Vegan Food Truck Business Podcast

Price, Prep, and Profit: Food Truck Advice from Legendary Foodpreneur Eric Stromquist (Ep. 13)

• Heather Zeitzwolfe • Season 1 • Episode 13

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In this episode of The Vegan Food Truck Business Podcast, Heather Zeitzwolfe sits down with food industry veteran and small business expert Eric Stromquist to break down the most common — and costly — mistakes food truck operators make.

Whether you're just getting started or trying to improve your profit margins, Eric shares hard-earned wisdom on pricing strategy, menu design, speed of service, and treating your truck like a real business. If you've ever wondered how to serve more customers, minimize waste, or make your numbers actually work, this episode is a must-listen.

What You’ll Learn:

  • The #1 mistake most food trucks make when pricing their menu
  • Why less is more when it comes to your menu options
  • How to use simple math to maximize profit and speed up service
  • What your food cost should be (and how to calculate it)
  • The truth about overhead, commissary kitchens, and real labor costs
  • Why running a food truck requires both heart and spreadsheets

About Our Guest:
Eric Stromquist was one of the founders of Portland's long-standing, local restaurant chain Hot Lips Pizza. Eric has been a prominent figure in the Portland Food scene for decades, including instructing at three notable culinary schools. He is now an advisor with the Small Business Development Center (SBDC) in Astoria, Oregon. He’s passionate about helping food entrepreneurs turn their ideas into sustainable, profitable businesses.

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singer:

This is the vegan food truck business show. Crank the sound on the key and go. Hosted by Miss Heather Z. She's savvy and frugal. You'll see vegan CPA and business mentor here for you front and center.

Heather Z:

Eric Stromquist, welcome to the Vegan Food Truck Business podcast. Thank

Eric Stromquist:

you, Heather. I'm excited to be here.

Heather Z:

we are gonna talk about how we can run our vegan food trucks more efficiently have. Better menu choices, better pricing, make sure there's a fast turnaround time to serve people, but also that we don't. Financially get into trouble doing all of this because, it can be a tricky situation trying to figure out food costs especially when it fluctuates. Eric, In your world that you've experienced, what is one major problem that you see whether starting a restaurant or any kind of a food business, what is that one major mistake when it comes to picking out the menu, food, pricing? any of that

Eric Stromquist:

Heather, I think the biggest problem is, whether it's a restaurant or a food truck, is that oftentimes it started by someone that has a passion for food. And, in the food truck can be pretty specific. You have one, item that you love or. you like one particular kind of ethnic food you want to mash up some ethnic foods into a fusion or something. usually there's, a lot of background in cooking, but very rarely, is there any business background and people. Don't tend to treat it as a business you really have to get both parts right in order to be successful. I think that's the fundamental problem is that, you have to think of it like a, business, even a food truck. It's a small business to be sure, but it's a business. you have to get your mind set.'cause a lot of times it's, I just, I don't want to charge a lot.'cause people can't afford it. They're struggling with money. that's not how you should set your pricing strategy. at the end of the day, you're gonna be spending a lot hours in that truck and you want it to be worthwhile for you. And if you're making a ton of money, you can give it away. You can do stuff for the community. You need to run a profitable business that works for you, that's the biggest problem. It gets into more specific ones Like, pricing strategy. A lot of people don't base their pricing on what it's costing them to put an item out the window. that's a huge mistake.

Heather Z:

okay, so let's start with the menu itself. you walk up to a food truck, some of them have a bazillion things to choose from, and then another one that has maybe like. Six things and you're like, wow, they don't have very many things to offer, but meanwhile they're busy and people are buying from them. why would somebody want to have very little to choose from versus having a whole bunch? And where do you think is the happy medium?

Eric Stromquist:

That's a great question. a philosophy of life is you're better off doing less than doing it well than you are trying to do a lot of stuff. my God in a food truck, trying to be the Cheesecake Factory is nuts. the biggest problem with having an extensive menu in a food truck is not just limited space, but also time. the more complicated your menu items are, the longer it's gonna take you to make them. And this is something that a lot of food truck operators don't understand. Heather and I, I end up talking to them about this. in the restaurant business, the revenue calculation is really simple. It's, your average check times, however many customers you're gonna serve. And, in a restaurant How many seats do you have and how often can you fill'em? And a food truck is just how many people can walk up to the window and buy something. if it takes you 30 seconds to serve a customer, if you serving hot dogs, you can do 120 transactions in an hour, right? But if it takes you five minutes to put the food together, then you can do 12. And you do the math, sometimes it's startling when their eyes just get really big and go, oh, I hadn't thought of that. the trick is to come up with a menu that's attractive, but one that you can execute efficiently and quickly, And also the tendency with a lot of items on your menu is, you end up carrying a lot of ingredients that maybe you use in one item or two items. and, that's no bueno. ideally you want to construct a menu where, you're utilizing ingredients in, two or three or all of your menu items.

