Not everyone is eligible to fulfill their dream of running a restaurant business in brick-and-mortar. Therefore, the food truck business is another good option to enter into an eatery business. This trend is now attracting many entrepreneurs who have cooking skills. As they are portable, they serve better service during outdoor festivals and other events.
According to IBISWorld, there are 4,000 food trucks in the USA and 7.9 percent is an annual growth rate of revenue in this industry.
But when you think of being a part of this, you must carry basic industrial knowledge and a solid business plan. It will enable you to run your profession smoothly.
This guide will help you unlock the answer to how to start a food truck business. So let’s begin the journey.
How to Start a Food Truck Business?
Plan Your Costs and Find a Truck
Before you initiate how to open a food truck, you should prepare an investment plan. If we talk about the general cost, $55,000 to $75,000 is the start-up cost of an average food truck. It might be cheaper and less risky.
The cost also depends upon the location, cooking equipment, and a truck. The start-up cost also includes legal activities charges, insurance, and a POS system.
The second thing comes down to finding a truck. You can buy the vehicle or take it on rent.
There are different options to find a suitable truck.
- Online classifieds: It is a good option because used trucks are cheaper.
- New custom trucks: It is a highly customized truck that is suitable for all needs. But it is an expensive option.
- Leasing and franchising: You may find a local truck to lease. Franchising a truck is another option, but you will have no control over the marketing, products, and menu.
Secure Funding
As we have already discussed above, the startup cost of a food truck depends upon the cooking equipment and location you choose. Once you know the cost, it is highly recommended to secure funding before opening a food truck.
The best way to accomplish this is by talking to investors and taking a business loan. Other ways are listed below.
- Angel Investors offer funding for a business profit percentage.
- Choose local credit unions to avail of long repayment times.
- Startup businesses can go to the Small Business Administration’s 7(a) loan program.
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Get Permits and Licenses
Obtaining a business permit is crucial when starting a food truck business. As the food truck business is operated from vehicles, every driver must have a proper license.
It may vary from state to state. As far as permits are concerned, food truck owners must apply for seller permits. With this, it will be easy for them to buy equipment at a wholesale price with no sales tax.
Here are some permits and licenses needed for a food truck business in the USA.
Business license: Every business, including a food truck, requires a business license. You need to obtain an additional license from the Alcohol and Tax and Trade Bureau (TTB) if you serve alcoholic beverages.
Food truck permit: This kind of permission includes the verification of documents like liability insurance and business certificates. You can search for the food truck permit requirements as per your state’s rules.
Fire permit: The local fire department will regularly inspect and this comes under the fire permission. You can check for the inspectional service departments or local food services to acquire a fire permit.
Parking permits: You need to apply for parking permits as per your state rules. These permits are crucial in case of fines or risk of banning a running a food truck.
Ice cream truck vendor license: In case if you are selling ice-cream then local municipalities or police departments can check this license.
Seller’s permit: This kind of permit helps to track sales tax. It can require both a seller’s permit and a resale certificate. To obtain this license you can apply on the website of your local government
Food service license: County health department or local city issues a food service license. You can obtain this license through the local health department website.
Employee health permit: Any employee needs to undergo FDA approved food handler training if it is about handling food and beverages. Professionals can acquire the permits as per the local and state rules.
Consider Using a Point-of-Sale System
Investing in POS systems is beneficial for business owners in this technological era. Paying cash is now an old story. Mobile payment and debit/credit card payment are other alternatives to cash payment. In such situations, choosing the best POS system is highly effective.
POS systems enable you to track inventory, take payments, and manage orders well. It acts as a central dashboard and facilitates many operational points of a food truck business. You must select the best food truck POS system like Moon POS.
Hire Employees and Training
You need to manage everything on your own in the beginning. However, with time and business growth, you will require manpower. It could be either cooking food or looking after your accounting work.
Source and hire people who keep faith in your vision. Also, your business will get better reach if you hire a candidate with great public relations. This will also enhance your marketing and accelerate the chance of popularizing your business among people in town.
