The work that goes into opening a restaurant, especially if it’s a brick and mortar shop kind of restaurant, can be overwhelming. Even more so if you’re just getting into the restaurant industry. Opening a food truck business, on the other hand, can be the ideal entry point. Let get into how to open a food truck.
New food truck businesses are opening up more than ever, as they're definitely part of 2022 food trends. In fact, the industry is estimated to be worth about $1.2 billion in the United States. Food trucks started out as a trendy and mainstream way for restaurants to make a name for themselves. However, over the past decade, they’ve become more common in the restaurant industry.
Nowadays, an entrepreneur will look at a food truck as a low-risk and low-cost alternative to opening a standard restaurant. Many food trucks, if successful, grow to become brick and mortar locations. Starting with a mobile restaurant can be a good way to test out various neighborhoods, menu types, and your business plan as a whole.
Before you settle on the idea of starting a food truck business, you have to consider the costs. You might be asking yourself, “How much does it cost to open a food truck business?” Keep reading to find out how to open a food truck.
How to Open a Food Truck - What Is a Food Truck?
A food truck is a restaurant that offers mobile food and kitchen services. Think of it as a restaurant on wheels. Food trucks used to only be popular on city streets, but the industry has grown since then. Now, it’s common to see these portable restaurants at weddings, catering events, birthdays, and backyard parties.
The low cost of food trucks is what made them so popular during the 2008 recession. Common food truck menu offerings include everything from burgers and falafel to cupcakes and crêpes.
Some menus go beyond the street food concept and cater to a more fine dining style. This is done through gourmet and artisan menu options.
How Much Does a Food Truck Cost?
On average, a food truck can cost about $60,000. However, this cost can vary based on location, what your goals are, and your business concept. If successful, the ROI for this business can be major (see ROI meaning).
Permits and licensing costs for a food truck business can average about $20,000. In most cases, the required permits and licensing categories include:
- Food safety certification
- Vehicle requirements
- Zoning
- Employment
- Administrative
- Hazard prevention
Food truck costs can vary based on location. The toughest cities to run a food truck business in are Washington, D.C., Seattle, San Francisco, and Boston. Some food truck-friendly locations include Philadelphia, Denver, Indianapolis, and Orlando.
One of the biggest cost factors of opening a food truck business is whether you will buy or rent the vehicle. A new and custom truck can cost you $75,000-$150,000. Used trucks can range from $40,000 to $80,000. Renting a food truck can cost between $2,000 and $3,000 per month.
Key Takeaway: Opening a food truck is a more cost-effective way to get into the restaurant industry. You have a lot more room to experiment with menu options and restaurant styles.
How Much Do Food Trucks Make?
When you consider the cost of starting a business, whether it’s opening a coffee shop or a food truck, you’ll want to know the potential profit. This is crucial to do for any business plan, including one on how to open a food truck.
In cities like Los Angeles and New York, food trucks often go head to head with some of the top restaurants. They end up generating millions of dollars in sales each year. However, this isn’t the case for most food truck businesses.
Realistically, food truck sales can average between $20,000 to $50,000 each month if they’re in big metropolitan cities. For smaller or mid-sized cities, those numbers can range from $5,000 to $16,000.
When considering profit, you’re going to want to come up with a break even analysis. You can also calculate the return on investment using the ROI formula.
How to Start a Food Truck Business
If you want to know how to open a food truck business, we’ve broken it down for you. Consider the following steps:
Scope Out the Food Truck Scene
You want to have an idea that sticks out so start by scoping out your city. Look for:
- Existing food trucks and their concepts
- Existing restaurant styles
- A niche market that you want to target
- A location to park your food truck
- Busy street times when you’ll likely get business
Decide On a Food Truck Concept
Food truck concepts can vary. Your concept should cater to your target market and their interests. However, it should also coincide with your passions and interests.
Once you’ve decided on a concept, choose a name and logo that reflect your business. These should be unique, descriptive, memorable, and attention-grabbing. This can help your business stand out from the rest.
