When I started a food truck business, I spent about a year planning and researching everything I needed to know about starting a food truck. Believe it or not, but back in the ancient time of 2012 there wasn’t that much information on the internet about how to start a food truck. In fact, information was scarce. I had to do all this research the hard way. But it really shouldn’t be so hard.
Anytime an interested food trucker has asked, I’ve been happy to share the information I’ve learned over the years. In fact we created the Food Truck Academy for that very reason. And in that time we’ve helped a lot of people learn about the industry and put them on the path to food truck ownership. And that’s why I’m sharing these 5 Steps to starting your own food truck, to put you on the path to creating your own food truck and sharing your love of food with the world!
Food Truck Startup Outline:
- Make your menu
- Write a food truck business plan
- Estimate total startup costs
- Food truck funding options
- Licenses, permits and insurance
- Open for business
- Frequently asked questions
Step 1: Make your menu
It all starts with your menu. Tacos. Sandwiches. Burgers. Pizza. Ice Cream. Every food truck has a specialty. And at this stage in the food truck game, customers expect you to excel in one type of food. There are a three reasons you should always determine your menu before tackling any other step in the startup process.
First, your menu determines the cooking equipment installed on your food truck. If you plan to start a taco truck then buying a mobile kitchen with a panini press won’t help. This advice seems basic, but I’ve seen a lot of people make this mistake.
One student in our annual food truck academy class found a “cheap” food truck online and purchased it. A couple months later, the student discovered the unit didn’t include the right equipment for their menu and couldn’t pass the local health requirements. The student was forced to buy a second food truck to meet his needs. That’s an expensive mistake!
Second, food trucks only have so much capacity to store ingredients. Creating streamlined menu allows you to carefully plan your ingredient purchases and run an efficient operation in the future. Be sure to select a cuisine that allows you the flexibility to remain creative for years, but also is specific enough so you don’t overstock your truck and create unnecessary food waste.
For example, let’s say you want to start a taco truck again. Tacos are a very specific type of food, but also has a ton of versatility. You can come up with thousands of combinations of tortillas, fillers, toppings, and sauces. And because most of your tacos will have some similarities (the tortillas and probably the toppings will be the same in all of your menu offerings) you won’t have to worry about keeping a fridge full of limited-use ingredients that take up space.
Your menu will have longer term marketing implications for the business that you need to consider too. If for example, you decide to start a Hawaiian food truck, it would only make sense that you vend at Hawaiian cultural events or festivals. You would also want to steer clear of St. Patrick’s Day events with this cuisine because it won’t match what people want to eat on that holiday.
Finally, you can’t even figure out where you’ll source ingredients and how much you’ll charge customers for a sandwich, hot dog, or pizza before figuring the exact menu. You can download our food cost spreadsheet to learn how to complete this step.
Step 2: Write a food truck business plan
That’s right… the dreaded business plan. If you follow the steps here, you’ll be able to build a pretty compelling plan that you can show to anyone. But even still a business plan feels like a really daunting task. I’m here to tell you that it doesn’t have to be.
In general, writing a business plan doesn’t have to be an exhaustive 100 page report. I’ve seen plans of all sizes, from one page on up.
The key is to make your plan specific to your business that you can write down and follow once you get started. The key is to focus on yourself and spend most of the effort figure out the operations, costs, and profitability estimates for your business. These are all important steps that will make a to your business.
Pro Tip: You can check out the exact business plan I wrote here and listen to an audio lesson explaining how I got started.
One big thing people always get hung up on is the formatting of business plan. I’m here to tell you, don’t stress out about the format! Unless your goal is to bring investors into the business, you don’t need a perfectly designed plan. Most food trucks are independent small businesses that don’t bring on investors so you probably don’t need to worry.
There are even some circumstances where you may never even show another person your business plan. But you’ll be much more knowledgeable about the industry and your specific needs because you have considered all the options and have prepared yourself well. The business plan is the embodiment of that preparation.
For more details, check out my business plan and audio lesson where I walk though this step in much greater detail. I even share the exact business template I used for my food truck.
Here is the basic structure of a food truck business plan:
- Executive summary: Introduce the name of your food truck and what you plan to serve.
- Mission statement: This should be a short description of the mission of your business. A mission statement works best if you print a copy of it to keep inside your food truck. This statement should guide the decisions of your business.
