Food Truck Cost - How Much Is It To Get Started?

Are you thinking about getting into the food truck business? If so, you're probably wondering how much it will cost to start.

Several factors affect food truck owners' startup costs, including the cost of the food truck itself, the size and type of truck you choose, the equipment you need, and the location of your business.

But don't fret. If you're wondering how to start a food truck business, our complete guide is here to help. We'll break down all the different factors affecting your startup costs and help you create a budget for your own food truck.

Let's get started.

The rise of the food trucks!

Food trucks (a.k.a food trailers) have become increasingly popular in recent years. And it's no wonder why. They offer a convenient and affordable way to enjoy various cuisines.

According to Grand View Research, the global food truck market is expected to reach $3.93 billion by 2025, growing at a compound annual growth rate (CAGR) of 6.8% [1].

Many factors are driving this growth, including the rise in gastronomy across the globe and the increasing preference of consumers for new meal experiences over traditional brick-and-mortar restaurant experiences.

The pandemic has also impacted the food truck industry, with many trucks pivoting to delivery and takeout to stay afloat during the crisis.

Food truck vs. restaurant

Before we dive into the details of food truck costs, let's first dive into the good ol’ restaurant vs food truck debate. When starting a food business, there are pros and cons to both food trucks and restaurants. Here's a quick overview:

Food truck pros

• Lower startup costs than a restaurant - Especially if you're looking to save money by buying a used food truck or by using cheaper ingredients.
• You can start with a food truck for a fraction of the cost of starting a restaurant.
• More flexibility - Unlike a brick and mortar restaurant, you can move to different locations to find the best foot traffic with a food truck.
• Lower overhead costs - You don't have to worry about the high costs of rent, utilities, and other expenses that come with a restaurant.

Food truck cons

• Seasonality - Food trucks do best in warm weather. You may have to close up shop or get creative with your menu in cold weather.
• Limited space - You have a limited amount of space to work within a food truck, which can make things difficult when it comes to preparing food.
• Permits and regulations - You'll need to obtain the proper food truck licenses to operate your food truck, which can be costly and time-consuming.

Now that we've gone over the pros and cons of both food trucks and restaurants, let's look at the cost of opening a food truck.

How much does a food truck cost?

As we mentioned before, the cost of starting a food truck can vary depending on a number of factors. But in general, if you're wondering how much does a food truck cost, you can expect to spend anywhere from $10,000 to $100,000+ on your food truck [2].

Of course, if you're on a tight budget, you can always start with a used food truck instead of a new food truck and equip it with the necessary kitchen supplies. This will help keep your startup costs low.

Here's a breakdown of the different food truck startup costs you'll need to consider.

The food truck itself

This is arguably the most important factor that will affect the cost of your food truck. The type of truck you choose will determine how much you'll need to spend on equipment and how large your kitchen will be.

Some of the factors you'll need to consider when choosing a truck include the following:

• The size of the food truck. Will you be cooking on-site or prepping food in a commissary kitchen? If you're cooking on-site, you'll need a larger truck. If you're prepping food in a commissary kitchen, you can get away with a smaller truck.
• The age of the food truck. A used truck will be cheaper than a new food truck. However, a new food truck will likely need fewer repairs.
• The condition of the food truck. A well-maintained used truck will cost more than a beat-up used truck.

According to FoodTruckEmpire.com, the average food truck cost starts at around $25,000 to buy outright or between $3,000-$5,000 a month to lease [3]. Of course, you can always find trucks that are cheaper or more expensive than this, but this is a good estimate to keep in mind.

The cost of the food truck equipment

In addition to the cost of the truck itself, you'll also need to factor in the cost of outfitting your truck with the necessary kitchen supplies. This can include commercial-grade appliances, storage shelves, prep tables, a restaurant POS and more.

You can expect to spend anywhere from $5,000 to $20,000+ on truck equipment, depending on the size and scope of your food truck [4].

Let's say you're starting a used food truck, and you find a truck that's in good condition for $10,000. If you're only planning on serving pre-made food, your startup costs will be pretty low. But if you're planning on cooking on-site, your startup costs will be higher because you'll need to purchase more equipment.

In this scenario, you might spend $5,000 on truck equipment, bringing your total startup costs to $15,000. Of course, this is just a rough estimate, and your actual startup costs will vary depending on the factors we mentioned earlier.

The cost of hiring and training staff members

If you're planning on hiring staff to help you run your food truck, you'll need to factor in the cost of training and wages. Depending on the size of your operation, you might need to hire a chef, cook, cashier, and/or food runner.

