A food truck is a mobile vendor that serves meals or beverages. Food trucks can operate at special events like festivals or concerts, or at regular venues depending on your business model.
The food truck business is a $2 billion annual sales industry, with a reported annual growth of 7.3% compared to 2% in traditional restaurants.
Reach a wider market. A food truck offers the opportunity to explore several locations and easily set up operations for markets or events. This allows you to reach more consumers than a static location.
Business is booming. Consumers are spending more money at food trucks than at traditional brick and mortars.
If this industry appeals to you, begin planning your new food truck with the steps below.
1. Find a niche.
Your food truck needs to have a specialty that sets it apart from competitors. You could choose cultural or national dishes that are not commonly found in your area, or make popular dishes in a unique way (like making vegan or gluten-free food).
Market research will help you to find out about food trends and popular food truck menu items in your target area, or within your target market. One way to acquire this information is by looking at the current food truck variety in your desired area and identifying which trucks do well and if there is a gap in the market for a specialty that isn't represented.
Food Truck Business Plan - Free Download
Use our food truck business plan template in Microsoft Word format to jumpstart the planning process for your new business.
2. Choose a name.
Your food truck's name has to be memorable. Given that you may not occupy the same space each day, having a memorable name will help customers to search for your business online to see where you will be next.
Purchase a domain for your business. First, you should check to see if your domain name is available by visiting domains.google and typing your domain name into the search bar. The results will display insights about your proposed domain name, including how it could potentially be misspelled. You can also purchase this domain from Google Domains, with other price options and domain variations available.
Once you know which domain names are available, you can also purchase it from a registrar like Bluehost or GoDaddy. Some registrars also offer web hosting services.
Make sure your name isn't already registered. While it may seem original, do a Google search of your business name to ensure that there are no companies with the same or a similar name.
Register your business name. Once you have decided on a unique name, register it with the U.S. Patent and Trademark Office so that you have ownership of it.
3. Form a business plan.
A business plan is essential for financing. If you intend to approach investors or banks for funding, they will want to see your business plan to make an informed decision.
Business plans help you to execute your ideas. Your business plan will be a roadmap for how to proceed with launching your food truck.
A business plan for a food truck should include the following items:
- Executive summary.
- Business description.
- Market Research.
- Marketing plan.
- Competition analysis.
- Financial data.
- Future goals.
4. Find a Suitable Location.
Once you have identified your target market, you need to choose a location (or several locations) that have adequate foot traffic. There are also legal restrictions regarding where you can park and operate your food truck, so you will need to contact your county clerk for information about available locations.
Foot traffic is essential. You should research areas that have frequent foot traffic. For example, business parks have employees that need lunch daily. College students are also a good target market, so setting up near campus is a good option. In both of these examples, it is imperative to assess the competition in your immediate and surrounding areas to see what kinds of food vendors are already there, and how you can stand out.
5. Form a legal entity.
There are a few options to consider when forming a legal entity. These include:
1. Sole proprietorship: This makes you the only operator and investor, with no employees.
2. Partnership: Two or more individuals share the expenses and income from the business. No income tax is paid, but an annual return must be filed.
3. Corporation: A corporation has shareholders but remains as a standalone entity.
4. S Corporation: S corporations forward all income and expenses to shareholders for tax purposes.
5. Limited Liability Company: An LLC is more flexible in how ownership is placed, as it can be owned by an individual, more than one person, or a corporation. An LLC can be treated as a corporation or partnership depending on the state.
6. Secure financing.
A food truck will have several startup expenses including the truck, licenses, and ingredients.
There are several ways in which to source funding:
1. Crowdfunding: You can set up crowd-sourced funding online, allowing friends, family, or interested investors to donate money towards your business. Some businesses offer to pay these initial investors interest.
2. Small business loan: Banks can be approached for small business loans, provided that you have a good credit score and some collateral.
3. Sell equity: You can sell equity in your company to get the funds you need, but this will mean splitting your ownership of the company as well as your profit.
4. Business credit card: Business credit cards are an option if you failed to qualify for a loan. Read our list of the best small business credit cards for more information.
7. Purchase a truck.
Food trucks have very specific requirements according to health and safety regulations, so it would be advisable to purchase a vehicle that has already been used as a food truck. Alternatives to trucks include trailers and carts, which can be cheaper.
Equipment your food truck will need:
- Undercounter refrigerator.
- Food warmer.
Check websites like Craigslist for second-hand trucks. This will not only save money but may also lead to meeting food truck owners who can offer advice. A second-hand truck can cost between $50,000.00 and $100,000.00.
Food Truck Business Essential Equipment Pricing:
Price per unit
Propane fuel cylinder
Other Startup Expenses:
- Cutlery and plates/napkins: $200.00
- Salaries: $8 - $15 per hour.
- POS system: $200.00 - $1,000.00
- Fuel: Varies depending on vehicle, but estimated at $500.00
Your truck may also require repairs, and the cost of maintenance should also be considered.
8. Apply for licensing and permits.
Depending on your state, you may need the following licenses and permits:
1. Employer Identification Number: You need an EIN if you plan to have employees. This is necessary for tax purposes.
2. Business License: Any business needs a business license to operate, especially if income is generated from it.
3. Vehicle License: Your food truck will need to be icensed, and any employee driving the truck will need a valid driver's license. In some states, a commercial driver's license may be required.
