Restaurant entrepreneurs embrace wide-ranging food concepts and service formats, continually pushing culinary boundaries and promoting limitless gastronomic invention. Their creative inspiration caters to public demand, which currently reflects a need for speed and efficiency, serving savvy diners’ advanced culinary sensibilities. The demands of modern consumers have food service professionals asking the question: How do you please on-the-go foodies? The answer, for some, is found where the rubber meets the road.
Though they are not entirely new to the epicurean landscape, food trucks have recently emerged as a prominent force in American gastronomy. The flexible food service format answers the call for convenience; trucks are mobile and situated for easy access. And the narrow food focus found on many trucks (there’s only so much room) commonly results in specialty dishes you won’t find anywhere else.
If you’re sitting on the next great street food idea, mulling the prospect of owning a food truck, a recent medifeed.org feature may have some of the answers required to start formulating your business plan.
Food Truck Expenses to Consider
The cost of launching a food truck business varies for each venture; several factors influence the cost of getting underway. The region of the country in which you do business, the condition of your truck, and the buildout required to convert it for food service are only a few of the variables influencing overall startup costs. The cooking methods and ingredients selected for your food truck recipes also contribute to the cost of your initial food truck investment, as well as your ongoing operating expenses.
The cost of your truck isn’t the only startup expense, but it is a good place to start, breaking down the actual costs of launching a food business. The type of truck you choose dictates what you can expect to spend. Roaming Hunger estimates truck prices in the following ranges:
- Used Food Truck – Expect to pay $50,000 – $100,000 for a used food truck. Examples at the lower end of the price range may include hidden costs, such as engine repairs and kitchen updates.
- Used Truck With a New Kitchen – Outfitting a used vessel with brand new kitchen equipment solves one of the problems associated with a used food truck, but an older chassis may require ongoing repairs. Although you can expect to pay $75,000 – $100,000 for a used chassis/new kitchen arrangement, revenue lost from a broken-down, sidelined, operation isn’t worth saving a few dollars on the cost of your truck.
- New Truck with a Brand New Kitchen – New equipment reduces the likelihood of mechanical breakdowns and hidden repair costs, but you’ll pay a price for the comfort of launching with a brand new rig. $100,000 – $175,000 may seem like a steep investment, but as long as your business plan supports the expense, launching with a fresh set of tools helps maximize productive efficiency.
Each approach to outfitting your food truck has pros and cons, so it’s up to you to weigh the benefits of investing in new equipment, versus taking a chance on a pre-owned setup. With a clear upside of affordability, compared to a new, state-of-the-art food truck, the downside of buying used includes these potential hiccups:
- Warranties are Expired – Any buyer protection that came with your used food truck or its kitchen equipment have likely expired.
- Difficulty Financing – Some business loans are more flexible than others, but a used truck may not qualify for conventional financing, at preferred rates.
- Breakdowns – Not only does a breakdown call for repairs, but a disabled vehicle sidelines your entire operation. With no money coming in and the cost of repairs adding to your overhead, an unreliable truck quickly undermines your food business.
- Unexpected Spending – In addition to problems with the truck itself; used, mobile, food prep facilities may also require investment. Replacing and repairing water heaters, deep fryers, freezers and refrigeration systems can result in substantial expense for upstart food truck entrepreneurs, unexpectedly adding to the cost of a truck.
Certification, Licensing, and Fees
The cost of a fully-equipped truck may be the biggest expense facing food truck entrepreneurs, but it isn’t the only cost of doing business. Like restaurants and other food service operations, food trucks must be certified by the health and fire departments before serving customers. Obtaining permits requires inspection and fees.
The total number of food truck licenses issued in a given region may be limited, driving-up the cost of licensure. Operators in major metropolitan areas such as New York City and Los Angeles can expect to pay tens of thousands of dollars for a food truck license.
In addition to the cost of general compliance, food truck operators must also pay to participate in events. Application fees for high-profile events can inch into the thousands of dollars, and the money is often due well in advance of the events.
National Food Truck Association president, Matt Geller, estimates the cost of launching a food truck business to be in the range of $130,000 – $250,000. The truck you select impacts the overall cost of getting started, potentially pushing startup expenses beyond the high limit. Yet scoring a great deal on a truck or trailer, may enable you to get up and running for under one-hundred thousand dollars.
Like any other small business venture, beginning with accurate startup cost projections increases your chance of succeeding as a food truck entrepreneur. From your initial investment in a mobile kitchen to the cost of licensing, insurance, and individual application fees for each event, this partial list of food truck spending can help you start formulating your business plan for a mobile food service operation.
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