Investing in a food truck isn’t going to be cheap but has huge potential, so you need to be informed from the start and have a plan for being profitable. Below we’ll review some of the top operating costs you can expect to encounter when you start your food truck business.
Fuel Costs
When using a food truck you have to consider fuel costs. No matter if you’re using your food truck locally or going across the country, fuel needs to be a line item in your budget. If you’re going across the country, you’ll need to factor in those costs before you travel.
You’ll also have to consider the size of your truck—the bigger the truck, the more you’ll be spending on fuel. How heavy the equipment you use will be a factor as well, as heavier equipment will add more weight to your truck. More weight equals higher fuel costs.
Calculate how many miles you’ll be going each day compared to your truck’s gas mileage to see how much you’ll be paying each month.
Keep in mind that gas prices vary from state to state. If you plan to travel across state lines make sure to calculate the difference.
Ingredient Costs
Know what ingredients you’ll be using frequently and how much they’ll cost you. Some foods are more expensive than others, especially meats and spices.
Try not to have a large menu, as more ingredients means higher prices. Moreover, you may not have space for as many different kinds of ingredients, depending on the size of your truck and how much storage is available.
Another way to reduce your ingredient cost is to rotate your menu with the seasons using seasonal foods. Buying food in season will save you a lot of money.
Buying in bulk can also reduce how much you should expect to pay. Keep in mind that you need space to store large amounts of food. You may want to store some of these bulk foods somewhere off site so they don’t crowd up the limited space in your kitchen and contribute even more to the gas-guzzling nature of your food truck.
When looking at your food costs, a good rule of thumb is to keep your food costs between 28%-35%.
Demand
When you set up shop, you need to know your demographic. You need to tailor your menu to the people you’re serving. What you sell in one location may not sell well in another location.
You also need to predict how many people will come to your truck. You don’t want to have more food than you need. Too much food can lead to waste, which basically means money down the drain.
Review how well other food trucks in the area have done. Look at sales forecasts and previous sales made by other food trucks.
Moreover, review when food trucks are more popular in that specific area. You want as much foot traffic as you can get.
On top of that, when people go to food trucks, they’re not expecting a large menu. Be clear about what you’re selling. If potential customers don’t understand what you’re selling they won’t buy from you.
Permits, Licenses, Certificates, and Insurance
There are many fees that come with food trucks. Make sure you can afford them before you start a food truck business.
Permits, Licenses, and Certificates
You need permits, licenses, and certificates to be able to legally serve food. For example, you’ll need health permits, hazard prevention, vehicle, and zoning permits. Moreover, food safety certificates may be required (e.g. ServSafe certified).
You may need to get many permits if you go out of your state, or even to a different location in your state. States and local jurisdictions (e.g. counties, towns) have different regulations and prices.
Research each location before you go to make sure you have the proper documentation. Getting this documentation can take time so prepare in advance.
Be aware of how often these need to be renewed as well. Each time you need to renew you’ll have to shell out more money.
Once you have all your documentation, you’re still regulated on where you can set up shop. There will be specific locations and hours you’ll be able to sell food.
Insurance
Not only do you need permits, certificates, and licenses, but insurance as well. Insurance is essential for protecting your business, but it comes at a cost.
Some types of insurance you’ll definitely want include auto, liability, and workers’ compensation. You’ll also want a business owner’s policy. This should bundle in your general liability and property insurance.
Getting bundle deals for your insurance will reduce the amount you’ll be charged for them.
Renting Space
Unlike a restaurant, you’re not guaranteed a fixed space. You need find somewhere to park your vehicle when you’re not serving food.
Moreover, you won’t have as much space as a restaurant. If you can’t get everything done in your food truck, and/or can’t hold everything in it, you’ll need extra space, like a commercial or commissary kitchen.
Parking
Before you go on the road, research your route ahead of time. Reserve parking, if possible. By reserving space ahead of time you may also save on costs.
Commercial/Commissary Kitchens
If you need to store food, you may want/need to use a commercial or commissary kitchen. You can pick up food as you need it.
Keep in mind how far away the location is from where you’re selling your food. You don’t want to make many trips if you have to travel further away from the kitchen.
Having access to one of these kitchens will make it easier for you to prep all your food beforehand. You won’t have to try and prep your food in the small space of your food truck.
On top of that, your food truck may not have all the equipment you need to prepare your food beforehand.
Top Food Truck Costs
These are some of the food truck costs you need to be aware of. Do your research to learn about other costs that could affect you. Look for ways to reduce your costs—you don’t want to pay more than you have to.
Check out some of our other posts to learn what you should consider before entering the food truck world.