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How to start a food cart business in the Philippines? This business concept is very hot in the Philippines currently. When we look at the stock market, the economy, and small businesses, we can see that many industries have started to grow, including the food industry, which is excellent news for the Philippines.
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How To Start A Food Cart Business In The Philippines
You can rent a food truck, buy a new one, renovate a used model, customize it for your business or choose a van, shopping cart, or trailer for the store(if you plan to open one).
You could also find more cost-effective food preparation and storage options, such as renting kitchens at a nearby restaurant, school, church, or other location with health inspections and licenses.
At the very least, business owners will need a business license and a hospitality permit (more on this later). In addition, most lenders and investors will ask about your business plan before taking out a loan or investing in your food truck business.
If you need additional funds, it is best to start a crowdfunding campaign asking your family and friends for support. Then, you are more likely to get a loan interest-free from them, but this is best discussed with a financial planner. It is best to explain your financing plan, why you need the loan, and specify the amount you need.
When you plan to finance your food truck business, it is important to determine how the funds will be used, such as buying a truck, cooking equipment, employee salaries (if needed), and repaying the borrowed funds.
Once you have a business plan in place, your financial forecasts will help you obtain an idea and estimate the amount you will need to get your food trucks off the ground.
Once you have a complete business plan in hand, you should have a good estimate of the total startup costs of your food truck, your upfront income, your financing needs, your short-term business loan, and the working capital needed to get you operational.
A free PDF business plan can be downloaded on our business plan page.
To start a food truck business in the Philippines, you need a competitive and engaging concept, a viable business plan, a well-stocked food truck, and a solid marketing strategy to build your client base.
Some venues and companies may host food trucks for private events requiring catering, so when looking for business growth for your food cart business in the Philippines, never be afraid to think outside the box.
Should You Start A Food Cart Business In The Philippines Or A Franchise
Franchising terms when starting a food cart business in the Philippines: Most people start a food cart business via franchising. An initial startup ranges from as low as 15,000 pesos up to 200,000 pesos depending on the food cart type. But one question remains, What about the terms of service?
Some companies will have monthly fees, while other food cart businesses in the Philippines will have a royalty fee. Some even will have a term that means they will receive a small percentage on each item sold.
However, many small food cart businesses in the Philippines have flexible terms, which is excellent news. The more growth and success a franchising business has, typically, the more terms will apply.
Please take a look at 7/11 and Jollibee, these are giants in the franchising field, and they have strict terms which are non-negotiable. These terms are to protect the brand. So, keep this in mind when looking for food cart businesses in the Philippines.
Terms when starting your own food cart business in the Philippines: On the other hand, if you start your own food cart business, then the terms are more towards the suppliers. Suppliers could include the location (i.e., landlord) or suppliers of products.
As an example, let us say that we are looking to start a burger food cart business. You have found a supplier for your meat. Do they have a minimum order which is a term that’s important to know before you start the business?
What Is Your Goal When Starting A Food Truck Business In The Philippines
The next question to ask yourself when looking at food cart businesses in the Philippines is what exactly are the goals? Thinking about the end goal will help us at the first stage of the business. For example, if you are unsure whether to franchise a food cart business or start your own food cart business, the question is, what are you trying to achieve?
Indeed, you can make a lot of money from a franchised food cart business that is franchised, and there are many benefits to this. Still, there are also limitations to franchising, which need some careful consideration.
On the other hand, if you want your food cart business in the Philippines to get you as much money as possible as quickly as possible, you may be better off joining a franchising company. Why? Because they will have a business plan and training available so you can start almost instantly. We will be talking about the pros and cons of different food cart models below.
How Much Does It Cost To Start A Food Cart Business In The Philippines?
The cost is the next area when we look at ‘should you start a food cart business in the Philippines?’. Some franchising advertises a minimal amount of required startup capital. Others require a capital of over 100,000 pesos.
The other option that is available to you is to start your own food cart business. Starting your own food cart business would initially be the most expensive route if you were to start your own food cart business. But when looking at this business model long-term, it could be the most profitable and the most money-saving model compared to franchising.
