You likely didn't get into the food truck business to crunch numbers, but data collection and analysis can help take your business to the next level.
Business intelligence and data-backed decisions have long been the domain of big business, but some providers are allowing small businesses to tap those new insights. It can take a while to get the hang of it, but data can help your food truck business sing. First, you've got to understand the role of data.
Why data is important for food trucks.
The most important parts of having regular, data-backed insights are twofold:
- They allow you to understand what's working (or not)
- They allow you to assess the impact of changes
Small-business owners are increasingly empowered by tech solutions, but still largely rely on their guts to assess business performance. Data is all about relying on concrete facts rather than instinct.
For example, you can track which menu items are selling or not selling, then compare their prices to the cost of ingredients. With something as simple as that, you can make informed decisions around pricing and promotion.
Let's say you have a lunch combo that's not selling but has a high margin. Could you do more to promote it? A data-connected food truck vendor will know what's selling and which items have the best margin.
Assessing the impact of changes.
First, collecting extra information helps you understand what's not working. Then, you come up with a creative business solution to solve the problem. But now you have to figure out whether your genius fix worked.
Say you notice that your birria tacos aren't selling that well. To remedy that problem, you could put a 25% discount on them. But if you don't know exactly how many you sold before the change, and how many you sell after the change, how will you know if the discount worked? Collecting data like this can easily help you continually perfect your business.
Three ideas for using data collection in your food truck.
There are a lot of ways food truck businesses can use data to run a more efficient and ultimately profitable operation—and if you're pressing paninis in a closet-sized kitchen on wheels, you know it's all about efficiency.
1. Track current performance.
You can use point of sale (POS) terminals and software to understand which items on your menu are selling when they're selling, and how many are selling.
You'll already know this intuitively (or by tallies on an easily lost piece of paper), but what data brings to the party is a set of specific numbers to gather meaningful and actionable insights.
You can also use data to understand how your marketing channels, like your website, are faring as promotional tools.
Still, wondering what "time on page" and "bounce rate" are? Luckily, a lot of website providers now come with user-friendly tools to help you sort your bounces from your exits and break down the walls of jargon.
2. Measure social media success.
Food trucks can live and die by how strong their 'gram game is, but it's not always easy to figure out whether growth in followers and engagement is resulting in an increase in dollars.
One way to figure that out is to understand how many people are coming to your food truck specifically because they follow you. Some food trucks will ask their customers how they found out about the truck when they order, but others will take it a step further and offer a discount code in their Instagram stories.
If a customer gives you that code, you can enter it into your point of sale. After a while, you'll start to have a rough idea of how much business your Instagram account is generating.
3. Create SMART goals to focus your attention.
A lot of business owners set goals, but often they're a bit fuzzy.
One of the more popular approaches to goal-setting is the SMART (Specific, Measurable, Achievable, Realistic, and Timely) system. Using this approach, you'll be able to accurately measure the progress you make against a goal. However, the Specific and Measurable parts of the system need data to succeed.
For example, your SMART goal may be:
"I want to increase the number of strawberry donuts I sell within the next month by 15% month-on-month."
As long as you can realistically sell and promote those donuts—and you have enough potential customers to eat them—that goal checks all the SMART boxes. How you achieve that is up to you, but you need data on what you're selling and on what you've sold in previous months to make sure you're actually hitting the mark.
Data is important for all businesses but maybe most important for food trucks. With tight margins at the best of times, you need to know what's working and have the numbers to prove it.
Armed with the right data, you can make decisions with the same panache and confidence that you have creating tasty treats.