Food truck

How to start a successful food truck

Thursday, June 23, 2022

Are you reading this because you’ve always daydreamed of hitting the road as your own boss? Did you Google “how to start a food truck” because you’re tired of where you sit in the food industry and want to break out on your own? Or maybe you’re here because you want to trade that 9-to-5 desk job for a [delicious] passion project. No matter how or why you stumbled on this guide, we’re glad you’re here, and we’re excited to walk you through how to start a successful food truck step-by-step, so you can:

… and so much more.

Are you ready to start a food truck business?

Most people will tell you that opening a restaurant can be an expensive, risky business. While cheaper than opening a restaurant, a food truck is still … a restaurant on wheels.

That said, as a food truck owner, you’ll likely wear many hats: head chef/baker, part-time mechanic, HR manager, accountant, inventory manager — we could keep going. If you’re in the food industry and want to test a concept, or are an avid home chef or foodie looking to break into the business, there is a lot more than the menu to consider before opening this type of small business. Only you can decide whether you’re ready to juggle all those hats — but we can walk you through how the path to opening a food truck could look.

You know how the old saying goes: “Failure to plan is a plan to fail.” Let’s walk through how to start your food truck business — from soup to nuts.

to-go food box

Plan your food truck business

Whether you want to open a food truck as a passion project or a by-the-numbers business venture, you’ll want to know everything about your local food truck market. Is your city friendly or hostile toward the food truck industry? Do you have a lot of competition, or is it an untapped market? Taking your time with research can help you avoid some pitfalls down the road in your process (pun intended).

Do your homework on local food truck laws

Every state, county and major city has regulations for food trucks and street vendors. These laws can be very friendly to food truck owners or make it extremely difficult to operate, depending on where you live.

Food truck laws generally fall into four categories: health, zoning/parking, safety and vehicle requirements:

  • Health: Health regulations can include mandated truck equipment, necessary permits for you and your employees and kitchen requirements — like whether you need access to a commissary kitchen, a by-the-day or by-the-hour rentable commercial kitchen.

  • Zoning: These laws regulate where food trucks can and can’t operate. They outline the neighborhoods you can service, where you can park and serve during the day versus park overnight and if you can park at paid parking meters.

  • Safety: These include things like making sure a fire extinguisher is on board and that you’re up to date with fire department inspections.

  • Vehicle requirements: These laws will outline which vehicles you can use as a food truck, the emissions standards food trucks must meet and whether the driver will need a commercial driver's license (CDL) to operate.

health, zoning, safety

Where do you find your local food truck laws?

There isn’t a one-stop shop for potential food truck owners to get the answers they need. Some states, counties and major cities have their regulations posted online while others don't. You may have to dig to find answers in multiple locations.

To make sure you’re crossing your t’s and dotting your i’s, you can reach out to your city or county health department and clerk’s department to get your questions answered. Some things to ask can include:

  • What permits and licenses do I need to start a food truck? How much are they?

  • Can I use one food manager safety license or will each employee need a food safety certificate?

  • What refrigeration, sanitation and on-truck cooking equipment does the health department require?

  • Does the truck’s equipment need to be professionally installed or can I do it myself?

  • Is a registered commissary kitchen required?

  • Do each of my employees require separate vending licenses, or is a single business license enough?

  • What vehicle size limitations are there?

  • Does the driver of the food truck need a CDL?

  • Are there zoning laws concerning where I can park the food truck? What about overnight parking?

Bottom line: These laws can impact startup costs, potential revenue and the viability of your food truck concept. For example, if you can’t park at a meter in your city’s busiest office district during lunch hours, will you be able to operate weekdays at all? Plus, these laws are at the whims of your city, county and state governments. They can change at any time, and what was once a friendly-to-food-trucks city can become hostile just like that. You’ll want to keep up with your local food truck scene to know if any problematic legislation may affect your business.

Server illustration

Size up your potential food truck competitors and your area’s food scene

Food truck scenes can vary widely; your community could be a saturated or untapped market. Researching the competition in your food truck (and restaurant!) scene can tell you:

  1. What food truck concept types are currently on the road

  2. Where they are (or aren’t) parking

  3. What brick-and-mortar restaurants and concepts exist

  4. How much your potential competitors charge for their food

  5. Potential competitor marketing strategies — are they on social media? How they are using it?

  6. The “rush” times due to heavy foot traffic in certain parts of town

  7. Potential customer demographics

  8. Currently popular food concepts (Is there a sudden crop of Nashville hot chicken/ramen/etc. concepts in the area?)

Armed with this knowledge, you can start brainstorming ideas about what food truck category and concept you might pursue.

