Food Truck

Selling food street-side dates back to the late 17^th century when living conditions were cramped and many people lacked the resources to cook their own meals. Vendors sold food from small carts or street kitchens, and the practice has continued throughout the world, especially in urban areas.

Currently, in the United States, food trucks offer menu options from cupcakes to grilled cheese to hybrid taco-waffles, and pretty much anything imaginable. Going beyond street food cuisine, food trucks now cater to all tastes, offering gourmet, locally sourced, artisan menu items.

As of 2021, research firm, IBISWorld notes that there are more than 24,000 food trucks in the U.S. doing about $1 billion worth of business annually. Growth from 2015-2020, meanwhile, was estimated to be 7.5%. Since state and local regulations vary among states, food trucks may be more popular in some areas than others.

Food trucks historically have been associated with quick and easy-to-prepare foods such as hot dogs or ethnic street food that can be found in busy urban centers. Since menus have expanded and the popularity of such trucks has grown, it has become more common to find food trucks in more locations than just busy street corners in densely populated cities.

Although some food trucks started as less expensive alternatives to brick-and-mortar restaurants, others are opened as extensions of renowned restaurants. Popular eateries sometimes add a food truck to their operations so they can take their dishes to the people at large events or for other special occasions. It also serves as a marketing tool that can draw attention to a brand.

In the United States, as with any small business, starting and operating a food truck involves regulations and licensing. You will also have to create a well thought out business plan. In cities such as New York, Los Angeles, and Chicago, the number of food truck permits available is limited.

Also, note that Cities and towns also regulate where and when food trucks are allowed to park for business. If you are thinking of opening a food truck, check with your local zoning office for more information. Many municipalities limit where and when food trucks can operate based on the number of brick-and-mortar restaurants in operation.

Pros and Cons of Owning a Food Truck

Indeed, starting a business in any industry has its benefits and risks. Even if you have a solid business plan and a passion for the mobile food industry, it can still be daunting to get your business off the ground. Even more so, it can be hard to sustain long term success. Nonetheless, here are the pros and cons of owning a food truck.

Pros

• Business ownership: Various tax advantages come with business ownership, and while it is difficult to own and run a business, at least there is a little bit of relief on the tax front.
• Freedom: Picking menu items, the vendors you want to purchase from, your employees, and the events at which you want to vend are just some of the freedoms you enjoy as a food truck business owner. You also have full control of your social media, marketing, and schedule.
• Mobility: Note that being able to bring your business to different locations based on demand during different periods of the day, days of the week, etc., is a huge advantage.

Cons

• Time: Long hours are especially normal with a food truck business. With shopping, prep, marketing, event booking, cleaning, truck maintenance, accounting, and tax obligations, etc., running such a business is more than a full-time job.
• Competition and market: You will have to extensively research your market to increase the chance of success – you will most certainly have competition with other food trucks.
• Ordinances and Zoning: Every area is different in terms of where you can park your food truck and how long you can park there. Make sure you know the rules in each location where you plan on operating to prevent tickets and fines.

How to Start a Food Truck in the United States

Note that the popularity of food trucks has grown massively over the past few years that some cities are now known for their food truck scene. In the United States, what used to be seen as a food risk has become a foodie trend across the globe! If you are eager to start a food truck business of your own, here are steps and facts to consider.

1. Research Your Food Truck Scene

Right before you invest in to starting up a food truck, you have to make sure that your idea will stand out against the existing market. Start by researching your city for the following:

• Existing food truck businesses and concepts
• Existing restaurant concepts
• The average demographic of the population
• Space where food trucks can stop and sell their products
• Busy street times where commuters can become customers

Furthermore, make sure to find out if there is a demand in your city for the food truck concept you will be interested in presenting.