- Company concept / description: Write what you hope the food truck will become, the food you plan to serve, and why you believe it will be a successful business.
- Market analysis: Get an understanding of your local competition. What other food trucks are successful in your town? How do you intend to create a unique offering in your market?
- Management structure: This is a brief section in for most food trucks. Write down who will be participating in the business and the specific responsibilities of each team member.
- Product line: In the case of a food truck, publish your menu here.
- Sales and marketing: Write down how you plan to market your business and generate sales. Figuring out specific places you plan to vend is really important for food trucks in this section.
- Funding request: Share how much money you’ll need to start the business and list out exactly how you plan to spend each dollar. Buying the food truck or trailer will be the biggest startup expense.
- Financial projections: Share how much you plan to make.
- Appendix: Include any supplemental information here. Ideas include a copy of your business and health department permits, photos of the truck, or anything else you think would be beneficial.
Step 3: Estimate total startup costs
As part of the business plan process, you’ll need to come up with your startup costs. It’s in your best interest to be as detailed as possible when figuring out your total costs by line item so you’re not surprised. In general, you can expect to pay between $28,100 – $114,100 to start a food truck. The startup cost could be even higher depending on the size of food truck and equipment you need.
Your startup cash is extremely valuable so you don’t want to overspend on equipment or anything else you don’t need. Eliminating unnecessary equipment gives you more space for storage, which is extremely valuable on a food truck.
We’ve created a detailed cost spreadsheet for starting a food truck business here. Below are some of the most common startup expenses for a food truck business:
|Food Truck Start-up Costs|
|Food Truck + Wrap & Equipment||$25,000 – $100,000||Feel free to add your personal notes here.|
|Initial Product Inventory||$1,000 – $2,000|
|Permits and Licenses||$100 – $500||Varies a lot depending on where you operate.|
|Website||Free – $5,000||Varies a lot depending on what you want.|
|Facebook / Twitter||Free|
|Register / POS||$200 – $1,000||Can also use an iPad and an app for credit transactions.|
|Uniforms / T-Shirts||$0 – $1,000|
|Paper Products (Plates / Napkins, etc.)||$200 – $300|
|Misc. Expenses (Like a Chalk Menu)||$500 – $2000||Plan for some unexpected expenses here and put it into the budget.|
|Smallwares: Pots, Pans, etc.||$1000 – $2000|
|Fire Extinguisher||$100 – $300|
|Total Low End||$28,100|
|Total High End||$114,100|
|Food Truck On-Going Costs|
|Item||Monthly Estimated Cost||Notes|
|Commissary||$0 – $1,200||Varies greatly depending on location and services provided by commissary.|
|Phone / Internet||$100 – $200|
|Fuel||$500||This will vary a lot.|
|Labor||???||$8 – $15 per hour is average rate.|
|Repairs||$1,000||Better to budget for it.|
|Food / Beverage Restock||???||Depends on food cost and frequency of operation.|
|Paper Product Restock||???||Depends on food cost and frequency of operation.|
|Insurance||$50 – $150|
As you can see, buying a food truck or trailer will be the biggest initial expense for your business. Here is a list of considerations when planning your truck build that impact the total startup cost.
What is your budget? This will determine if you are buying a brand new truck built from scratch to meet your specifications, or you are buying a used truck already built from another owner.
How much food truck do you need? (What’s your food truck size?) Some trucks are as small as a minivan or as big as a bus. The type of cuisine you serve may help determine your size (for instance, for coffee service a van sized vehicle may be all you need).
What type of equipment will you use? Equipment comes in all shapes and sizes and types and it can be easy to get overwhelmed, but try to keep it simple for now. Think about basics (refrigerator, flat top grill, prep table, shelves, generator, propane tanks, sinks, water heater, fire extinguishers, fume hoods, etc) and go from there. Remember you don’t need to buy anything right away, but having a general estimation of the cost will be very valuable when budgeting for this purchase.
When thinking of the truck and equipment you need remember to look at your local food truck regulations like fire safety and health requirements. These will also help guide you on any necessary equipment and safety considerations that you’ll need. For instance, some cities require trucks to have a fully working fume hood and kitchen fire extinguishers. Not every government has the same requirements so be sure to check with your local authorities.
Now that you have a general idea of what you want or need you can start to go shopping:
Check out the huge list of builders on Food Truck Empire to find a builder near you that you can talk with and get a quote that meets your exact needs.
