Are you wondering how to start your own food truck business? Our guide walks you through what you need to do to make your food truck dreams a reality.
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If you’ve always wanted to start your own restaurant but prefer to avoid the high overhead costs, you might be wondering how to start a food truck. Food trucks are an easier and more affordable way to open your own business and share your tasty creations with the masses!
In this article, we’ll go over the basics of starting your very own food truck. You’ve already taken the first step; let’s keep going!
What Are The Requirements For Starting A Food Truck?
As a business that will be serving food (out of a somewhat unconventional space), there are plenty of requirements you’ll have to meet to open your own food truck.
The specific legal requirements will vary depending on your state, county, and even city of operation, so do your research to ensure you start your business out on the right and legal foot, including getting an Employer Identification Number (EIN).
Here are some other general requirements:
- Business license
- Driver’s license
- Health Department permit
- Food Handler’s permit
- Fire Marshall certificate/approval
- Seller’s permit
- Commissary letter of agreement
You’ll also need to know what type of business structure you want to set up, whether as a sole proprietor, an LLC, or another kind, each coming with its own pros and cons.
Because you have a restaurant on wheels, you may not be thinking about renting a commissary space, but it is actually a city law or health department code requirement to join one.
A commissary provides you with the space you need to prepare and store your food but will also add to your monthly expenses, as rental fees are typically between $250-$1,000.
You can also store your truck at your commissary and dispose of gray water. For many food truck owners, using a commissary is much more affordable than renting their own private commercial kitchens.
Some industries can get away with not needing much business insurance. Food trucks are not one of those industries.
You will need several types of insurance to operate your business responsibly and legally:
- Liability insurance
- Commercial auto insurance
- Property insurance
- Workers’ compensation insurance
Learn more about the types of business insurance you may need as a food truck owner.
6 Steps To Start Your Own Food Truck
Create A Business Plan
This is where you HAVE TO start. It doesn’t matter how simple you think your business concept is; a great business plan will make it easier to help you achieve your goals and apply for funding.
Your business plan is going to be unique to your business and should be designed around your needs and goals. All business plans do follow a very similar format and include the following sections:
- Executive summary
- Company description
- Business structure
- Industry analysis
- Customer analysis
- Competitive analysis
- Management team
- Operations plan
- Marketing plan
- Financial plan
Learn more about these sections and find a step-by-step guide on making a one-page business plan.
As a food truck owner, there are a couple of different things you have to plan for that other businesses don’t need to worry about.
You will need to make sure that you research locations to sell your food. Unlike a restaurant, you don’t need to bring customers to you, you can bring your food to them!
Consider the following:
- Local parking and zoning regulations
- A consistent location vs. moving frequently
- Local events, such as festivals, concerts, and farmers’ markets
- Catering at private events, such as weddings and business luncheons
As a food truck, you need to have, well, food! You need to know the following:
- What kind of cuisine are you going to serve?
- Will you have a static or seasonal menu?
- Is your menu going to focus on a few specialties or a variety of samplings?
- Where will you source your ingredients from?
- What are other food trucks in your area serving?
- How much competition will you have?
While your food is obviously the most important part of your food truck, you will need to draw your customers in to try it before they fall in love.
It’s time to begin working on your brand. Pick a theme for your food truck that:
- Is unique while still relating to your cuisine
- Translates well to the design of your truck (more on this later)
- Lends itself to a catchy and easy-to-remember business name
Fund Your Food Truck
Now that you’ve made your business plan and have a basic idea of future expenses, it’s time to really break down what it’s going to cost for you to start your food truck.
The most important decision you will have to make is if you are going to lease or buy your food truck. If you decide to buy one, you’ll probably also need to know your options for getting funding for it. Luckily, you have a lot of options when it comes to finding the best business auto loans.
How much will it cost to purchase equipment, such as an oven, grill, refrigerator, deep fryer, and/or exhaust hood? What about your POS system fee and hardware?
Be sure to account for licensing/permits, website/domain fees, payments for insurance policies, advertising costs, and future truck modifications when making your hypothetical budget.
Check out our article on startup funding to learn more about your options for getting the funds you need to get started.
Pick Your POS System & Technology
Sure, you could operate a cash-only business, but you could lose valuable customers by taking this route. Instead, consider purchasing a POS system for your food truck.
A POS system goes beyond just a traditional credit card processor. This system allows you to not only accept credit cards, debit cards, and other forms of payment, but it also offers features such as reporting and inventory tracking. You’ll also be able to ring up customer orders and print receipts.
We’ll talk more about the best POS solutions for your food truck later on.
Register Your Business
There are a number of reasons to register your business. The type of legal structure you select determines how much you’ll pay in taxes. Some legal structures also offer personal liability protection.
Even though your business is on wheels, you still have to abide by the same health requirements and regulations as traditional restaurants. This means that you have to acquire licenses and permits to operate your food truck legally.
The types of licenses and permits you need vary based on your location. In general, though, you should expect to acquire the following:
- General business license
- Food service establishment permit
- Food handler’s permit
- Health Department permit
- Sales tax permit
You may also be required to obtain additional local permits, including signage, parking, and zoning permits.