Consider food truck startup costs

Starting a food truck, while still relatively cheaper than opening a restaurant, is a significant financial investment. Taking a look at your potential startup costs early and often can help you understand just how much it will cost to start and maintain your business. Plus, tracking down these costs now can help with crafting your business plan later.

One-time food truck costs

You may experience other costs to get started, but this table will give you a general idea of what one-time food truck costs you could expect.

Category

Food truck

Truck wrap (graphic design/logo on your vehicle)

Equipment

Cost

$50,000 - $175,000

Initial product inventory

$1,000 - $2,000

Incorporation fees

$50 - $725

Professional, legal or consulting fees

$1,000 - $5,000

Permits and licenses

$800 - $1,400*

Branding (logo creation, etc.)

$300 - $1,300

Website

Free - $5,000

Social media – Facebook, Instagram, Twitter

Free to start accounts

$200 - $1,000

Uniforms, shirts

$0 – $1,000

Service items (plastic forks, napkins, plates etc.)

$200 – $300

Cooking utensils (pots, pans, serving utensils, etc.)

$1,000 - $2,000

Fire extinguisher

$100 – $300

Miscellaneous (Better to plan for the unexpected!)

$500 – $2,000

Insurance premiums
Basic business owner’s policy (BOP)
Commercial auto

$2,000 – $4,000

Total

Lower end

$56,950

Higher end

$201,025

*This will vary based on your location — certain major cities, including Los Angeles and New York City, may charge significantly more than the fees listed here.

Monthly recurring food truck costs

There are ongoing costs you’ll need to consider outside of your payroll, insurance premiums, any food truck association dues, restocking ingredients/drinks, etc. These are examples of some general expenses you may experience — and by all means, are not all of the recurring food truck expenses you’ll encounter in the wild. Your monthly costs can vary widely if you have a one-person operation or a larger staff.

Category

Commissary kitchen fees

Cost

$400 – $1,200

Food truck parking

$500 - $1,000

Fuel

$500 - $1,000

Phone/Internet

$100 - $200

Social media marketing

$0 - $500

Total

Lower end

$1,500

Higher end

$1,900

If you’re taking a deep breath to calm yourself from the sticker shock, don’t worry. With careful planning and hard work, the food truck of your dreams can exist.

Create your food truck concept

Food trucks can live or die by their concept. Choosing a concept is one part market research and the other an expression of your food interests. Your food truck concept should be well-researched and meet a need in your community. And this should go without saying, but it also should be something you enjoy cooking and eating yourself — because you’ll be spending a lot of time prepping, planning, chasing down vendors and more (especially if you’re a one-person show). Whether it’s your cultural or ancestral foods or just a cuisine you love and think will be truly unique in your community’s food scene, passion is key.

Maybe your daydream already included a concept. Or now that you’ve done your research, you have a few ideas in mind. Let’s put those concepts to the test.

Consider your risk with a SWOT analysis

Take a look at your concept’s strengths, weaknesses, opportunities and threats. You know it, you love it, it’s a SWOT analysis!

Let’s SWOT a potential concept for a fictitious aspiring food truck owner, Al, who lives in Cincinnati, Ohio. He’s testing his concept of Wieners on Wheels, a truck that will serve various types of specialty German frankfurters.

Internal (things within your control)

Strengths

  • Experience: Al’s been a butcher at shops and specialty groceries for over 20 years

  • High-quality product/family recipes: Al has authentic recipes passed down by generations of butchers in his family

  • Ability to charge premium prices: Al’s recipes are less common than his competitors, with higher-quality meat

  • Proven concept: Al has successfully sold at farmers’ markets and pop-ups

  • Good local market knowledge: Customer demographics make product recognition more likely; can fine-tune recipes to meet customers’ tastes

Weaknesses

  • No brand equity: Starting from scratch without name recognition in the greater Cincy food industry

  • Inexperience with websites and social media: Al isn’t on social media, so marketing may be an issue

  • Limited product range: Menu may seem more or less static because of the concept

  • Limited options for special diets: no vegetarian or vegan options

External (things out of your control)

Opportunities

  • Purchase meat from local farms: Keep food costs low with the benefits of better quality, humanely raised beef and pork, as well as benefit of marketing truck as supporting local agriculture

  • Support: Learn and get support from other owner-operators in the city’s food truck association

  • Large customer base: Cincy has one of the largest German populations which may interest them to try ‘old world’ recipes

  • Attract new customers at events: Cincy is home to the second-largest Oktoberfest celebration in the world, which along with other local Oktoberfests, can help build a customer fan base quickly

Potential Threats

  • Competition: Many street vendors and trucks already serve hot dogs and various sausages (although not specialty)

  • Cost of beef, pork: Rising food costs due to increased grain prices

  • Cost-conscious customers: Said rising food costs may force customers to eat out less

  • Rising fixed costs: Increase in oil and fuel costs make it more expensive to travel and make truck repairs.

