If you want to start a business where you combine delicious food and traveling the open road, starting a food truck might be perfect for you. The multi-billion-dollar food truck industry is inspiring more entrepreneurs to skip the costly brick-and-mortar restaurant and put their operations on wheels.
Still, the costs to open a food truck can be significant. Before you go out and buy your food truck, stick around because we’re breaking down what you need to know about food truck startup costs.
Let’s get started.
How Much Does It Cost to Open a Food Truck?
Many people believe food truck startup costs are low because you’re not renting a physical location. But the initial costs to open a food truck might surprise you. Your food truck alone can cost $50,000 or more, depending on its condition and how you design it. And this does not cover any of your other food truck startup costs and operating expenses.
If you’re learning how to start a food truck, understanding your financial requirements is critical to your success. This will help you budget your expenses so that you can have a smooth and successful launch.
Food Truck Startup Costs
Below, we’ve detailed the various expenses you can expect when opening a food truck.
You can’t open a food truck business without a food truck. It’s critical that you buy the right truck for your business. After all, it will be where you and your staff prepare the food, take orders, and serve your customers. Your food truck will likely comprise the majority of your food startup truck costs. Whether you buy used or new, you can expect to spend at least $50,000.
Also, be sure to prioritize value over cost. A proper food truck should have:
- Non-slip floors
- Inflammable surfaces
- Proper ventilation
- Emergency exits
- Enough space for kitchen equipment and staff to move around
If you’re buying used, be sure to check for these features. Depending on its condition, you may need to put in extra work (and money) to make your food truck functional, safe, and compliant with all guidelines.
Moreover, make sure the truck is in good driving condition. A cheap truck that breaks down has to sit in a repair shop—that means you’re closed for business and losing money.
Buy vs. Lease
Faced with such a large upfront expense, you may be wondering whether buying or leasing your truck is right for you. Typically, the answer to this question depends on your funding availability.
Purchasing outright can be beneficial so you can design it to fit your needs exactly. You can outfit it in any way you want, apply your branding, and more.
Of course, if buying the truck outright isn’t a viable option, you can also look into leasing. Just be sure to read the contract carefully so you’re aware of what you’re getting into and any limitations you’ll have to comply with.
Fuel and Maintenance
After you buy your food truck, you’re not done. Your food truck will be both your restaurant, prepping station, and mode of transportation—you must keep it clean and operational. That means general maintenance, regular washes, and refilling the fuel tank. Your small business budget should include at least $500 each month for fuel and maintenance—but depending on how far you drive your truck each day, this number could grow significantly.
When you buy your food truck, it’s a blank slate. You’ll want to add some branding so your future customers can recognize your business and what you have to offer.
As the name suggests, vinyl wraps are made of vinyl material, which is then affixed to the truck. Vinyl wraps are a popular way to brand your food truck, but they can be costly and difficult to install. A full vinyl wrap can cost at least $3,000. Still, many food truck owners find that vinyl wraps are worth the investment because they:
- Cover the entire truck
- Maintain the truck’s original color
- Create consistent branding visuals (in case your business expands to accommodate additional food trucks)
If vinyl wraps are too expensive, you could also consider hand-painting your food truck.
Some food truck business owners opt for hand-painting their branding visuals because it’s a cost-effective alternative. You can usually hand-paint your truck for about $1,000. You save even more in costs if you take a DIY-approach.
While hand painting may be more cost-effective initially, it can be challenging to replicate your design should you ever purchase multiple food trucks.
Be sure to weigh the long-term pros and cons of vinyl wraps and hand-painting before deciding.
Professional Graphic Designer
If you want your food truck brand to make an impression, consider hiring a graphic designer. Working with a designer with prior food truck design experience can help you craft a brand and logo that is sure to catch your customers’ eyes.
Also, if you choose vinyl wraps, you’ll want somebody who has experience designing a food truck—after all, designing a 3D truck is far different from designing a website logo. But this service doesn’t come cheap. Hiring a professional graphic designer to design and install a full vinyl wrap can easily exceed $5,000.
Business Registration, License, Permits
As with any business, there are various documents you must file and fees to pay before opening your doors to the public. Here are a few of the documents, licenses, and permits you must secure.
When registering your business, you’ll need to choose a business entity. Your business entity will grant certain personal protections and have different tax filing requirements. The fees you must pay during registration will vary by state. For example, in California, filing articles of organization for an LLC incurs a $70 fee, while filing articles of incorporation for a corporation incurs a $100 fee.