2. Choose a Food Truck Concept

As much as you will want to cater to the interests of the population of your city with your food truck, you will also want to share your interests and passions through your business as well. After doing your preliminary research, ensure to pick a food truck concept that aligns your unique style with the concerns of the community. From there you can pick a name and logo that properly reflect your business. Your concept, name, and logo should buttress the following attributes:

• Be unique and memorable
• Be descriptive and attention-grabbing
• Clearly express your intentions without being too specific so that it can allow for growth

Have it in mind that a well thought-out concept and a visually appealing logo can make a major impact on customers and whether or not they choose to shop from your truck.

3. Write a Food Truck Business Plan

After you must have made up your mind in terms of concept and ideas, it is time to get started on your food truck business plan. Start with putting together a food truck business plan, especially since it is an excellent way to work out the details of your business before you begin investing in it. The sections of a food truck business plan should include the following:

• An Executive Summary: This section should establish your company’s identity, lay out your goals, and depict what kind of food you want to sell and why.
• A Company Description: List why you would like to start up a food truck and how your business is different from the competition in this section.
• A Market Analysis: Use this section to explain which demographic your truck would cater to and who your target audience would be.
• An Organization and Management Plan: Lay out the employee ranks and your internal structure in this section to show a clear business organizational system.
• A Service or Product Line Description: You will want to provide your menu details and options for seasonal or future menu alterations.
• Marketing and Sales Strategies: Provide your advertising plan and different marketing tactics you plan on using to spread the word about your food truck.
• A Funding Request: Clearly identify where the funding for your truck will come from and how much you will need to get your business started.
• Financial Projections: Here you will show your investors the projected growth and financial plan for your company’s future in the next 5 years.
• An Appendix: In this final section, you can add any additional information that did not make it into the plan, like photos, logo design, and blueprints.

4. Get Funding for Your Food Truck

Have it in mind that your business plan is your first step toward requesting funding for your truck. Considering the costs involved in opening a food truck, it is likely that you will need a loan to get your business off of its feet. Note that the funding and start-up savings can come from a variety of places:

• Community sponsors
• Personal investors such as friends and family
• Crowdfunding such as Kickstarter
• Small Business Administration microloans
• Rollover of Business Startup (ROBS) from a retirement account
• Opening a business credit card
• Equipment loans and financing programs

5. Get Food Truck Licenses and Permits

At this point, you will need to explore what licenses are required to start a food truck. Food truck permits and licenses can vary from state to state and even city to city, so it is necessary to check with your local jurisdiction like the Chamber of Commerce, Health Department, and the Department of Motor Vehicles (DMV) office to find out their requirements. However, to open a food truck, you will also encounter many of the same licenses and permits required for restaurant businesses:

• Business License
• Employer Identification Number
• Food Service License
• Employee Health Permit
• Mobile Food Facility Permit
• Zoning and Parking Permit

When working with your DMV to establish your parking permits and registration, ensure to ask about parking restrictions and limits in your city, along with where overnight parking is permitted

6. Buy A Food Truck

Since the largest portion of your start-up budget will go to your food truck vehicle, it is pertinent to choose one that will serve your business well. Moreover, there are a few aspects to consider when choosing the vehicle that will become your food truck, such as the following:

• Deciding whether you want to lease or own your truck
• Deciding whether to select a new or used vehicle
• Choosing a reputable food truck dealer
• Selecting what customizations you will need for your truck

Furthermore, it is very crucial to acquire insurance for your truck and business to cover any physical damage and liabilities that may occur. Once you acquire a food truck vehicle, you may need to finalize your inspections and permits in order to become street legal.

