Starting a mobile business in the UAE; selling from a truck

Many people don’t realise that mobile businesses are not novel, to even this century.

From fruit and toy vendors pushing around carts, girls with lemonade stalls and bullock carts selling fresh produce in small Indian villages, to the friendly chaat bhai around the corner, mobile businesses have been around for a long time. It was only around 10 years ago that food trucks in particular became popular as a one-stop cooking and selling station.

In the UAE, many businesses – mostly established brands – have been going mobile and this is not limited by industry. Fashion, retail stores, pet grooming, mobile offices and tailoring services are popular business ideas, other than food, that have gone mobile in the UAE.

We spoke to several stakeholders in the business to understand the why and how of starting your own mobile business in the UAE. From the final decision to start a business to ultimately getting your business on the road – literally – there are many things to consider.

Why would you want to start a mobile business?

In many countries, a mobile business is often considered a first step or a stepping stone to going true ‘brick and mortar’ style – especially for food vendors. This helps create a customer base and try out the offering without tying up money in real estate investment.

In the UAE, however, many vendors go the other way around. Many mobile businesses here stem off of established brands that already have a store or fixed outlet – the mobile aspect is an added feature for many.

To find out why we spoke to some companies that help business owners get mobile.

Bespoke Trailers is a UAE-based company that specialises in creating made-to-order trucks, trailers and carts for businesses that want to go mobile. Jamal Wick, co-founder at Bespoke Trailers said, “We were originally in manufacturing and trading, but we saw an opportunity in the food truck business, and so shifted our focus on to that.”

Starting a mobile business has increased efficiency by at least 25 per cent for many of our clients. For various industries trucks are not just a point of sale option but also a great tool for advertising the business effectively.

- Jamal Wick, Co-founder of Bespoke Trailers

SugarMoo is one such brand based entirely on mobile operations. Started as an online dessert delivery bakery, they use everything from kiosks to stores-on-wheels to sell their products.

"We have needed kiosks for event purposes with the most sophisticated customizations for approximately Dh15,000 all the way to mobile units which are virtually store fronts on wheels for approximately Dh70,000. This is significantly much more cost effective than the traditional brick and mortar budget that can run up to millions", said Raki Phillips, Co-founder and CEO of SugarMoo.

However, Wick has a word of warning for prospective business owners. “Starting a new mobile business from scratch [in the UAE] can get complicated and expensive”, he says. This is attributed to several factors including cost of set-up, the legal and hygiene requirements for businesses such as food trucks and different levels of paperwork. However, as long as you have the capital and the patience to push through the initial set up, a mobile business in the UAE has the definite advantages of flexibility and creativity for business owners.

It’s not all about huge trucks and trailers. Al Mouj Muscat is a waterfront development in Oman, and they used the mobile concept to push their retail offering called The Walk set along the marina promenade. They used pop-up style kiosks and carts on The Walk, to add to a pedestrian friendly retail shopping experience.

The benefits to Al Mouj are several, they said: creation of a new revenue stream, activation of space, provide a platform for SMEs to affordably enter the retail sector while also offering existing retail outlets an opportunity to reach new customers. This also appeals to big-name brands and local entrepreneurs/SMEs

Ask yourself

So this part of the equation is really important, especially here in the UAE – the huge ‘why’. Here’s a checklist to ask yourself when considering a mobile business;

What trade license should you get?

If you are a business owner already with a trade license that covers the operation of your prospective mobile business, you can use that – thus significantly cutting down a heavy item on your expenses list when going ‘business-on-wheels’. However if you are starting from scratch you need a related trade license, which costs Dh15,000 or more depending on your business.

“This would be, by far, the most expensive item on your licensing requirements list, with other permits/licenses adding up to Dh2,000 or less“, says Wick.

The Big Idea

To start off, as with all business trucks, you need to have a strong business idea and plan. This will also address the aforementioned ‘Why’ of your business. From your concept to the name of your business, have everything jotted down. You need to also streamline the menu which will help you in the licensing process and when the truck is being designed or customised for you. Get experts to help you with every aspect of the business before and after set up including marketing, accounting, food vendors, kitchen contracts, kitchen fittings and possible locations to sell your product effectively.

