Food Truck Business

A food truck business is a business that sells food from a truck, and food trucks are designed to service areas where it might be difficult to quickly construct a conventional restaurant; areas like carnival sites, construction sites, sporting event centers, campgrounds, beaches et al.

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 Food Truck Business

  1. Conduct Market Research

If you are considering starting a food 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 should be to develop market-based research questions in line with your overall business goals and objectives.

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

a. Who is the Target Market for Food Truck Business?
  • Facility managers
  • Event Planners
  • Tourists
  • Everyone who resides in the location where you intend to sell your food.
b. Is the Food Truck business a Profitable Business?

Yes, the food truck business is profitable. According to Off the Grid’s Matthew Cohen, most trucks are making annual revenue between $250,000 and $500,000, while the top 25 percent bring in upwards of $1 million.

c. Are There Existing Niches in the Industry?

Yes, there are existing niches when it comes to the food truck business, and here are some of them;

  • All meals food truck
  • Snacks and drinks food truck
  • Gourmet food truck
  • Vegan food truck
  • BBQ and grilled food truck
  • Organic and local fare
  • Ice cream
  • Ethnic fusion
d. Who are the Major Competitors?
  • Oink & Moo BBQ, Florham Park, New Jersey
  • Cinnamon Snail, New York City
  • Cheezious, Miami
  • Kogi BBQ, Los Angeles
  • The Cow and Curd, Philadelphia
  • Luke’s Lobster, New York City
  • Mac Mart Truck, Philadelphia
  • Fukuburger Truck, Las Vegas
  • The Taco Truck, Hoboken, New Jersey
  • Grilled Cheeserie, Nashville, Tennessee
  • GastroPod, Miami
  • Lardo, Portland, Oregon
  • Clover Food Lab, Cambridge, Massachusetts
  • Fojol Brothers, Washington, D.C.
  • Torched Goodness, Phoenix
  • Where Ya At Matt, Seattle
  • Coreanos, Austin, Texas
  • Hapa SF, San Francisco
  • Schnitzel & Things, New York City
  • East Side King, Austin, Texas.
e. Are There County or State Regulations or Zoning Laws for Food Truck Business?

Yes, there are county or state regulations or zoning laws for food truck businesses. As a matter of fact, 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 Food Truck Business?

Yes, there are franchise opportunities for the food truck business, and here are some of them;

  • Kono Pizza.
  • Captain D’s Seafood.
  • ZooHoo’s Eatery.
  • Johnny Rockets.
  • Gandolfo’s Deli.
  • Toppers Pizza.
  • Cousins Maine Lobster.
g. What Do You Need to Start a Food Truck Business?
  • A Feasibility Report
  • Business and Marketing Plans
  • Business Licenses and Permits
  • 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
  • Food 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 food truck business are;

Creative Food Truck Business Name ideas
  • We Move© Food Truck, Inc.
  • Danny Beck® Food Truck, LLC
  • GEE© Food Truck, Inc.
  • Food Solutions® Food Truck Company, Inc.
  • Meal King™ Food Truck Company, Inc.
  • Green Line™ Food Truck Company, LLC.
  • Luke Elton and Co© Food Truck Company, LLC
  • Food Guys® Food Truck Company, Inc.
  • Star Serve© Food Truck Company, Inc.
  • Chop Life© Food Truck Company, Inc.
  • Leafy Green® Food Truck Company, LLC
  • Grace Made® Food Truck Company, LLC
  • Seven Twenty™ Food Truck Company, LLC
  • Creamy Taste© Food Truck Company, Inc.
  • Sun Rise® Food Truck Company, Inc.
  • Don Pedro™ Food Truck Company, Inc.
  • Food Depot™ Food Truck Company, Inc.
  • Lauren King© Food Truck Company, Inc.
  • Smokey Serve® Food Truck Company, LLC
  • Puri Pot™ Food Truck Company, Inc.
  1. Register Your Business

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

Even though there are several options such as sole proprietorship, partnership, limited liability company (LLC), and corporation, when it comes to the business structure of a food truck, most players consider 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 Food 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
  • Food purchase record storage and record-keeping
  • Copy of license for the service support facility and/or a recent inspection report.
d. What Type of Certification is Needed to Start a Food Truck Business?

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

e. What Documents are Needed to Open a Food Truck Business?
  • DBA
  • EIN
  • Business and liability insurance
  • Federal Tax Payer’s ID
  • State Permit and Building Approval (For your kitchen and 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 food 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 Food Truck Business?

The startup cost for a food truck business is not uniform as some factors such as the number of food trucks, the size, the brand, and the model of the trucks can influence the cost. But basically, a food truck business will cost from $50,000 – $600,000 to start, and that can easily go higher depending on your overall business goals and objectives.

b. What are the Costs Involved in Starting a Food 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.
  • Promotional expenses, $3,500 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 include stationery ($500) and phone and utility deposits ($2,500).
  • Operational cost for the first 3 months (salaries of employees, fueling of the food trucks, purchase of gas, payments of bills et al) – $60,000
  • The cost for start-up inventory (food ingredients, flours, coffee, and other drinks and packaging materials et al) – $5,000
  • The cost of storage hardware (bins, rack, shelves, food case) – $3,720
  • The cost for counter area equipment (countertop, sink, ice machine, etc.) – $5,500
  • The cost for store equipment (cash register, security, ventilation, signage) – $3,750
  • The cost of the mobile food truck – $30,000
  • The cost of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $10,000.
  • The cost of launching a website – $600
  • The cost for opening party – $5,000
  • Miscellaneous – $5,000
c. What Factors Determine the Cost of Opening a Food Truck Business?
  • The size of food truck business (number of food trucks you intend starting the business with)
  • The choice of location
  • The required licenses and permits
  • The cost for branding, promotion, and marketing of the food truck business
  • The cost for furnishing and equipping the food truck business – commercial kitchen inclusive
  • The cost for insurance policy covers
  • The cost for registering the business
  • Cost of recruiting and training your staff
  • The cost for the purchase and customizing of uniforms, shoes, and caps for your employees
  • The cost for the grand opening of the food truck business
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?