7. Acquire Your Food Truck Equipment and Supplies

Once you have a truck, the next step is to furnish your space with food truck equipment and supplies. These items will be necessary for producing your products and keeping your truck operating efficiently. To stock your food truck you will need:

• Cooking Equipment – Grills, ranges, fryers, microwaves, toasters
• Warming and Holding Equipment – Countertop food warmers, soup kettles, fry dump stations
• Food Prep Equipment – Work tables, chef knives, cutting boards, cookware, kitchen utensils, kitchen thermometers
• Serving Equipment – Disposable take-out supplies, food trays, napkins, cups, plastic cutlery
• Refrigeration Equipment – Prep tables, under counter refrigeration, ice machines
• Janitorial Equipment – Hand sinks, compartment sinks, floor mats, sanitizing chemicals, trash cans, recycling bins, floor care products

8. Choose a POS System

When running a food truck, chances are you will need a mobile Point of Sale (POS) system. These systems allow you to take credit card payments directly from your truck but may require internet access. A good number of food trucks choose to take a cash-only route in order to not depend on internet access; however, customers are less likely to have cash on them, which can limit your customer base. This is moving food truck owners to select POS systems that allow them to accept both cash and credit.

9. Invest Marketing and Advertising

Since your food truck won’t have a permanent physical address, advertising and marketing for your food truck plays a very crucial role in its success. There are many marketing tactics you can use to boost your brand awareness in the public eye. Here are some food truck marketing ideas:

• Make your eye-catching logo highly visible. Place it on your truck, on flyers, and online.
• Design a bold menu board. You will want to make sure that your menu board is legible, appealing, and clearly showcases your food.
• Create a website that features your regular locations, photos, and an “About Our Company” section.
• Create social media accounts where customers can be notified about events, see pictures, and interact with your business.
• Find unique locations for your food truck. At first you will want to explore various neighbourhoods to find where your business best fits. Once you have determined excellent locations, visit them regularly to establish name recognition with your customer base.
• Be featured at community events like catered parties and local food truck festivals. These events will make customers more familiar with your business.
• Sell merchandise with your logo or slogan on it. You can offer t-shirts, travel mugs, and stickers for customers to purchase at your truck or online.

Conclusion

Food lovers with an entrepreneurial itch may not be able to afford to start a brick-and-mortar restaurant, but they may be able to start a food truck business. Every city has different laws and opportunities for food truck owners, so it is important to understand your market before jumping in. Conduct research and determine if your city offers incentives for small business owners and if they allow parking on city streets.

Frequently Asked Questions

1. What Is A Food Truck Called?

A food truck, mobile kitchen, mobile canteen, roach coach, gut truck, catering truck, or (in Austin, Texas) food trailer, is a mobile venue that transports and sells food. Some, including ice cream trucks, sell frozen or prepackaged food; others resemble restaurants on wheels.

2. What Is The Purpose Of A Food Truck?

The purpose of a food truck is to successfully retail food via mobile platforms in places where it is difficult to establish a standard restaurant. Places like construction sites, camping and hiking sites, parks and schools et al.

3. What Does Food Truck Mean?

Food truck is a large wheeled vehicle from which food is sold. It typically contains cooking facilities where the food is prepared.

4. What Is The Difference Between A Food Trailer And Food Truck?

The main difference between food trucks and food trailers is their size and the type of unit that they occupy. The average food truck kitchen is 7-feet wide, while a food trailer kitchen can be wider at 7-feet or 8.5-feet.

5. What Is The Difference Between A Food Truck And A Food Cart?

Even though food trucks are already quite small, they require at least two employees to pump out food. A food cart, on the other hand, is small enough to be operated by just one person.

6. What Trucks Do You Use For Food Trucks?

Here are some of the trucks you can use for food trucks;

• Ford Stepvan (UPS truck)
• Citroen H Vans.
• Horse Boxes.
• VW Beetle.
• Peugeot J9
• Piaggio Ape
• Tuk Tuk Taxi

7. What Kind Of Equipment Do You Need For A Food Truck?

• Fryers, Ranges, and Griddles.
• Sanitation and Sink Options.
• Refrigeration and Cooling Equipment.
• Preparation and Work Areas.

8. What Is The Target Market For Food Trucks?

Middle-class millennials are the target market of the billion-dollar food truck industry. According to an IBISWorld Inc. report, 43 percent of food truck spending each month is made by 25- to 44-year-olds, with an additional 20 percent coming from those under the age of 25.