Accountant

Write your food truck business plan

You’ve done a thorough SWOT analysis. You’ve nailed down your concept. Now it’s time to sit down and make a business plan!

Why should you bother writing a food truck business plan now? A business plan is just a road map for you to structure, run and grow your food truck. Plus, many loans or potential investors require a business plan.

How to write a business plan for a food truck

A food truck business plan uses the same business plan template you’d use for any other small business. Many traditional lenders use this type of business plan for issuing loans.

We’re breaking down the basic components of a food truck business plan to give you an idea of the information you may want to include. Note that it’s OK to leave out sections that don’t make sense for your food truck.

Checklist

Executive summary

This is the high-level first look at your food truck — where you explain your business and why it will be successful. You can rely on your SWOT and food truck scene research (and the rest of your business plan!) to share:

  • Business name

  • High-level introduction

  • Types of food you’ll serve

  • Where you plan to serve your food

  • Projected costs and profits for your truck (high-level)

  • How your concept will meet a need in your community (i.e., what market gaps are you addressing and why it will be a successful truck)

  • Your strengths as a potential food truck entrepreneur (i.e., knowledge and skills you bring to the table — food industry experience, accounting skills, etc. )

  • Future business goals

This should be a short section, painting the broad strokes of your business. It may be helpful to save the executive summary as the last thing you write. You’ll really get down to the nitty-gritty in the next sections we’ll cover, so getting those out of the way may help you better craft your summary.

Store icon

Company description

This is where you get to dive into the details, sharing:

  • The type of truck (truck, trailer or food cart)

  • Why you chose to pursue a food truck vs. a brick-and-mortar restaurant

  • If you’ll use a commissary kitchen or prepare your food on-truck

  • How your menu will compete against your direct competitors' — both their food trucks and restaurants

  • What makes your food truck unique, including any competitive advantages and niche markets you serve in the food scene

Chart icon

Market analysis

This section is your opportunity to showcase all of the extensive competitor and local food scene research you did. Here you can share how you’ll show up in the existing market and stand out in the crowd by describing things like:

  • Your local food industry, current trends, growth expectations and major customer demographics

  • Your ideal customer: age group, geographic locations, socioeconomic status and other demographics relevant to your concept

  • Your potential customers’ needs, as well as any trends (seasonal or not) that could impact your customers and business

  • The current size of your target customer demographic, and how it’s poised to grow

  • How you will corner the market within your local food scene

  • Any issues that could affect you getting your business off the ground

  • Any city, county or state regulations that can affect your operations

People icon

Organization and management

This section outlines the structure of your business, including staff and their duties and responsibilities as your business grows. This section can include:

  • Your legal structure — partnership, sole proprietor, limited liability company (LLC)

  • Full name of owners and percentage of ownership per person

  • Ownership type — general partner, common stock

  • Profiles of your management team that include buisiness responsibilities, prior employment, education and skills, food industry experience, community involvement and salary

Delivery icon

Service or product line

This section will get you talking about your truck concept, potential menu and dishes. This is the spot where you can really play up how your truck will be unique. Use it to share:

  • Your cuisine(s)

  • Why you’ve chosen this concept, and its meaning/connection to you

  • Any competitive advantages you may have

  • Current stage of recipe development (established or in-development)

  • If you already have brand recognition or are gaining popularity

  • If you have any relevant trade secrets or patents

  • If you’ll require employees to sign non-competes

  • How you believe your menu may develop in the future

  • If you have interest in expanding this business (fleet of food trucks, etc.)

  • If you’ll consider expanding the truck’s reach with event catering opportunities, attending food truck fairs and other large community events, etc.

Bills icon

Marketing and sales

This section is all about your overall sales and marketing strategies. How do you plan to find and build a customer base? This section answers that question and shares:

  • If there are menu items unique to your truck

  • Your menu pricing strategy compared to market food costs and your direct competitors

  • Your truck’s sales schedule (How many days will you be on the road a year? Will you be a summer-only business?)

