Food Truck Business

A coffee truck business sells different types and flavors of coffee from the truck and coffee trucks are designed to service areas where it might be difficult to quickly construct the conventional shop; areas such as carnival sites, construction sites, sporting event centers, campgrounds, beaches et al.

You can find different types of coffee drinks in a mobile coffee truck, including cappuccino, espresso, iced coffee, decaffeinated coffee, et al. The coffee truck business is a niche idea in the food truck industry and the annual food truck revenue in the United States is about $1,200,000,000, and the industry revenue increased by 12.4 percent over the past five years. The total number of food trucks in the U.S. is put at 4,130.

Food truck Industry revenue increased over the past five years at the rate of 12.4 percent. The average revenue generated per food truck in the United States is about $290,556 and the average spending per order at a food truck is $12.40. The average amount required to own a food truck is about $85,000.

Steps on How to Start A Coffee Truck Business

  1. Conduct Market Research

If you are considering starting a coffee truck business, you would need reliable market research to be able to maximize profits from the business. The first step in the market research process for your coffee truck business should be to develop market-based research questions in line with your overall business goal and objective.

In this regard, you should source for information that will help you maximize your business, give you reliable data, and of course clue of what your potential market will be looking out for from a coffee truck business.

a. Who is the Target Market for Coffee Truck Business?
  • Event Planners
  • Tourists
  • Workers in construction sites
  • Campground patrons and staff members
  • Everyone who resides in the location where you intend to sell your coffee.
b. Is Coffee Truck Business a Profitable Business?

Yes, the coffee truck business is very profitable. Research conducted shows that coffee offers incredible gross profit margins of up to 90 percent which is what has attracted the big companies to expand at such a rapid rate. Very few other products even come close, meaning that you have the potential to make a lot of money when you start a coffee truck business.

c. Are There Existing Niches in the Industry?

No, there are no existing niches when it comes to the coffee truck business because the coffee truck business is a niche idea in the food truck industry.

d. Who are the Major Competitors?
  • Vintage Coffee Vendor
  • New Holland Coffee Co.
  • Seattle Coffee Company
  • Kings Road Coffee Mobile Truck
  • Elite Espresso Catering
  • Dessert Oasis Detroit
  • Milstead & Co., Seattle
  • Panther Coffee, Miami
  • Cappuccino Xpress Coffee Vans
  • The Coffee Guy
  • Jim’s Mobile Café
  • Xpresso Delight
  • Lava Carts
  • Xpresso Mobile Café
  • Petite Rouge | Mobile Espresso & Tea Bar
  • Big Shoulders Coffee (Chicago, IL)
  • Celesto Espresso (Seattle, WA)
  • Ralph’s Coffee (New York City, NY)
  • Reveille Coffee Co. (San Francisco, CA)
  • The Beignet Truck (Los Angeles, CA).
e. Are There County or State Regulations or Zoning Laws for Coffee Truck Business?

Yes, there are county or state regulations or zoning laws for the coffee truck business. Towns, cities, and counties also have zoning restrictions, designating commercial and noncommercial zones. While you may be mobile, you can’t park just anywhere. Most areas limit food trucks, trailers, buses, and carts to specific locations.

A list of where you can and can’t park should be available from the county clerk. You may also have to adhere to two-hour parking restrictions and pay for parking meters. Please note that trucks are required to stop at motor carrier safety and weight inspection stations when signs direct them to do so.

f. Is There a Franchise for Coffee Truck Business?

Yes, there are franchise opportunities for the coffee truck business. Here are some of them;

  • Cappuccino Xpress Coffee Vans
  • The Coffee Guy
  • Jim’s Mobile Café
  • Xpresso Delight
  • Lava Carts
  • Xpresso Mobile Café
  • Scooter’s Coffee
g. What Do You Need to Start a Coffee Truck Business?
  • A Feasibility Report
  • Business and Marketing Plans
  • Business Licenses and Permits
  • Coffee Trucks (Food Trucks)
  • Commercial Driver’s License (CDL) (at least a Class B CDL)
  • Insurance
  • EIN (Employer Identification Number)/Federal Tax ID Number.
  • A Corporate Bank Account
  • IRP Plates
  • Employees
  • Commercial Kitchen
  • Coffee Ingredients and Packaging Materials
  1. Choose a Memorable Business Name

When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.

