What is the value of your food truck or trailer?

What is the value of your food truck or trailer?

by | Dec 21, 2016 | Food Truck Insurance, Food Trucks, Mobile Food, Mobile Food Business

You have poured countless hours and money into getting your mobile food business off the ground, and you want to make sure your investment is protected, right?  The first question we will ask you is “What is your food trailer or food truck value and what do you want it insured for?”

…crickets! What a loaded question! Let’s dive into how to find the appropriate food trailer or food truck value for you.

food truck value

Step one:

To determine what you should insure your food trailer or truck for, you need to know a little insurance lingo in determining your food truck value.

Insurance companies pay property claims two main ways:

1) Actual cash value (ACV) covers your property at the current market value. Meaning what the property worth is today.  This takes into consideration the age, condition, and “useful life” left. This is how most insurance companies cover vehicles, trailers, and equipment.

2) Replacement cost (RC) covers your property to buy brand new like kind and quality regardless of age and condition. This coverage is typically only offered on buildings and their contents.

Step two:

Now that you understand how insurance companies value food truck and trailer property at actual cash value, we have a target in mind.

Below is a formula to get you closer.

What you paid for the trailer/truck + What you invested after you bought it (Labor and Parts) = The value.

I know you are saying right about now I did most of the work! However, you do need to add this “labor cost” into the calculation.

To get more comfortable with the value you calculated above; it helps to look on eBay.  You can also look at a truck for sale sites such as Used Vending or Roaming Hunger’s Directory of Trucks for sale.

Ross of Ross RV and Food Carts has also offered to help if you want to discuss with him.

Step three:

Now is not the time to round down to the value of your truck or trailer.  Insurance companies require you to insure to value.  If you don’t, you can be subject to coinsurance penalties, come claim time and nobody is into that!

For example, if your trailer is valued at $35,000, but you only insured it for $20,000. The insurance company will only pay 57% of the claim because you only insured 57% of the value. Ouch!

The reason insurance companies take insuring to value so seriously is without this constant, there is no way to accurately rate insurance cost.

 

We hope this helps you as you are determining your food truck or food trailer value.  As always, we are happy to answer any questions you have in this process.  Give Joel a call at (800) 985-7859 or shoot an email to info@insuremyfood.com.  With over a decade of experience as a Certified Insurance Counselor, he has seen it all!

 

What To Look For In A Prospective Employee For Your Food Truck

What To Look For In A Prospective Employee For Your Food Truck

by | Dec 16, 2016 | Food Trailers, Food Truck Employee, Food Trucks, Mobile Food, Mobile Food Business

Terrence of TBD Foods offers his take on what to look for in a prospective employee for your food truck. Terrence wrote this article while he was an employee of a Food Truck and now owns TBD foods.

Store Front EmployeesIf you’re doing things right in running and growing your food truck business, eventually you will need to hire employees to help out with daily operations. At this point, it is tempting to go around asking friends and family for help but in my opinion this is a huge learning experience for new entrepreneurs and is necessary for the success of your food truck.

What will happen is the opportunity cost (cost of doing one aspect of your business instead of another) or yourself working the truck versus say calling potential catering or event client will begin to lean in favor of the later.

Here a few tip and key characteristics of hiring a prospective employee and retaining quality food truck workers.

Clock for food truck

Reliable

To begin, reliability is the most essential quality in hiring a prospective employee in any field. If you employees don’t show up, are consistently late, or not keeping up with their responsibilities they are hurting your business. In a business with uncertainties at every corner your employees should not be one.

Check references, past employees and get a strong feel for potential employees work ethic. Having a no call no show can add a serious amount on unwanted and unneeded stress on a days service no only for yourself but other employees

Desire to Learn

Owning a food truck typically means you operate on a fairly small profit margin and profits are not typically astronomical, Meaning food trucks can not typically pay their employees top dollar.

In order to attract strong talent, focus on what else your food truck has to offer for these potential employees. Remember: An opportunity to learn can be a huge incentive for these hopeful truckers.

Food truck employees tend to be younger and “foodies” (as much as I hate the term).  If you’re lucky, they want to cook for a living too!

So give them what they want: Teach them, coach them.  It’s a strong way to keep employees happy.  Get them interested in your food and who knows maybe help with menu item development. The best thing is all it cost your is your time.