9. What Is The Average Size Of A Food Truck?

Food trucks are typically 16 feet long and 7 feet wide but can range in size from 10-26 feet long.

10. How Do You Price Food For A Food Truck?

Most food service establishments target food-cost percentages between 20 and 40 percent. In other words, if a menu item’s total food costs are $2, its sale price should be between $5 (20 percent) and $10 (40 percent).

11. How Much Does It Cost To Start A Food Truck Business?

In general, it costs between $28,000 and $114,000 to get a food truck business up and running, with the average food truck earning around $300,000 per year.

12. How Many Menu Items Should A Food Truck Have?

A good rule of thumb is that most food trucks can handle five to 12 different menu items at any given time. The fewer the better to keep your quality top notch.

13. What Are The Advantages Of Opening A Food Truck Business As Opposed To A Traditional Restaurant Business?

Food trucks offer a way for people on the go to still eat great food. They can stop at your truck, grab a quick bite, and be on their way to their next destination within just a few minutes. From a business standpoint, being able to cater to this fast-moving crowd is crucial.

14. How Do You Finance A Food Truck Business?

You can finance a food truck business via;

• Equipment Financing.
• SBA Microloans.
• Business Lines of Credit.
• Business Credit Cards.
• Crowdfunding Campaigns.

15. How Can You Make Your Food Truck Stand Out?

• Create A Unique Brand.
• Offer a Novel Take on a Favorite Food.
• Make Your Truck Visually Striking.
• Develop a Following on Social Media.
• Take on Catering Work.
• Stay Up-to-Date on Latest Trends.
• Treat Your Customers Like Family.

16. What Are The Costs Involved In Opening A Food Truck Business?

• The total fee for registering the business
• Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software)
• per copy) for the total amount of
• The cost for hiring Business Consultant
• Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium
• Other start-up expenses including stationery and phone and utility deposits
• Operational cost for the first 3 months (salaries of employees, payments of bills et al)
• The cost for start-up inventory
• Storage hardware (bins, rack, shelves, food case)
• The cost for counter area equipment (counter top, sink, ice machine, etc.)
• Cost of purchase of a well – equipped mobile food trucks
• The cost for store equipment (cash register, security, ventilation, signage)
• The cost of launching a website
• Miscellaneous

17. What Is A Good Marketing Budget For A Food Truck?

The general rule of thumb is that your food truck marketing budget should be 3 to 6 percent of sales.

18. Can You Turn A Box Truck Into A Food Truck?

Yes, and as a matter of fact, in a box truck, the cab is separate from the cargo space, but the good news is one is easily accessible to the other. This makes for the easy insertion of a door that opens up into a cooking area. Which is all you really need for a food truck. Just kidding, there is a lot more to it than that.

19. Why Is A Food Truck Unique?

When you open a restaurant, people push you to cater to everyone and every diet, but with a food truck, you’re allowed—even encouraged—to master one specific thing (fish tacos, please!). It transforms the truck from just another restaurant into a mission.

20. How Much Does It Cost To Turn A Trailer Into A Food Truck?

You can get a trailer for about $4,000 and you can build it out from $900 to $4,000

21. How Much Does A Typical Food Truck Weigh?

The average food truck weighs between 1,500 pounds to 16,000 pounds. More weight usually comes from more appliances and bigger dimensions.

22. Do You Need A CDL To Drive A Food Truck?

In most situations, you don’t need a CDL to operate a food truck. A standard Class D driver’s license issued by the state you live is sufficient to legally drive and operate a food truck.

23. What Licenses Are Needed To Start A Food Truck?

Here are some of the licenses and permits you would need to start a food truck;

• Business License.
• Employer Identification Number (EIN)
• Driver’s License.
• Food Handler’s Permit.
• Health Department Permit.
• Seller’s Permit.
• Fire Certificates.
• Parking Permits.
• Commissary Letter of Agreement
• Standard Operating Procedures Document
• Special Event Permit

24. Why Do Food Trucks Fail?

Food trucks can fail due to improper inventory management and underestimated food costs. Without planning specifically how capital will be spent and why, the future may not prove very bright for a business.