Licenses and Permits
Operating within the food and service industry subjects you to several licenses and permits. Again, these requirements will vary by state. For example, in the California Quick Start Guide for Mobile Food Vendors, food truck businesses require the following (but are not limited to):
- California Food Handler Card: $15 for one training course
- Business license: $32 (may vary by city or county)
- Seller’s permit: free (in California; may vary in different states)
- Mobile food vendor permit: around $50
- Food-specific licenses: varies (e.g., a soft-serve license selling frozen or dairy products requires a soft-serve license: $325 annual fee)
- Zoning permit
- Fire permit
- Parking permit
- Certificate of general liability insurance
- Permits if you’re operating at various fairs and festivals
We recommend visiting your state and city business portal to confirm what documentation you need to secure. This is also a good time to consult a business attorney to make sure you have everything you need to operate your food truck legally.
Food and Other Supplies
You purchased the food truck. You registered your business and obtained the necessary paperwork. Now, it’s time to secure inventory and supplies.
These food truck startup costs will fluctuate because ingredients will vary by the type of food you serve—a cupcake business’s inventory costs will differ from a seafood vendor. But typically, profitable restaurants spend 28% to 35% of their sales on food costs.
When working out your small business budget, you can expect to spend at least $1,500 on cookware, ingredients, spices, and more. You’ll also want to account for to-go containers purchased in bulk.
Technology and Software
Technology is changing how people conduct business—that includes mobile food trucks.
These days, you can’t get by on accepting cash only. Fewer people carry bills and coins in their pocket, opting for card or contactless payment. If you expect to succeed in this industry, you need to accommodate this cashless trend.
A point of sale (POS) system offers the software and hardware you need to accept credit and debit transactions. Some software plans can start as low as $14 per month and climb up to $105 per month, depending on your business’s needs.
As a small business owner, you do more than drive a food truck and feed your customers. Part of the gig is managing your small business accounting.
But accounting isn’t everybody’s strong suit. Fortunately, small business accounting software makes it easy to automate various processes:
- General bookkeeping
- Manage inventory
- Track income and expenses
- Send and track custom invoices
- Run basic reports
- Run payroll
Accounting software doesn’t have to increase your costs to open a food truck significantly. For example, QuickBooks Online lets you get started for as low as $12 per month.
Marketing is also essential to your food truck’s success. Expanding your marketing efforts can incur additional costs, such as:
- Small business website: Website hosts can start around $8 per month
- Printed fliers: Around $25 for 50 fliers
- Email marketing software: Starting at $15 per month
- Social media ads: Starting at $0.20 per click
If you intend to hire employees, you’ll need to pay an hourly wage or annual salary. The federal minimum wage is $7.25, but this number can be higher, depending on your state and county. For example, New York’s minimum wage is $15.
Hiring employees and paying salaries will significantly increase your food truck startup costs. But when starting, you’ll likely only have one or two employees—you have only so much space in a food truck, after all. But if your food truck business grows, you may buy more food trucks and hire additional staff.
As a business owner, having small business insurance can save you when you need it most. As a food trucker owner, you’re also vulnerable to additional incidents, such as a car crash.
Small business insurance is one of the necessary costs to open a food truck business. Having insurance protects you and your business from financial and legal claims in an accident or lawsuit. Here are some small business insurance plans you should consider for your food truck business:
- Commercial Auto: Approximately $135 per month; covers damage to a company vehicle and bodily injuries you cause when operating your vehicle.
- General liability: $400 to $600 per year; covers various losses that your business causes to another entity.
- Workers Compensation $0.75 to $3 per month per $100 of payroll; for work-related injuries
- Unemployment: 0.6% federal tax rate for most businesses; guarantees a portion of employee’s wages after a job loss
Food Truck Financing Opportunities
As you can see, the costs to open a food truck can add up. The following food truck financing opportunities can help you secure the funding you need to meet your food truck startup costs:
- SBA Microloans: This type of loan is an excellent option for food truck startups that need $50,000 or less. With interest rates sometimes as low as 7.5%, an SBA microloan can be the perfect option to purchase your food truck.
- Business Credit Cards: Obviously, a credit card likely won’t fund your food truck purchase. Instead, you can use it for smaller purchases, like replenishing your inventory or recurring charges related to software subscriptions.
- Equipment Financing: With so much of the food truck startup costs attributed to equipment (truck, kitchen equipment), you may find equipment financing to be the best option to fund these larger purchases.
The Bottom Line
The food truck industry is growing and creating exciting opportunities to bring your culinary skills on the road. Hopefully, this article offered insight into the costs to open a food truck so that you can make your dream a reality.
If you learned that the food truck startup costs exceeded your expectations, don’t feel discouraged. Fortunately, with small business financing, you can access the capital you need to get your food truck zooming across town.
- CA.gov. “Quick Start Guide for Mobile Food Vendors”
- restaurantreport.com “Restaurant Accounting: For Profit’s Sake, Inventory Your Food Cost”
- labor.NY.gov “Minimum Wage”