Food trucks are a great way to start a business and can create unique dining experiences for customers. You can either do it part-time like on the weekends or make it your full-time job.
Food trucks can become a great source of income if you manage to find a crowded and busy area with lots of hungry customers.
However, it might seem like a simple and easy business to start, but like most businesses, a food truck takes time and money for it to become successful. There are also other aspects such as licensing, inventory, operational costs, marketing, and more.
But with proper planning and research, you can run a successful food truck business without necessarily breaking the bank. In this article, we will discuss the various costs associated with starting a food truck and what you should keep in mind while setting up your business.
Initial Investment: The initial investment required to start a food truck business varies depending on the type of equipment and facilities it requires. So if you are planning to buy a food truck and start a business, this article is for you!
Table Of Content
Writing a Business Plan
Just like any other business, a food truck business needs to have a well-written plan. A business plan is an important foundation to establish goals, define the scope and purpose of your business, and create a timeline for launching and managing it.
For food trucks, a plan should include details such as the
- The type of food (food niche) you’ll be serving
- Your target customers and their needs
- Associated costs for starting a food truck business
- Competition in the area you plan to operate
- Marketing plans for promotion and generating sales
- Profitability projections based on your research and assumptions, etc…
As you can see, there are various aspects to consider while writing a business plan. Doing your research and having a solid plan in place will help you move ahead with the planning process with confidence.
Also, creating a business plan involves having a good idea of the tools and technology needed to run a successful food truck. For example, learning how to choose a KDS or a Kitchen Display System or how to choose the best POS system will make your job easier!
Licenses and Permit Costs for a Food Truck
Food trucks fall into the food and beverage industry, so they need to follow certain rules and regulations. You will need to acquire licenses, permits, and other paperwork from certain legal authorities before you can set up a food truck business.
You must also make sure that your food truck is compliant with the health codes of the area it operates. As part of this process, you may have to get inspected by health department officials and obtain a food establishment license.
In addition to that, you will need to get a business permit from your local government office, register your business with the state, and acquire any other additional permits depending on where you plan to operate.
The cost of acquiring these important documents can vary greatly depending on the location and your business model, so make sure to get a detailed quote from the relevant authorities before planning your business.
However, a typical food truck business can expect to pay anywhere between $50-$500 for licenses and permits. You must also factor in the cost of renewing these permits regularly as required.
Renting vs. Buying a Food Truck
It is one of the biggest decisions that you will have to make while starting a food truck business. You can either buy a used truck or rent one for your operations.
Buying a food truck
Buying your food truck is always going to be a better option only if you have the necessary capital and resources available. The cost of buying a used food truck can vary between $20,000 -$75,000 depending on the model, condition, and features.
However, let’s say, your business doesn’t go according to plan or your food truck needs repairs and servicing, you will be fully responsible for all these costs.
If you want to later sell your truck, you will have to keep in mind that its resale value is always going to be lower than when you bought it.
So you should only plan to buy a food truck if you have a full-proof business plan in place, enough capital to buy it outright, and resources for maintenance and repairs.
Renting a food truck
Renting is also a convenient way to start a food truck business. It gives you the flexibility to select from different models, without having to worry about buying and selling costs.
Rentals are usually charged on an hourly basis or daily basis and can cost anywhere between $50 -$500 per day depending on the size, facility, and amenities that come with it. You can even find discounted food truck rentals for special events or longer duration.
Though renting does not give you ownership of the vehicle, it is still a good option to consider – if you don’t have enough capital to buy one outright and are just testing out the market with your business idea.
Necessary Kitchen Equipment
One of the obvious requirements for setting up a food truck business is getting the right kitchen equipment. Depending on what type of food you plan to serve, you will have to buy certain kitchen items.
Some of the most common food truck equipment includes
- Deep fryers
- Refrigeration units
- Prep tables
- Storage racks
- Food warmers
On the other hand, you’ll also have spoons, plates, cups, and utensils to serve your customers. All these items will depend on the type of food you are serving and how much space is available in the truck.
Now you can either rent or buy these items depending on your budget and needs. Make sure to check out different suppliers, compare prices and services, and select the one that best suits you.
On average, the cost of kitchen equipment for a basic food truck can vary between $2,000 -$10,000.
Similar to kitchen items, you will also need to purchase food supplies, condiments, and drinks depending on what type of cuisine you plan to serve.
You’ll need to buy fresh ingredients like vegetables, meat, dairy products, etc., as well as processed items such as sauces, spices, and more.
It’s important to calculate the cost of these items and factor in the cost per serving. This will help you get an idea of what your expenses are likely to be and how much profit you can potentially make.
On average, the cost of food inventory for a basic food truck can vary anywhere between $500 -$2,000. You can go higher or lower depending on the type of food you are serving and how much you plan to stock up.
You can also use a pos system for your food truck.
Operational Costs of a Food Truck to Get Off the Ground
So the operational cost for setting up a basic food truck business can range between $20,000 -$75,000. If you have an idea of how much it costs to start a restaurant, you can get an estimate of the operating cost of a food truck.
This includes the cost of buying or renting a truck, kitchen equipment, inventory, and other expenses such as licenses and permits.
Apart from these one-time costs, you will also have to factor in recurring expenses like fuel costs, insurance, marketing, advertising costs, etc.
It’s important to consider all these expenses before starting a food truck business and plan accordingly. This will help you get an idea of how much money you will need to generate to make a profit.
To beat your competition and let people know about your food truck, it’s more important than ever to invest in marketing.
Now there are multiple ways you can start marketing your business, from traditional methods like putting up flyers and advertising in newspapers to digital marketing channels like social media, email campaigns, etc.
Depending on the size of your budget and the method you choose – the cost of marketing can range anywhere between $200 -$2,000 per month.
It’s important to set aside enough funds for this purpose as it can help you reach your target audience and attract more customers.
Setting up a food truck business is an exciting venture with huge potential. However, to make sure that everything runs smoothly – it’s important to factor in all the costs involved and plan accordingly. This will help you get an idea of how much money you will need to generate to make your business a success. Good luck!
Also Read: How to Start a Smoke Shop?