Check out used food truck marketplaces to see prices for trucks that are currently on the market. Even if you don’t want to buy a used food truck knowing what is available and how much it costs will help you understand your budget needs. You can find a more detailed list of places to buy a food truck in this post.
Finding a food truck that fits your needs and your budget is incredibly time consuming but it will prepare you for the next step…
Step 4: Food Truck Funding Options
Are you fortunate enough to be completely self-funding your business operations? Well then go right ahead and skip this step. For the rest of us, you’ll need to have a plan to raise capital.
Once you have a business plan and know how much funding you’ll need, you can start looking for money. When it comes to finding cash there’s no amount of searching that can be enough. So I encourage you to leave no stone unturned.
But to get you started, here are a few of the most common ways food trucks owners get startup capital:
Business loans are a lot of work to get. Let’s face it, when asking a bank for money you expect to be grilled and tested to determine how much risk the investment will be. They will most certainly require a business plan, a background check, a credit check, and maybe your first born (or unborn) child.
It will also be very difficult if you are a first time business owner, or your food truck is in its first year. But there are options out there so keep at it and persist. In fact your persistence will be a huge benefit, because that passion is what funders want to see in their investments.
Crowdfunding seems like a low hanging fruit, but trust me, it is a lot of work. To raise the money you need, you’ll need to market your crowdfunding page as if you were marketing your food truck, but without actually having the food truck.
Don’t get me wrong, it is an incredibly valuable process, but don’t expect to raise $30,000, that is a value for the crowdfunding elite. $1000 – $5000 is very attainable however, so aim low and shoot high. But like with a loan, you’ll need to have some concept of a plan. On your crowdfunding page, you’ll need to clearly communicate your food truck concept, your menu, where you’ll be, and what makes you special. Just like with the banks, you’ll really want to let your passion and personality shine.
Grants are extremely hard to get and very unlikely. There aren’t too many business grant opportunities, but you can partner with a nonprofit organization to create a really impactful program and do some social good. Think about partnering with shelters or family needs organizations to provide the food services. Usually in these instances, profitability is not the goal so keep that in mind before pursuing this option.
Family and Friends are always an available option. If you decide to ask family and friends for startup cash, keep the request extremely professional and clear. You will need to clearly lay out the needs and detail all of the expectations for both parties.
Money can affect relationships both positively and negatively and you don’t not want this to play a role in your personal life, the business side is hard enough! If you borrow money, create a repayment plan. If there is no expectation of repayment get it in writing! Be clear, detailed, and precise.
Investors are common in the restaurant industry, but less common in food trucks. But if you are lucky enough to have an investor willing to pony up a large portion of the business startup costs, remember: your investor is EXPECTING a return of investment. Hopefully, there is a very clear plan of the expectations so that there are no surprises and you can actually build these expectations into your business plan for future reference. Preparation is everything.
Once you have secured some startup revenue you can begin to spend that money…
Step 5: Licenses, permits and insurance
There are a bunch of licenses and fees you’ll have to pay for right off the bat, but luckily these are inexpensive compared to the rest of the business operations. We’ve published an extensive checklist of food truck licenses and permits in this article.
First you will need to register your business with the IRS, then with your local state and city governments. Make it easy and use a service like LegalZoom to handle all of this for around $200.
Next you’ll need to acquire some business licenses, most likely: a health permit and a fire safety permit. Not only are there nominal fees for these licenses, but you’ll also need to undergo inspection processes. Expect this to take some time to get prepared and approved. Make sure you communicate with your local offices early enough to figure out the required steps and timeline for these processes.
Finally you will definitely need insurance. At the very least you will be required to have commercial auto insurance (this is a food TRUCK after all) and you will need business general liability coverage. Each state has different insurance providers so make sure to ask around.
In fact, speak with insurance agents and they may point you to providers in your area even if they aren’t that person. Depending on your local laws you may even need workers compensation, especially if you intend to hire employees.
Again be sure to check with your city’s local business registration office to determine if there are additional licensing requirements. But once you complete your business licensing you are ready to get your food truck ready for it’s first day!
Step 6: Open for business
By this point you will have done all the heavy lifting, but there are still a lot of smaller projects to tackle.
