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Wheels come off food-truck venture

By Roz Wrottesley Time of article published Feb 26, 2020

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“When A friend told me about a food truck for sale, it felt like the gods were sending me a message: ‘Here’s your chance - now let’s see what you can do with it.’ I have to have a second income, and this would get me out of the kitchen at home, combine my driving and cooking and give me a chance to be my own boss. And maybe mobile catering could be developed into a business, and I would be able to give up my driving job. Everything about it seemed right.

“The couple who owned the truck wanted R150 000 with all the fittings: gas hotplates, a fridge and a freezer even a cash register. It was small but so well designed. I was so excited to be able to reach everything from one standing position.

“The owners had been selling the usual hamburgers and hot dogs and chips, but they must have done it well because they showed me their books, and you could see it was successful. I showed the figures to an accountant, who agreed they were good, but he did warn me that curries in roti wraps were totally different, so I couldn’t really expect the same results. But what else can you do that doesn’t need a huge investment?

“My wife, Sara, doesn’t work and was willing to help, and my children were old enough - 9 and 11 - to be excited about going to different places on weekends. So I told my extended family, and they all thought it could work. The decision was the easy part; the big problem was money. I had a bond and a car loan and some credit card debt and children needing an education no one could see a bank giving me a loan just because I can cook curries.

“After endless talking and worrying, my mother offered me a gift of R50000, which will be deducted from my inheritance one day, and my brother agreed to lend me R100000 at 10percent interest, to be paid back in monthly instalments of R5000 over two years. I was so excited. I managed to scrape together enough to cover the extra equipment the truck needed and to smarten it up with new paintwork and a new name.

“We needed some practise serving the wraps, and we worked out which sambals and chutneys and sweet treats that we could offer on the side to bring some variety to our menu. It took a while to feel confident doing it, but it was interesting - we’d go to private parties, markets, and sporting and music events mainly, up and down the coast and as far as Pietermaritzburg.

“It was often profitable, but there always seemed to be more potential, which kept us going and made me wish I could do it full-time. I never stopped thinking of giving up my driving job one day.

“But that never happened. My brother started to worry about getting his money back from the very start. He would question me endlessly, tell us to try taking the truck to places that weren’t going to work, or keep on at me to market the truck more. And when we were arguing, my mother would get upset with us.

“Things were so tense that when things started to go wrong, it seemed inevitable. We had started in September 2017, and in 2018 the fuel price went up a lot, with no serious prospect of dropping again, and we had some disappointing events that ended in losses. Then the truck was rammed by another car in a shopping centre car park and I had to pay an enormous excess, and the children were getting tired of the travelling.

“When I couldn’t pay my brother every month, I really thought he would let me extend the loan - after all, I wasn’t going anywhere. I thought it was only banks that were hardegat (stubborn). But he was really upset and wanted the details of my family budget to prove I didn’t have the money, as if I was a child.

“Eventually, he was communicating with me only by email. And the tension made Sara very anxious too. We had had a close family; I couldn’t believe how much damage was being done.

“I didn’t know what to do. I knew enough about food trucks by then to know it wouldn’t be easy to sell it. It was terrible; at least a bank could have taken the truck in lieu of payment. And the family wouldn’t have been involved - in fact, I might have got some sympathy and support.

“Meanwhile my debt was growing, and I had less and less motivation and energy, because I knew it was over. Then I had some luck at last. A guy who runs a chain of market food stalls wanted to add a truck to the mix, so he could take small event bookings. If I sold him the truck, he would employ me to run it on weekends and holidays.

“And that’s what I’m doing now. Selling the truck didn’t clear my debt, but it went a long way. I don’t know if I’ll take a chance on working for myself again. I’ve learnt that I like the security of being employed, with someone else making the decisions. Running a business takes over your life; you can’t think of anything else.

“But most of all, I have learnt that you shouldn’t borrow start-up finance from family or friends. You need to operate independently and accept that the pain and/or the profits are yours, on your own. Another thing is that applying for a formal loan would have forced me to do more careful research.”


“Nesh recognises his mistakes to a great extent and it’s generous of him to share his story,” says Craig Torr, a certified financial planner professional and director of Crue Invest in Cape Town.

“He won’t be surprised our advice would have been to put much more focus, right from the start, on budgeting and forecasting for the business.”

Torr makes three key points:

1. The set-up costs of a business are only one part of the planning. Nesh doesn’t seem to have factored ongoing costs into his budget, such as insurance and excesses, food costs, rising fuel costs, seasonal demand, or the amount of personal effort he would need to put into shopping, prepping, cooking and managing the truck, especially with a full-time job. He definitely would have benefited from some budgeting and forecasting assistance before starting the new venture.

2. Nesh was encouraged by the previous owner’s success, but hamburgers and hot dogs have wide appeal, whereas his spicy curries would appeal to a smaller market segment. That would naturally affect profitability.

3. If Nesh and his brother had entered into a written loan agreement they could have included terms for non- or late payment. Without that formality, Nesh’s brother felt he had license to interfere in the business.


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