How to Start a Food Truck Business. A Guide to Starting a Food Truck
May 31, 2019 • 20 minutes
A food truck is the opportunity to open a food service business, with lower costs and a lot more fun. Most food truck owners fall in love with their business and the new lifestyle as they’re getting ready to open. Learning how to start a food truck business marks your first step in this labor of love.
After the launch, the success of your food truck will depend on how many hours you’ll put in. Your daily routine may start on an early morning from shopping and food preparation, and finish late at night after cleaning and paperwork (renewing licenses, booking festivals, dealing with providers, paying taxes and bills).
Most truck owners work at least 10 hours per day. Yet, despite such a daunting list of chores, the result is worth it. So, if you are mentally prepared but lack practical advice on how to start up a food truck business, follow this guide to make your way to success.
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Catch the food truck trend
To find the key to success, you need to split your focus between catching up with the latest trends and learning the best practices of the trade.
This industry relies on a few authority figures to collect and analyze data from food truck owners. The industry stats show that food trucks have surged in recent years. In their majority, they represent small independent businesses, not chains.
Look at a few stats for food trucks that operate in the U.S.:
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Between 2017 and 2019, the food truck industry grew by about 20%.
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On average, catering makes up 30% of a food truck’s revenue.
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In 2017 annual sales exceeded 1.2 billion dollars, food trucks now make up a $2 billion-plus industry.
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There are more than 4,000 food trucks nationwide.
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56% of consumers between 18-34 years old patron food trucks.
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70% of all adults say they would visit a food truck of their favorite restaurant.
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Minorities and women own the majority of food trucks.
The community effect makes it easier for people to figure out how to open a food truck with realistic expectations and goals.
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Low initial investment when compared to full-service restaurants.
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Freedom with changing locations, menus, and schedules.
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Greater involvement with the local community.
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The ability to actualize a fun concept which would not work in a traditional restaurant setting.
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Availability of mobile technology, like Poster point of sale software, that makes street food businesses less dependent on cash.
Knowing industry stats and reasons that draw other food service entrepreneurs to food trucks will help steer you through important decisions from choosing a concept to buying equipment.
Decide on a concept and a name for your food truck
To compete in this saturated market, you better choose a concept that you love. Consider both your target audience and biggest competitors when planning your truck’s theme and name.
Ask yourself three questions. Who is your audience? Who is your biggest competitor? Why should customers choose you rather than any other food truck? Thinking this way you have a good chance to find the right niche and create the winning concept.
It’s best that your food truck design, name, and logo deliver showstopping performance in three key ways. They should support your concept, attract customers, and let people know what you sell.
Many food trucks use wordplay for an effective name such as «The Hogfather» or «Mamas and Tapas.» If you need some inspiration to brainstorm your future concept, here are a few fun examples:
**Specialty drinks **Lemonade stands on a new level. Specialty drink food trucks can offer anything from frozen drinks to fresh pressed juice. The possibilities are limitless, the inventory costs are smaller, and as specialty drink truck you’ll have much less competition.
**Unconventional menu items **Fried foods and fair foods are losing their luster among the food truck community. Instead, opt for food that delivers shock and a ton of flavor. From serving unconventional proteins to replacing all starches with healthy vegetable options, you’ll grab attention.
**Ethnic menu planning **Although taco trucks have become a staple in everyday dining throughout cities such as L.A. ethnic menu planning is diving into less frequented cuisines. Cambodian snacks, French pastries, and even traditional Japanese ramen trucks are appearing in numerous countries.
**Super fast food **Nothin dissuades customers more from a good food truck than a long line and a long wait. With careful menu planning and preparation, you can make your food super fast. Make hot foods ahead of time, streamline your menu, and begin advertising as the fastest food truck in town.
After you choose a concept and come up with a cool and authentic name for your business, it’s time to calculate money. You can’t feed your community with an idea, thus you have to figure out how much it will cost you to launch the business.
Make a business plan for opening a food truck business
First, though, write the food truck business plan. You need to have an idea of what you want: It’s a combination of business, management, marketing, and finances. The better you plan ahead the easier it will be for you to cope with the upcoming challenges and get through crises.
In terms of finance, every food truck is individual and there is no specific formula for calculating your budget. Start by making a list of everything you could possibly need. Include everything from buying the truck and cooking equipment and ending with getting the food truck licenses.
After you have the raw numbers, you’ll understand whether you have enough money or have to secure a loan. In the case of the latter, your business plan requires to be truly well thought of.
How much does it cost to start a food truck business?
When calculating your costs to get your food truck up and running, you need to account for more than the initial investment in your truck. However, let’s estimate how much money you’ll need straight forward.
If you are going to launch your business in the U.S., it’s likely that your food truck startup costs will fall somewhere between $70,000 and $130,000. This sum will include the vehicle and equipment.
You’ll need to decide between a new or a used truck. It’s an exciting step, and it can determine whether you’re spending the next few months making payments or repairs.
Buy a food truck: New v. used
With a pretty wide range on the market, how do you decide which truck is for you? You’ll have to consider all options and select: new v. used, buy v. lease v. built yourself.