Hopefully you’ve planned your menu, but if you haven’t you’ll definitely want to do that first. Figure out your recipes and ingredient lists. Maybe you want to have a seasonal menu and plan out your menu for each season of your first year. Once you get rolling it will be really hard to experiment, especially in that first year. As you get more comfortable with your menu, the truck, and your business you will operate more efficiently and your time will free up. But that first year of operations will be a doozy!
Once you have your ingredient list find your food sources. You can use warehouse stores like Costco and Sams, or food providers like Sysco. Since you have limited space on the food truck you may not need to buy in bulk much of the time, so even grocery stores can be useful.
Talk to local butchers and grocers and make special deals to highlight their skills on your truck, if you play your cards right you can get a much better quality product for near or lower cost than the grocers. Thanks to innovations in food delivery in recent years you can also turn to Amazon Fresh that offers fast and free shipping just about anywhere if you sign up for their Prime membership option.
Test your menu. Host some friends and family and ask for honest feedback. Also do a little social media marketing and host free tastings for potential customers. Refine your recipes and perfect them and then hit the ground running.
And speaking of social media, setup accounts on Facebook, Twitter, and Instagram. Build yourself a website, or hire a web designer to do it for you. Sites like Weebly and WordPress work great for very little monthly fees. Create business listings on Google, Yelp, and Roaming Hunger. The idea is to build your presence online. As a mobile business you need to make sure customers can find you in as many different ways as possible.
Start marketing your truck at least 6 months out. Unveil teaser pics, host tastings, participate in festivals, and get the word out about your business. Then carry all of that momentum into your first day of business and beyond!
Frequently Asked Questions:
Advantages to Starting a Food Truck Business
As with any business model, there are advantages and disadvantages to starting a food truck business compared to a restaurant or kiosk. Here are a few of the pros:
- You aren’t locked into a specific location. One of the biggest risks of starting a restaurant is that you’re pretty much stuck in one place. Overtime the demographics and appeal of a certain city can decline. A food truck can travel to where the most business is every day.
- Lower startup costs. It can cost well over $1 million dollars to start a restaurant. You can start a mobile food business for under $100,000 in most situations.
- You can get started part-time if you want. In the early days of any business, reaching profitability can be tough while you establish a brand name in your area. By starting a food truck on the weekends only, you can hold down a full-time employment in the early days and operate with less financial stress.
Disadvantages to Starting a Food Truck Business
Here are some of the challenges of operating this business:
- No frequent hours or location. If you’re always moving and vending at different events, it can be challenging for repeat customers to find you.
- Lack of storage space. With a restaurant, you can keep meats, diary, and other ingredients stored in a freezer or refrigerator. With a food truck, it’s tough store a lot of food, which can make operations more complex.
- Overnight parking and storage. Even though you operate a food truck, you’ll still need a safe place to store the vehicle overnight. Some counties require food trucks to park overnight at a commissary or commercial kitchen. This can add $500 – $2,000 per month to the expense column.
How Much Do Food Trucks Make Per Year? Per Day?
We surveyed 223 food truck owners to get an estimate of the annual revenue for a food truck. Here are the results:
|Food Truck Income Survey|
|Annual Gross Income||Responses||%|
|$150,000 – $199,999||67||30.04%|
|$100,000 – $149,999||76||34.08%|
|$50,000 – $99,999||24||10.76%|
|Less Than $50,000||8||3.59%|
Keep in mind that the annual income you can make on a food truck will vary greatly on a variety of factors including your menu, how frequently you vend, what part of the country you operate, and other factors.
Why Do Food Trucks Fail?
Food trucks that fail usually get the basics wrong and don’t take the time to research their business or write a business plan. Sometimes their food takes too long to make, which cuts down on profitability. Sometimes, it’s just a lack of marketing and planning where they’ll vend. Another issue is new vendors don’t understand how much work operating a food truck will actually be. You’ve got to be driven to start this business.
We interviewed 32 veteran food truck owners to gather insight into the reasons why their competitors went out of business. This is essential reading for anyone hoping to break into this industry.
The Bottom Line
Naturally, you could write an entire book on the topic of starting a food truck and there are a lot of unique details to the process of getting started that will be unique to your city or region. As with any business, there are a lot of tiny little details that make up getting started.
But take it from me and my experience, if you take it one step at a time and remember to enjoy the ride you will achieve your goal of owning and operating a food truck business of your very own. I wish you nothing but the best in your journey and encourage you to sign up for our free food truck business kit where you can download by complete business plan and other documents that will help you launch this business fast.
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