Give adequate training to your team. Training will help your team to work efficiently for a fruitful result. You might get an experienced person but still, training will be needed.
Figure Out Where to Park
The biggest challenge for a food truck business is choosing the appropriate parking space. Unlike restaurants, it is purely a mobile business that can be moved anywhere. Because of this reason, the food truck owner must choose the right situation to park the vehicle.
The ideal place to park a vehicle is near parks, malls, and other high streets. Some areas are non-commercial and restricted to carrying out commercial activities. So research before final setting up. In this case, contacting the local motor vehicle department can be a fruitful approach. Acquiring the best parking zone can create the story of your successful food truck business.
When it is about choosing the right location or parking zone you have 3 choices.
- Static: Choose and finalize one location and use it throughout the year.
- The nomad: In this option, business owners notify their customers a few hours before arrival. They use Twitter for this purpose and do it randomly.
- Weekly route: Business owners can finalize different locations for different days of the week.
Start Marketing and Promoting Your Food Truck
Prepare a robust marketing plan before starting a food truck. Without proper marketing and business promotion, it is impossible to achieve success. Websites and social media platforms such as Instagram, Twitter, and Facebook are valuable marketing tools for food truck business. Don’t forget to choose Google My Business to let your customers easily navigate you.
Besides that, some traditional marketing strategies also work.
- Event marketing: Attain local events and advertise your business there. Give branded merchandise to your new clients.
- Partner up: Get a partnership with brick-and-mortar restaurants. It will be a mutually advantageous scenario for both parties.
- Traditional print marketing: Posters, flyers, and business cards are still business marketing tools.
What Is the Cost to Start a Food Truck Business in 2024?
How much does a food truck cost? Many people think over this question. Various factors decide the cost. Here we have the bifurcation of the cost for various factors.
| Food Truck vehicle | $40,000 to $150,000 |
| Startup inventory | $2,000 to $3,000 |
| License and permits | $1,864 to $28,276 |
| Fuel and maintenance | $500 to $1,000 |
| Serveware | $300 |
| Insurance | Varies as per the policy |
Here, the vehicle cost depends upon your choice while selecting a vehicle. A new truck costs $75,000 to $150,000. Used and second-hand trucks cost between $40,000 and $80,000.
The rental cost of the vehicle depends on the lease period. The general cost is between $40,000 and $80,000, while the longer lease period is $2,000 to $3,000 per month.
The overall cost of opening a food truck business also depends upon the location where you operate.
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Do Food Truck Owners Face Challenges?
Food truck professionals can face the following challenges while entering this profession.
Weather and Environmental Factors
Weather conditions highly affect the food truck business. Thunderstorms and wet conditions can make it difficult to park your truck. Ultimately, it could affect the daily operations and footprints of your food truck customers.
Parking
Food truck owners need to find suitable parking places. Some zones are highly restricted for commercial activities and it could lead to high fines.
Seasonal Food Items
The demand of food items is subject to change, according to the location and weather condition. It is highly fluctuating because food trucks are associated with seasonal demand. Overall, this could affect the business’ revenue and profits.
Maintaining Food Truck
Food truck business professionals must be well familiar with mechanical minds. Along with running your own business, you have to keep checking your vehicle’s health. It is highly recommended to have proper maintenance and service for the truck. Therefore, along with the chef you have to be a driver as well.
Conclusion
If you are really looking to turn your love of food into a profession then you have to keep a note of all the things mentioned above. We hope that you have a satisfactory answer through our guide on how to start a food truck business. Combine your cooking passion and business skills to have a successful business. Serve the best and earn the best. Thanks for reading!
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Jayanti Katariya is the founder & CEO of Moon Invoice, with over a decade of experience in developing SaaS products and the fintech industry. He holds a degree in engineering. Since 2011, Jayanti's expertise has helped thousands of businesses, from small startups to large enterprises, streamline invoicing, estimation, and accounting operations. His vision is to deliver top-tier financial solutions globally, ensuring efficient financial management for all business owners.