When talking about a mobile business or a truck, people mostly think food – however, UAE is home to many diverse companies offering mobile services. For example, Pets in the City, Nin9 Tails and Shampooch are all mobile pet grooming services in the UAE, who also have physical salons and stores as well. The Custom Shop New York, which has multiple permanent stores across the UAE, has a boutique-on-wheels option called The Tailor Truck offering tailoring, alterations and fabric selections on the truck itself.

A unique mobile truck business we spoke to was Fixerman. They have a FixerVan, a gadget repair centre on wheels, getting to customers requiring urgent and quality gadget repairs across Dubai. Any unique idea and offering requires strong investment though, for example Fixerman was set up at a cost of Dh1 million.

A food truck business?

Starting a food truck business in particular has a few extra rules and regulations because it deals with food as the main product, with mandatory hygiene and sanitary standards to maintain.

You need your own kitchen

Wick says, “Food trucks are where most people may struggle if they’re starting from scratch on their own without an already functioning restaurant which has kitchen space.”

This is because, according to UAE law, no food can be cooked in the food truck itself – the only cooking allowed is the kind that enables heating and serving of the cooked food – more like a finishing station. Therefore, unless you already have kitchen space, the owner will have to enter into a contract to rent space and time in an industrial kitchen to cook on a daily basis. This contract is key to getting your licensing and permits.

The rental can add significantly to the daily cost of running a business, especially if you’re struggling the first few months – as can be expected.

Your truck

After that you can start on the interior design of the truck, which is everything from the size of the truck to the number of water outlets you need. In most cases, suppliers start off with a consultation session to understand what you need in terms of truck design.

“A standard shell and core truck for us is around 7 meters in length, two kitchen sinks, around 150 litres of water-holding capacity, along with standard kitchen fittings. For a custom-made truck like this, a client could pay anywhere from Dh105,000 to Dh135,000 depending on various factors”, Wick said when asked about basic costs. He also said that there are options where you could ask for just the base truck, ready to be fitted, and then deal with kitchen installations on your own. “This [standard kitchen fittings inside the truck] usually costs around Dh40,000 ”, he added.

If you don’t want a custom-made one, companies such as Truck-a-licious and Bespoke Trailers also sell ready-made trucks. Used food trucks can even be found for sale in user-sourced classified sites such as dubizzle. While costs may be lower for second-hand trucks, as compared to trucks built just for sale, you would have to pay extra for customisations based on your business idea.

Another option is to rent one. There are companies who offer trucks for rent – again the customisation cost and limitations can be cons - while you’re not tied down by heavy capital investment.

There are many vendors who custom-make, lease and sell trucks in the UAE including The Food Truck Co., Truck-a-licious, Jorefco Food Trucks, Bespoke Trailers, Food Truck Kings among others.

Licensing

You have to deal with and get permits from various government departments depending on your business idea. For food trucks, this includes the Dubai Economic Department (trade license and name), Dubai Municipality (food safety and health permits) and Roads and Transport Authority (getting your business on the road and getting permits for setting up shop in public places). On a regular basis you will have to deal with Dubai Municipality and the RTA depending on new events, new locations to sell at, menu changes etc.

Can you sell anywhere?

No. You have to be semi-permanent on whichever location you get a permit for. You can sell in private areas with a rental contract, and in public areas with an RTA permit. You could spend as little as Dh500 for one month with an RTA permit, and up to Dh25,000 per month in private spaces like malls or retail developments depending on the contract.

“For food trucks Last Exit is an ideal spot; the yearly rent could be anywhere from Dh600,000 to Dh1 million a year”, Wicks said when asked about collated spaces for trucks.

Competition

While mobile businesses can be considered new to the UAE (just a couple of years in), the industry is very competitive. One of the vendors we spoke to refused to give us generic licensing details for that sole reason.

“Truthfully, we've had several people who have tried to replicate our business and copy our concept. Hence as a business, we prefer to not elaborate or reveal the trade information on what the procedures are to establish a business like our own because of its unique nature.”, the proprietors said.

Will you start a mobile business in UAE?

A mobile business is flexible, requires lower investment than a brick-and-mortar establishment and offers more options to get creative with the product and the service. However, it requires deep research, customer surveys, smart designs and business plans, heavy traditional and modern marketing investment to truly succeed. As with all businesses there is risk, but if you hit it off there is no looking back.