Starting a Food Truck Business? Here’s What You require to recognize About Costs

From 2018 to 2023, food truck businesses in the United States grew nearly 16%—in part because they propose consumers a way to eat distinctive foods at lower prices. The thriving food truck industry also provides food truck operators advantages like geographic flexibility and lower overhead than a brick-and-mortar restaurant. However, starting a food truck comes with many considerations, including enterprise and operational costs.

discover more about the costs associated with starting and running a food truck business.

How much does a food truck expense?

The expense of buying or renting a food truck depends on several factors, including location and what features you desire to add on. Here’s a general breakdown of the costs: 

recent

A recent truck with a kitchen can range between $75,000 to $200,000. Wrapping, high-complete kitchen equipment, and other custom alterations can drive up the expense. This is the priciest alternative and it can receive months for it to be ready—but because it is recent, you may run into fewer maintenance issues.

Used

You can buy a used food truck for about $50,000 to $100,000. You can also commence with a used truck chassis and add a recent kitchen for about $85,000 to $115,000. Both options may arrive with some mechanical issues, but you should still be able to commence using your truck without much delay.

Rental

Renting a food truck can be a more expense-effective alternative since you don’t have to spend as much money upfront. You can rent a food truck for about $2,000 to $3,000 a month if you commit to a six-month rental agreement. Shorter leases are typically more expensive. This is a excellent alternative if you desire to test whether your food truck concept works without a large initial stake apportionment.

Food truck enterprise costs

• Permits and licenses
• Kitchen equipment
• Generator
• Initial inventory

Food trucks have similar enterprise costs as other businesses in the restaurant industry, with the costs fluctuating based on where you decide to commence a food truck business. Not counting the truck itself, enterprise costs include the following:

Permits and licenses

Working in the regulated food industry means you require to acquire the proper food truck permit and licenses. According to the US Chamber of Commerce Foundation, permits and licenses can range from just under $1,000 to tens of thousands of dollars.

This figure changes from one city to the next. For example, a food truck operator will pay $590 in Minneapolis, $2,439 in Los Angeles, and $17,066 in Boston.

Kitchen equipment

Your food truck equipment costs might just include tools such as knives, cutting boards, pots and pans, food processors, blenders, and storage containers. If you are buying a used food truck, you’ll also require to replace or upgrade ovens, microwaves, and food prep surfaces to commence serving customers. These costs can range from about $25,000 to $100,000 based on your needs and the state of the used truck.

Generator

A generator can power your food truck. The size, features, and how much power it generates will affect the expense, which can range between $500 and $3,000.

Initial inventory

Initial inventory includes ingredients and serveware products like napkins, plates, and utensils. This will largely depend on the benevolent of food you are serving, but expense management a few thousand dollars for initial inventory can be a excellent starting point.

Food truck operational costs

• Regulatory operating costs
• POS structure
• Staff
• Maintenance
• Fuel
• Marketing
• Insurance
• Storage and parking
• Food

Regulatory operating costs

These annual costs—which include insurance, taxes, and permits—keep food trucks legally compliant. The costs differ across cities. Portland, Oregon, comes in at the lowest, at $5,410, and Boston is the highest, at $37,907.

POS structure

A point-of-sale structure can have a fixed or monthly expense. It can expense up to $2,000 to install the hardware or software. For a software-based structure, you might pay an additional $500 to $1,000 a year in subscription fees. POS systems also expense a flat fee or a percentage of sales to procedure payments.

Staff

Because of a food truck’s tiny space, you likely will have a smaller staff compared to a restaurant. According to the US Bureau of Labor Statistics, in 2023, the median pay for food and beverage serving and related workers was $29,710 per year, or $14.29 per hour. Cooks earned $34,320 per year, or $16.50 per hour.

Maintenance

Maintenance costs are harder to factor in because the state of your truck will dictate what you require. Putting money aside in case of an emergency can keep you prepared if the engine gives out or you require to replace the tires.

Fuel

This expense, which includes gas or propane, can vary from month to month depending on fuel prices. Unless you have an all-electric food truck, this is a essential expense to power your equipment and drive your truck.

Marketing

Your marketing budgetary schedule hinges on your goals, what sort of professionals you hire, and whether you hire a packed-period or part-period in-house staff member or a contractor. For example, advertising, promotions, and marketing managers earned a median pay of $75.28 an hour in 2023, and community relations specialists earned $32.09 per hour.

Insurance

Since not all food trucks are the same, their insurance needs differ. However, insurance typically will include coverage for the vehicle and a business owner’s policy, which includes medical payments and bodily injury debt. There are also specialty insurance options that can cover spoiled food or damage to cooking equipment in the case of a power outage. For general debt and commercial auto insurance, a food truck operator will, on average, pay around $2,500 to $4,500 a year.

Storage and parking

Parking your food truck is another expense to receive into consideration. Your location will determine how much you will spend each month. In California, for example, you must park your food truck at a designated food facility when it isn’t in use. A facility in Los Angeles might propose parking for a few hundred dollars per month, plus an additional few hundred dollars for freezer space and other food storage, if required.

Food

Food costs vary, but profitable restaurants usually spend anywhere from 28% to 40% of their turnover on this expense. The type of establishment—whether it’s an ice cream truck or a quick-casual restaurant—and the variety of ingredients you require will affect this number.

Tips for cutting down food truck costs

• Buy gently used equipment
• receive excellent worry of your truck
• schedule your menu carefully
• discover the most efficient routes

Here are a few ways you can save money as a food truck operator:

Buy gently used equipment

recent food equipment can be costly. Look for gently used tools that arrive at a lower worth point that you won’t have to replace as quickly.

receive excellent worry of your truck

Repairs can add up, but taking worry of your truck with regular maintenance and secure driving habits can assist you catch issues before they become a solemn issue.

schedule your menu carefully

Buying seasonal produce or finding uses for food scraps (like making distribute out of carrot peels and potato skins) can assist you save money. By planning your menu strategically, you can ensure you are being considerate about what you buy and how you use it.

discover the most efficient routes

Stopping and starting your truck over and over again can expend more fuel. discover the most efficient routes and the best times to trip to use less gas.