A successful business owner is always looking for new opportunities. Whether it’s an opportunity to grow their business by building new locations or expanding their services, a company will not be successful by staying the same.
Some brewery owners see food trucks as an opportunity for expansion. The opportunity to serve food as well as their beer products give brewery owners the possibility of new revenue. Yet, a food truck might not always be the best choice for those looking to serve food. The costs of opening a food truck line can often offset the potential revenue an owner might receive.
The amount of money needed to start a food truck will depend on many factors. Buying used trucks or equipment, staff size, and administrative budget will make start-up costs smaller. A new truck, full staff, and budget will drive expenses up. All in, according to food truck statistics an owner can expect to pay between $50,000 up to $120,000.
Opening and managing a food truck is more than buying a van and driving to different parts of town. From fuel, supplies, and permits, the expenses of a food truck can add up quick.
Outside of the initial cost of the truck, additional costs include:
- Food and supplies
- Licenses and Permits
- Employees and Training
We’ll breakdown the costs to help provide an estimated cost on what to expect when opening a food truck.
1. The Truck
The essential component of a food truck is this actual truck. Just as purchasing any vehicle, prices can vary. If buying a new truck, you can expect to pay much more than buying a used truck. If the food truck has a lot of upgrades, it will cost more than a basic model.
At a minimum, a food truck will cost around $50,000. This price point can come with hidden expenses as a truck in that price range will likely need work done to bring it up to operational standards. Additional costs could include work on the engine or the kitchen.
A new kitchen in a used truck can add $75,000 – $100,000. A new kitchen isn’t always required, but it can help prevent future issues.
If the work of updating a used truck sounds like too much effort, a new truck with a new kitchen will run at least $100,000 and can go up to as much as $ 175,000.
2. The Fuel
A recurring cost to remember when operating is a food truck. A food truck that can’t move isn’t a food truck at all. A food truck isn’t known for getting the best gas mileage. When driving a food truck, expect to be refueling often. If other pieces of equipment require a generator or other source of energy, it will increase the cost of fuel used as well. All in all, fuel for a food truck can average around $500 to $1,000 per month.
3. Food and Supplies
An absolute necessity for a food truck is… food. It is essential to incorporate the cost of food and supplies required for the dishes served.
Experts in the restaurant industry state that to remain profitable, food costs should be 28% – 35% of the price for which the product sells. For most food trucks, food cost can be around $1,000 – $2,000, with serverware expenses being an additional $300.
Despite the importance of food costs, many restaurant owners do not calculate food costs correctly. If food cost figures incorrectly, the food truck will have issues with cash flow in the future.
4. Licenses and Permits
Administrative duties for a food truck are just as costly as the physical goods. To stay on the up and up with the government, a food truck owner will need to make sure they have all the permits and licenses required to operate.
These documents are either administrative, health/menu/food safety, vehicle requirements, and safety/hazard prevention, employment, and zoning.
The price of permits varies by city and state, but the average price from the top-19 food truck cities is $1,864. Indianapolis is the cheapest at $590, and Boston has the highest fees – by a lot – at $17,066. Though, Boston’s charges are substantially higher than the second-highest fees, Seattle, at $6,211.
TIP: Learn how to get a food service license for your food truck.
A food truck is excellent because of its mobility – allowing it to travel from spot to spot and going to customers instead of relying on them to come to the restaurant. However, when the food truck is stopped and ready to serve, where can it be parked?
Cities have various rules and regulations on where food trucks can park, so it is important to research local laws.
Here are a few considerations about parking spots:
Parking during business hours can depend on the size of the city. Cities with a larger population will generally have more regulations about where food trucks can park. Some spots may lease food truck parking for rates of $500 – $1,000 month. These spots typically provide a location for many food trucks to gather and offer amenities to customers like tables and bathrooms.
Parking during off-hours is again dependent on the city. For smaller population cities, it may be as simple as parking the truck in a residential driveway overnight. For cities that have parking as a premium, other costs may occur for parking while the truck is not in operation.
Event Parking is a great way for food trucks to get business. Knowing where customers will be is half the battle. If an event is happening, it is almost guaranteed sales. Participation in activities – like festivals or concerts, can range from $200 – $1,000 to reserve a spot. Some events might require a percentage of profits as well, so it is crucial to read the entire agreement.
A great product is nothing without great marketing. To grow the food truck business, more customers need to be aware of the service.
If a food truck owner is savvy and willing to learn, they can save by doing marketing for themselves. Social media is a free opportunity for owners to market their food trucks, letting customers know where they will be, what’s on the menu for the day, and giving a platform for happy customers to voice their testimonials.
If marketing is too big of a task for an owner, they may need to hire additional staff. When paying for marketing services, tools for email marketing, digital marketing, graphic design, or website can create substantial costs.
How much or little an owner is willing to place into marketing, costs can range from free to over $50,000.
7. Employees and Training
The amount of staff required to operate depends on how much work the owner is willing to do to themselves. A busy food truck operator may need a crew to assist in food preparation and sales. A hands-off owner will also need a manager to deal with day to day operations.
In reality, the amount of staff required to operate a food truck will depend on how the number of customers the food truck has. In busy cities, one truck may have a crew of four to six people.
The amount to pay employees will differ based on the local cost of living, but generally, wages for line staff are around $15 and $20-$22 per hour for managers.
8. Technology (POS)
Previously, food trucks would operate as a cash-only business. In the 21st century, fewer people carry real money and rely heavily on credit and debit cards.
Food trucks require a quick POS system that can communicate with their cooks, accept card payments, and give their customers a swift and efficient experience. Costs for a food truck and restaurant POS system can change based on what features, but a new food truck owner can expect to pay around $1,000 or less.
To be successful, a business owner needs a plan. It is necessary to understand the market and the value of the service that they are providing. A business plan needs to be created to identify these as well as the other intricacies of running a business.
An owner can create a business plan themselves, but if they are inexperienced, it may be worthwhile to hire a consultant for assistance. The cost of hiring a consultant can range from a few hundred dollars to many thousands depending on the amount of work required.