Do you want to get a truck to start your food truck business? If YES, here’s how much it would cost to build, buy or rent a food truck and where to get it. More consumers have been turning to food trucks to get their meals – breakfast, lunch, dinner and snacks. According to a survey on the industry, food trucks in 2009 generated $1.2 billion with annual rates growing at 8.4 percent between 2007 and 2012 as there are more than 15,000 food trucks in the United States with the number still growing.
Those who eat out on a regular basis have purchased food from at least one food truck and it has been estimated that younger people who eat out more often have spent at least $150 each week purchasing meals from food trucks. If you are an entrepreneur looking to get into the food and restaurant industry, you are going to find that the food truck business will allow you easy entry into the industry as not only are the costs affordable compared to a brick and mortar restaurant, but you do not need to possess a strong business background.
The food truck business is one that is getting increasingly competitive as even successful restaurants are now getting into it in order to market their restaurants. However, just like any business that you plan to startup, it is necessary that you have a plan in place before starting your business. This will help you have an idea of how to market your business, communicate to and with your customers, and know the value of what you are offering.
It is also important that you know the size of vehicle you intend getting as this will enable you create an ideal plan of the various equipment you will require in accordance to the size of the vehicle. It is important that you keep your budget as realistic as possible.
The fact that you are going to be running a food truck business does not mean that you will still not operate in a brick and mortar building as you will need a commercial kitchen where you can prepare, store food overnight and also get fresh water.
2 Factors to Consider Before Buying a Food Truck
Food trucks come in different sizes. Either you opt for a small food cart or a massive trailer that hitches to a huge truck. Food trucks in recent years have found some creative methods to serve up their creations. To narrow the field a bit and decide on the type of food truck you would be looking at, you’ll need to make the following three key decisions.
When planning to buy a food truck, the very first thing you have to decide is the size of the truck. Don’t forget that a lot of cities have restrictions on food trucks and parking space sizes, so it is very essential that any vehicle you are thinking of buying would comply with these local codes.
Outfitted Truck or a Custom Build
After you must have decided how you want your truck to look from the outside, you need to still decide how you want the inside to be. A lot of food trucks available for sale are already outfitted with all the kitchen equipment and sanitation systems you need to run a successful mobile restaurant that align with local health laws. The initial cost of a basic truck will be lower than that of an outfitted truck, but you have to still spend more to purchase and install all of the equipment and tools you will need.
The cost of buying a basic truck or an outfitted one can vary greatly based on factors like the condition of the truck, the equipment you need, and where you buy your vehicle from—so it is very crucial to compare and cancel out the prices carefully and to factor in additional considerations like the flexibility you could enjoy by choosing your own equipment and cabinets.
Buying a New Food Truck Vs Used Food Truck Vs Renting a Food Truck
After the above considerations, the next thing will be to decide if you want to buy a used food truck, buy a new food truck, or lease a food truck. Note that each option comes with its own advantages and risks, so you should weigh your funding source, your projected costs, and your anticipated profits carefully before you begin signing any papers. Frankly, it will be very hard to say that one option is more cost-effective than the other because the final price will rest solely on your individual situation and the truck itself.
However, keep in mind that if you have a lender or investor, their funding may be dependent on you choosing a particular type of truck, particularly if you outlined costs in your business plan based on a specific option. This is why we suggest you ask for guidance from your financial backers or a trusted business advisor who can help you choose the best option by weighing your funding situation and the market.
Is Buying a Truck Better than Leasing a Truck?
Whether you are more interested in a used truck, a new truck, or a leased truck, you can choose to get an outfitted or basic vehicle of any size through each option. But you need to understand the benefits and disadvantages in each option you choose.
If your aim is to buy a food truck, used vehicles are less expensive compared to brand new trucks in the short-term. We suggest you get outfitted food trucks from business owners who are closing up shop or upgrading to bigger, better trucks.
Benefits of Buying a Used Food Truck
This option is cheaper than buying a brand new custom truck and the work is often already done for you. Choosing the type of equipment your truck needs can be complex and confusing, especially if you want to have some flexibility in the types of food you will cook or which cities you will end up spending most of your time in. When you buy a used food truck, it is a straightforward decision because there are fewer choices to make as much of the work has already been done for you. The best thing is to find out which used truck best fits your ideas.
Indeed buying a used food truck can be very risky. We can all agree that it is great to cut costs on the upfront purchase of your truck, but you should not forget that you may have higher repair costs and maintenance work than someone who opted for a new truck. We suggest that you get a trusted mechanic to check over any used food truck you are thinking of buying before you put down your money, and if you can, request a full vehicle history report to make sure you have all the information about the truck.
Where to Buy a Used Food Truck?
We believe you can find used food truck listings on some popular auction and sale sites, including eBay and Craigslist. Your local food truck association may even have a place for food truck owners to sell their vehicles and equipment. Note that you can also check out sites like Road Stoves and Commercial Truck Trader or your local car dealership for listings of used food trucks for sale. You can also ask your favourite local food truck owners where they got their trucks.
Buying a Brand New Food Truck
If you have the capabilities to buy a new truck, you can find a brand new truck that suits your dream or find someone who can build a custom truck for you with the exact equipment and layout you need inside.
When you buy a brand new food truck, nothing like costly breakdowns and major repairs will bother you for a very long period. There is no need to be concerned about whether or not the last owner really took care of the truck, and you will probably receive an enticing warranty to protect you in the case of an emergency over the next few years. Also if you decide to opt for the custom route, you can design your truck to be set up any way you want so that cooking is as convenient, efficient, and enjoyable as possible.