Customer Service Oriented

You are in the customer service industry so it would make sense that your employees keep up with the old adage of “the customer is always right.”

I don’t believe customers are right all the time.  Honestly customers can be needy, cranky, and sometimes even unreasonable!  However it’s your job to ensure that you and your employees make the customer feel at ease.  Remember, it’s always best to take the higher ground.  Build a reputation for incredible food AND customer service.

Also, remember people can be fickle.  They’ll have 9 good experiences at a food truck and on the 10th have a negative experience. Unfortunately, that bad one is the one that sticks in the customer’s memory.

My advice, your prospective employee should be happy!  Hire people who are energetic and flexible enough to go out of their way to cater to each customer’s needs.  Retaining customers is important as it helps maximize your profits.

As always, If your employee makes a mistake first let them know it’s OK. Due to the error, have them ask the customer if they can offer something for their troubles. Most offered is free drink or side, ideally something with a low food cost. Also, worst-case scenario you can give their money back. I recommend that should be the absolute last scenario because it costs the most money.

You understand the value of your customers, and you should be hiring employees that feel the same.

many hatsAdaptable/Wear Many Hats

If you are already operating you food truck, you can attest to the uncertainties and speed bumps that come along the way to running a successful business. Consequently, your prospective employee needs to “be like water” and roll with the punches from day to day.

Personally I found it fun! Having different challenges thrown at you each day it keeps things interesting. Find employees who like a challenge and can handle the stress. Additionally, find people that take pride in their work.

If your employees are adaptable, they will be able to take on many roles of the truck. Being a newer industry and mainly first time ventures for entrepreneurs, there really isn’t a specific job function listing for each position on the truck. You may need someone who is a manager, line cook, prep cook, marketer, cleaner, etc.

Think of all the hats you had to wear at the start of your business.  Now, think of how you can try to find employees to fill these roles on your food truck.

Lastly, know that many of these roles can be taken on by an individual with the right mind-set and attitude.  Continually be on the lookout for these potential employees.  They can and will help your business (and you!) grow!

You may also enjoy the related blogs below:

InsureMyFood.com offers affordable insurance made easy for food trucks, food trailers, caterers and chefs.

Food Truck Employee Guide Part 2

Food Truck Employee Guide Part 2

by | Dec 16, 2016 | Food Truck Employee, Food Trailers, Food Trucks, Mobile Food, Mobile Food Business

Welcome to part 2 of the Food Truck Employee Guide! In this post we’ll cover payroll, healthcare, managing and the unfortunate reality of terminating an employee.

Shout out to Terrence of TBD Foods for helping us with this post. TBD foods offers fine dining chef service – specializing in farm to table fare.

Let’s dive back in, and check out Food Truck Employee Guide Part 1 if you missed it!

Pay and Benefits

After finding the right candidates, you need to hire these folks and make sure they are happy with the offer you’re presenting to them.

First you need to figure out what to pay these new food truck employees, should it be hourly or salary? Full or part-time?

Before you overload yourself with all these questions take a breath. Look to otherPayroll-1-300x199.jpg food truck owners or other online job postings to get a feel for what competitive wages are in your area.

Payroll Accounting

Having an employee requires you to file state and federal taxes (Unemployment tax, Social Security, and Medicare tax) as well as document pay.

This can be a daunting task and take your focus away from growing your business. You might be tempted to outsource all your accounting.  However, I caution against that.  Where your income and expenses are coming from is the pulse of your business. Monitoring that pulse and understanding the financial details will allow you to make sound business decisions.

To keep in touch with your financials while outsourcing the detail work, I recommend a free program called Wave accounting or QuickBooks Online.

Food Truck Food Truck Payroll Accounting.jpgWave is a free cloud based accounting program for small business.  It allows automatic downloads from credit cards and banks. I should note, I find their payroll services and auto filing lacking compared to QuickBooks. You can get Quickbooks for around $40 a month.  In addition, QuickBooks is the gold standard for accountants and this will save time and costs when working with an accountant.

By taking small steps and keeping up with your expense and income weekly, bi-weekly or monthly, you’ll set yourself up for success come tax time.  If you keep your books current, it can easily be exported to your accountant.

TIP: Meet with your accountant at the start of each year to make sure you categorize expenses and income correctly.