The cost of training will vary depending on the position you're hiring for. But in general, you can expect to spend a few hundred dollars on training per employee.

As for wages, the average hourly wage for a food truck worker is $19.95, according to Talent.com [5].

The cost of commissary kitchen space

If you're not planning on cooking on-site, you'll need to factor in the cost of renting or leasing a commissary kitchen. This is a commercial kitchen where you can prepare food for your truck.

The cost of renting or leasing a commercial kitchen can vary depending on the size of the kitchen and its location. But generally, you can expect to spend anywhere from $15-$30 an hour on commercial kitchen space [6].

The cost of insurance

Another important factor to consider is the cost of insurance. This is often overlooked, but it's an important part of starting a food truck business.

The insurance cost will vary depending on the type of coverage you need and the size of your food truck. But generally, you can expect to spend a minimum of $2,500 for commercial auto and around $1,500 annually for a basic business owner's policy [7].

General liability insurance is the most important type for food truck businesses. This type of insurance will protect you if someone is injured or their property is damaged due to your business.

The cost of permits and licenses

Another factor that will affect the cost of your food truck is the licenses you'll need to operate. The licenses you'll need will vary depending on the city and state you're operating in. But in general, you can expect to spend anywhere from $50 to $500+ [8].

The cost of marketing and advertising

Last but not least, you'll need to factor in the cost of marketing and advertising your food truck company. This can include flyers, online ads, social media marketing, and more.

The amount you'll need to spend on marketing and advertising will vary depending on the size and scope of your food truck. But in general, you should expect to spend at least a few hundred dollars on marketing and advertising each month.

Get some inspiration from our food truck marketing ideas blog!

How to create a business plan budget for your food truck

Now that you know some key costs you'll need to factor into your food truck budget, it's time to start creating your budget.

Here's a quick overview of how to create a food truck budget

Start by estimating your monthly income and expenses

So you've decided that you want to start a food truck selling tasty pan-asian cuisine. The first step is to come up with an estimate of your monthly income and expenses.

To do this, you'll need to research the average cost of food trucks in your area and the average price of the items you'll be selling. You can use this information to come up with a rough estimate of your monthly income and expenses.

Some of the metrics you'll need to research include

• The average cost of food trucks in your area
• The average price of the items you'll be selling
• The average cost of rent for commissary space in your area
• The average cost of permits and licenses in your area
• Your food cost percentage (more on this later)

Why not reach out to current food truck owners to see if they can give you some more insights into this?

Make sure your income is higher than your expenses

Once you've estimated your monthly income and expenses, it's time to ensure your income is higher than your expenses. After all, you want to make sure your food truck company is profitable. (TIP: Check out our blog on how much do food trucks make to get an idea of your average profits)

If your income is less than your expenses, you'll need to either find ways to reduce your costs or increase your prices. But if your income is higher than your expenses, you're on the right track.

This is where the calculations come in. You'll want to take your monthly income and subtract your monthly expenses. This will give you your monthly profit margin.

For example, let's say your food truck has the following monthly income and expenses.

Monthly Income: $10,000

Monthly Expenses: $8,000

Monthly Profit Margin: $2,000

You'll also want to work out your food cost percentage. This is the percentage of your income that goes towards food costs. To calculate this, simply divide your monthly food expenses by your monthly income. In our example above, the food cost percentage would be $800/$10,000, or 8%.

Track your actual income and expenses

Once you've created your food truck budget, it's time to start tracking your actual income and expenses. This will help you see how well your food truck performs and make necessary adjustments to your budget.

A bar POS system can help you track your food truck's income and expenses. This information can be used to create weekly or monthly reports, which will help you track your progress and make necessary changes to your budget.

Many hospitality POS systems also allow you to integrate popular accounting apps such as QBO and Xero. This can save you a lot of time and hassle when preparing your financial reports.

Adjust your budget as needed

Creating a food truck budget is important to starting and running a successful food truck business. By taking the time to create a budget, you'll be in a better position to manage your finances and make smart decisions about how to grow your business.

But remember, your food truck budget is a living document. As your business grows and changes, so too will your budget. Be sure to revisit your budget regularly and make adjustments as needed.

For example, if you're consistently exceeding your monthly income targets, you may need to increase your prices. Alternatively, if you're regularly falling short of your income targets, you may need to find ways to reduce your costs.

Final thoughts

As you can see, there are a lot of factors that go into the cost of starting a food truck business. The key is to do your research and figure out what type of truck and equipment you need and how much it will all cost, and then create a budget accordingly. With a little planning and preparation, you can get your food truck business up and running without breaking the bank.