If you’re thinking about starting a food truck, you’ve probably read and heard the buzz about how food trucks are the new money makers. And to a certain extent it can be true — after all, the food truck business is a $1.2 billion industry.
But regardless of the surge in popularity with mobile cuisine, there are a variety of elements that need to be considered when examining the success of any food truck. Let’s take a look at some of the factors at play and how much you should expect your food truck to ultimately make.
How Much Do Food Trucks Make
Like in all industries, how much a food truck make varies drastically depending on its geographic location, the hours it keep, the cuisine it sells, and the volume of their transactions. On the high end, some food trucks report raking in millions. But businesses like these are the outliers. Just like a neighborhood jewelry store is going to make only a fraction of what a Zales or De Beers jewelry location will make, the same applies for food trucks.
So if revenue on the high end is in the millions, you’re probably curious as to what is reasonable to expect from your business. On average, a successful food truck in the U.S. can expect to pull in around $300,000, not bad for a business on wheels.
But remember, this is revenue, not pure profit. Your profit will equal your total revenue minus your total expenses. To give you a better idea of what you’ll have at the end of the day, let’s take a look at a few of the more common costs associated with starting and running a food truck.
Like all small businesses, there are certain startup costs that are unavoidable. Though launching a food truck will cost considerably less than opening a full-fledged brick-and-mortar restaurant, costs do add up and it’s good to know what you’ll need to pay. Looking at startup costs will also give you a better understanding of how much food trucks make within their first year.
For example, you can expect at least $30K – $90K and upward to buy a used or new food truck and getting it up and running these days. Now you’ll have a better idea of how much do food trucks make when you know the start up costs because unless you were “gifted” that money you’ll most likely have to pay it back.
Purchasing Your Truck
Food trucks are no different than other vehicles, you’re going to have your Toyotas and your Lamborghinis. You can purchase a truck for as little as $5k and for as much as $125k. It all depends on whether you are buying new or used and how many alterations or customizations you’ll need to make. Since the success of food startups tends to be fickle, we recommend going with a used truck. If your business takes off, you always have the option of upgrading.
Insuring Your Truck
Though insurance is an ongoing cost, you also definitely can’t launch your business without it. Depending on the truck you are insuring and where you are insuring it, the price will vary. But you’re at least going to be looking at a cost of a few hundred dollars.
And Fueling It
It might seem like an obvious cost, but sometimes the most obvious things are the most overlooked. Again, this cost will vary depending on the size of your truck, but expect to shell out a few hundred dollars to get your food truck out of the gate, or more accurately, out of the parking garage.
Fast and Secure Transactions with a POS
Traditionally food trucks were cash-only businesses, but that is no longer the case. Most food trucks are offering customers the options of paying with cards. As an owner you won’t know how much a food truck makes unless you have a full grasp of your overall business and that can only be done with a POS solution that can keep track of debits and credits for you.
In order to make this a reality for your diners you’re going to need to acquire both a POS system and an account with a payment processor. Costs for POS systems vary widely, but reasonable pricing and reliable service are available for food trucks and cost in the ballpark of $1,500 or less.
These five cost are by no means all you’ll need to invest in to get your business off the ground, but they are a few of the biggies. There are of course additional miscellaneous items such as uniforms, a website, disposable plates and silverware, and of course, food!
You can’t answer how much food trucks make without addressing ongoing costs — and there’s plenty of them. Though you might think all you need to do is cough up a few grand for a truck and then you’re good to go, unfortunately, that’s not the case.
And like startup costs, depending on your business, these costs will vary. The main factor will be how large the city is that you operate in.
|Food and Beverage for resale||27 %|
|Insurance, repairs and maintenance, licenses, fuel||26 %|
|Employee wages||18 %|
The Ability to Sell in Certain Locations
Though it might seem like all you have to do is park your truck and pop the window, this isn’t always true. Very often, depending on the city or festival, food trucks often have to pay daily fees to simply park and sell in certain locations. Sometimes these fees are over a $100 a day, which over the course of a month or a year really adds up. Creating authentic relationships with festival owners and event coordinators is a good way to ensure premium space at events and maybe a less expensive fee schedule.
Though you might have purchased a shiny beautiful truck, it’s not going to stay that way for long. You’re going to need to wash the outside, clean the inside, touch up your logo, pay for mechanical issues and rotate your tires, just to name a few. It’s also worth noting that your truck is literally the lifeblood of your business and you’re always just one pothole or flat tire away from the loss of a day’s-worth of profits. So to be on the safe side, always budget for the worst case scenario and underestimate your sales.
Unless you plan on striking out all on your own, which we don’t recommend, you’re going to have to hire a least one employee to help you run your business. Even if they’re just a cashier, it’s an ongoing cost that can’t be overlooked. Depending on where your truck is located, you’re looking at upwards of $15/hour.
As you’ve probably gathered there is no cut and dry answer to how much food trucks make. But in general, trucks in busy metro areas selling higher cost food can see revenue in the range of $20,000 to $50,000 a month, while smaller trucks with simpler menu options are closer to the $5,000 to $16,000 range.
Regardless of which camp you’ll fall into, running a food truck is similar to running a restaurant — it’s long hours and hard work. Don’t jump into the mobile cuisine business purely for the potential of turning tacos into cold hard cash, you need to have your heart (not just your brain) in the business. So, don’t bet on big money, but do invest in your passion.