Health Care and Workers Comp

Healthcare continues to be a trending topic nationally. It also plays a large role in the food truck business.

Fortunately, a food truck employee tends to be young.  Workers under 26 are still covered by their parents insurance, so hopefully they wouldn’t need your coverage!

For yourself and employees who do need coverage, healthcare.gov or your state’s healthcare exchange site can provide options.  There are subsidies that can be obtained based on income.

healthcare-center-qlook.jpgSome states will require you to carry workers comp while it’s optional for others. Either way, it’s best to know the requirements by law.

For an overview of each state’s requirements, check out Workers’ Compensation Laws – State by State Comparison

What is workers comp?

Workers comp covers employee’s medical, disability, rehabilitation, or death as a result from an accident in the course of employment.

Why carry it?

Workers comp insurance protects employers from most employee injury lawsuits and promotes workplace safety.

Managing Employees

Hopefully by this point you’ve done your due diligence and your team is growing! Naturally, this growth requires management.  This is where you come in.

To ensure the paychecks are accurate each week, make sure you have a time clock or clock in clock out system.  Compare that to the week schedule and compile the info weekly or bi-weekly.

Depending on where your food truck is, your business will fluctuate with the weather. Obviously in colder areas, business is slower in the winter months. It also slows as the heat rises in the summertime! Weather becomes a reason for hungry patrons to venture to areas of air conditioning compared to your truck’s al fresco dining.

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With these fluctuations the size of your staff will also vary, which can be tough on employees having their hours and paychecks dwindle. Let your staff know of these changes well in advance to be prepared for the slow down.

This communication will allow your employees to look for other work if they want.  As their employer, respect their decision to find another part-time job or another job entirely.

Remember,your employees do have bills to pay and it would be unfair to expect them to wait around until the busy season not working to help your business.

It is a tough situation when the weather does change.  This advanced notice of hours being cut will help your food truck employees plan to make alternate plans when hours are cut.

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Time to terminate an employee?

Firing an employee is challenging in itself.  Combine that with the fact that possible missteps can result in a lawsuit!  You’ll need to tread lightly when looking to part ways with employees.

Use the below PDF as a guide when seeking a preliminary legal opinion from your own counsel before terminating an employee. This should aid your counsel in evaluating whether the proposed termination creates potential legal exposure and the need for additional legal advice.

Be sure to check out the first part of this blog series – Food Truck Employee Guide Part 1

This article was a collaboration of Joel Paprocki of InsureMyFood.com and Terrence Rogers of TBD Foods.

Food Truck Employee Guide Part 1

Food Truck Employee Guide Part 1

by | Dec 14, 2016 | Food Truck Employee, Food Trucks, Mobile Food, Mobile Food Business

This is a collaborative article we did with Terrence of TBD Foods to cover some lesser thought of problems associated with finding a food truck employee.

 

Food Truck Employees

 

You’ve started or are starting a food truck, congratulations!  Aside from time capital and creating tasty treats, you’ll need employees.  Finding people to run your business and sell your product for you, eventually without you there, are imperative to your success.

In another post, Terrence outlines what to look for in a prospective food truck employee.

Finding your Food Truck Employee

Now that you know what to look for in a food truck employee, you’ll need to know how to find them! Craigslist is first thought for most for its ease and cost to post a job listing title. Believe it or not, it’s how I found my job! craigslist-logo2.jpgThis does require some time to create, check out this article on how to write a solid craigslist job posting.

Apart from the world of Craigslist, ask around to see if friends, family or former co-workers know of anyone who is looking for work. I don’t suggest hiring your best friend. If you’ve cooked before, it doesn’t hurt to ask your cook friends to see if anyone is looking for work. Maybe you can get lucky with an unhappy line cook or dishwasher looking for new work.

Prospects

Now you have an idea of demand for people trying to fill your job vacancy, how do you whittle the number down to find your ideal Food Trucker? Due diligence, just like in any job industry.  Bring them in for an interview and if that goes well, bring them in for a trailing/stage (derived from the French word stagiaire meaning apprentice/trainer.) Free labor for a few hours and a real opportunity to see how your prospective employee does in the tight quarters of a food truck – really valuable information for employers.

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Protecting your Investment

Treating this like any other job, it is worth your time to check the background of a prospective employee. Remember, employees are an investment so it’s important to check references, past employers and a do background check to make sure you are getting the same person whose resume had you jumping up and down in excitement when you received it.