Some of the catchy business name ideas suitable for a coffee truck business are;

Creative Coffee Truck Business Name ideas
  • Always Movin© Coffee Truck, Inc.
  • Coffee® Mobile Coffee Truck, LLC
  • Brownie Balling’s© Coffee Truck, Inc.
  • Coffee Solutions® Coffee Truck Company, Inc.
  • Coffee King™ Coffee Company, Inc.
  • Door Step™ Coffee Truck Company, LLC.
  • Thompson Zack and Co© Coffee Truck Company, LLC
  • Coffee Anytime® Coffee Truck Company, Inc.
  • Coffee Serve© Coffee Truck Company, Inc.
  • Coffee Now© Coffee Truck Company, Inc.
  • Go Guys® Coffee Truck Company, LLC
  • Filipinas® Coffee Truck Company, LLC
  • Twenty Thirty™ Coffee Truck Company, LLC
  • Creamy Taste© Coffee Truck Company, Inc.
  • Moonlight® Coffee Truck Company, Inc.
  • Connel Rodham™ Mobile Coffee Truck Company, Inc.
  • Owen McGraw™ Coffee Truck Company, Inc.
  • Coffee Queen© Coffee Truck Company, Inc.
  • McGee Dickson® Coffee Truck Company, LLC
  • Clem Coffee™ Mobile Coffee Truck Company, Inc.
  1. Register Your Business

a. What Type of Business Structure is Best for Coffee Truck Business?

Although there are several options when it comes to the business structure of a coffee truck business, but the one that most players in this line of business consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits. Please note that an LLC will need an EIN if it has employees or if it will be required to file any of the excise tax forms listed below.

b. Steps to Form an LLC
  • Choose a Name for Your LLC.
  • File Articles of Organization.
  • Choose a registered agent.
  • Decide on member vs. manager management.
  • Create an LLC operating agreement.
  • Comply with other tax and regulatory requirements.
  • File annual reports.
c. What Type of License is Needed to Open a Coffee Truck Business?
  • General Business License
  • Commercial Driver’s License (CDL) (at least a Class B CDL)
  • Zonal Permits
  • Signage Permit
  • Proof of ownership, proper identification, and vehicle license
  • Proof of district-issued food manager identification card
  • Depot, commissary, or service support facility meets vending unit operation needs
  • Copy of license for the service support facility and/or a recent inspection report.
d. What Type of Certification is Needed to start a Coffee Truck Business?

You don’t need any certifications to start a coffee truck business.

e. What Documents are Needed to Open a Coffee Truck Business?
  • DBA
  • EIN
  • Business and liability insurance
  • Federal Tax Payer’s ID
  • State Permit and Approval for parking)
  • Certificate of Incorporation
  • Commercial Driver’s License (CDL) (at least a Class B CDL)
  • Food Handlers’ License
  • Business License
  • Business Plan
  • Employment Agreement (offer letters)
  • Operating Agreement for LLCs
  • Insurance Policy
  • Online Terms of Use
  • Online Privacy Policy Document
  • Contract Document
  • Company Bylaws
  • Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?

If you are considering starting a coffee truck business, usually you may not have any need to file for intellectual property protection or trademark. This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.

  1. Cost Analysis and Budgeting

a. How Much Does It Cost to Start a Coffee Truck Business?

The startup cost for a coffee truck business is not uniform as some factors can influence the cost. But basically, a coffee truck business will cost from $30,000 to over $250,000 to start and that can easily go higher depending on your overall business goals and objectives.

For example, the price of a food truck depends largely on its size, and light-duty class 2 and 3 trucks run from $25,000 to $45,000. Medium duty class 4 trucks run from $35,000 to $50,000, while medium-duty class 5 trucks run from $45,000 to $70,000.

b. What are the Cost Involved in Starting a Coffee Truck Business?
  • The total fee for registering the Business in the United States of America – $750.
  • Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines, and other software) – $1,300.
  • Marketing promotion expenses for the grand opening for $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of – $3,580.
  • The cost for hiring a business consultant including writing a business plan – $2,500.
  • Insurance (general liability, workers’ compensation, and property-casualty) coverage at a total premium – $2,400.
  • Other start-up expenses like stationery ($500) and phone and utility deposits ($2,500).
  • Operational cost for the first 3 months (salaries of employees, fueling of the coffee trucks, purchase of gas, payments of bills et al) – $30,000
  • The cost for start-up inventory (coffee making ingredients, packaging materials et al) – $5,000
  • The cost of storage hardware (bins, rack, shelves, and casing) – $3,720
  • The cost for equipment (commercial espresso machine, automatic drip coffee maker, industrial grinder, refrigeration system, pumps and containers, toasters, ovens, and other cooking equipment, etc.) – $15,500
  • The cost for store equipment (cash register, security, ventilation, signage) – $3,750
  • The purchase of well–equipped mobile coffee trucks (2) – $65,000
  • The cost of launching a website – $600
  • The cost for opening party – $5,000
  • Miscellaneous – $2,000
c. What Factors Determine the Cost of Opening a Coffee Truck Business?
  • The size of coffee truck business (number of coffee trucks you intend to start the business with)
  • The choice of the locations you intend covering
  • The required licenses and permits
  • The cost for branding, promotion, and marketing of the coffee truck business
  • The cost for furnishing and equipping the coffee truck
  • The cost of insurance
  • The cost for registering the business
  • Cost of recruiting and training your staff
  • The cost for the purchase and customizing of uniforms
  • The cost for the grand opening of the coffee truck business
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?