Heather Z:

with food, we have spoilage, that doesn't necessarily happen in other types of businesses where things can stay on the shelf a little bit longer. if you prep something and then it doesn't sell, then what do you do? Right. Have a special the next day that includes that.

Eric Stromquist:

No, that's a great point.

Heather Z:

So, pricing, talking to my clients, I'm like, okay, how did you decide how to price this? Oftentimes their answer is, well, I look around and see what other people are charging well, okay, that might be what the market can bear, but does that even cover your food costs, is the question. Talk to me about that mentality or how you go about pricing. When you're designing a menu,

Eric Stromquist:

I end up having this conversation a lot, Heather, and the problem is, I would say the majority of people that open a food service operation based, their pricing on what other people are doing and what they think the market will bear. I think with food trucks in particular, there's an expectation from customers that they're not gonna pay, prices like at La Cirque they're gonna want something reasonably affordable. But, I ended up working with a lot of clients that aren't gonna do clean monthly. Income statements, p and Ls, they're not gonna do inventory, they're not gonna do it on a regular basis, which means that, even if you have income statements, your food cost percentage is gonna be a rollercoaster. the trick is to, Know exactly what each item costs, and that's something you can figure out. And there's lots and lots of sophisticated software out there now, and I don't recommend one or another. Okay. I you can google, recipe costing software and you're gonna get, hundreds of options. my preference is, I have an Excel spreadsheet that works just fine. And I've also done it with clients who, one of whom was in tears and shall remain nameless,'cause she couldn't operate the software and even the Excel spreadsheet was too much. And I just sat down with her and we did it on paper with a pencil. you know, it's really a pretty straightforward process of, each ingredient. You break down into some countable unit, usually ounces each, add it all together. And, and a common mistake is people omit. Packaging and condiments. And, you need to count and, the containers now can be very expensive, especially if you are eco-conscious. Mm-hmm. And giving people, compostable utensils and on and on. And I applaud that for sure. but it's gonna add significant cost to your item and condiments too. You know? I not, everyone's gonna put a. squirt two tablespoons of sriracha on their rice bowl, but you should assume they are. Mm-hmm. price it accordingly. but once you get to your actual item cost and you're sure of it, then since you're pricing, it's the old saw in the restaurant business for the profitability formula is 30, 30, 30 10. Right. 30%. Product costs, 30% payroll, 30% overhead, and 10% profit. that's kind of more or less accurate for a full service restaurant. But it depends entirely on the concept. And let's face it, in a food truck, your labor's probably you, maybe you've got someone helping you. So your labor isn't gonna be 30%, your overhead isn't gonna be 30%. So you can get away with a higher. costs, but I would argue that it shouldn't absolutely. Should not be more than 40%.

Heather Z:

and oftentimes with food carts or trucks, the truck is small and they have a commissary kitchen, which is another rent. Some spaces for these food trucks is unbelievably high. And when I look at how much they're paying in rent, it's what we were talking about before, Efficiency and volume, can you actually produce enough to cover your rent each day? And what does that foot traffic look like? when people are designing a menu, since food spoils, take in consideration the volume of how many people come through there

Eric Stromquist:

that's a great point. in many instances they are paying to rent commissary kitchen space and do prep and usually storage is at a premium even in those places. Sometimes you get lucky and you find a spot that's got a lot of refrigerated or even frozen storage, but. the really critical issue people just have a hard time. Wrapping their heads around really believing in is that, I know you're capable of doing, more complicated, higher end food, but how quickly can you prepare it and how quickly can you serve it?'cause I said earlier, the revenue calculation is simple math and it doesn't lie. you gotta be able to serve customers quickly if you want to make any money. And nobody wants to stand around, especially if it's cold and rainy for five or seven minutes waiting for their food.

Heather Z:

you know, here in Portland we have a big food cart culture it's interesting how the prices suddenly like, why am I paying$18 for a Pad Thai? that just seems wrong. I understand that they're trying to cover their costs and they're Basing it on the market but how can a food truck keep their prices more in line with what people expect So people don't feel like they're getting price gouged

Eric Stromquist:

Again, setting up the menu, Heather, you just, you have to reel yourself in you're not trying To get a Michelin star, you're trying to make money. And then, for a lot of these people, their long-term goal, their dream is to morph into a brick and mortar. And if you get to that point, great. then think about adding some of these menu items. But. have to, discipline yourself when you're operating a food truck and focus on what you can serve and what you can serve affordably. you can't price yourself out of that market. People aren't gonna stand out in the cold for seven minutes waiting for an$18 Pad$12 maybe. you have to give the market what it's asking for. and a lot of people in the restaurant business make this mistake. I sure did when we opened Hot Lips Pizza back in the 1980s, we were gonna sell gourmet pizza and everybody was gonna love that and all these exotic ingredients and, hey, what do you know? Two thirds of our sales were cheese and pepperoni a better strategy is, is to give the customers what they want, even if it's, not your favorite thing in the world But, don't try and do it all in your truck.

Heather Z:

What else can you do to speed up efficiency with a food truck?