Background Info USA, provides access to comprehensive background checks which includes:

  • Multi-Court Criminal Database
  • Search, Sex offender registry for 50 states
  • Social Security Number verification
  • One Single-County Criminal Search
  • OFAC/Global Homeland Security Check
  • Adverse Action Notices

If you are going to have an employee driving your truck, you NEED to check their driving record. This prevents surprises when it is time to add them to the business auto insurance policy. With a spotty record, you will get hit with a large premium increase.

Records highlighting driving history over the past 3 to 7 years and are available in all 50 states and Washington DC. Background Info USA, and other providers allow for easy ordering.

The food industry is notorious for having employees who are rough around the edges.  They also put out good food. Before hiring a person ask yourself if you want your customers to see this person as part of my brand? Cooking can be to taught.  Value reliability and professionalism over culinary skill.

Classifying a Worker: Employee vs. Independent Contractor.jpg

Classifying a Worker: Employee vs. Independent Contractor?

Many Food Truck owners prefer to pay their “employees” as 1099 workers due to the small amount of tax paperwork and expenses.  Mistakenly classifying an employee as an independent contractor can result in significant fines and penalties from the IRS.  It can also lead to a workers compensation insurance audit surprise.

WHY? It has to do with the way the IRS and Workers Comp insurance define employees (W2) and independent contractors (1099). For a full IRS checklist of determining an independent contractor go here.

If you are uncertain whether you have an employee or an independent contractor, Form SS-8 is available to request the IRS make the determination for you. There is no charge for filing Form SS-8 with the IRS.

*Note that a incorrectly classified workers will sometimes be surprised by the amount of taxes they owe at year-end.  Independent contractors are generally required to make quarterly estimated tax payments instead of having their tax withholding payments made through payroll.

This unexpected tax burden at year-end can lead workers to argue that they are an employee and NOT an independent contractor.

If the IRS believes there was intentional disregard, the employer can be held personally liable for both the employer AND employee payroll taxes.  A penalty of 20% of wages paid to the worker along with interest and additional underpayment penalties will be assessed. The IRS can mandate these adjustments going back the last three years!  I cannot stress the importance of doing your research on employees!

You may also enjoy the related blogs below:

This article was a collaboration of Joel Paprocki from InsureMyFood.com.  Joel offers affordable insurance for food trucks, food trailers, caterers and chefs. Also contributing is Terrence Rogers from TBD Foods who offers fine dining chef service – specializing in farm to table fare.

How To Start A Food Trailer or Food Truck Business in Austin, TX

How To Start A Food Trailer or Food Truck Business in Austin, TX

by | Nov 28, 2016 | Food Trailers, Food Truck Insurance, Food Trucks

So you’ve decided that you are going to open up a food trailer or food truck, congratulations! We have created a basic outline to help you with the necessary steps needed to open up your business. Although the outline is intended specifically for mobile food vendors in Austin, TX, the process and regulations are often similar in different cities and states. Food Truck Sales Tax.jpg

Step 1: Filing a Limited Liability Company For Your Food Trailer

It is very common for food service businesses to form an LLC. You can find out more info here.

Step 2: Texas Sales and Use Tax Permit

Before you can receive your Mobile Food Vendor Permit you will need to have a Texas Sales and Use Tax Permit. You can find out more information here.

Step 3: Join The Austin Food Trailer Chamber Google Group

This is a free and open email group that a few industry heavy hitters in Austin (Trish from Capital Kitchen, Case from Trucklandia, Phyllis from Cheesecake experience, and I) started. There are currently over 200 trailer owners in the group. You can ask questions, post answers, and tips for others or can search the archives. Send an email to be added to the group or join the Facebook Group Online.

Step 4: Buying a Food Trailer or Food Truck

Although you may be able to find good deals on Craigslist for used food trailers or food trucks, there are also many great food trailers and food truck builders in Texas. One benefit of buying a newly manufactured food trailer is that the builders are usually knowledgeable about what is required to pass a City of Austin Health and Fire Inspection. You will also have the peace of mind knowing that all of your equipment is new and not damaged or aging. Here are a few local builders to consider: Smokin Joe’s Trailers Sanchez Trailers Custom Made Trailers
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Step 5: Buying Insurance for Your Food Trailer or Food Truck

We recommend purchasing $1,000,000 worth of liability insurance and property coverage on your food trailer or food truck as soon as you purchase so that you are immediately protected from accidents or theft. With a food truck, you will also need commercial auto insurance before you drive the truck on public roads. We can help here! Get a quote for your food trailer or truck TIP: Many landlords require you to have $1,000,000 worth of general liability insurance before they will let you sell food on their property.