Develop a Business Plan
After establishing your concept, it’s time to work on your business plan. This will include all the details of your food truck business and help you determine whether you want to fully commit.
Your vision and financial plan should be carefully laid out. It should include an ROI analysis, potential overhead expenses, labor cost, operating costs, and restaurant monthly expenses. Your business plan should also cover your decision on selling white label vs. private label products.
When you create your business plan, it’s best to include the following sections:
- Executive summary
- Business description
- Management plan
- Product offering description
- Funding details
- Financial estimations
- Any additional information
- Loyalty program options
Obtain the Necessary Licenses and Permits
Each state has different licensing requirements for food trucks. You’ll have to check with your local jurisdiction–including the Department of Motor Vehicles, Chamber of Commerce, and Health Department–for the specifics.
Common licenses and permits that you may need for your food truck business include:
- Employer Identification Number (EIN)
- Business license (see eCommerce business license for comparison)
- Employee health permit
- Food service license
- Zoning and parking permit
- Mobile food facility permit
Keep in mind that there might be parking restrictions and limits within your city. If you plan to sell alcohol from your food truck, you’ll also need to look into how to get a liquor license.
Get a Food Truck
Every food truck business will need a food truck. This part of the business process can greatly affect your spending budget.
Here are a few things to consider when picking the vehicle for your food truck business needs:
- Whether you want to lease or own your food truck
- Whether you want a new or used truck
- Finding a reputable food truck dealer
- Choosing the proper customizations for your truck
- Deciding on the right insurance package to cover damage and liabilities
Buy Food Truck Equipment and Supplies
Equipping your food truck with the essential equipment is a must. This includes furniture and supplies so that it can operate efficiently.
Common food truck equipment and supplies include:
- Food preparation equipment: Cookware, chef knives, kitchen utensils, cutting boards, and work tables
- Warming equipment: Soup kettles and countertop food warmers
- Cooking equipment: Fryers, grills, ranges, toasters, and microwaves
- Janitorial equipment: Hand sinks, floor mats, trash cans, sanitizing chemicals, and a floor mat cleaner
Pick a POS System
Similar to a bar POS system, a food truck POS system will allow you to take credit card payments right from your truck. This can attract additional customers since you won’t be limiting them to cash-only payments.
POS systems are one of the latest restaurant technology trends that many customers look for when choosing food establishments. They’re looking for convenience and contactless payment options through online payment processing companies.
Start Marketing
Your food truck will be mobile and won’t have a permanent or physical address. This is why marketing and advertising your food truck will be essential for its success. Marketing tactics like creating a website for your food truck can boost your brand awareness.
Your website should include an about us page to tell people who you are. This can entice them to visit your food truck and share it with others. Exploring some about us page examples can give you an idea of what to include. You can also use an about us page template. It's also crucial for you to create a privacy policy.
Marketing through social media can also be effective. You can notify your followers about special events, post pictures of food, and interact with others to boost engagement.
Physical marketing efforts like creating an eye-catching logo and using O2O marketing may also help your business. A bold single use menu or restaurant QR code menu can be a staple marketing tool.
Frequently Asked Questions About Opening a Food Truck
Is a Food Truck a Good Business?
A food truck is a good business if you’re looking for an opportunity to make money in the restaurant industry. Food trucks can bring in upwards of $500,000 per year if they’re successful. Startup costs can range from $40,000 to $100,000 depending on various factors. .
What Are the Most Profitable Food Truck Items?
The most profitable food truck items include:
- Burgers
- Loaded fries
- Mac nN’ cheese
- Indian street food
- Falafel
- Pizza
- Cupcakes
- Crêpes
Do you know what is the food supply chain? This should be considered when picking the items to sell from your food truck.
What Are the Advantages of Having a Food Truck Business?
The advantages of having a food truck business include:
- The ability to take your business on the road
- Being able to choose the ideal location
- Keeping operating costs to a minimum
- Your food truck will act as free advertising
- You can experiment with different food and menu types