Food trucks can earn up to RM45k a month?? Sure onot?!!

(This article was originally written in BM. Klik sini untuk artikel Bahasa Malaysia di Soscili.my)

The concept of food trucks isn’t particularly new to Malaysians, with lok-lok and rojak and cendol being sold out of mobile trucks for some time now. However, recent iterations of the idea has turned the concept up to 11 with fancier offerings and even fancier trucks gracing the roadsides.

Able to offer cheaper and more convenient meals in a unique, casual setting; gourmet food trucks (sometimes also called “modern” food trucks) have become increasingly popular among urban Malaysians not just as a place to eat but also as a serious business venture. In fact, the number of food trucks in the Klang Valley alone have sauté-mushroomed from three in late 2014 to an estimated 70 by January 2016!

So rather than than do the standard “Best Food Trucks in PJ,” our sistah from another editah over at SOSCILI decided to look at it from the business end of starting up a food truck in case you might wanna, y’know, start your own one day. So let’s start with the first question for every business – the cost.

 

You can start your own food truck business for RM100k or less

Depending on the scale and complexity of the business, getting your food truck business up and running could cost as low as RM20k all the way up to RM100k. Food truck veteran Rosman Hussin of Humble Chef – whom you might remember as the guys selling pasta along the Pusat Bandar Damansara flyover – gave us a much more concrete estimate:

“To me, if you have something within the region of RM60,000, dah boleh jalan dah.” – Rosman Hussin to SOSCILI, translated by CILISOS.

Rosman also added that, from his experience, this cost would be recouped within 6 months to a year. 

To give you a general idea of where that money goes to, Malaysian Food Truck – a support/guide group on Facebook – breaks down the cost as follows:

• SSM Company registration | RM100 (required)
• Bank account | RM2,000 (required for company registration)
• GDL License | RM500 (required for you to drive the truck)
• 10% deposit to purchase truck (RM55k on the road) | RM5,500
• Monthly repayment for truck | RM600
• Menus and buntings | RM300
• Truck decals and decorations | RM500 (depending on how nice you want it to look)
• Working capital | RM3,000 (basically your standby cash for materials and stock)
• Equipment | RM4,000 (depending on your business)
• Raw materials | RM2,000 (depending on business)
• Operating license from municipal authorities | RM5,000/year (estimated)
• Maintenance | RM300 (estimated)

If you’re capitally-challenged, don’t lose hope! There are special loans for entrepreneurs that you can look into, such as MARA’s Skim Pembiayaan Peningkatan Perniagaan (SPiM). Just… keep away from Ah Longs, aite?

But let’s go on to the question you’re probably itching to have answered – can you really earn RM45k a month with a food truck, or were we just clickbaiting?

 

Yes, you can earn RM45k a month… but in SALES, not PROFIT

So here’s the catch… That RM45k estimate comes from Kuantan Food Truck Club which doesn’t stray too far from another estimate by The Star, which puts the figure around RM35k. However these figures refer to gross sales (how much you get from selling) rather than profit (how much you make after deducting costs, aka net income). That number differs a lot more in terms of profits – The Star estimates some food trucks only make about RM3,000 a month while others have reported higher figures:

“… kini pendapatan bersih [Net income] setiap bulan yang diperolehi mencecah RM10,000” – Muhammad Hafiy, Founder of Babarittos Food Truck, quoted by Sinar Harian.

But really, like with any business, food truckin’ comes with its ups and downs… just because one guy’s rolling in the dough (and we aren’t talking about a pastry truck) doesn’t mean you’re guaranteed the same results. However, there are some things that you can look at to make all the difference…

 

You really have to find a way to make your truck stand out (and we aren’t talking decorations)

Unlike a shop-based restaurant, the mobility of a food truck means that finding a good location can make all the difference between success and failure:

“Finding the right location is extremely important. We once opened the business in the wrong location and sales were really low, but when we moved to a different area – one with students – sales started booming.” – Rosman Hussin, Manager at Humble Chef.

Also, another location concern is that you’d have to be able to “park” there on a regular basis so that your customers would know where and when to find you.

“Having a regular spot is important because in Malaysia, generally people won’t want to chase you to new places all the time. They want to know that on this particular day, you’ll be here so they can sort of plan their drive.” – Ku Azharul Nizar, Cowboys Food Truck, as quoted by The Star.

And then there’s the risk that your whole truck might kena towed away la, since food trucks are currently considered to be operating illegally; though the authorities are looking at ways to allow them to legally operate.

You also have to find ways to differentiate yourself from the competition, which in the case of food trucks usually involves pricing and strong branding. For instance, one of the major selling points of Humble Chef that drew in the crowds was that they offered pasta dishes for RM5:

“The idea came about because pasta is usually sold at high prices so we decided to do things a differently and, till today, that RM5 price point is maintained… if you don’t include GST lah.

In business, you have to create your own product. Don’t copy others.” – Rosman Hussin, Humble Chef.

Others distance themselves from the rest through strong branding exercises, such as La Famigla which wholly embraces the concept of “Food, Fashion, Lifestyle” with their Godfather-themed look; offers (besides food) a range of clothing, vapes, lego, and even a mobile app for Android and iOS which allows the user to keep up with new products, get real-time truck locations, and interact with other fans!

“We don’t just offer food, but branding as well. La Famiglia is the first food truck to to introduce a mobile app and reward system. Anyone with the app will also get to redeem points whenever they dine with us for a free meal later on.” – Danial Marizd, La Famiglia Operations Director, in interview with SOSCILI.

This, coupled with a strong social media presence on Facebook, Instagram, and Twitter has allowed La Famiglia to build a strong community of followers.

But even if your food truck business is booming…

 

Your business needs to look beyond the food truck

Any credible business requires a business plan, like if it’s to expand the business, open a restaurant, test the market, and so on. In the early days, the first generation of food trucks leveraged on the uniqueness of the idea to attract customers as mentioned in the previous point, but that market is slowly becoming saturated, with Danial saying that 10 out of the 70 food trucks that opened in the past year had their engines turned off for good because they weren’t making enough money.

For other entrepreneurs, the food trucks are a way of getting (literally) to their end goal. Danial Marizd’s dream is to get his own brand of pasta sauces into supermarkets while Cowboys Food Truck founder Ku Azharul Nizar entry into the food truck business is to gauge the market’s response to his food before pursuing his goal of opening an American barbeque-style restaurant.

So in this sense, the food truck business still remains the most cost effective way of testing the food market without going through the major expense of opening a restaurant, but it might be better considered the means to an end rather than an end in itself.

“It’s not as lucrative as many people think. A food truck is the in thing and it looks cool but you won’t get rich with a food truck. You have to think bigger than that,” – Ku Azharul Nizar, as quoted by The Star.

But, with a clear idea of what you want the business to be, you might say that when there’s a wheel, there’s definitely a way. And you got four of ’em 😉