Actually, it is not compulsory to build a new commercial kitchen or parking facility for your food truck business. This is because the nature of the business makes it possible for you to get everything done on the go.

e. What are the Ongoing Expenses of a Food Truck Business?
  • Food ingredients and serving 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
  • Food Truck Drivers – $26,800 Per Year
  • Kitchen Staff – $26,500 Per Year
  • Attendants – $26,100 Per Year
  • Cleaners -$24,000 Per Year
g. How Do You Get Funding to Start a Food Truck Business
  1. Write a Business Plan

a. Executive Summary

Puri Pot™ Food Truck Company, Inc. is a registered and licensed food truck company that will be based in Brooklyn Park – Minnesota but will operate all across major cities in Minnesota serving delicious meals and drinks.

Puri Pot™ Food Truck Company, Inc. has been able to secure all relevant licenses and permits to operate throughout the United States and Canada. We will only hire experienced and qualified drivers with valid commercial driver’s licenses (CDL) to handle our vans and trucks.

b. Products and Service
  • Food and Snacks
  • Drinks
c. Mission Statement

Our mission is to build a food truck business that will meet the needs of 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 one of the preferred choices of individuals and organizations when it comes to food trucks in the whole of Brooklyn Park, Minnesota.

d. Goals and Objectives

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

e. Organizational Structure
  • Chief Operating Officer (Owner)
  • Manager
  • Food Truck Drivers
  • Kitchen Staff
  • Attendants

Marketing Plan

a. SWOT Analysis
Strength:
  • Excellent operational history
  • Superb menu list
  • Experience and trained professionals
  • Well-equipped food truck
  • Excellent customer testimonials
  • Reliable and efficient food trucks and service
Weakness:
  • The owner is new to large scale marketing
  • We will need a loan to purchase the latest food trucks and commercial kitchen equipment
  • The owner is currently running the business solo
  • Lack of economies of scale.
Opportunities:
  • Growing outdoor activities
  • Build upon existing clientele
  • Online market, new services, new technology, and of course the opening of new markets.
  • Increase of the number of families who would want to patronize food trucks.
Threat:
  • 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 our business.
b. How Do Food Truck Businesses Make Money?

Food truck businesses make money by selling foods and drinks.

c. Payment Options
  • Payment via bank transfer
  • Payment with cash
  • Payment via credit cards
  • Payment via online bank transfer
  • Payment via mobile money transfer
d. Sales & Advertising Strategies
  • Introduce your food truck brand by sending introductory letters to residents, park managers, and other stakeholders in and around the city you intend to cover.
  • Open your food truck company with a party to capture the attention of residents
  • Advertise your food 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 food truck brands
  • Engage in direct marketing and sales
  • Deliberately brand your food truck
  • Encourage the use of word-of-mouth marketing (referrals)

Financial Projection

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

Most food truck businesses charge based on the quantity of food or drink sold and it could range from $1 and above.

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

It depends, but available reports show that on average, a food truck business should net more than $100,000 per year assuming steady clientele.

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

The profit margin of a food truck business is not fixed. It could range from 25 percent to 55 percent.

e. What is the Sales Forecast?

Below is the sales forecast for a food 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: $220,000
  • Second Fiscal Year:  $380,000
  • Third Fiscal Year: $450,000
  1. Set Up your Shop 

a. How Do You Choose a Perfect Location for Food Truck Business?
  • The demography of the location
  • The demand for the type of food and drinks offered by your food truck
  • The purchasing power of businesses and the residents of the location
  • Accessibility of the location
  • The number of food truck businesses, and food 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 Food Truck Business?
  • Salt Lake City, UT
  • Saint Joseph, MO
  • Port Allen, LA
  • Rock Hill, MO
  • Atlanta, GA
  • West Sacramento, CA
  • West Chester, OH
  • Austin, Tx
  • Westbrook, ME
  • Idaho Falls, ID
c. What Equipment is Needed to Operate a Food Truck Business?

You should be prepared to purchase gas cookers, ovens, deep freezer et al. You will also need computers or laptops, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.

  1. Hire Employees

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

  1. Launch the Business Proper

In recent times, no food truck business opens its door for business without first organizing a 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.

The bottom line is that with a proper launching of the food truck business, you will be able to inform people in your city that your food truck is open for business.

a. What Makes a Food Truck Business Successful?
  • Choose a good location, good menu, and reliable food trucks to launch the business
  • Hire only competent, hardworking, and trustworthy staff
  • Throw an open house party before officially opening the business
  • Be deliberate with your marketing sales approach
  • Encourage the use of word of mouth to promote your food truck business
  • Leverage on all available online and offline platforms to promote your food truck business
b. What Happens During a Typical Day at a Food Truck Business?
  • The business is open for the day’s work
  • The food trucks are washed, cleaned, and ready for business
  • Food and drinks are prepared
  • Customer’s requests are taken and they are attended to
  • Schedule maintenance of food 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 Food Truck Business?
  • Good culinary skills
  • Good driving skills
  • Customer services skills
  • Interpersonal skill
  • Business management skills
  • Work experience in a food truck industry
  • Experience in managing people
  • Experience in business administration
  • Experience in handling relevant software.