Step 6: Registering Your Food Trailer or Food Truck with the DMV

Before you can apply for an Application for Mobile Food Vendor Permit, you will need to register your trailer with the Texas Department of Motor Vehicles here.
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Step 7: Get Your Food Managers Certification For Your Food Truck

In order to pass your health inspection, you will need your Food Managers Certification displayed inside of your food trailer. You can find out more information and testing options here. TIP: We suggest paying a bit extra to have your Food Managers Certification stay valid for 5 years because the class takes a full workday day to complete.

Step 8: Get The Application For Your Mobile Food Vendor Permit

This is the application packet that you will need to submit to the Health Department before they will inspect your food trailer or food truck and issue you a Mobile Food Vendor Permit. TIP: The Health Department has a How To Start A Mobile Food Business Guide and a resource webpage for mobile food vendors. TIP: All applications must be walked-in to 1520 Rutherford Lane, Austin, TX 78754 only on Tuesdays and Thursdays from 7:45am-11am. After the application is approved then a physical mobile unit inspection is scheduled. (During COVID the city has changed to by appointment only)  If you have questions call Health Department at (512) 978-0300 or visiting at (1520 Rutherford LN, NE corner of Rutherford LN @ Cameron RD, Building 1 East Entrance).

Finding A Central Prep Facility

In order to complete page 2 and 3 of the Application for Mobile Food Vendor Permit you must find a Central Prep Facility to use. Many food trailers and food trucks use their CPF strictly to dump grey water, get fresh water, and dump grease. Here are some local CPFs in Austin Capital Kitchens Just Add Chef Hudson Bend Commercial Kitchen Manon’s Shared Kitchen TIP: By using a CPF that specializes as a commercial kitchen to many different food businesses, the Sanitarian will be acquainted with the facilities, which will likely speed up the application process.

City of Austin Restroom Facility Agreement

In order to complete page 5 of the Application for Mobile Food Vendor Permit, you will need permission to use a restroom within 150 feet from the location of your food trailer.
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Passing Your Fire Inspection

AAA Fire & Safety Equipment Longhorn Fire and Safety Ace Fire Equipment Please refer to the Application for Mobile Food Vendor Permit for more details about the fire inspection. We suggest calling the Austin Fire Department at (512) 974-0160 if you have any questions regarding the safety of your food trailer because the requirements listed in the packet are not exhaustive.

Step 9: Finding a Location for Your Food Trailer

Congratulations on passing your inspection! Finding the right location for your food trailer will be one of the most important decisions you will make. Make sure that you understand the rules and regulations regarding certain neighborhoods. This map shows areas of the City of Austin that have adopted additional ordinances. Ordinances may affect your hours of operation or proximity to certain structures. Find out more info here: Mobile Food Establishments Codes TIP: Don’t be shy about asking other food trailer owners questions about their food park. They will often be happy to share advice with you and give you the “inside scoop” about their location! Or join the Austin Food Trailer Chamber and ask around there (It’s free!) Send us an email to add you to the Google group.

Helpful Links

Propane Delivery Companies: Absolute Propane Garnett’s Propane Grey Water and Grease Removal Companies: Texas Disposal To have grey water removed from your trailer OR portable restroom servicing Diesel Green Fuels To recycle used cooking oil Kitchen Towel/Laundry Delivery Companies: Admiral Linen Linen Service Food Parks in Austin: Austin Food Park Mueller Trailer Eats The Picnic The Thicket The University Co-Op

Insure My Food was designed by an insurance agency that gets food trailers and food trucks

We understand the challenges and needs of your business and are committed to supporting the mobile food community. Not only do we offer food trailer and food truck insurance in almost every state, we insure many types of mobile food vendors including concession trailers, food carts, pop-up vendors, street vendors, food stands, and catering trailers.
Contact Us for a free, no obligation quote or if you have any further questions.  From our small business to yours, we’re here to help you succeed!