The popularity of food trucks has exploded within the past decade. What began as a fad has transformed to mainstream as Americans have embraced mobile restaurants. As a result, aspiring chefs and restaurant-industry entrepreneurs have turned to food trucks as a lower-cost, lower-risk alternative to opening traditional restaurants. However, it’s crucial for aspiring entrepreneurs to understand about their potential food truck costs before trying one out.
Even if food truck owners aspire to at least one day open brick-and-mortar locations, starting out with a mobile operation may be a smart thanks to try different neighborhoods, test and tweak dishes, and build a following before taking the plunge with a physical location.
Perhaps the foremost attractive aspect of starting a food truck rather than (or as a precursor to) a brick-and-mortar restaurant is that the concept it’s a relative bargain. But the particular food truck costs endured, especially counting on where you reside , could be greater than you expect.
Food Truck startup costs
So what proportion does a food truck cost? the solution is that it depends, but let’s take a glance at a number of the food truck cost factors that determine startup and operating expenses.
Licenses and permit costs for a food truck
To start a food truck and operate for one year, an entrepreneur spends a mean $28,276 on permits, licenses, and legal compliance, consistent with the U.S. Chamber of Commerce’s Food Truck Index.
The types of permits and licenses required to work a food truck fall into these five categories: administrative, health/menu/food safety, vehicle requirements and safety/hazard prevention, employment, and zoning.
Costs vary by location, but the five cities friendliest to food trucks are Portland(Oregon), Denver, Orlando, Philadelphia, and Indianapolis. The five toughest cities for food trucks are Boston, Washington, D.C., San Francisco , Minneapolis, and Seattle.
Indianapolis has rock bottom fees at $590, while Boston comes in at $17,066 (Seattle has subsequent highest fees at $6,211). Boston is an outlier with its extra-high fees, so if you remove it from the equation and calculate the typical permit and license costs of the opposite top-19 food truck cities, you discover that the typical fees paid by food truck operators are about $1,864.
In food trucks, as in land , location is everything. So if you’re trying to make a decision where to start out your food truck, think critically about whether your city’s permit and licensing fees — on top of all the opposite costs related to your business — are cost prohibitive.
The cost of renting vs. buying a food truck
Perhaps the most important (and priciest) question new food truck entrepreneurs face is whether or not to rent or buy their vehicle. And this may deeply effect food truck costs. you’ll expect to spend anywhere from $75,000 to $150,000 on a replacement , made-to-order truck, consistent with Restaurant MBA, and that they take months to create .
Used trucks generally cost between $40,000 and $80,000, and you ought to be ready to start using them soon . the value of renting a food truck depends on the length of the lease, but if it’s longer than, say, six months or more, it should be around $2,000 to $3,000 per month.
Necessary kitchen equipment
The type of kit you would like depends on the sort of food you serve, but common appliances are ovens, fryers, grills, and refrigerators. Other equipment may include pots and pans, storage containers and knives, serving implements, and other utensils. Appliances can cost well into the thousands, and supplies like pots, pans, and other tools can cost a couple of thousand dollars.
When you’re launching your business and handling many other food truck costs, it’d make more sense for you to lease appliances while you work out what you actually need and build up the capital to reinvest in your food truck.
Inventory needed to urge off the bottom
The basic materials you would like to launch your food truck include ingredients for your menu items and serveware like plates, cups, lids, utensils, and napkins. The startup costs for ingredients depends on your menu, but expect to spend around $1,000 to $2,000 once you take under consideration items like vegetable oil , spices, and more. Serveware startup costs for food trucks are around $300.
Operational costs of a food truck
The greatest food truck costs related to running your business don’t have anything to try to to with the food. Gas, insurance (auto liability, general liability, workers’ compensation, etc.), permits, licenses, maintenance, equipment, and supplies are all major considerations when creating a budget and deciding how you’ll turn a profit.
As noted above, the typical cost of permits and licenses within the top-19 food truck cities is $1,864. Fuel and maintenance costs vary, but average around $500 and $1,000, respectively. There’s also the value of implementing a restaurant point-of-sale system.
There are some operational costs that you simply can’t control, like permits and licenses, but there are ways in which you’ll lower your bills. for instance , if you purchase used equipment rather than new, or if you limit your menu items, you’ll economize on ingredients.
Read more: Where to Donate Food Near Me
How to minimize food truck costs for your business
Build your menu around versatile, seasonal ingredients: rather than having many different menu items that each one require different ingredients, choose a smaller number of dishes that use a number of an equivalent produce, proteins, and spices. Doing that, along side sticking to seasonal produce, cuts your food truck costs and reduces waste. By keeping close track of your inventory, you’ll also get a way of what items are most or least popular.
Don’t go overboard at the grocery store: Before you’ve got a robust sense of the number of ingredients you ought to buy, err on the side of underbuying. It’s better to sell out on a given day than be cursed with ingredients that spoil and attend waste. Even better, selling out builds buzz.
Staff your loved ones: When you’re beginning , invite help from family and friends. This isn’t meant to be a permanent situation, but it can assist you compute the kinks and find out what percentage staff members you would like at different times.
Rent or buy used equipment: The startup costs of a food truck business can quickly get out of control, so refrain from buying all-new, top-of-the-line tools and devices. Get by with used or rented equipment until you work out what you actually need (and you would possibly find that you simply never need the foremost expensive stuff).
Launch your business during a market with reasonable costs:As the Food Truck Index shows, the value of licenses and permits varies significantly by city. So, if you aren’t constrained by location, consider launching your venture during a city with lower regulatory fees and a market that isn’t already saturated. If you’d wish to consider taking over outside funding through a bank or an investor, put together a business plan so you’ll account for a way that cash are going to be wont to grow the business. A business model canvas also can be an honest thanks to sketch out how everything works together.
Explore new revenue streams: rather than restricting your business to, say, weekday lunch crowds, check out other potentially lucrative opportunities like weddings, graduation parties, and late-night crowds outside bars or concert venues.
Buy in bulk with other food trucks: Bring down costs by purchasing certain ingredients or supplies in larger quantities together with your fellow mobile restaurateurs.
Embrace social media marketing: Traditional advertising are often a budget-buster for little businesses, so build an audience on social media platforms by, for instance , tweeting information like your location and hours every day and posting photos of your menu items (particularly daily specials) on Instagram and Facebook.
Take care of your truck: It sounds simple, but taking the time to urge regular maintenance checks reduces the likelihood that you’ll need to affect larger, costlier issues within the future.
Compare vendor prices: If you go searching for airline tickets or mobile service, why wouldn’t you are doing an equivalent together with your business’s vendors? shop around , and if you discover better offers, either switch providers or give them the chance to match or beat that price.