Beginner’s guide to starting a food truck business
Food trucks have become a staple at festivals and farmers’ markets. These versatile, mobile restaurants can offer diverse options to customers. Some provide quick access to local flavors. Others bring authentic, overseas dishes to a brand-new audience. Business owners can also use food trucks to try out unique food fusions.
Starting a food truck has become a popular and growing opportunity among entrepreneurs. In the United States, the market currently brings in 2.7 billion dollars in revenue and has grown by 10% annually since 2018. It’s easy to see why. There are several advantages to starting a business in this trending industry.
- Low start-up costs - A food truck is a relatively small investment compared to opening a traditional restaurant. Food truck owners report start-up costs that can be one-eighth as high as a brick-and-mortar location. You’ll also have less overhead costs without renting or owning a space.
- Mobility - With food trucks, you can easily move around to discover the prime locations for your business. You can be more flexible about where you operate to take advantage of events or easily move to new markets to reach new customers.
- Low labor costs - The average food truck has just 1.2 employees. Because food trucks require only a few employees, you can get up and running with lower labor costs.
- Food truck festivals and events - Food truck festivals and events are becoming increasingly popular. These offer an opportunity for owners to showcase their dishes. Customers attend these events to try an array of fresh foods. This means they’re a great way for your business to gain exposure and build a loyal customer base.
Starting a food truck business is a great idea for aspiring restaurateurs. A food truck can become a successful business due to low initial costs, flexibility, and the ability to target specific marketing and events.
How to start a food truck business
If you dream of serving customers from your own food truck, your work doesn’t begin with your first recipe. Long before your first day as a mobile chef, there are several things you must do to set your business up for success.
Research local regulations and requirements
Regulations can vary by state and city. This means you’ll need to do some research before opening and operating your food truck. You need to be sure you comply with all relevant laws, such as food safety regulations. Typically, you’ll also need to register for a business license and other permits that are necessary for your area.
Determine your concept and menu
Likely when you first dreamed of opening a food truck, you had some idea of the food you hoped to offer. However, you must define a clear, cohesive concept for your menu and theme at some point. Many food trucks offer classic street food, like tacos, hotdogs, or other handheld items. Others offer inventive small bites that are more unique to set them apart from existing food trucks in the area.
Secure a mobile kitchen
After you’ve developed your menu and concept, it’s time to secure a vehicle. You’ll need a mobile kitchen that meets all your needs. It’s important to consider the type of food you’ll be offering. This can affect the equipment and size of the kitchen you’ll need. Consider different vehicle options. You might want a truck, trailer, or even a retrofitted bus depending on your needs. Not only can the right vehicle serve your practical kitchen needs, it can also serve the aesthetic of your concept.
Purchase kitchen equipment and utensils
Once you have your vehicle, get your kitchen ready. Buy all the equipment and utensils. The recipes you’ll serve might require a stovetop, oven, fryer, and refrigerator. You’ll also need plenty of sanitizing products. Don’t forget the storage items, such as shelves, bins, racks, and coolers.
Market your business
When your food truck is ready, you’ll need to market your business. It's helpful to create a website or blog. Using social media platforms can also help you spread the word. You can share images of your dishes and make your menu accessible online. Attend special events like farmers’ markets and festivals to build your customer base.
Tips for starting a food truck
Food trucks allow you to offer delicious, creative flavors to a broad audience. You might serve up street tacos, Korean-style BBQ, or vegan desserts. The best part is you can bring your dishes to your customers. With some tried-and-true tips, you can set your business up for success.
Do some market research
Before buying or leasing a food truck, research your specific market. Make sure you know which neighborhoods will be most profitable for your food concept and which areas have high foot traffic. Understand your competition and be sure you consider any overlap in menu offerings. If your concept resembles another local business, emphasize what makes your menu distinct.
Consider a commissary
One option many food truck owners use to increase efficiency is a commissary. A commissary is a local restaurant or kitchen that you can use for prep equipment, refrigeration, and basic amenities. Having this location can expedite your food prep time in the truck and make your customer experience more efficient. However, you’ll want to weigh the advantages of a commissary against its added cost.
Network with other food trucks
Knowing other food truck owners can help you stay up-to-date with the broader industry. Building relationships with local business owners can open doors for community engagement.
Choose proper price points
Many food truck owners are tempted to price their food too low. However, it’s important to make a profit. You’ll need to do research to be sure you price your food appropriately. Consider the cost of ingredients, overhead, labor costs, and competitive prices in your area. You can do this and still ensure your prices remain appealing to potential customers. Options include price specials on menu items to showcase fresh additions or to engage with a holiday. Other price incentives might include customer loyalty programs or deals during special events.
Frequently asked questions about starting a food truck
Starting a food truck business can be full of unknowns. Here are answers to some of the most common questions about getting into the mobile food business:
How much does it cost to start a food truck?
The cost to start a food truck can vary depending on the type of cuisine, the vehicle you choose, and the location of your business. On average, entrepreneurs spend between $20,000 and $100,000. After purchasing your truck, you’ll also need to budget for items like supplies and marketing.
What type of truck should I buy?
The type of vehicle you choose will often be determined by your budget, menu items, and the number of staff you plan to have. Food trucks come in all shapes and sizes. Some are vintage vans or trailers. Others are larger commercial-grade trucks. If you’re unsure, you can consult with a professional to help you determine the proper size and fit for your business.
How do I pick a location for my truck?
To choose a location for your food truck, consider factors such as access to potential customers, zoning laws, parking regulations, and competition. Look for areas with high foot traffic, such as college campuses, downtown areas, and places with ongoing events like festivals or concerts.
What permits do I need?
To legally operate a food truck, you must get local permits, food handler’s certificates, and business licenses. Depending on the area you plan to operate in, you may also need to follow certain regulations regarding vehicle size and signage.
What should business owners remember when starting a food truck?
Of course, a food truck’s menu and concept are vital. To stay on track, follow health and safety rules, pay taxes on time, and have the right business insurance. It can also give you an advantage in developing a business plan early.
Tax tips for food trucks
Being familiar with the tax rules and regulations for food trucks is vital for business owners. Fortunately, there are a few tax tips for food trucks you can follow to help you manage your taxes business.
One of the most important tips for food truck tax management is staying organized. Keep records, receipts, and other documents. Make sure you can easily access them if you need to. This will make filing taxes much easier and less stressful.
Record all expenses
Record all expenses related to your business. This includes the costs of food, supplies, and professional fees. These expenses will reduce the amount of taxes you owe and can even lead to tax deductions.
Make estimated payments
If your income is largely from self-employment, you may need to make estimated payments throughout the year to comply with tax regulations. There are a few different options to pay estimated taxes, such as via check or credit card.
Don’t forget deductions
Take advantage of all the deductions you can. Common food truck expenses you can write off include operational costs, fuel, advertising, and professional fees.
Work with a professional
If you still have questions, talk to a tax professional. A professional can help you navigate the complexities of filing taxes, review your financial situation, and give you advice.
Easily managing taxes for food trucks
Managing taxes for your food truck can seem daunting, but it doesn’t have to be. With tools like ComplYant, you can keep up with tax deadlines and be confident you won’t lose track of any important filings. Staying compliant with your taxes is another way to ensure you do everything possible to keep your business running smoothly. Start managing your taxes with less stress. Sign up for a free account today.