On average, a franchising food cart business in the Philippines requires a total investment cost of 40-60K pesos and at least 100,000 pesos to open your own food cart business in the Philippines. The total cost needed depends on your sub-niche and the area
What Are The Business Requirements For Starting A Food Cart Business In The Philippines?
When you are looking to open a food cart business in the Philippines, you will need certain things as a business owner. Some of these things will have already been taken care of if you become a franchisee. However, if this is your first business, then check out our list below of basic business needs.
- Business Plan
- Marketing Strategies
- Financial Plan
- Suitable And Profitable Location
- A Further Understanding Of Your Products
- A Market That You Can Sell Too
- A Strong Brand
- One Or More Unique Selling Points
- A Long-Term Strategy
- Capital
- Emergence Capital
- Staff
Above are a few of the main areas that you will need as a business owner. Of course, as I mentioned, you may not need every one of these, and some of these may be covered by the franchising company. Nevertheless, the majority of these will put you ahead of the game.
One last thing I would mention is to spend some time looking at potential threats. In most business plans, we speak about S.W.O.T. – SWOT stands for; strengths, weaknesses, opportunities, and threats. For example, let’s say you are selling ice creams.
After six months, a new ice-cream restaurant and 7/11 opens in the same location you are in. This example shows us a potential threat to your business. This is, of course, an example for this article, but it is recommended to spend some time looking over your strengths, weaknesses, opportunities, and threats.
What Are The Legal Requirements For A Food Cart Business In The Philippines?
For more information on setting up a food cart business/food truck business in the Philippines, feel free to click on the hyperlinks below to be taken to the relevant pages.
- Business Permits
- Food Truck / Food Cart Registration
- Food Service Permit
- Health Requirement
- Sales Tax Permit
How To Be Different When Starting A Food Truck Business In The Philippines?
What is U.S.P.? If you haven’t come across this term, all it means is a unique selling point. A unique selling point is something that you possess or your business possesses differently from the competition. For example, if you are selling ice creams, your U.S.P. could be a particular flavor. If you are selling milk tea, this could be a special promotion you are running.
A USP is something that keeps customers coming back. Remember the 80/20 law that we have spoken about before. The law states that 80% of your profits will come from 20% of your customers. So, in other words, when we are setting up a food cart business in the Philippines, we want customers to return and make more orders. Therefore, it’s essential to have a U.S.P.
What should your U.S.P. be? This is your choice. If this is your own food cart business, then you have complete freedom. If you are franchising a food cart business, then you may have specific limitations. However, the company that you are with may have already established a U.S.P. in the market. This will be an advantage in the early days.
What Is The Current Food Cart Market In The Philippines
As we all know, The Philippines differs dramatically from island to island and city to city. In order words, what products are popular in one area may not be as popular in another. This is always a hard thing to scale when looking at a business. Therefore, market research is always critical at the initial business stage.
When we look at the current market, what trends are you starting to see? For instance, a few years ago, milk tea first became popular across Asia, China, the Philippines, Thailand, Taiwan, and many other countries. Do you feel the current market is saturated with this business idea, or do you still feel a market gap?
One of the biggest mistakes I’ve seen businesses make time and again is copying another business that’s been succeeding.
Even filipinowealth.com has seen countless blogs set up in recent times that have copied certain parts of our article and added it to their website as their own. The problem that this causes is there is no originality, and there is nothing unique.
Filipino Wealth
This may sustain a business for a little bit of time. But, ultimately, businesses that copy other businesses will fail, so never be afraid to be different and be a leader in your industry.
How To Start A Franchising Food Cart Business?
Starting a food-cut business in the Philippines is very easy. Suppose you have some capital and fundamental knowledge, that is. Then, if you are looking to franchise, all you need to do is contact a franchising company. They would then register your details and invite you down for an information session. Most often, you will find this business advertised on Facebook.
How To Start A Solo Food Cart Business?
On the other hand, if you are looking to start your own food cart business, then there are certain things you will need to do. The most obvious is registering the company and gaining any permits or licenses required for the products you are selling.
