Ownership Types, Each With Their Own Advantages

¶ … ownership types, each with their own advantages and disadvantages. The simplest structure is the sole proprietorship (Wyman, 2013). In this structure, income flows to the proprietor for tax, but the proprietor bears all the risk of the entity. This is an inappropriate structure for a company that sells food and has employees. A partnership is an option. The partnership agreement will outline the contributions that each partner makes, and the split of the profits. The partners still bear the risk of the business, which again is not appropriate for a food service establishment, nor for that matter a moving vehicle.

The most logical form of business organization is the corporation, but there are several types of corporation to choose from. A limited liability company enjoys flow-through taxation, but limits the liability of the owners. This form of business organization is beneficial for a company like a food truck, but it is worth noting that the IRS does not recognize LLCs, so the company must be organized in one of the other ways for taxation purposes. The basic form of corporation is a more complex form of organization, but one where the risk is limited to the equity in the company, and the company is taxed on its income as a distinct entity. The principals would only be taxed on whatever salary or dividends they draw from the business, plus whatever capital gains they would enjoy when they sell the business. It is recommended in this case that a partnership be formed, but taking advantage of the LLC form to limit downside liability while retaining flow-through taxation.

Marketing is a key element to any successful business. Food trucks, because of their mobile nature that compels customers to seek them out, need to have the ability to create a buzz (Lagorio, 2010). To this end, the promotion strategy is a key success factor. Social media is common for food trucks, because it is one of the main ways to reach the target demographic. In addition, the constant changing of locations necessitates an easy way to communicate with fans and potential customers about one's location. Twitter is particularly good for this. However, social media is also used for promotions, and loyal followers can be cultivated by occasionally rewarding them with special food, deals or events.

In addition, it has to be said that place is a key success factor in the marketing mix as well. The place will change, but all of the locations where the food truck resides in the course of a week must be strong. It is also recommended that the rotation be consistent, so that people have a better idea of when and where to expect the truck. Product is also important. With any food business, the long-term sustainability of the business depends on the quality and appeal of the food. This is why we have a focus on comfort food. The ingredients are rich and the dishes are familiar, a good way to appeal to a wide audience.