Tips for Managing Daily Cash Flow in a Food Truck

As is true of most businesses, having access to cash on hand is crucial for your food truck. With it, you have the ability to buy food and beverage ingredients, pay your staff, cover insurance costs, and maintain your truck. 

Ongoing expenses also include your food truck POS system, cooking supplies, marketing expenses, and licenses and permits. That’s why you need a comprehensive cash flow strategy.

Start with sufficient cash

Unforeseen needs are inevitable, and emergencies have a way of catching even the best planners off guard. For that reason, you should make it a point to have more cash on hand than you believe you will need. Try to accumulate at least a few months’ worth of cushion. If you don’t need it, you can always redirect it back to your long-term budget.

Regularly examine your cash flow

Create a budget when you open, and periodically keep an eye on your revenue and expenses. If they begin to exceed your forecasts, this proactive approach will enable you to make changes in plenty of time.

Do your homework about ingredients and supply prices

Believe it or not, one of the most effective strategies to increase your cash flow does not involve bringing more money into your business. Instead, you need to take a careful look at all of your expenses that may fluctuate or be negotiable, including the costs of ingredients and materials that are essential to the success of your truck.

Delay vendor payments

If possible, hold off on bills that can be postponed.

Some vendors require immediate payments, and there is no changing their minds on the subject. However, you do have control over many of your bills. If you are given 60 days to resolve an invoice, do so on day 59. You might even contact vendors and ask them if they are willing to extend your credit if money is really tight. They might just agree.

Give customers several ways to pay

Taking credit cards may trigger added fees, but it also expands your customer base and meets an increasing demand.

Many food truck owners cling to only taking cash because they are reluctant to be hit with monthly and per-transaction credit card charges. However, today’s patrons are increasingly leaving their cash at home. Without flexible payment options, they might opt to take their business elsewhere. Providing various ways to pay will boost your revenue above and beyond the fees while leading to a better buying experience.

Raise prices or add value

Scope out your competitors’ prices, and raise yours if feasible. Alternatively, offer food bundles or locally sourced ingredients that enable you to justify the higher cost.

If your expenses are creeping up incrementally, you may have no choice but to pass the increases on to your customers. Soften the blow by offering appealing meal bundles, or switch to locally sourced products that you feel good about offering, even at a higher price point. This can be one of your most effective summer strategies when ingredients are fresh and are grown on farms near you.

Determine your slowest sales period

Figuring out your least profitable time of year can enable you to put cash in reserve for busier months.

With the help of your food truck POS system, you can analyze data about your past sales trends. This will enable you to figure out when sales are the most tepid. This part of the year is when you will not need to spend as much cash. Use these insights next year to plan your long-term cash flow in keeping with periods of low and high expenses.

With passion, a great idea, some cooking expertise, and a fistful of startup cash, you can make great strides in the food truck industry. Build it on a solid bedrock of fiscal planning, and you have every chance of succeeding in this competitive sector.