Once you have done this, the rest of the business is something many people enjoy doing. You can start building your plans, finding a location, buying your machinery, and of course, the actual food cart itself.
Tips For Starting A Food Cart Business In The Philippines?
What guide would this be without some tips for a food cart business in the Philippines!
Right Location: The right location can make or break your business. Try to look at potential businesses nearby. For instance, is there a call center or corporation nearby where the staff could benefit from your selling product?
Right Network: Are you able to network with different companies or people? Perhaps you can agree with a company to offer its workers 20% off all drinks on Saturday and Sunday.
Right Products: There are millions of products you could sell! Okay, probably not millions, but you get the point. When you are out and about and see a food cart business, what do you want? In other words, what can you not walk past without buying?
Right Team: You may decide to run this business on your own, or you may decide to hire someone to run this for you. Whatever you choose, make sure you have the right team behind you. This is critical when building the foundations of your business.
Right Plan: At the start of any business, a plan or a strategy will be needed. Unfortunately, some businesses are ‘winged,’ which means they start without any plan. This is not recommended for a food cart business in the Philippines.
Right Vision: Finally, you must have the right vision for your company. Where is your company going? Do you want to make food so good that others will want to franchise your company?
I wouldn’t suggest spending days looking at each of these points but at least a few hours with a pen and paper. Of course, you can always change your plan and strategy as you grow, but having a necessary foundation will help you in the early days of business.
Food Truck Business Philippines: Summary & TakeAway
Is a food cart business a good idea? If you can find the right market, customer, and product, then yes, a food cart business in the Philippines can be very profitable.
It is recommended you thoroughly research this business and assess your strengths, weaknesses, opportunities, and threats.
What I’ve always noticed around the Philippines is that Word of mouth is powerful. In other words, you will have to bring your A-game when serving customers. It’s effortless to set up a business without the correct requirements.
However, this will always catch up to you, so it is best to obtain the correct permits before opening a business.
If you have the capital, a healthy entrepreneur mindset, and a robust product while teaming this together with a solid business plan, my opinion would be to start your own food cart business. Why? Because you will have much more control over the growth of your business, and it’s your brand. You will also have the opportunity to franchise your business in the future too.
If you do not have the resources to fund your own food cart business in the Philippines, another route could be to franchise. When you franchise another company, you are given certain benefits that are very helpful in the early stages of business.
For example, an established food cart business always has its own U.S.P., Idea customer, suppliers, etc. This will help your business run smoother in the early days.
Many believe starting a food cart business in the Philippines is a great way to earn quick money. But, unfortunately, even though this can be true, it’s not always easy.
Food Cart Truck Tips
- It’s often wise to slightly overestimate expenses and underestimate profits if you are not 100% of the outcome and financial matter of business in the early days
- Always investigate the terms and conditions of food cart suppliers in the Philippines. Price, rules, and regulations can differ from business to business
- Start small and build rather than starting big and reducing. It is always possible to add more and grow your business as you scale
Warnings Starting Food Business
- Choose a suitable location. Accessibility is a big factor for the customer. If your business is in the wrong location, then your business could suffer
- Put the customers first. The biggest mistake is forgetting to put your customer first. What do they want, and what would they pay extra money for?
- Don’t open a food cart business in the Philippines without comprehensive research. Research can tell you all the demand, supply, and whether your business idea is a good idea or not
Future Reading & References
- Food carts for sale https://www.carousell.ph/food-cart-for-sale/q/?searchId=DTNi6Z
- Basic business registration https://www.foodcartlink.com/business-registration-steps/
- Food business law https://resourcehub.bakermckenzie.com/en/resources/asia-pacific-food-law-guide/asia-pacific/philippines/topics/food-product-and-safety-regulation#:~:text=The%20Food%20Safety%20Act%20of,or%20reduce%20risks%20to%20consumers
- Philippines food safety act https://www.officialgazette.gov.ph/2015/02/20/implementing-rules-and-regulations-of-republic-act-no-10611/
