Entrepreneur Confessions from Making It!

The Journey of Starting A Food Truck Business

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"For the next eight months, Ian was unemployed and, running low on money, was forced for the first time to be strategic about his cooking."

Questions pour in almost daily from aspiring food entrepreneurs who are thinking of starting a food truck business. While the Food On Wheels book covers most of the logistical and financial information one needs to start a mobile food business, I thought it would be useful to provide readers with some of the thoughts/fears/concerns that a new food truck entrepreneur has just mere weeks before rolling out the new business.

I had the pleasure of sitting down with Ian Thackaberry who is in the process of putting the finishing touches on his food trailer and getting the last pieces of his menu in order. Like many food entrepreneurs, Ian isn’t a classically trained chef but he’s certainly done his time in a kitchen and it was that time that inspired him to start his own food truck. Over the next few days you’ll get to know Ian and the process he went through to get his business to the starting line. Just as a note, in this series I’m not going to name Ian’s business or what he plans on serving so as to be respectful to the fact that he hasn’t yet launched the company. However, Ian and I have plans to meet back up in a few weeks to find out how things are going and at that time I’ll share that information with you.

The one thing you notice about Ian right away is his passion. He is a man who is starting a mobile food business because he truly and passionately believes in what he’s doing. Interestingly, Ian comes from a very strong financial background. He studied economics at University of Oregon and was recruited directly from college to become a financial advisor for a major corporation. In order to take that role he also had to pass several very rigorous financial compliance exams that tested his understanding of the domestic and international financial markets.

So it may come as a surprise that the driving force behind Ian starting his business is not actually to make millions of dollars and retire by 40 to his own private island. Ian said that after four months of working at the financial firm he realized that the life wasn’t for him. “I was valued based on the assets in my portfolio and not for who I was,” Ian said, explaining why he quit shortly after that. “I found it to be very superficial. It was jarring to realize that everything I’d focused my education on was a career I didn’t want to do.”

For the next eight months, Ian was unemployed and, running low on money, was forced for the first time to be strategic about his cooking. Ian says that he’s always loved cooking but once out of college and out of job he didn’t have any income so everything he made had to be as cost-effective as possible. Now, with an eye on funds, Ian not only focused on making delicious and healthy meals for himself, but he also made sure that everything he used would be put to good use. “I looked at cooking from a financial training standpoint,” Ian explains. “Everything I made was focused on efficiency and the ability to lower my costs by cooking cost-effective cuts of meat and reducing spoilage.”

During those eight months, Ian also drank in the Portland food culture. As you are probably well aware, Portland is on the cutting edge of food these days and is responsible, some would say, for the food truck phenomenon. It was during these months that Ian realized that food was where he found himself happiest and he thought a career in the food industry might be a better fit than the financial world.

Tomorrow Ian will get his first taste of the food industry and you can see how that has influenced all of his business decisions.

Ian left Portland and headed back to Seattle where his family is from and found a job as a butcher at Whole Foods. This was the first official culinary position he’d ever held and as a butcher he was basically making a third of what his financial advisor paycheck had been. “The money wasn’t the important thing,” Ian says. “I needed to see if I really liked working with food as much as I enjoyed cooking with it at home.” Regardless of the pay differential, Ian was immediately smitten with what is a very physical position. “I wanted to work with my hands,” Ian recalls and his parents were incredibly supportive of his decision. “I followed my heart and they were just as supportive of me being a butcher as a financial advisor. They just wanted me to work hard.”

Work hard he did; Ian threw himself into his Whole Foods position trying to learn everything he possibly could not only about butchering but also any other department they’d let him try his hand at. “Whole Foods is an excellent organization in that they train their staff to be able to answer customer questions intelligently. We can not only tell you that this cut of meat is a certain price, but why a certain cut of meat might be better than another for your recipe, as well as information on how the rancher that supplies Whole Foods raises their animals. They really work hard to educate their staff.”

Not long out of college himself, Ian looked at his time at Whole Foods as just another facet of his education. “If you’d asked me as a child what I wanted to grow up to be, I would have told you that I wanted to own a restaurant,” Ian says. The more time he spent at Whole Foods the more that desire returned so Ian tried to file away every piece of information he learned while working at Whole Foods.

