How to Start (and Scale) a Food Truck Business

There are many niche industries where innovative entrepreneurs can start a business. If you have a knack for management, customer service and food, you might try the food truck industry. Read more to find out everything you need to know about starting a food truck business, from how to register your business to marketing strategies and hiring techniques. 

 

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What is a food truck?

A food truck is a vehicle that operates as a business serving food and meals. It’s typically a large service van, equipped with food products and kitchen equipment like a stove, refrigerator, fryer and anything else needed to make a specific cuisine. They park in permitted locations and serve food and beverages to people on-the-go. Here is more information about the history of the food truck and prime food truck locations:

 

History.com says that the practices that would pave the way for the food truck industry first started in the late 1800s and early 1900s when vendors would pass out food and beverages to factory workers in major cities. In the 1950s, the ice cream truck emerged, providing suburban America with its first look at a business run from a vehicle. From the 1960s onward, more food-oriented trucks began selling things like tacos or burgers along city streets. Modern food trucks are now a popular alternative to brick and mortar restaurants. 

 

Successful spots for food trucks

There are a variety of settings where food trucks can be successful. Here are some examples of places where food trucks make the bulk of their business:

  • Business parks
  • Food truck parks
  • Street-side parking in towns or cities
  • Farmers markets
  • Colleges and universities
  • Parties and event venues

 

Successful cities for food trucks

According to a report completed by the United States Chamber of Commerce Foundation, here are some of the best-ranked places to own a food truck business as of 2018 (#1 being the top city):

  1. Portland, Oregon
  2. Denver, Colorado
  3. Orlando, Florida
  4. Philadelphia, Pennsylvania 
  5. Indianapolis, Indiana
  6. Houston, Texas

 

Benefits of starting a food truck business

Before you start your own food truck business, you should understand the potential benefits it could bring to you and your business goals. Here are some examples of benefits:

 

Provides increased mobility 

Operating your business out of a vehicle can provide you with the freedom to change your business location. You could travel to different cities or areas every day. The mobility also affords you the opportunity to move easily to a new location if you’re not getting the sales you’re expecting in one place.

 

Less risky compared to a restaurant 

A restaurant is typically a brick-and-mortar business that requires you to establish yourself in a particular location. If you misjudge the market, you could end up putting your time and money into a company that isn’t successful. In contrast, operating a food truck might offer more flexibility. Because you operate out of a vehicle, you can adjust your location, menu items or overall business model without the same costs you would need to devote to a restaurant.

 

Minimizes overhead costs

Because a food truck offers a compact space compared to a restaurant, there can be minimal overhead costs. For example, while restaurants might have to pay rent, utility bills and building upkeep, food truck businesses may only have a monthly vehicle payment and the occasional costs for new kitchen equipment. Also, depending on size, a restaurant owner might spend a lot of their funds on food inventory. With limited stock space, food truck owners may spend less on inventory and avoid overstocking. 

 

Design costs are another area where food truck owners can save money. Sit-down restaurants may need to frequently replace decorations and perform renovations to keep appealing to their customer base, whereas food trucks don’t need to worry about these costs because they usually don’t supply a customer dining area. Instead of interior decorations, they can devote funds to their vehicle’s exterior design.

 

Allows you to be your own boss and have more control over tasks

Because a food truck has a condensed business model, it’s easier to be your own boss and perform a wide variety of duties, rather than juggle head chef, owner and manager like you would in a traditional restaurant business.

 

Provides a foundation for branding

Operating a food truck can establish your brand in a specific location, so you could build a loyal customer base and expand your services. After establishing your business, you could create a food truck chain or even expand to open a brick-and-mortar restaurant.

 

Gives you a starting point to learn and grow

If you are just starting as a chef or entrepreneur, a food truck could be an excellent way for you to learn about the process of owning a business. It can also help you develop your food prep and customer service skills since you’ll have direct contact with customers and will need to be able to prepare food with a quick turnaround.

 

Creates meaningful interactions with customers

Another benefit of starting a food truck business is that you can interact with customers on a more personal level. With the lack of restaurant and kitchen staff, you can greet your customers, make their order and see their reaction to your creations. Your food truck business can also help you establish connections on a first name basis with your customers, creating a sense of community and loyalty on the part of the customer.

 

Skills you need to start and run a food truck business

To start and run a food truck business, you need a variety of skills. Here are some examples of skills that could benefit you and your business:

  • Customer service
  • Culinary talent
  • Time management
  • Organization
  • Creativity
  • Adaptability
  • Basic mathematics
  • Leadership
  • Excellent driving abilities
  • Perseverance

 

How much money do you need to start a food truck business?

In addition to good management methods and culinary skills, you also need to have good financial practices when starting a food truck business. While fees could vary depending on the type of equipment you purchase and the price of location permits, here are some projected costs related to starting a food truck business, according to information from CNBC and Square:

 

Vehicle costs: +/- $20,000

Vehicle costs can vary depending on the make and model you choose or if you pick a new vehicle versus a used vehicle. Here are some examples of common food truck vehicles and options to consider:

  • Trailers (Airstream, Caravan, Horsebox)
  • Ford StepVan
  • VW Bus
  • School bus
  • Dodge Ram ProMaster

 

Equipment costs: +/- $45,000

You may need to furnish the interior of your vehicle with commercial kitchen equipment if it’s not already provided. This includes items like:

  • Fryers
  • Refrigerator
  • Stovetop
  • Sink
  • Oven
  • Pots and pans
  • Cooking utensils
  • Cleaning materials

 

License and permit costs: +/- $25,000 

The amount of money you spend on licenses and related fees typically depends on your area. Larger cities typically charge higher fees than small towns. Here’s what contributes to license and permit costs:

