September 21, 2022
Mobile kitchens have low investment and operational costs. They allow first-time restaurateurs to experiment with their brand and menus before going brick-and-mortar. Food trucks can also be highly profitable. For all those reasons, restaurant owners and chefs are jumping at the opportunity to expand their business with a mobile kitchen. However, not everyone has access to immediate capital for food truck financing. If you are looking to take your restaurant dreams on the road, but need advice on how to fund your operation, see our tips below.
How to Buy a Food Truck: The Basics
Before you start thinking about raising capital or seeking out investors, you need to determine your essential start-up costs. How much a food truck will cost depends on several factors, including your location and whether you plan to buy or rent your rig. However, here are some average numbers that provide a great place to start:
Average Costs for Food Trucks
- Leasing: $2,000-$3,000 a month
- Used Truck Pricing: $40,000-$80,000
- New Truck Pricing with Fully Equipped Kitchen: $100,000-$175,000
One-Time Mobile Kitchen Costs
- Vehicle Inspection: $100-$500
- Licenses and Required Permits: $500-$1500
- Professional and Legal Fees: $500-$200
- POS Systems: $500-$1500
- Starting Food Costs: $500-$2000
- Operational Equipment and Supplies: $200-$1000
- Truck Wrap and Signage: $2,500 to $5,000
Ongoing Costs
- Paper Goods and Disposable Ware: $200-$400 per month
- Insurance: $2000-$4000 per year
- Internet and Phone: $800-$1400 per year
- Routine Maintenance: $1000 a year
Other costs can include website development, advertising, and marketing. Whether you plan to do your own low-cost marketing campaigns or hire an outside company, prices can fluctuate widely. When compiling your business costs, don’t forget to allocate funds for marketing.
How to Raise Money for a Food Truck
Generally, food truck start-up costs range from$50,000 to $250,000. While those amounts might seem daunting, don’t let initial numbers scare you from pursuing your mobile kitchen dream. There are plenty of ways to finance your operation without stress. Start by creating asolid business plan. A thought-out plan is crucial because it will show potential investors or loan officers your initial financial needs, your plan to generate income, and highlight your unique brand. Once your plan is complete, it is time to begin the financing journey.
Minimal Funding Options
Try these tips for starting your food truck with zero to little loan debt:
- Reach out to current food truck owners and work out a rental or lease option
- Partner with an existing restaurant, run a food cart under their brand, and share in the profits
- Look for community sponsors if your business plan includes providing a public service
- Purchase a low-cost used cart to start, then upgrade once the money rolls in
Financing Options
Most new businesses seek out loans and other financing options to get on their feet. Food trucks are no exception. Since food carts have a low operating overhead compared to restaurants, owners can usually make healthy profits in the first few years. In fact, an initial expenditure of $100,000 can see revenue returns of up to $500,00. This means loans can get paid back quickly. Plus, there are plenty of financing options out there:
- First-time and small business bank loans
- Merchant cash advances
- A private loan from friends and family members
- Utilizingcrowdsourcing sites for backing
Investment Options
First-time businesses benefit when they secure solid investors.Working with an investor means owners don’t have to create up-front capital. However, finding a person or company to take on fiscal responsibility can be tricky. Financial experts recommend reaching out to friends and family first. They are more likely to understand your drive and vision and know you to be trustworthy. If that isn’t an option, consider working with aninvestment expert or an established restaurant owner.
Grow Your Food Truck Business With US Foods CHEF’STORE
At CHEF’STORE, we know quality products at affordable prices are crucial for preserving profits. That is why we only stock the best meats and seafood, freshest produce, high-quality paper goods, and more! We don’t stop there. CHEF’STORE offers excellent business tools to help any restaurant owner take their brand to the next level. Stop by one of our many locations today!