We can all agree that brand new food trucks are very expensive, so you need to be sure that you have what it takes to make a pricey decision like this one. You will also wait longer to have a custom food truck built and shipped to you than you would if you chose a used truck.
How Much Does It Cost To Buy a Food Truck?
Every state has certain requirements that may differ as it regards what should be the standard in the construction of a food truck. If you are going to be buying a food truck or constructing one, it is best that you have an idea of the standard required by your state’s fire, safety and health department so that you do not end up wasting money on something that will not be acceptable.
The cost of a food truck varies as it could run into thousands of dollars depending on whether the entrepreneur intends to start with only the bare essentials or add several frills before starting.
Therefore, if you are looking to start your food truck business where quality is not compromised nor the reliability of your transport, then you should be looking at having $80,000. You can get a few years old food truck for $60,000, then remodel it to fit what you have in mind plus additional costs such as business permits, fuel, maintenance, food supplies, insurance, kitchen equipment purchases or rentals, employee expenses or advertisements.
Buying a used food truck especially with all the needed equipment already installed instead of going for a completely new one will lessen your chances of losing too much money should your business fail but you should also realize that you might need to work on the truck which will require additional investment. Ensure that you do inspections on the truck and get a full report of the vehicle’s history.
Buying a new food truck will give you the entrepreneur a greater peace of mind as not only are you getting a brand new truck that will come without faults as a used one, you can customize the new truck to meet your needs. New trucks can however be expensive and you should be ready to shell out between $75,000 and $160,000 in order to get a new truck customized to meet your own needs.
This amount is outside the other expenses that you will need to start and run your business successfully. If you are therefore an entrepreneur that hasn’t been in this kind of business before, then you might need to limit your investment risk by renting a food truck instead of out rightly buying one so that you can have an idea of what would work for you and what it is like to operate a food truck.
How Much Does It Cost To Rent a Food Truck?
Buying a food truck can be considered a very good investment when compared to starting a traditional brick and mortar restaurant; however, renting a food truck as opposed to buying one offers the entrepreneur more flexibility in being able to decide if the business should be a short or long term thing. One other advantage to renting a food truck as opposed to buying one is that should you fail at the business, you can just return the truck, and should it succeed, you can go ahead in buying a new truck.
In renting a food truck, it is essential that you make a thorough research on what options are available as things like who will be responsible for insurance, truck maintenance, permits, cleaning and commissary utilities needs to be known and agreed on before renting a food truck. Also, ensure that there is a purchasing or lease renewal option during negotiation so that the money that you have already invested will be put to good use especially if you have built a name for yourself.
The cost of renting a food truck will vary depending on the length of your intended lease. If you are looking to rent a food truck for 6 months or more, then you might be looking at shelling out between $2,000 and $3,000 every month; and so a shorter rental will likely cost you more. It should however be noted that the cost of renting a food truck differs from the commissary costs that you will have to pay each month which might fall between $1,000 and $1,500 .
Other Costs Associated With Getting a Food Truck
Even though the food truck is going to gulp a significant amount of your start-up capital, there are other expenses that you will need to allocate funds for as well and they include;
i. Health Permits
In the united states generally, it is expected that any business that intends to serve food should possess a health permit. Therefore, depending on where you intend to operate your business from and any other specific requirements that you might have, you should budget an amount between $900 and $5,000.
Some food truck operators prepare their food in the truck while on-site, while others prepare theirs in commercial kitchens at commissaries that have been approved by the local health department. Depending on the commissary, secure parking spaces as well as other services can be provided. Costs will therefore depend on the services being offered and the location of the commissary and can therefore range between $500 and $1,500.
The food truck business is one that can be run by one person especially if the menu is not an extensive one. However, if you are going to be offering various meals, then you might need to employ one or two persons to help out and depending on the location, you might need to shell out at least $20 per hour.
iv. Website and Advertising
Nowadays, businesses understand the benefits of advertising their business and also getting a visible presence on the internet by creating a website. To keep costs down, you can get a free website on certain platforms or use your social media platforms to create the buzz about your business. Ensure you study which advertising means will be most effective in reaching your target audience and allow you see results. You should budget between $100 and $50,000 for it.
It is important that you stock certain food items that you will use in making your meals. Depending on what you intend to serve as well as where the products are coming from; your inventory costs could go up or down. You should budget from $1,500 upwards.
vi. Other running costs
There are other costs that you will need to factor in such as repairing your truck or filling it with gas. You should budget at least $1,500 monthly for these sorts of costs.
The food truck business is becoming very popular because of busy commuters and workers in inner cities, and so the cost of starting one is going to increase coupled with the competition, and as such the price tag used in this article should act as a guide and give you a general idea of how much you might need. You also need to take the city where you will be operating in into consideration as this will likely cause the cost to vary by a few or at most thousands of dollars.
There are several reasons for and against which option – buying or renting – will be the best, but it all depends on the entrepreneur and what you are looking to achieve. You can decide to stay as a renter till you are tired of the business or you can decide to buy a new truck and sell it off if you are no longer interested in the business as well.
What should help you in making your decision is what kind of competition you are likely to face, what your budget is, how to deal with the mechanical aspects of a food truck, and how much income you are looking to expect on a monthly or yearly basis.
Finally, regardless of whether you intend to buy or rent a food truck, you will need to budget between $50,000 and $250,000.