“I knew that if you start with good ingredients the rest would take care of itself,” Ian says, “but Whole Foods taught me more about the logistics side of the food business than I ever could have imagined.” Not to mention that as a butcher for Whole Foods, Ian now understood how to break down an animal and how to use all the pieces of that animal. In a day and age where meat costs are rising precipitously, that would prove to be a major factor in his future business (more on that later). “I worked every shift and not just in meat but also in beer, in cheese, in wherever they’d let me work,” Ian remembers. “I couldn’t do what I’m doing now without my experience at Whole Foods.”

One of the most critical components of his Whole Foods experience was learning about Whole Foods’ minimum standards for their vendors. Whole Foods sets standards that their producers must meet and, in some cases, it was Whole Foods standards in things like animal welfare that actually helped guide the national regulations. That concept so impacted Ian that when he first drafted out his thoughts for his mobile food business he chose to not put together a financial analysis (as you might think a former financial advisor would do) but to lay down what he called his “Rules” for how he will run his business. Whether you call them Rules, Mission Statement, or Company Values, these are the core of Ian’s business and all business decisions are evaluated to determine if they are in line with the Rules. In Ian’s case, his rules are:

No Cages
No Antibiotics
No added Hormones
No Garbage (everything from his business will be 100% compostable)
No Coins (more on this later too!)

“The first thing was to set down my standards,” Ian says of his Rules, “and then I had to find the people who can help me work within those standards.” That meant that Ian spent the summer months going to every single Farmers’ Market in the Seattle area (not an easy task given that he rode his bike to each and every one!) and talked to the farmers.

Unlike Whole Foods which is unable to work with some phenomenal vendors simply because they are too small to adequately supply the entire region, Ian knew he had the flexibility to work with small producers as long as they raised their animals or produce in a way that was consistent with his Rules. “I developed all of my budgets based around what I found at the farmers’ markets,” Ian says while showing me a very detailed folder that includes wholesale price lists from numerous producers. “That’s when I knew I could find ingredients that were right for me.”

The fact that Ian wasn’t hesitant to talk to anyone worked to his favor. He found many superb vendors simply by asking around. “I want to find out where the food starts. I want to see the product in the ground and then figure out how to work with it.” In many cases Ian even visited the farms themselves where the product was being grown or raised and he looks forward to more such visits in the future. “It took me about five months to get this far with the information,” he says, “but as far as I’m concerned I want to know everyone. I’m meeting with the farmers and I want to respect the product they’re trusting me with.”

Respecting the product – that may sound like an unusual phrase coming from a soon-to-be businessman. But this is also at the core of his business philosophy. Thanks in large part to his training at Whole Foods as well as the time he spent cooking when he was unemployed, Ian wants to utilize all the usage parts of every piece of produce and every animal he receives from farmers. This means that he has created a menu that will enable him to, for example, use the breast of a chicken for one thing, the bones for another, and the internal organs for yet another. “My goal is to use the whole animal."

As I mentioned yesterday, in starting up his food truck business, one of the core pieces of Ian Thackaberry’s business plan is to utilize all edible parts of the animals and produce he receives from farmers with an eye towards “respecting” the product that the farmers are giving him. To some this may sound like West Coast fluffery but it’s actually based in solid financials.

Ian showed me the spreadsheets he’s developed for his menu items that show his cost per item (based on the wholesale prices he received from talking with the farmers) and his margins based on what he plans to charge for his items. Ian’s financial education is still well ingrained in him and he’s created his menu with an eye towards efficiency in all things. “Because I’m butchering my chickens,” he explains, “I can take the breast [and leg] meat off the bird and it’s the same price as I would get buying just the breast meat that someone else has already butchered. However, [because I have the whole bird] I now also have the bones and other remains from the chicken that are actually usable. Bones for instance make incredible soup stock and that is all, essentially, ‘free’ because the cost of the chicken is in the meat.”

Ian illustrated to me how because of this concept some of his items actually cost significantly less than normal and help fund the cost of the more expensive products. Since he wants his prices to be competitive but wants to use high-quality ingredients from local vendors, the fact that he is working with whole animals and plants is a key part of his plan as the ‘free’ items from a cost standpoint will bring in a certain amount of anticipated revenue. That then enables him to lower the cost of his more expensive products. So while his more expensive products have a lower margin his ‘free’ products have an incredibly high margin and the goal is to make it all balance out into a healthy profit margin. Since I’m not going to share Ian’s spreadsheet with all of you to see you will just have to believe me when I tell you that Ian has also done a very extended Break Even Analysis and can tell you exactly how many of each product he needs to sell on a daily basis and it is surprisingly doable.

(Source: SmallFoodBiz.com)

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