4. Seller's Permit: A seller's permit is available in some states, allowing bearers to buy ingredients at wholesale prices without tax.
5. Food Handler's Permit: A food handler's permit is required in some states, as the permit is precluded by a safety course to ensure that food is handled correctly.
6. Health Department Permit: The health department must approve the health and safety standards of your truck to verify that your food storage and preparation is hygienic.
7. Fire Safety Certificate: The fire department must ensure that you and your staff are educated about fire safety and suppression methods, due to the susceptibility of a fire beginning with cooking equipment.
8. Auto Insurance: Your food truck should have commercial auto insurance to protect your truck against damages. This should include cover against fire, physical damage, and engine repair.
9. Parking Permit: Many areas have zoning laws that prohibit certain vehicles from parking in them. There are also restrictions on how long a vehicle may be parked in a location. It is advisable that you contact your county clerk for information about where to legally park and operate your food truck.
10. Create social media accounts.
Without a permanent location, a food truck relies on social media to update its location. Followers can see your upcoming locations, and use social media to check-in when they visit your truck.
The most effective social media marketing takes place on Facebook and Instagram. These platforms have the most user engagement and offer more flexible advertising campaigns.
Create event pages on Facebook. If you plan to be at a specific event, you can create an event page for your food truck to gauge interest. Whilst at your event, you can post stories on Facebook and Instagram with a geotag.
Post pictures of your food and new dishes. Advertising images of your food, and encouraging others to do so, will encourage new customers to try your products.
Create a hashtag for your food truck. When customers take pictures of your food and tag you, as well as share your hashtag, you can see how many people are engaged with your content and share these image on your own accounts (with permission).
How 'The Cravings Truck' Uses Social Media:
Linking Foursquare to Facebook and Twitter: Foursquare is an app that shows nearby restaurants based on users' locations. The Cravings Truck updates their daily location on Foursquare and links this account to Facebook and Twitter, instantly alerting followers.
Using polls to engage with followers: Facebook, Instagram and Twitter have poll features that allow users to vote on questions posed by others. The Cravings Truck uses this feature to ask customers what they would like served for the week. The brand has also asked customers to come up with new dessert options, and have named these desserts after the users who suggested them.
Responding to customer complaints on social media: When a customer complains about poor service on social media, The Cravings Truck uses this opportunity to apologize and offer a coupon where appropriate. This boosts their public image and settles the dispute.
Rewarding employees based on customer feedback: Customers are encouraged to post about positive experiences with staff, and the staff who are mentioned receive rewards for their excellent service.
Communicating with customers on a personal level: The business talks openly about their old truck and the various mechanical mishaps they encounter. They feel that this connects the audience to the truck as well as the staff. The business tries to post relevant conversation starters like views on events or news to engage with customers about more than food.
By following these steps, you'll have an excellent starting point for your new business. For more information, you can read our article on How to Start a Business.
How profitable is a food truck?
On average, food trucks earn $5,000.00 to $20,000.00 per month. Depending on your expenses, this can be extremely profitable.
How much does it cost to start up a food truck?
According to our research, food trucks can cost between $50,000.00 and $60,000.00 to start up.
What licenses are needed to start a food truck?
- Employer Identification Number.
- Business License.
- Parking Permit.
- Health Department Permit.
- Fire Safety Certificate.
- Seller's Permit.
- Food Handler's Permit.
Why do food trucks fail?
The most common reason that food trucks fail is because of unexpectedly high expenses. Failure to budget for these expenses can lead to minimal profit, with no room to expand.
Are food trucks a good investment?
If you would like to enter the food industry, a food truck is far more affordable than a brick and mortar restaurant and shows a higher annual growth rate.
Can you park anywhere with a food truck?
No, you can't park anywhere with a food truck. Zoning laws prohibit food trucks from parking in particular areas, so it is advisable to contact your county clerk to find out where you can park legally.
How much profit can you make owning a food truck?
On average, food trucks earn $5,000.00 to $20,000.00 per month. Profit is dependent on your individual expenses, but this is a fair estimate of what to expect.
Do food trucks pay to be at events?
Yes, food trucks pay to be at events. They can either be charged a flat rate, or be asked to pay a percentage of sales from the event.
Can you rent a food truck?
Yes, you can rent a food truck for between $100.00 and $1,000.00 per day depending on the type of truck and facilities included.
Do food trucks have running water?
Yes, food trucks are required to have running water.
Do food trucks pay taxes?
Yes, food trucks pay taxes because they earn an income by selling products. Food trucks must have a seller's permit and Employer Identification Number.
Do I need a CDL to drive a food truck?
If your truck is heavier than 26,001 pounds, you will need a commercial driver's license to drive it.
Can you prepare food in a food truck?
Most cities require food trucks to have a commissary where food is stored and prepared.
Can food trucks sell alcohol?
Food trucks may serve alcohol if they have the correct license and only serve alcohol in an allocated area.
Where can I park my food truck?
County clerks will be able to give you specific information about where you can park, but generally, food trucks park outside of office buildings, at events, outside of shopping centers, and near other restaurants or street vendors.
How can I make my food truck successful?
By following the steps above, you can make your food truck successful through proper research and planning.
How do I start a small food truck business?
Our steps for starting a food truck will provide you with all the information needed to begin your business.
Do you need an LLC for a food truck?
An LLC is one option for registering your business but is not the only option. You can form a corporation, a sole proprietorship, an S corporation, or a partnership.