How Much Does It Cost to Open a Food Truck?
Starting a food truck small business has made the dream of striking out on their own attainable for so many chefs, and would-be chefs. The costs of opening a food truck can vary from a few thousand dollars to well into six figures.
There's no definitive answer to the question, "How much does it cost to open a food truck?" Instead, you'll face range of expenses, which you can add up to determine the cost of the food truck business you want to open.
What factors go into the cost of starting a food truck?
Costs vary based on a lot of factors, including the size of your truck, local permitting requirements, and equipment needs. You must also factor in how often your truck moves, and whether you rent the lot where you operate it or pay to park it overnight.
"When starting a mobile operation, costs are going to vary (just like for any restaurant), but you can expect to pay between $28,000 and $114,000," according to the small-business website Shopkeep.com . That's a very wide range and, frankly, it's really only a guess; how much you spend depends on what type of food truck you want, how resourceful you are, and a host of other factors.
Setting aside ongoing costs like salaries and gas, these are the expenses you're likely to incur just to get your business off the ground:
- A truck : You can't be in the food truck business without a truck, and this expense will likely have the widest range of cost possibilities. Some food trucks are box trucks that have been cleverly retrofitted, or even repurposed ice cream trucks or school buses. If you're handy or have access to people who are, you can piece together your own truck, instead of buying one that's ready to go. It's possible to buy an old box truck (truck rental companies often have them on sale) for a couple of thousand dollars and outfit it as a food truck for a few thousand more.
- Licensing : Local permitting costs will vary, but assume at least $500 for various business licenses. This is a prime subject to discuss with people already operating in your market because it varies by city and state.
- A CDL : If your truck weighs over 26,000 pounds, you will need a commercial driver's license to operate it. The actual license only costs between $100 and $300, but going to school to learn how to pass the test will cost between $2,000 and $3,000 (which may explain why most food trucks are below the weight limit).
- Insurance: It makes sense to talk to a professional about this. You will not only need insurance for driving the vehicle, but also business insurance (in case someone gets sick or hurt) and insurance for theft or property damage.
- Equipment : If you buy a truck already outfitted, this may not be a factor. But you will have to figure the cost of stoves, ovens, refrigeration, prep sinks, blenders, coffeemakers, and anything else you might need to prepare the items on your planned menu.
- Food start-up costs : This depends upon your menu, but you should factor in how many customers you expect to serve and whether you need to rent a place to keep inventory. (Remember that the cost of the food should be roughly 28% to 35% of the price you plan to sell it for if you hope to make a profit.)
- Parking : Some food trucks occupy a permanent spot and never leave. Others roam around or set up at festivals and other events. Do your homework so you can budget for the costs associated with whatever you intend to do. In addition, realize that your truck will need to be someplace at night, and many residential areas don't allow overnight parking of commercial vehicles.
- Emergency fund: You are starting a new business. Things will go wrong and expenses will come up. Try to budget at least 15% of your total planned expenses to handle these emergencies.
Plan and prepare
While a food truck seems like an easy way to get into the restaurant business, it requires plenty of planning and smart preparation. Don't buy a food truck on a whim because you see a used one listed at a low price. Consider that listing a warning: Someone is showing you that this is not an easy space to enter. Indeed, many people get into the food truck business only to find that they made a mistake.
Write a formal business plan and go over it with food truck operators who are succeeding where you hope to operate. Know as much as you can going in, and then you can look for that great deal on a truck.
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