25. How Does A Food Truck Business Make Money?

Here are some of the products and services that food trucks offer to make money;

• Selling different type of foods and snacks
• Training, Advisory and Consultancy Services
• Selling Franchise

26. How Do Food Trucks Get Power?

Food trucks get their power from three main sources, such as portable diesel generators, Liquefied Petroleum Gas (LPG) cylinders and solar panels attached to the roof of the food truck.

27. How Profitable Is A Food Truck?

The truth is that it is not uncommon for popular food trucks in major metro cities to pull in $20,000 to $50,000 in sales each month. Food trucks in smaller, more mid-sized cities likely make considerably less at $5,000 to $16,000 a month.

28. What is the Profit Margin on Food Trucks?

The profit margin on food trucks depends upon many factors, including labor costs, food waste, the weather, commission, or parking fees at specific events and accounting issues. On average, a typical fast-food truck can expect a margin anywhere between 6 percent and 9 percent.

29. Where Is The Best Place To Set Up A Food Business?

The best place to set up a food business is a place where the demography consists of people from medium class to lower class, a place such a camp sites, construction sites, parks and schools et al.

30. What Is The Growth Potential For A Food Truck Business?

The Food truck industry is growing fast. It has been growing for years into today’s existing market segment. Although the restaurant industry has moved up at the growth rate of 2 percent yearly, the food truck industry growth has a huge 7.9 percent annual rate for the past 5 years.

31. Should Your Food Truck Have A POS System?

Sure, a food truck should have a POS system, this will enable them have an all-inclusive payment system and of course easily track and collate their payment.

32. Is The Food Truck Business Growing?

The average annual industry growth before COVID-19 was 7.5 percent. The food truck market size in 2020 surpassed 1.2 billion dollars. Over 34 percent of mobile chefs experiment with their menu. Food truck industry statistics for 2021 predict a yearly growth of 2.4 percent.

33. What Are Some Popular Food Truck Foods?

• Cheezious.
• Oink And Moo BBQ.
• Two For The Road.
• Grilled Cheeserie.
• The Taco Truck.
• Mac Mart Truck.
• The Cow And Curd.

34. What Shape Kitchen Do Most Food Trucks Have?

The dominant geometric shapes in most food truck kitchens are typically four sided, from rectangular cabinetry to square appliances. But in all reality the most important one is a triangle.

35. How Do You Start a Food Truck Business?

• Research Your Target Market.
• Choose a Food Truck Name & Concept.
• Create a Food Truck Business Plan.
• Get Licenses and Registrations for Your Food Truck.
• Finance Your Food Truck Business.
• Design Your Menu Board.
• Purchase, Insure & Outfit Your Food Truck.
• Market Your Food Truck.

36. What Equipment Is Required In A Food Truck?

A few of the basic things you will need include a refrigerator, deep fryer, freezer, heat lamp and storage space.

37. Is It Hard To Start A Food Truck Business?

No business is easy to start and food truck business is not an exception. As a matter of fact, with the food truck market booming, it can be difficult to break through and generate a concept that will stand out from the masses. A food truck can require many hours of maintenance, location scouting, cleaning, event booking, and more.

38. What Is The Most Popular Food Truck Item?

• Ethiopian Food.
• Grilled Cheese.
• Lobster Rolls.

39. Is It Cheaper To Have A Food Truck Or Restaurant?

Food trucks tend to have lower startup and overhead costs than sit-down restaurants. A food truck tends to be cheaper to start up and run, which means they are less of a risk from a money standpoint.

40. What Is The Most Profitable Food To Sell?

The number one most profitable food and beverage business is a bubble tea shop. It is the most profitable because the cost of goods sold (COGS) is relatively low. It ranges from 10 percent to 15 percent.