  • Your growth strategy for your business (hiring employees, acquiring more trucks, expanding the service area)

  • If sales will be tied solely to your truck (will you cater or do pop-ups?)

  • How you’ll announce your route to customers

  • If you’ll offer return customers a loyalty program

  • Your advertising plan — both traditional media (radio, newspaper, billboards, local magazines) and social media (Facebook, Twitter, Instagram, TikTok, LinkedIn)

Chargeback icon

Funding request

Now you need to explain the cost breakdown of how much funding you’ll need to jumpstart your business to potential lenders. We know that food truck costs vary widely, but outline everything you think you’ll need — from the truck itself to things like permits and insurance (they have a price tag too). In this section, you’ll share:

  • The amount of capital you believe you’ll need

  • How this capital will create opportunities for your business

  • Whether or not you’ll request more funding in the future

  • Exactly how you’ll use the funds awarded to your business

  • How you’ll repay your loans

  • Any benefits to an investor if you’re successful

Growth icon

Financial projections

This is where you’ll highlight your estimated overall revenue, sales forecasting and break-even analysis. Sales forecasts estimate future sales based on historical sales data, economic trends or market analysis.

You can use historical data for sales forecasting — for example, if you’re a restauranteur who is opening a food truck based on an existing brick-and-mortar concept. But if your business is just getting started, you’ll want to try forecasting sales for the first three to five years for potential lenders.

Plus, they’ll want to know how much food you’ll need to sell to make a profit. This is called a break-even analysis and can give you and your investors an idea of how profitable your food truck will be. The break-even analysis process can help you decide if you need to cut some costs and adjust the amount you request from lenders. You want to show them you have a well-thought-out plan that aligns with your funding request.

Appendix

This section is a catch-all for information and data that just doesn’t fit in any of the other categories. It could include anything from letters of reference to food photos or your menu.

Secure funding for your food truck

After all of your research, concept testing and business plan creation comes another boss to conquer in your quest to start your food truck: finding the funds to get started. By completing a business plan, you’ve finished one of the biggest tasks that many lenders will ask you to tackle when applying for a traditional small business loan.

But your homework isn’t quite over yet. Gathering and organizing items on the SBA loan checklist is a good idea before researching and applying for loans. Since government small business loans usually require more paperwork than other lending options, you’ll likely be more than ready to hand over the documents your lenders will need quickly.

Having good personal credit and business credit can help improve your chances of being approved for a loan and potentially getting better rates and terms. Getting a loan isn’t the only way to find the cash, though. There are many creative ways to fundraise, including:

Cooking

Get your food truck licenses and permits

You’ve finally secured your financing, and now you’re ready to start making moves! First things first, you need to take care of food truck permits and licenses. These can include:

  • Business license

  • Employer identification number (EIN) — this is crucial for establishing business credit

  • Food service license

  • Employee health permit (food handler’s permit)

  • Mobile food facility permit

  • Fire department inspection

  • Zoning permits

  • Vehicle registration

  • Parking permits

  • Commercial driver’s license (if needed)

Finally! Buying a food truck (or leasing one)

Now for the fun part! It’s time to buy or lease a food truck. A truck will likely be the biggest ticket (and most pressing) item in your startup budget, no matter which option you choose.

Let’s break down the pros and cons of each to see which option will be best for your business.

 

Buying a new truck

Pros

Cons

Can be customized for your business

Significant upfront costs

Project a clean, sanitized and polished appearance

May take longer to get on the road due to customization

Access to warranties

May have to "live with it" instead of modifying the truck when capacity needs to change, due to high costs

Lower risk of expensive major repairs or breakdown

 

Lower mileage, no undisclosed accidents or damages

 

Buying a used truck

More affordable than buying a new truck

Higher potential maintenance costs

Opportunity to shop around for different layouts that fit your needs

Increased risk for time off the road due to breakdowns

Equipment may come pre-installed

Higher risk of wear and tear due to mileage

Fewer decisions to make regarding customization, equipment, etc.

May be difficult to find vendors that will agree to customize the truck

Leasing a food truck

Ability to get a newer truck without the commitment and costs of buying

May need to return the truck after the lease ends, losing any potential customization work you put into it

May benefit those new to the food industry, or brick-and-mortar restaurants wanting to try out a food truck extension

Lost wages during the transition from one truck to another after lease ends

Smaller payments over time

Risk of interruption to business if another truck cannot be leased or purchased after the current lease ends

Agreements can include lease renewal and lease-to-own options

 

How to find food trucks for sale

There are many ways to find your truck, depending on if you’re buying used or new.