No, you don’t need to build a facility for your coffee truck business because the nature of the business makes it possible for you to get everything done on the go inside your truck.

e. What are the Ongoing Expenses of a Coffee Truck Business?
  • Coffee making ingredients and serving and packaging materials
  • Gas
  • Utility bills (internet subscriptions, phone bills, signage and software renewal fees et al)
  • Salaries of employees
  • Trucks maintenance
  • Insurance
  • Marketing costs
f. What is the Average Salary of your Staff?
  • Chief Operating Officer (Owner) – $38,000 Per Year
  • Manager – $30,000 Per Year
  • Bartender (Baristas) – $26,100 Per Year
  • Truck Drivers – $26,800 Per Year
  • Sales Boys and Sales Girls -$24,000 Per Year
g. How Do You Get Funding to Start a Coffee Truck Business?
  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell shares to interested investors
  • Applying for a loan from your bank/banks
  • Source for soft loans from your family members and friends.
  1. Write a Business Plan

a. Executive Summary

Coffee King™ Coffee Company, Inc. is a registered and licensed coffee truck company that will be based in San Antonio, Texas but operate all across major cities in Texas serving different flavors of coffee and snacks.

Lauren King© Coffee truck company, Inc. has been able to secure all relevant licenses and permits to operate throughout the United States. We will ensure that we abide by the rules and regulations guiding the coffee truck industry and we will only hire experienced and qualified drivers with valid commercial driver’s licenses (CDL) to handle our trucks.

b. Products and Service
  • Americano
  • Cafe Latte
  • Cappuccino
  • Cold Brew
  • Espresso
  • Macchiato
  • Mocha
  • Snacks
  • Bottled water.
c. Mission Statement

Our mission is to build a coffee truck business that will meet the needs of all our customers in the regions/cities where our trucks will cover and to sell franchises all across the United States of America and Canada.

Vision Statement

Our Vision is to become the go-to coffee truck in the whole of San Antonio, Texas.

d. Goals and Objectives

The goals and objectives of a coffee truck business are to service areas where it might be difficult to quickly construct the conventional coffee shop; areas such as carnival sites, construction sites, sporting event centers, campgrounds, beaches et al.

e. Organizational Structure
  • Chief Operating Officer (Owner)
  • Manager
  • Bartender (Baristas)
  • Sales Girls and Sales Boys
  • Truck Drivers

Marketing Plan

a. SWOT Analysis
Strength:
  • Excellent operational history
  • Robust menu list
  • Experience and trained professionals.
  • Well-equipped coffee truck.
  • Excellent customer testimonials.
  • Reliable and efficient coffee trucks and service.
Weakness:
  • The owner is new to large scale marketing
  • We will need a loan to purchase the latest coffee trucks and commercial coffee brewing equipment
  • The owner is currently running the business solo
  • Lack of economies of scale.
Opportunities:
  • Growing outdoor activities
  • Build upon existing clientele
  • Low start-up
  • Coffee is always in demand
  • Variety of what to offer
  • Online market, new services, new technology, and of course the opening of new markets.
Threat:
  • Weather constraints
  • Loans diminish profitability until they are paid off
  • The first year will be financially tight while we gain customers and pay off loans
  • Competition in the area could increase
  • Management of employees requires time, money, and efforts
  • The regulatory department could change its regulatory status and decide to enforce strict regulations that can strangulate new business.
b. How Do Coffee Truck Businesses Make Money?

