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The popularity of food trucks has exploded in the past decade. What began as a fad has gone mainstream as Americans have embraced mobile restaurants. As a result, aspiring chefs and restaurant-industry entrepreneurs have turned to food trucks as a lower-cost, lower-risk alternative to opening traditional restaurants. However, it’s crucial for aspiring entrepreneurs to know about their potential food truck costs before trying one out. And, of course, one of the most important questions is simple: How much does it cost to start a food truck?
Perhaps the most attractive aspect of starting a food truck instead of (or as a precursor to) a brick-and-mortar restaurant is the idea that it’s a relative bargain. But your actual food truck startup costs might be greater than you expect, especially depending on where you live.
How much does it cost to start a food truck? Consider these essentials
So, how much does it cost to start a food truck? The answer depends on a lot of factors. Let’s take a look at some of the factors that determine your startup costs and operating expenses.
|
Average food truck startup costs |
|
|
Food truck |
$40,000–$150,000 |
|
Licenses and permits |
$1,864–$28,276 |
|
Startup inventory |
$2,000–$3,000 |
|
Serveware |
$300 |
|
Fuel and maintenance |
$500–$1,000 |
|
Insurance |
Varies by policy |
If you intend to rent a truck instead of buying it, your initial food truck startup costs may be lower.
Licenses and permits are a large part of your food truck startup costs
To start a food truck and operate for one year, an entrepreneur spends an average of $28,276 on permits, licenses, and legal compliance, according to the U.S. Chamber of Commerce’s Food Truck Index.
The types of permits and licenses required to operate a food truck fall under five categories: administrative, health/menu/food safety, vehicle requirements and safety/hazard prevention, employment, and zoning.
Costs vary by location, but the five cities friendliest to food trucks are Portland (Oregon), Denver, Orlando, Philadelphia, and Indianapolis. The five toughest cities for food trucks are Boston, Washington, D.C., San Francisco, Minneapolis, and Seattle.
Indianapolis has the lowest fees at $590, while Boston comes in at $17,066 (Seattle has the next highest fees at $6,211). Boston is an outlier with its extra-high fees, so if you remove it from the equation and calculate the average permit and license costs of the other top 19 food truck cities, you find that the average fees paid by food truck operators are about $1,864.
In food trucks, as in real estate, location is everything. So if you’re trying to decide where to start your food truck, think critically about whether your city’s permit and licensing fees — on top of all the other costs associated with your business — are cost prohibitive.
The cost of renting versus buying a food truck
Perhaps the biggest (and priciest) question new food truck entrepreneurs face is whether to rent or buy their vehicle. And this will deeply affect food truck costs. You can expect to spend anywhere from $75,000 to $150,000 on a new, made-to-order truck, according to Restaurant MBA, and they take months to build.
Used trucks generally cost between $40,000 and $80,000, and you should be able to start using them almost immediately. The cost of renting a food truck depends on the length of the lease, but if it’s longer than, say, six months or more, it should be around $2,000 to $3,000 per month.
More food truck startup costs that can add up quickly
Obtaining a truck itself is the most expensive item in your food truck startup costs, followed by fees and permits. However, there are a number of additional costs to consider before you can serve your first customer.
Necessary kitchen equipment
The type of equipment you need depends on the type of food you serve, but common appliances are ovens, fryers, grills, and refrigerators. Other equipment may include pots and pans, storage containers, knives, serving implements, and other utensils. Appliances can cost well into the thousands, and supplies like pots, pans, and other tools can cost a few thousand dollars.
When you’re launching your business and dealing with lots of other food truck costs, it might make more sense for you to lease appliances while you figure out what you really need and build up the capital to reinvest in your food truck.
Inventory needed to get off the ground
The basic materials you need to launch your food truck include ingredients for your menu items and serveware like plates, cups, lids, utensils, and napkins. Generally, your food truck startup costs for ingredients depend on your menu, but expect to spend around $1,000 to $2,000 when you take into account items like cooking oil, spices, and more. Serveware startup costs for food trucks are around $300.
Operational costs of a food truck
The greatest food truck costs associated with running your business have nothing to do with the food. Gas, insurance (auto liability, general liability, workers’ compensation, etc.), permits, licenses, maintenance, equipment, and supplies are all major considerations when creating a budget and figuring out how you’ll turn a profit.
As noted above, the average cost of permits and licenses in the top 19 food truck cities is $1,864. Fuel and maintenance costs vary, but average around $500 and $1,000, respectively. There’s also the cost of implementing a restaurant point-of-sale system.
There are some operational costs that you can’t control, like permits and licenses, but there are ways that you can lower your bills. For example, if you buy used equipment instead of new, or if you limit your menu items, you can save money on ingredients.
10 ways to minimize food truck startup costs for your business
Build your menu around versatile, seasonal ingredients
Instead of having lots of different menu items that all require different ingredients, opt for a smaller number of dishes that use some of the same produce, proteins, and spices. Doing that, along with sticking to seasonal produce, cuts your food truck costs and reduces waste. By keeping close track of your inventory, you will also get a sense of what items are most or least popular.
Don’t go overboard at the grocery store
Before you have a strong sense of the quantity of ingredients you should buy, err on the side of underbuying. It’s better to sell out on a given day than to be stuck with ingredients that spoil and go to waste. Even better, selling out builds buzz.
Staff your loved ones
When you’re starting off, ask for help from family and friends. This isn’t meant to be a permanent situation, but it can help you work out the kinks and figure out how many staff members you need at different times.
Rent or buy used equipment
Your food truck startup costs can quickly get out of control, so refrain from buying all-new, top-of-the-line tools and devices. Get by with used or rented equipment until you figure out what you really need (and you might find that you never need the most expensive stuff).
Launch your business in a market with reasonable costs
As the Food Truck Index shows, the cost of licenses and permits varies significantly by city. So, if you aren’t constrained by location, consider launching your venture in a city with lower regulatory fees and a market that isn’t already saturated. If you’d like to consider taking on outside funding through a bank or an investor, put together a business plan so you can account for how that money will be used to grow the business. A business model canvas can also be a good way to sketch out how everything works together.
Explore new revenue streams
Instead of restricting your business to, say, weekday lunch crowds, look into other potentially lucrative opportunities like weddings, graduation parties, and late-night crowds outside bars or concert venues.
Buy in bulk with other food trucks
Bring down costs by purchasing certain ingredients or supplies in larger quantities with your fellow mobile restaurateurs.
Embrace social media marketing
Traditional advertising can be a budget-buster for small businesses, so build an audience on social media platforms by, for example, tweeting information like your location and hours each day and posting photos of your menu items (particularly daily specials) on Instagram and Facebook.
Take care of your truck
It sounds simple, but taking the time to get regular maintenance checks reduces the likelihood that you’ll have to deal with larger, more expensive issues in the future.
Compare vendor prices
If you shop around for airline tickets or mobile phone service, why wouldn’t you do the same with your business’s vendors? Look around, and if you find better offers, either switch providers or give them the opportunity to match or beat that price.
The final breakdown: How much does it cost to start a food truck in 2024?
There are a lot of factors to consider when starting up your mobile restaurant business. But at the end of the day, how much does it cost to start a food truck? If you’re renting your truck, the average food truck startup costs you can expect vary between about $46,700 and $187,440. However, your costs may be much higher depending on the city where you’re operating your business, your menu offerings, and the cost of upkeep in your area.
But no matter where you are, you can save a lot of money with some simple tips and reinvestments to make your business stronger.
