to D ot oot py N yp oo D to o yp yp to C Co y to o o yp yp o o to t y o o C o t p N D o N tt p t p o o y yp N y to tto opypy t C pyp Do ottto y pyp ot C D to y o p D D ot pp o Noo o o N y tto yp o o D N o y t C opp y ot o yp opp N o tto p y D ooN D N t o C oto op y to opp N C yp o o too Do No D Noo yyyp o Do N t p pyp C po y

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