July 29, 2022
It’s no secret that food trucks have gained traction as a popular dining and operation experience in the culinary industry. Since 2016, the mobile kitchen industry has grown roughly 12 percent annually. Chefs and restaurateurs love food carts for their low overhead and flexibility. However, some first-timers might wonder about food truck profit margins. Much like owning a restaurant, the financial security and success rate of mobile food carts depends on various factors like equipment costs, menu, labor, and more.
Are Food Trucks a Good Investment?
Based on industry data, a well-run food truck can pull in $23,000 to over $100,000 per year. That range is influenced by everything from location, marketing strategy, menu offerings, and more. While it might be difficult to pinpoint an exact revenue number upfront, some common factors can impact expenses and potential profit.
Understanding Your Upfront Expenses
For food truck owners, your initial upfront expense will be the truck itself. Where you are located and if you choose to buy or lease a truck plays a prominent role in your first expenditure:
- Leasing Costs: Rental costs for food trucks typically require less money upfront than purchasing. Plus, you have the added luxury of having the truck already outfitted with needed equipment. Leasing prices range widely on factors such as the length of the lease and truck size. Some estimates show anywhere from $1000 to $5000 per month; however, it is also possible to find trucks outside that range.
- Purchasing Costs: Buying a food cart is more of a long-term investment than leasing. On average, prices range from $50,000-$175,000, but used food carts can sometimes be found for less. There might also be additional costs for equipment if the cart isn’t fully furnished with all your cooking needs. However, truck ownership does allow for more customization, which can be helpful in terms of effectiveness and marketing abilities.
Other Food Truck Expenses to Consider
Like any other food service company, food cart operators must determine their general startup and operating costs.
- Startup costs include all licenses and permits, POS and mobile technology systems, website design, business cards, food truck wrap, etc.
- Operational expenses are ongoing and include food costs, payroll, takeaway packaging materials, marketing, utilities, truck payments, and rent for your lot.
While the average overall cost for permitting a food truck is $28,000, operational and startup expenses vary significantly based on the size of your enterprise, the number of employees, the type of food you serve, and even your state. For example, a mobile food license can run $700-$1000 over two years in Chicago, but $74-$200 in New York.
There's a lot that can go into operating a food truck business. For more information, read our guide on 'How to fund your food truck business'.
How Profitable Are Food Trucks?
If some of the above numbers give you sticker shock, don’t panic. While initial spending calculations might look high, statistics reveal that an investment of $100,000 can see between $250,000 and $500,000 in revenue. Keep in mind that sales don’t always equal profit, so you want to assess your projected costs and expenses, then work on pricing your menus to cover expenses and generate profits.
Maximize Your Food Truck Profits
A successful food truck requires a plan of action to keep costs manageable and drive consumers to your business.
- Price your menu to cover food and operational costs
- Choose a location that can boost traffic
- Market on social media
- Maintain and keep your food truck inspection-ready
- Plan for the unexpected, including equipment repairs, weather events, etc.
Food truck owners that stick to their plan can see early profits of almost 8 percent and even more in the future.
Choosing Your Food Truck Supplier
Securing a restaurant supplier that provides quality ingredients and packaging at wholesale prices for your food truck business is also an important step to running a successful business and maximizing profits. When considering your food truck supplier here are a few things to keep in mind.
- Product Availability: You want to make sure that your supplier will consistently deliver high-quality produce and goods. You also want to make sure you partner with a supplier where your shopping needs will be fulfilled. Some suppliers also only provide food while others carry a wide range of products needed to run a food truck.
- Product Variety: When shopping for bulk food items, not all produce is created equal. Some food suppliers only carry single types of food in bulk while others offer a variety of options. Make sure you find the supplier that carries the specific produce you need.
- Product Costs: How much things cost shouldn’t be the ultimate factor, but they should still be considered when picking a supplier. Compare prices and choose the best fit for your business needs.
- Supplier Reputation: Look at online reviews for potential food truck partners and suppliers. See who has positive reviews and who may have concerning or unresolved issues. Learning more about the brand can help you find the partners who best align with your brand.
Keep Food and Supply Costs Low at US Foods CHEF’STORE
Are you looking to create dynamic menus without compromising your budget? At CHEF’STORE, you’ll find fresh produce, meat and seafood, pantry items, and more! Plus, we stock all your paper products, cleaning supplies, and takeout packaging. Browse our products for delivery, or stop by one of our locations today. For marketing support, take advantage of our business tools.