You can lay out more money and buy a brand-new vehicle and equipment to build a food truck. The average cost of a new food truck – without equipment – is $60,000, but you can end up spending hundreds of thousands of dollars on it.
If you have a limited budget, search for used food trucks. There’s a variety and you may spend between $30,000-$40,000. But be ready to pay at the minimum $1,000-$2,000 for the renovation.
A new food truck
New trucks are a hefty investment. But as the lifeblood of your company, a new truck might be the difference between success and struggle.
Vendors often offer so-called food truck packages that include a vehicle and a basic set of equipment: generator, hood, handwash, compartment sinks, stainless table, air conditioning, electric, gas & plumbing. As an alternative, they can make a custom build for you.
Pros of buying a new truck:
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Can be customized to fit your requirements
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No costly breakdowns and major repairs in the short run
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Technical support and warranty service
A used food truck
When you purchase a used truck, there is the possibility it will need repairs before you can hit the streets. It’s best that you invite a friend who has a head for mechanics or hire a professional to help you examine the vehicle before making a buying decision to minimize risks.
The best places to find a used food truck are in community supported classifieds and groups on Facebook. Food Truck Empire and Roaming Hunger both have classified pages to help you find a suitable truck. Alternatively, you can ask the owner of your favorite truck about where they bought their vehicle and whether they’d recommend this vendor.
Pros of buying a used truck:
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A chance to make a great deal
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Retrofitting is done and tried-out
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Fewer choices and decisions to make
If none of the options suits you, you can try to build a food truck yourself. This may take you more time but become the best way for you to save money and express the creative side of your personality.
Build a food truck yourself
Can you build a food truck? You sure can, and throughout Latin America and Asia, it’s the preferred option. Learning how to build a food truck is fun, but the actual work is physically exhausting and time-consuming.
To get an idea about what it takes to build a food truck, watch the video by M&R Specialty Trailers and Trucks, a food truck building company from Florida.
To build your food truck:
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Determine your layout
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List all the equipment you’ll need and everything your equipment will need, such as electricity or propane.
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Find a truck, bus, or trailer.
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Essentially «gut» your vehicle.
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Mark out your layout for equipment installation.
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Install the electrical wiring, light fixtures, switches, etc.
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Reinforce stability with framing.
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Create openings for serving and an A/C.
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Install propane or gas utility.
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Install the interior hood if necessary.
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Install any necessary plumbing.
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Install a generator.
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Load equipment.
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Finish with a design.
If you’re handy and good at finding materials at reasonable prices, you’ll manage to save a fortune on buying a truck.
Choose the right kitchen equipment for your food truck
Your choice of equipment, of course, depends on if you are going to prepare food on-site or sell pre-cooked meals. The essential equipment will include a steam table, refrigerators, warming ovens, hot and cold water, fire extinguisher, first aid kit.
Equally, your menu will dictate particular requirements. If you’re going Italian, you’ll need pasta rollers, pizza oven, meat slicer, sandwich press and everything that your food truck menu demands. You’ll find equipment lists online on suppliers' websites.
A vital piece of equipment for your street food business is POS system hardware. Your food truck POS system shouldn’t occupy much space. A tablet and a compact receipt printer would make a perfect set.
Recurring costs for a food truck
In addition to the startup costs, you should think in advance about the future recurring costs you’ll have to cover.
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Truck and equipment maintenance
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Business and vehicle insurance
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Inventory
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Payment processing fee (percent per transaction)
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POS software subscription
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Propane, fuel, and generator expenses
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Payroll
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Utilities
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Commissary fees for kitchen rental space and storage.
One thing we know for sure is that a subscription to an all-in-one POS and inventory management system won’t cost you an arm and a leg. To estimate your monthly expenditures for the business management technology, quick-check our pricing plans and estimate what you can get for your money.
The rest recurring costs range massively between cities and countries. Operating in the U.S., you can plan a flat monthly rate such as $1,000 for truck and equipment maintenance, planning for payroll and inventory will depend on your needs and location.
To determine your estimates in payroll, research your local minimum wage. Decide how much you want to pay your staff and how many hours they will work each month. Then ensure that you accommodate for employee taxes in your payroll estimate.
In other countries, there are fewer restrictions on handling payroll, gas, and utilities. In some countries you won’t even need a commissary kitchen for prep, you could do it at home.
Either you fit into the minimum or maximum cost estimation it’s not that much anyway! Still, you need to think twice before spending money so that you don’t run out of your budget before you get going.
Make your food truck business legal
Many food truck owners say that they wish they understood the legal requirements that come with opening a food truck earlier. In the U.S. you have legalities on a city level that will often interfere with where you can park, and how you can serve food.
Opening a food truck unleashes a lot of chaos in a short time. New food trucks, on average, complete 45 government procedures, including permit applications and inspections within 37 days. You will have a very hectic month as you get ready to launch your business.
Typical license requirements in the U.S. include:
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Business license
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Employer Identification Number
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Vendor Permit
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Driver’s License
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Health Department Permit
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Insurance for the Truck
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Vehicle License
Permits and licensing are the most consistent struggles that food truck owners experience when opening. Some advise that food truck owners get involved in the legislative process within their city to influence positive changes.