  • Local classified ads/Craigslist: If you’re buying used, this may be a good way for you to inspect a vehicle in-person before purchase. You’re bound to the inventory available in your area, however. So if a truck isn’t exactly what you want, there may be extra costs to retrofit it to meet your needs.

  • National online classifieds: You’ll have access to more inventory and a wider variety of trucks with a nationwide search. But keep in mind, you’ll want to get as much information as you can about the vehicle upfront, because the first time you’ll see the truck in person will likely be when you pick it up, and you don’t want any surprises.

  • Build a truck with a company: The priciest option by far, but it’s the option most likely to give you exactly what you want while meeting local codes and standards.

  • Leasing companies: You may be able to secure a low-cost option through national and local truck leasing companies. If you aren’t looking to devise your own concept, truck franchising opportunities are available with established brands. If you choose a franchise opportunity, you’ll be bound to the brand’s policies, meaning you’ll have less control.

Icon set

New, used or leased, it’s a big decision. You need to be able to trust your truck to keep you on the road for the foreseeable future. Try to make a decision you can live with for the short- and long-term.

Buy equipment and supplies for your truck

If you bought a custom food truck that’s tricked out with new equipment, you might have less to do on this front. But you’ll still need to purchase everything you need for preparing, serving and keeping your food safe to eat. These items probably include:

  • Cooking and food prep equipment: ranges, fryers, grills, microwaves, toasters, prep tables, knives, cutting boards, cookware, utensils, thermometers, etc.

  • Refrigeration: undercounter refrigeration, ice machines

  • Holding and warming tools: soup kettles, food warmers, fry dump stations

  • Serving tools: takeout containers, food trays, napkins, cups, plastic cutlery, straws

  • Food safety/sanitation: compartment sinks, sanitizing chemicals, trash cans, recycling bins, cleaners, floor mats

Food truck illustration

Choose a food truck POS system that meets your needs

For better or worse, the big decisions don’t stop after you’ve got your truck. You’ve got plenty of more to make: Will you accept credit cards or be cash only? If you accept credit cards, what type of point of sale (POS) should you choose? How do you pick the right POS system for your food truck?

With payment processing and POS systems, or any vendors for that matter, you’ll want to consider functionality, costs AND the company’s customer service. If you’re having technical issues with your POS before a rush, can you call someone to get help quickly, or will you have to put on your IT manager hat? An unreliable system can mean lost sales, so feeling confident that you can get help when you need it is crucial, especially when you’re on the road.

Build word-of-mouth with marketing and advertising

Since your food truck is a restaurant on wheels, you likely won’t have a permanent address for potential customers to walk or drive past. They won't be able to see your lovely logo on exterior signage, with a GRAND OPENING sign in the window announcing you’re ready for customers. Advertising, marketing and social media will be just as important as your food truck menu when it comes to getting customers to place an order. Some things you’ll want to consider:

  • Invest in your brand: It can be easy to lean on “the food will speak for itself” — especially when you’re so busy doing every single thing we’ve shared up to this point. But, eye-catching graphic design certainly helps in luring folks to your window (a truck wrapped with beautiful branding will get more eyes and foot traffic than a truck without).

  • Build an online presence: Even if the thought of keeping it up to date is a chore, you need a website. You can include your menu, route schedule, food photos, social media handles and – of course – an “about us” section.

  • Use social media: We can’t stress this enough. Being on social media can help get the word out about your truck faster than you think. When people can take photos of your food and tag you on Instagram, you’ve got free, positive word-of-mouth going for your truck. You can make daily posts with where you’ll be, share daily specials and build loyalty by responding to guest comments. Sharing content regularly can help customers get to know, like and promote your business.

  • Get involved with the community: Try to park at community events and festivals. Explore different neighborhoods and find where your truck fits best. Where you park may come down to city regulations, but try to research as much as you can to find your ideal spots and customers.

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William and Ivana

Create a food truck concept that can't be denied

In an episode of The Entrepreneur’s Studio, food truck operators Ivana Orlovic and William Hubbell of the Seattle-based food truck Sugar + Spoon, share how they developed a no-cook, quick service, high-energy brand. They also share five hacks that can help any food truck owner perfect their strategy for driving maximum profit: