For food lovers with the Midas Touch in the kitchen and ambitions of being their own boss, opening a restaurant would be a dream.
A really, really expensive dream. But there is an option that is slightly less pricy: running a food truck business.
While operating your own food truck will obviously still be a major investment, they’re typically cheaper than brick-and-mortar restaurants for a couple of reasons, including not having to sign a lease or employ a large staff.
But what exactly does it take to open and maintain your own food truck? I went to a seminar hosted by Tampa Bay Food Trucks to find out.
The company doesn’t actually own or operate any of its own food trucks. Instead, the it serves as a source of information and resources for local food truck owners.
Its network consists of over 170 food trucks and aims to help them generate as much revenue as possible by organizing events and alerting them to locations and catering opportunities. They also assist with the buying, selling and modification of food trucks.
Michael Blasco, TBFT’s chief eating officer and speaker at the seminar, wants to help potential food truck owners avoid making the same mistakes over and over, à la “Groundhog Day.”
While I can’t possibly impart everything I learned during the TBFT seminar, I can share some of the major tips, tricks and information I learned from Blasco.
Startup Costs
There isn’t a one-size-fits-all formula for determining startup costs in the food truck business, but let’s go over some of the major costs and decisions you’ll face in the beginning.
Truck vs. Trailer
Obviously, if you want to start a food truck business, this will be one of your first major startup costs. But do you want to go for a full-blown truck or a trailer? Your budget will play a major role in this decision.
You can find used food trucks with price tags between $15,000 and $60,000. But remember, you get what you pay for. You might be able to snag a truck on the low end, but if it’s in bad condition you could end up forking out double what you paid for it in repairs.
When shopping for used trucks, consider how much it will have to be modified to fit your needs and meet local health and fire regulations. The food truck is, after all, a vehicle, and your business will suffer if it can’t reliably get you from point A to point B. And if the truck is in the shop, that means your business isn’t making money.
If you’re willing and able to splurge, brand new food trucks will typically cost between $80-$100K, including equipment. Forking over that kind of money is a hard pill to swallow, but it means you’d be getting a truck that is definitely up to code and customized to fit your needs.
On the other hand, you could spring for a trailer. Trailers are generally more affordable than food trucks, but keep in mind that you’re going to need a vehicle capable of towing them. You have to factor that into costs.
Wraps vs. Paint
Regardless of whether you choose a truck or a trailer, you have to brand it. And your design can make or break you. We all know we’re not supposed to judge a book by its cover, but let’s be honest — a really good design will naturally draw us in.
Painting your food truck will be the cheaper option, probably in the $1,000 range.
Your other option is a wrap, which is printed vinyl that will be adhered to your truck. These are considerably more expensive, running between $2,500 and $5,000.
You might balk at the price, but Blasco insists that wrapping a truck is the way to go. It can impact your sales upwards of 50%, he says.
Wraps are durable and will give your truck a clean design, which looks more professional to the consumer’s eye.
Remember, your food truck is literally a moving advertisement for your business. You have limited space, so carefully consider a design that will get your brand and name across clearly.
Blasco offers a few tips when it comes to placement.
Trailers typically ride pretty low to the ground, so your branding needs to be high enough that cars driving next to you can clearly see who you are. But for trucks, don’t put your name and information too high up, and definitely don’t put it on your serving window.
Generator
Brace yourself, because generator prices are a bit shocking: A proper food truck generator can set you back anywhere between $3,000 and $10,000. Yikes.
“Wraps and generators are like band-aids,” says Blasco. “It’s hard to accept how much they cost, but you just gotta rip it off.”
The type of food you’re serving and the amount of appliances you have will determine how many watts you’ll need to run on a regular basis. Do you need a refrigerator, freezer, fryer, stove, lights and an exhaust system? Oh, and don’t forget air conditioning.
Blasco suggests running propane when possible to avoid using too much electricity.
Don’t just consider the amount of wattage you need when generator shopping — consider also how loud the model is. Blasco warns that loud generators will deter customers and suggests they shouldn’t be louder than 68 decibels.
POS System
The whole point of your food truck is to sell your delectables to hungry customers, right? In order to do that, you’re going to need some form of POS, or a point-of-sale system.
Oh, you say you want to run a cash-only food truck? Blasco encourages potential food truck owners to rethink that plan.