Eric Stromquist:

try to avoid menu items that require a la carte cooking, If it can be prepared in advance and it's not gonna degrade in quality that quickly, you're on the right track. you wanna just be able to assemble items and serve them. I understand that for a lot of foodies and. cooks, chefs. that's not a very interesting or exciting concept. I get it. But, if you want to run a food truck. Profitably. you need to consider that above all else. but, time is money Your top line, your revenue is gonna be entirely dependent on how quickly you can serve customers.

Heather Z:

any last thing that you wanna share that I didn't go over?

Eric Stromquist:

in general, I tell my clients this all the time is don't be afraid to fail. there are, no losses, only lessons If you try something and it doesn't work, and then that can be a small thing of if you put something on your menu that doesn't sell, get it off even the business itself, it's not for everyone. And, absolutely don't be afraid to fail. I've learned way more from my failures in life than I did my modest successes.

Heather Z:

Yeah. and share your failures too. if people are doing similar things talk to them, see what struggles that they've had. And we can all learn from each other because I think of, being an entrepreneur is also being like a scientist. you're always testing your ideas test it out and see if anybody wants it.

Eric Stromquist:

great advice, Heather and I, just to, to piggyback on what you were saying, it's really true. there are exceptions, but by and large, the small business community, they treat each other as brothers and sisters, not competitors. And they will share a lot of information and, before you start your food truck, it's a great idea to just, go around and talk to people and see what they think about it. And they, more often than not, are gonna share a lot of information.

Heather Z:

Yeah, exactly. the grim reality of owning a business. especially, a food truck, like you mentioned, they're probably the ones in the truck all day long, prepping and serving and doing all of the things. Then they gotta also manage their money and inventory and all that kind of stuff too. a lot of pokers in the fire,

Eric Stromquist:

maybe we can tie this up with a bow here back to what I said first Heather, and it's really true is there are a lot of people in the restaurant business there. They're, Amazingly talented chefs. But, unless you treat it as a business, chances are you're gonna struggle and maybe fail.

Heather Z:

how can they treat it more like a business?

Eric Stromquist:

Well, you just, you have to think in terms of dollars and cents a lot of places aren't gonna do monthly p and ls or income statements, but, your prime costs, product, cost, and labor, you can. Watch your labor cost. You know what your sales are and you know what your payroll is for a certain period. What's the percentage? And you know what your items cost. You know what you're charging, you know what your food costs ought to be. Those are two concrete steps you can take to manage your product cost and your payroll. if you do those two things, then you're running a business. You're watching the numbers and you know this, you live in spreadsheets, they don't, but that doesn't require you living in spreadsheets very long. Right? Right. And if you do those two things and do it regularly, then you're running a business.

Heather Z:

Yeah, exactly. one major mistake. I see when they're first starting out a business, they're not thinking about, how they're going to compile all their financials. So they're like, oh, I'll just put this on my personal credit card. I'll just put this over here. I'll just Venmo somebody this and do this, and now suddenly they have no idea what their costs are. that's where I see a lot of businesses get into trouble you ask them about their profit margins they have no idea. Then, maybe they're out of something, then they go to just a regular supermarket and, buy the ingredients. And now it's, at different costs There's a lot to think about. So it's, it's a, there really is, and

Eric Stromquist:

but yeah, I mean, that's another really, really common mistake, and it's a bad one, is co-mingling your personal and your, business expenses. some of the people we wind up talking to don't even have a business account set up separately and, then you end up giving. somebody a box at the end of the year and they're gonna charge you$3,000 to try and sort out your mess.

Heather Z:

exactly. tell us a little bit about your background. You mentioned that you started Hot Lips, which I had gone to Hot Lips Pizza many times as a Portland State student, I would go over to Hot Lips and get a slice. cause you know, when you're a college student, that's like what you can afford. Now you're, retired, but you worked at a culinary school. now what are you doing in your life?

Eric Stromquist:

I, had worked for 10 years at another place, which used to be Western Culinary Institute and morphed into La Cordon Bula and left Oregon Culinary in 2016, I believe. And, Portland just kind of wore us out and we had been in love with Astoria and just decided, you know what, we're looking for a slower pace, a smaller town, and we, we wanted to get out of Portland and we moved to Astoria and just, about six and a half years ago and we just, we love it I've been working the last three and a half years with the small business development center down here, which is tied to CLA of community college. we offer free advising to anyone that wants it. you know, we're, the SBDC is all over the country really are funded mostly by the small business administration. we're able to give free advice. We also teach programs, I do a little teaching, which I love. and those usually cost a little bit of money, it's all about building small businesses in our community and Astoria in particular, this North coast area is just really a tight knit community. It's been a lot of fun and gratifying to work with people here.

Heather Z:

That's awesome. they have so much exposure to other people that are in the business community that they are great people to network with. if you're looking for something, they might be able to hook you up with somebody that does that, Thank you so much, Eric, for being on the show today. Of course. I

Eric Stromquist:

really enjoyed it.