Food Truck Startup Costs
The amount of work required to open a bricks and mortar restaurant of your own can be daunting, especially if you have no prior experience in the food industry. However, a food truck could be the perfect entry point into the world of catering. New food truck operators are opening businesses all the time, and the industry itself is currently worth an estimated $1.2 billion - so now could be the time to launch your new venture.
To help make your food dreams a reality, we’re taking an in-depth look at the costs involved with starting a food truck.
Writing a business plan
More often than not, money is the main thing holding entrepreneurs back from following their ambitions. As a new business owner, the first step in is to write a business plan. This should focus on your financial forecasting, covering your initial funding requirements, a close look at the predicted food truck costs and how you believe your business will grow in its first few years. The more research you do in the initial stages and the more thorough your research is, the easier it should be for you to get your business up and running.
You can get a better idea of how much money you’ll need to start your food truck business by using our custom startup cost calculator (please note these costs are indicative, and you can alter the figures for your own requirements).
Resources and equipment
Your main expense will be the food truck itself - prices range considerably when it comes to buying one of these specialist vehicles. At the low end of the scale, you could be looking at spending around $50,000, however, prices can go a lot higher for a new food truck, especially ones which are fully equipped and decorated.
Other costs you’ll need to factor in include:
- Insurance - $2,000 to $4,000 per year
- Initial food costs and inventory - $1,000 to $2,000
- Uniforms - $0 to $1,000
- Paper products (napkins, plates, etc) - $200 to $300
- Website - $0 to $5,000
Hiring a team and finding vendors
One of the benefits of owning your own food truck is that they only need a couple of people to make them work. So if you’re planning on working in the truck yourself, you’ll only need one, or possibly two, employees. The average wages you can expect to pay your staff will vary from state to state:
As well as staff, you’ll need to source reliable vendors if your food truck startup is going to be a success. When looking at the price of ingredients, remember that you’ll bemarking up by around 300%, so you will need to think about your profit and loss here.
Getting your paperwork in order
Paperwork is an important part of launching any new business. Even though your food truck will be mobile, you’ll still need a number of permits and licenses before you can begin trading. These include:
- Employer Identification Number
- Business License
- Vehicle License
- Seller’s Permit (some states only)
- Food Safety/Food Handler’s Permit
- Health Department Permit
- Fire Certificate
Choosing the right payment solution for your business
In general, consumers who use food trucks want to be served as quickly as possible. Most customers will also appreciate the ability to pay using a variety of methods. This means you’ll need to invest in a point-of-sale system that can process payments quickly and efficiently, and that accepts all common payment methods.
The cost of your POS system will vary depending on the package you choose. While some providers ask for a flat fee, others optimize each transaction based on a variety of factors.
For more information on how payment processing works, read our Credit Card Payment Processing 101 Guide.
Invest in marketing
Although a lot of entrepreneurs invest heavily in marketing, there are a lot of ways to keep these costs down. Many food truck owners make use of social media which can be an incredibly effective marketing tool, and a fantastic way to get your brand name out there and bring people to your business.
These are just a few ways to attract customers:
- Post menu items and appetizing content
- Free or inexpensive advertisements
- Offer incentives / discount codes to connect with you
- Partner up with other food trucks in your area
Food truck stats
Between 2007 and 2012, the food truck industry grew at an average rate of 8.4% per year. In general, it costs between $28,000 and $114,000 to get a food truck business up and running, with the average food truck earning around $300,000 per year.
Starting your own business is incredibly rewarding, especially if it’s a success. The most important part of starting any new business is getting your financial forecasting right. Make sure your costs breakdown is as accurate as possible to ensure there are no surprises along the way.