For those in the U.S., you can rely on Food Truck Nation’s city index to learn how complex it is to open a truck in your area.
In other countries, street food has fewer requirements and can be easier to open. Throughout Asia and Mexico, open markets are part of the culture, and food trucks are welcome in these venues with minimal licensing requirements.
Find a location to park your food truck
One of the greatest advantages of food trucks is their mobility. It’s cool to participate in fairs, festivals and local city events. However, to build an audience of loyal patrons, you’ll have to find a regular place.
The biggest misconception when it comes to food trucks is that you can just park and start selling food. When choosing locations, ensure that you have access to any necessary connections such as electricity and water. It’s typically best to start your food truck off at a few festivals where these facilities are available.
Additionally, make sure that you’ll have the proper amount of space to park, and when you’ve found an ideal location check with your city’s Chamber of Commerce as well as the Health Department. Look for locations that feel safe, and are easy to deal with when it comes to city or state restrictions.
Get your team together
At the start, you can run a food truck solo or as a family business. In this case, the question of staffing disappears.
Further, you might prefer to hire 2-3 part-time employees. Keep in mind that equipment usually breaks at the worst possible time. So you need a good mechanic handy.
It is crucial to be on the same page as your employees. The food truck business is very soulful and represents an intimate working environment. That is why you’d better hire people who share your views and love this business and lifestyle as much as you do.
Create and test your menu
If you serve up delicious and exotic food, people most likely will remember you and come back. Food truck cuisine should have short prep time and serve.
First, make sure your food is tasty, easy to serve and travels well. Ask your friends and family to help you refine your menu, get them to critique your preparations and take their advice.
Try different recipes and options and experiment until you are completely happy with your menu. The important thing is to price your menu properly and optimize your food cost.
Choose food suppliers
It’s absolutely essential to find good suppliers. Ingredients must be fresh, good quality and fit your menu. Maybe you’ll go food shopping in the morning before the work day starts. Or you can order online and get deliveries every day or a few times a week, depending on how well sales are going.
You’ll have to compare prices and quality to decide where to source ingredients and plan your purchases. Go search the Internet for useful advice from food truck owners in your area.
Take part in food festivals
Festivals are an excellent way to get the first customers and try out your menu and operations. Besides, by visiting fairs, food festivals and city events, you will have an opportunity to meet your competitors and figure out their advantages.
In the US, there are a lot of annual food festivals. Every festival has different participation fees and conditions. All this information is available on the official website for each event.
In general fees for the participation in such food events range from $200 to $900. So, find the right one, book in advance and roll on!
Think about events catering
The mobility of food trucks gives you the opportunity to work at parties, picnics, and fairs. This is a cool way to earn extra money, promote yourself, and reach a new audience.
For such occasions, you’d better have some branded packaging to wrap your food. Some cool merch that people will want to keep may also be a good way to promote your food truck.
Here are a few options for mobile catering:
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Drop-Off. You deliver the order to the customer.
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Pick-Up. The customer grabs the order from the truck.
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Food Truck Service. The food truck with staff stays for the duration of the party.
Food trucks are a hip, fast and tasty variation on traditional caterers. People are choosing this option more often now. Mobile catering can also include music festivals, business conferences, sporting events, and even weddings.
Promote your food truck online
Word-of-mouth marketing impacts day to day sales of a street food business a lot. Many customers also find food trucks through social media and food truck apps. Popular apps include Food Network’s Eat St., Food Truck Fiesta, or TruxMap.
This is why food truck owners everywhere strive to contribute their success to social media. You can tap into Facebook, Instagram, and Twitter, to create a cult following and help customers find your truck. Follow other food truck owners, and start contributing to the online community. You’ll learn more about your competition than you could imagine.
To check out successful food trucks in your area, there are a few pages online you can resource. Get involved in:
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Facebook groups for food trucks
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Facebook groups for your local foodies (a great way to get in contact with locals)
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A Local «Orchids and Onions» page, or equivalent.
Research how customers feel about food trucks through:
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Yelp reviews
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Google reviews and feedback
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Review comments, posts, and tweets by searching for #foodtruck, #streetfood, and #foodtruckfestival.
When checking out your local competition, take on the task as a customer. First look through social media posts to find the best food trucks in your area. Then, hit the streets of your city, walk around for a few days and try the street food.
When talking to people who are lining up for a trendy food truck ask them why it’s worth the wait. This hands-on experience will help you adjust the impression you got about your competition from the Internet resources and the real state of your local market.
The insights you’ll get during your research will help you identify what differentiates your business from other food trucks. It’s your chance to get a leg up on your competitors and choose the most lucrative business concept.
The final thoughts
Now that you have a general idea of how the food truck business works, you have only one thing to do: Get rolling!
Don’t be afraid to look out something new and work on it, improving daily. Here are some useful resources for you:
In a few months, after many permit applications and long days, you’ll be ready to enter the food truck industry. Be patient and remember that starting your own business you’ll get a lot more experience and other benefits that you might never have considered before.