Coffee truck businesses make money by selling;

  • Coffee beverages served in different forms
  • Snacks
  • water
  • Franchise
c. Payment Options
  • Payment with cash
  • Payment via credit cards
  • Payment via online bank transfer
  • Payment via mobile money transfer
d. Sales & Advertising Strategies
  • Introduce your coffee truck brand by sending introductory letters to residents, park managers, and other stakeholders in and around the city you intend to cover.
  • Open your coffee truck company with a party to capture the attention of residents who are your first targets
  • Engage in roadshows in targeted communities from time to time to sell your coffee and snacks and promote your coffee truck company
  • Advertise your coffee truck in community-based newspapers, local TV and radio stations
  • List our business and products on yellow pages ads (local directories)
  • Leverage on the internet and mobile apps to promote your coffee truck brands
  • Engage in direct marketing and sales
  • Deliberately brand your coffee truck
  • Encourage the use of word-of-mouth marketing (referrals)

Financial Projection

a. How Much Should You Charge for your Product/Service?

The amount to charge will depend on the location, quantity, and type of coffee to be served. An average cup of coffee costs $2.70, and a drink of cafe americano is even less expensive with an average price of $2.62. The average price of a Starbucks drink in the U.S. is $2.75, but New York City is the most expensive location coming in at $3.25 for a tall cappuccino. And if you go for a decadent seasonal beverage with all the bells and whistles, it can run you over $5.

b. How Much Profit Do Coffee Truck Business Owners Make a Year?

It depends, but an available report that is based on the survey of 223 full-time food truck owners, shows that over 50 percent reported generating at least $150,000 in revenue per year.

c. What Factors Determine the Amount of Profit to Be Made?
  • The capacity of the coffee truck business (number of coffee trucks owned)
  • The location the coffee truck business is covering
  • The management style of the coffee truck business
  • The business approach of the coffee truck business
  • The advertising and marketing strategies adopted by the coffee truck business
  • The number of years the coffee truck business is in business
d. What is the Profit Margin of a Coffee Truck Business?

The profit margin of a coffee truck business is not fixed. It could range from 35 percent to 90 percent.

e. What is the Sales Forecast?

Below is the sales forecast for a coffee truck business. It is based on the location of the business and other factors as it relates to such startups in the United States;

  • First Fiscal Year: $120,000
  • Second Fiscal Year:  $280,000
  • Third Fiscal Year: $350,000
  1. Set Up your Shop 

a. How Do You Choose a Perfect Location for Coffee Truck Business?
  • The demography of the location
  • The demand for coffee in the location
  • The purchasing power of businesses and residents of the location
  • Accessibility of the location
  • The number of coffee trucks, and coffee retailers in the location
  • The local laws and regulations in the community/state
  • Traffic, parking and security et al
b. What State and City are Best to Open a Coffee Truck Business?
  • New York City, New York
  • Los Angeles, California
  • Dallas, Texas
  • Miami, Florida
  • Broward County, Florida
  • Nashville, Tennessee
  • Las Vegas, Nevada
  • Providence, Rhode Island
  • San Francisco, California
  • Chicago, Illinois.
c. What Equipment is Needed to Operate a Coffee Truck Business?
  • Coffee trucks or vans
  • Commercial espresso machine, automatic drip coffee maker, industrial grinder, refrigeration system, pumps and containers, toasters, ovens, and other cooking equipment.
  • Serving equipment.
  1. Hire Employees

When it comes to hiring employees for a standard coffee truck business, you should make plans to hire a competent chief executive officer (you can occupy this position), manager, baristas (bartenders), salespersons, truck drivers, and cleaners.

  1. Launch the Business Proper

No coffee truck business opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening if you are operating on a low budget or you can go for a grand opening party.

With a proper launching of the coffee truck business, you will be able to officially inform people in your city that your coffee truck business is open for business.

a. What Makes a Coffee Truck Business Successful?
  • Choose a good location, good menu, and reliable coffee trucks to launch the business
  • Hire only competent, hardworking, and trustworthy staff
  • Be deliberate with your marketing sales approach
  • Your branding must be top-notch
  • Encourage the use of word of mouth to promote your coffee truck business
  • Leverage on all available online and offline platforms to promote your coffee truck business
b. What Happens During a Typical Day at a Coffee Truck Business?
  • The business is open for the day’s work
  • The coffee trucks are cleaned, and ready for business
  • Supplies are loaded into the truck
  • Trucks move from one location to another
  • Customer’s requests are taken and they are attended to
  • Schedule maintenance of trucks are carried out
  • Marketing/website upkeep
  • Supply ordering
  • Administrative duties
  • The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Coffee Truck Business?
  • Good culinary skills
  • Good driving skills
  • Customer services skills
  • Interpersonal skill
  • Business management skills
  • Work experience in a coffee and food truck industry
  • Experience in managing people
  • Experience in business administration
  • Experience in handling relevant software.
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