Cat & Joe’s Pig Rig: Food Truck Business

Introduction

With their food truck business, which they called “Cat & Joe’s Pig Rig,” the engaged pair Cat and Joe were the leading chefs. They are masters of low and slow beef and pork cookery. Their truck’s performance exceeded expectations, and the company’s clientele had expanded. To boost their regular revenue stream, the couple participates in community events and provides catering services (Bell & Fergus, 2017). In Kamloops, British Columbia, they have the first pulled pork food truck. It was requested that the couple bring their vehicle to the “Bullarama” rodeo in the adjacent town of Barriere. Ticket sales indicate 700 individuals attended the charity rodeo Bullarama (Bell & Fergus, 2017). Cat and Joe may offer their consumers lower prices and faster turnaround times by limiting their menu to sandwiches that fit those criteria. Further costs of $300 would be incurred to cover the fixed costs of attending the event, including $100 for petrol, $100 for donations, and $30 for a second vehicle (Bell & Fergus, 2017). Due to this, the pair is debating whether or not to travel to the event from Kamloops. However, the pair only knew what to do once they weighed the benefits of attending the Bullarama Event.

Benefits and Drawbacks of Owning a Food Truck

There are numerous benefits to operating a food truck rather than a brick-and-mortar eatery. Investment and operating costs for food trucks are lower than those of traditional restaurants because of the mobility of the business. The less initial investment is needed because the machinery is more compact and less expensive to run (Bell & Fergus, 2017). The smaller crew required to run a food truck results in cheaper labour costs compared to a traditional store, and often the owners are the workforce and do not receive a salary. On the other hand, mobile food vendors can take their businesses wherever their consumers are and participate in events to generate new revenue. There is no need for costly advertising because they are already where their customers are.

If not handled correctly, the benefits of having a food truck can rapidly become a liability. Smaller, less expensive appliances mean less kitchen space is available, which slows service. Due to insufficient refrigeration space, business owners cannot stock as wide a selection or as much food (Bell & Fergus, 2017). A potential loss of income due to the vehicle breaking down cancels any benefits from its mobility and adaptability. Due to the correlation between sales and weather, the selling season is shorter. If current customers do not know where the truck is and other vehicles do not respect the sales boundary, the money saved on advertising could be squandered.

Key Issue

When a company is presented with a business opportunity, it must carefully weigh the benefits and drawbacks of the arrangement. “We do not need to say yes to every chance,” Cat and Joe stated (Bell & Fergus, 2017, p. 1). This demonstrates that the pair pondered the potential benefits and drawbacks to their business of attending the Bullarama Event. This research examined whether or not Bullarama events are helpful to businesses by analysing various variables, including opportunities, costs, earnings, and business threats. If the issue of whether or not Cat & Joe should go to the Bullarama can be settled, the business will certainly see an uptick in profits if the most lucrative option is chosen.

Alternative Courses of Action

The business has two alternative courses of action to address the issue at hand.

1. Cat and Joe can operate a regular day in Kamloops.
2. Cat and Joe can attend to Bullarama Event.

Courses of Action Evaluation

No competitor	One competitor	Two competitors
$ 1, 783.69	$ 685. 69	$ 316.69

Pessimistic	Realistic	Optimistic
$ 807.41	$ 1, 107.41	$ 1, 407.41

Assumptions

• Even though 700 people bought tickets, they still needed to show up.
• The weather will be pleasant
• Thirty-five per cent of the crowd will buy food.
• Only a few available alternatives.
• No other notable eateries are located near the event venue.
• Nonetheless, Pig Rig is not widely known in Barriere.
• Other food trucks may also be present.
• No other pulled pork food truck operates in Barriere.

Recommendation

An alternative course of action No. 1which is to stay in Kamloops and continue with daily operations, appears effective. Due to this, I recommend that Cat and Joe spend the day in Kamloops because it produces highest margin safety (see Table 2). This difference is significant compared to the predicted profit from pursuing Bullarama event (see Table 1). Furthermore, there is a significant possibility that there will be more than one onsite competition and a greater possibility that clients may reject their product.

Conclusion

Pig Rig could lose a day of revenue by participating in Bularama; that loss might not be worth it if the event’s anticipated margin safety holds. Furthermore, when choosing a business, they should consider the relative importance of non-financial benefits and drawbacks. With more time under their belts, Cat and Joe will have a better idea of how to plan for the future of their food truck business in terms of attending events and expanding their operations.

Reference

Bell, T., & Fergus, A. (2017). Cat & Joe’s pig rig: Should we stay or should we go? Sage Knowledge. Web.