41. Can A Food Truck Make You Rich?

The truth is that some trucks can make you rich. Here’s how it broke down: 21.52 percent made over $200,000, 30.04 percent made $150,000 to $199,000, 34.08 percent made $100,000 to $149,000, 10.76 percent made $50,000 to $99,000, and 3.59 percent made less than $49,000.

42. How Hard Is It To Run A Food Truck?

A food truck can require many hours of maintenance, location scouting, cleaning, event booking, and more. It can be difficult for food truck owners to stay up to date with zoning restrictions and local ordinances regarding where they can park their truck and how long they can remain at a single location.

43. Can You Sell Food You Make At Home?

Yes, but you should make sure you check with your city council. For example, as of January 2019, California residents can legally sell prepared meals made at home as a Microenterprise Kitchen Operation, which is different from the Cottage / Homemade Food Law.

44. What Food Can I Make And Sell From Home?

People who manufacture food at home can only sell low-risk foods such as coffee and tea blends, dry foods such as granola, chips and popcorn, baked goods such as breads, cookies and some cakes, and jams and preserves. Many food items fall within acceptable parameters.

45. Why Would A Food Truck Need A Brightly Colored Design?

Because food trucks need to capture attention on city streets, most tend to use bright colors and playful imagery.

44. Which Is Better Food Truck Or Trailer?

If you want a lot of space, flexibility, and low maintenance, food trailers are the way to go. If you prefer to stay mobile, food trucks may be a better option. A food truck is going to be more expensive and will require more repairs compared to food trailers.

45. What Is The Best Color For A Food Truck?

BLUE. It is associated with peace, water, tranquility, and reliability. Blue provides a sense of security, and stimulates productivity.

46. Can You Make A Living Owning A Food Truck?

Starting and keeping a food truck running isn’t cheap. There are licensing and ongoing maintenance costs to consider. If an entrepreneur can carve out a niche in the right market, though, making a good living with a food truck is certainly doable.

47. What Is The Best Van For Food Truck?

• Alexander-Dennis Enviro400.
• Volkswagen Westfalia.
• Ford Transit Full-Size Van.
• Nissan NV2500 Cargo.
• CITROEN H.

48. How Do You Calculate Food Cost For A Food Truck?

Food & labor cost is calculated as a percentage of the total volume of revenue (sales). If a food truck does $5,000 per week and the total cost of food and beverages is $1,750 for that week, then the food cost is considered 35 percent.

49. Where Are Food Trucks Most Successful?

• Orlando, Florida.
• Philadelphia, Pennsylvania.
• Indianapolis, Indiana.
• Houston, Texas.
• Austin, Texas.
• Los Angeles, California.
• New York City, New York.
• Nashville, Tennessee.

50. In What Geographic Location Or Specific Areas Are Food Trucks The Most Successful?

Los Angeles and San Francisco both best New York, which is not too surprising given their mild climates and foodie cultures. L.A. has the most top trucks, at 18, and San Francisco comes in at 13, followed by New York in third with 11.

51. Which State Has The Most Food Trucks?

Some states are hot spots for food trucks while others lag behind. California leads in first place with 13.6 percent of all food truck locations in the United States.

52. What Are Some Trends In The Food Truck Industry?

Here are some of the trends shaping the food truck industry

• Increased Demand for Environmentally Friendly Food.
• Increased Vegan Options and Meat-Plant Blends.
• More Event Partnerships and Promotions.
• More Commercial Restaurants Experimenting with Food Trucks.
• Increased Technology and Social Media.
• More Peanut Butter Alternatives.
• Flour Alternatives
• West African Cuisine
• Refined Sugar Alternatives

53. What Are Some Skills And Experiences That Will Help You Build A Successful Food Truck Business?

• Cooking skills
• Customer services skills
• Interpersonal skill
• Accounting and bookkeeping skills
• Business management skills
• Bargaining skill
• Business management skills
• Basic computer skills

54. How Many People Should Work On A Food Truck?

Most food trucks need a team of 3 – 5 employees to operate successfully during its lunch rush.