To operate your food truck, an inspection from your health department is required. Make sure that your truck meets all requirements and regulations and that you’re following the rules when it comes to things such as cleanliness, food preparation, and food storage.
Purchase Or Lease A Truck
One additional expense, and your largest, that we haven’t yet discussed is your food truck. This will serve as your mobile restaurant, so it should not only meet all health regulations but should also be fully stocked with everything you need to create your menu items.
You have several options for acquiring your food truck. First, you have the option to purchase your truck. You can purchase a new truck that is fully outfitted and up to code. You can also purchase a used truck.
A brand-new truck is the most expensive option, somewhere between $100K-$200K, but it has the following benefits:
- No worrying about DIY health code violations
- You can customize your truck inside and out
- No unseen transmission or engine problems
A used truck can be far less expensive, between $30K-$100K. However, there are some potential problems you need to consider:
- Repairs of unexpected/unseen mechanical problems
- Unexpected expenses due to health code violations
- Additional expenses to customize your truck inside and out
If you plan to purchase your truck, having it financed could help you save tens of thousands of dollars in upfront costs. Equipment loans may be an option for you, and we have an explainer post on how to get equipment loans for your small business. After all the payments are made as agreed, the truck is yours to keep, sell, or trade.
You may also lease your truck. Equipment financing for a lease vs. a loan works similarly. However, at the end of your lease period, you’ll return the truck and sign a new lease. Some lenders also give you the option of paying off the balance at the end of your lease if you want to keep your truck.
If you don’t qualify for equipment financing, you may explore other financing options, such as taking out a personal loan for your business. If you have a solid credit score and history, you’ll be able to borrow the funds you need at competitive interest rates.
If you don’t want to finance your purchase, you could tap into other funding sources, such as using your savings or setting up a ROBS plan.
There are several ways we recommend finding your first customers. Follow the pointers below to get started on finding your loyal fan base!
- Bolster Your Web Presence: While your food truck alone will be your main form of advertising, take it a step further by using a website builder to make your own site. Create a social media marketing campaign and promote your locations and connect with other food trucks and pods! Learn more about how you can create and maintain your web presence.
- Take Advantage Of Your Truck: Display your website and social media handles on your truck. Make sure to include a QR code that links to them all and pick a URL (domain name) that is easy to read from a distance and remember when you drive past.
- Market Your Business: Offer catering options, interact with customers online, and don’t hesitate to ask for positive reviews and feedback. Word-of-mouth advertising is one of the best forms of advertising, especially for food trucks, so make sure to work your hardest to keep your positive reputation amongst food truck goers.
- Advertise On Other Websites: If you plan on catering events or weddings, consider adding your contact information and web address to local event websites. Reach out to wedding planners to become a recommended vendor.
- Host A Grand Opening Event: Food tastings, holiday parties, and fundraisers are all options for events you can use to introduce your food truck to the world. You can also consider donating food or services to a charity or fundraiser.
- Make Your Truck Your Own: Along with your website and social media accounts, you want to make sure your truck is wrapped with something like a custom vinyl wrap that helps you stand out to your customers. Make sure that your logo is prominent, you are staying on brand with your colors, and any fonts you use are clear and easy to read. It’ll cost around $2K-$5K to get your wrap installed.
Best POS Solutions For Your Food Truck
Toast is a great option for food trucks mainly because of the multiple methods customers can use to order, which can help when you’re at a busy pod or have a long line.
Toast POS is an all-in-one Android-based system created especially for the restaurant industry. The excellent customer service certainly doesn’t hurt, either! The Starter plan begins at $0/month and offers the option to grow with your business and change to more expansive plans in the future.
Square For Restaurants POS
Square for Restaurants is an all-in-one cloud-based restaurant POS. It offers online ordering and an iPad kitchen display system and is easy to use for just about anyone who has ever encountered Square or an iPad before.
There may be options with more advanced features and reporting, but Square beats them all with an easy-to-use and functional interface for a great price. The Free plan starts at, well, $0/month!
Like Square for Restaurants, Shopify POS is a cloud-based all-in-one POS system, it was just created for retail, not the food industry. It will take some more work to customize Shopify POS to your needs, but not much more than any other platform.
The introductory plan starts at $39/month ($29/month when paid annually) and includes features like a full online store builder, in-store inventory, gift cards, and custom discounts.
talech POS is a reasonably priced and highly customizable cloud-based system with options specifically tailored for businesses in the food industry.
This POS system can be perfect for food trucks that are just getting started and don’t want to worry about investing too much in POS hardware to take payments. talech’s Mobile POS plan costs $0/month and includes the mobile POS app to take payments with your smartphone, menu management, reports, and other great features!
How To Start A Food Truck FAQs
How profitable is a food truck?
Depending on your source, a well-run, properly marketed, and efficiently managed food truck can bring in anywhere from $25k-$100k annually.
Do food truck owners make money?
Typically the owner of a food truck makes less than 50% of the truck’s yearly profit. This can range from $24k-$153k annually.
How do I start a small food truck business?
To start a food truck, you need to create a business plan, fund your food truck, pick your POS system, register your business, purchase or lease a truck, and find your customers!
What is the most profitable type of food truck?
The most profitable type of food truck is the one that finds the balance between cost, labor, and sales. In North America, this is typically going to be a barbecue or burger food truck.