  • Business license
  • Food service license
  • Parking permits
  • Insurance

 

Inventory costs: $1,000 to $2,000

Starting out, you might pay between $1,000 to $2,000 per month to purchase menu and packaging items. Examples include:

  • Food ingredients
  • Utensils
  • Napkins
  • Plates or packaging materials

 

Operational and maintenance-related costs: $500 to $10,000 

There are a lot of different factors that go into the maintenance and daily operations of a food truck business. Here are some factors that could contribute to operation costs:

  • Portable water system
  • Lighting
  • Gas heating/air conditioning
  • Vehicle repairs
  • Equipment repairs
  • Fuel expenses
  • Payroll
  • Cash register or POS (point of sale) system

In total, starting a food truck business can cost around $100,000. You could come up with the funds by taking out a small business loan or starting your business out of a small cart to set up at farmer’s markets or in neighborhoods. Food carts usually aren’t as expensive as a vehicle, so you can use a food cart to build up your company.

 

How to register your food truck business

To register your business, there are several steps you should take and potential state or local requirements you may need to follow. Here’s a basic outline of what you should do when you want to register your food truck business:

 

1. Pick an available name

Before you start the registration process, make sure that another company in your state doesn’t already have the name you want to use. You can confirm this by conducting a simple online search. There is not a specific website where you can find available food truck names, but certain state governments may have websites that allow you to search for available business names. For example, Oregon’s state government website allows you to search for business names and trademark availability.

 

2. Get your business license

You can typically find licensure information — like where to apply and any required application fees — by going to your state government’s website. Depending on your state’s requirements for starting a business, you might also have to register for a business license at the county level. If this is the case, you usually do this through your county clerk’s office.

 

3. Get your food service license

You need to get your food service license to sell food products within your state. Typically, you can apply for a food service license at your local health department. For example, food service providers in Maryland have to fill out an application before also submitting a detailed report about their facility, its equipment and the products they plan to serve.

 

4. Check on specific state and local requirements

Each state may have different requirements for those looking to start a food truck business, so you should conduct additional research about food truck and service permits in your area. Some states might require a health and safety license or inspection before you can start serving food to the public. Your state might also require that you use a commercial kitchen, rather than your home, to process and prepare your food.

 

5. Get a parking permit and information about your community

Find out what type of parking permit you need to operate out of your vehicle and where you can park. You can usually find locations to park your food truck by going to your county clerk’s office. You may also be able to get a parking permit at the clerk’s office if necessary.

 

How to hire employees for your food truck business

Depending on the size of your food truck business, you may find it helpful to hire employees to enhance productivity. Here’s how to hire food truck employees:

 

1. Establish your needs

Before you post a job ad, identify what you need the most help with. For example, If you find that you have trouble balancing orders and cooking, look to hire someone to work at the cash register so you can focus solely on cooking.

 

2. Write a job description and post it on job search sites

Create a job title and description to publish to Indeed.

 

3. Use ATS software to pull candidates who match your requirements

You can manually review resumes and cover letters, but if you want to speed up the process, you can download an applicant tracking system ( ATS) software program. This software allows you to search candidates’ applications by entering keywords like relevant job titles, certification titles or skill sets, making narrowing down applications more efficient.

 

4. Arrange an in-person interview

When you find the right candidate, call or email them to schedule an in-person interview to get to know them and learn more about their qualifications. If you’re hiring for a cook position, you might have them prepare a dish or discuss their kitchen experience.

 

5. Write a job offer letter

After finding the right person, write an offer letter that summarizes their position, duties and starting salary or hourly wage.

 

Creating a business model for your food truck business

A business model is a written document that allows you to organize each aspect of your business. Here are the key components to include in a business model:

  • Purpose (value)
  • Sources of revenue
  • List of vendors and partners
  • Main industry competitors
  • Target audience (customer base)
  • Products or services
  • Marketing strategies

 

Best ways to market the business (online and offline)

Here are some tips for marketing your food truck business:

  • Use social media to your advantage.
  • Put up posters and leave business cards in cafes.
  • Give out free samples of your food.
  • Start a food blog to drive web traffic.
  • Do a vlog-style video to share recipes and tutorials.
  • Partner with food bloggers to promote your business.
  • Create a loyalty club.
  • Offer a free beverage with a particular menu item.
  • Volunteer to cater for a local event.

 

Food truck business FAQS

 

What are some popular food truck foods?

In general, popular cuisine for food trucks includes Mexican-style food like tacos, burritos and nachos, classic barbecue foods like pulled pork or ribs and American staples like hamburgers, hot dogs, deli sandwiches and pizza. Also, many food truck companies offer options like Greek, Indian, Thai, Jamaican, French and other cultural-themed food trucks.

 

How much do food trucks make a year?

The amount of annual revenue you can expect from your food truck business can depend on the area where you sell your products.According to the latest figures from ;”>FoodTruckEmpire.com

 

Do you need a CDL to drive a food truck?

Whether you need a CDL or commercial driver’s license to drive your food truck typically depends on the weight of your vehicle and the state you operate in. Either way, it’s advisable that someone running the truck holds a driver’s license with a good driving record ;”>AAA, some scenarios where food truck owners need a commercial driver’s license include the following:

  • If the vehicle weighs 26,001 pounds or more (Class B license required)
  • If a vehicle weighs 26,000 pounds or less (Class C license required)
  • If a trailer weighs more than 10,000 pounds (Class A license required)
  • If a trailer weighs less than 10,000 pounds (Class B license required)
  • For those with an entrepreneurial mindset, culinary skills and a desire to provide a service to the public, the food truck industry offers a variety of opportunities for growth and fulfillment.

     

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