Sure, cash-only is the cheapest option — all you need to do is buy a lockbox and you’re ready to go. But we are living in an increasingly paperless world, and people are less likely to be carrying cash. You could be missing out on potential customers by not offering card or mobile payment options.
Plus, a cash-only business means you won’t have anything to track your sales or inventory.
Luckily for food truck owners, payment processing systems have come a long way, so you don’t have to sacrifice precious space with a clunky cash register. With some services like Square, all you need is an iPad.
This is another cost that can be considered both startup and ongoing. Depending on the service you choose, some costs you may end up paying include a monthly POS fee, card processing fees and mobile data fees.
Initial Product Inventory
This category goes without saying, but we’re going to say it anyway.
Some of your startup funds will have to go toward food, kitchen utensils, pots, pans, napkins, plates — the works.
Shop for products in bulk to save a penny or two, and consider potential food cost percentage when making purchases. You should aim to keep your food cost between 18% and 25% of overall cost.
A high food cost means low profit. But if your food cost percentage is super low, that probably means your prices are too high.
Operating Costs
We’ve already touched on a couple of ongoing costs that you’ll be facing as a food truck operator, such as inventory and card processing fees. Let’s go over some more, shall we?
Unless you’re going to be running a one man/woman show, you’ll have to pay for labor, aka employees. And consider some hidden labor fees, like travel time to and from location.
Some cities and states have health codes that prohibit food preparation within a truck, which means you have to use a commissary. A commissary is a licensed, commercial kitchen where you can prepare and store food; maybe you can even park your truck there overnight. But commissary use means paying monthly rent.
Some other recurring costs to keep in mind include:
- Fuel — both propane and gas
- Vehicle maintenance
- Event fees
- Marketing and advertising
Branding Is Key
Blasco stresses that in the early process of opening a food truck business, branding is everything. It’s even more important than the food.
“No one knows what or who you are, so presentation is everything,” he says.
One major tip: Don’t pick a name you have to explain.
Sure, you might have your heart set on “The Awesome Possum” as your food truck name, but if a customer sees your truck, what will they think you sell? That’s right. Their brain will automatically think you sell possum. And no one wants that.
On top of picking a clear name, Blasco stresses to all of the seminar attendees that you should pick a food theme and stick to it.
One food type means a smaller menu. A smaller menu means faster output, which results in more customers. As a rule of thumb, food trucks should aim to have about five main menu items.
When Joe Dodd first attended the Tampa Bay Food Trucks seminar, Blasco told him that his food truck would fail. His range of menu items was broad and the name, Taste Buddz, didn’t convey a clear theme.
Eventually, Dodd took the seminar’s advice and rebranded his business as Soul Food Street Kitchen, commiting to a clear name and one type of food. It paid off — his sales went up 30%.
A Day In the Life
We’ve covered a lot of the technical aspects of running your own food truck business; now let’s talk about the day-to-day life.
Consider yourself warned: Food truckers put in long hours, operate on a sporadic schedule and do it all inside of a sweltering truck full of cooking equipment.
On average, food truckers will shoot for 20 to 25 shifts a month, working double shifts three days a week.
When you’re working doubles, that means being up by 7 or 8 a.m. to get prepped and on site by 11 a.m. for a lunch shift, which will usually end around 3 p.m. Then you have to get everything cleaned and packed up, and head to your next location for a dinner shift. By the end of dinner and cleaning for the night, you probably won’t be home until 10 p.m.
Blasco says that the long hours and the heat are some of the hardest parts of working as a food trucker — that, and securing spots.
You could work with a company like Tampa Bay Food Trucks that helps you find locations and gigs. But if you’re operating solo, finding lucrative spots that you are legally allowed to sell at will be more difficult.
Let’s Wrap It Up
Get it? Like a food truck wrap? Please, hold the applause.
We covered a lot of information, but trust me when I say there’s a lot more to be learned about running a food truck business. We didn’t even touch on insurance, permits or any legal costs you might incur! But here’s a pro tip or two: Permits and regulations vary state to state, and your personal car insurance will not cover a food truck.
Hopefully, this information can at least serve as a starting point for any potential food truckers out there.
Ultimately, running a food truck is just like running any other business, even a brick-and-mortar restaurant. Preparing yourself with as much information as possible can only help you.
Kaitlyn Blount is a staff writer at The Penny Hoarder. If she ran a food truck, it would specialize in grits, and would be called Let’s Talk About Grits, Baby.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
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