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March 7, 2011

Starting A Food Truck Business Part 1 – The Basic Startup Costs

 On the off chance you haven’t noticed, food trucks, once one of the few means of getting food to things like construction sites and Hollywood movie sets, have stepped outside their normal boundaries and have essentially taken over every city in the US.  And these trucks are not at all like food trucks of old.  Greasy reheated tacos are few and far between and soggy burgers are a thing of the past.  In a nutshell, food trucks have upped their game and now it’s easy to find gourmet burgers with bacon jam, delicious crepes,  and decadent treats on every street corner.

If you, like me, have toyed with the idea of jumping on the bandwagon (or, in this case, the food wagon), and starting your own food truck, then how much it will cost to get up and running is likely one of the top questions you have. 

Most obvious is the cost for the truck itself.  If you’re looking for a new truck then prices can easily run upwards of $150,000 depending on what type of kitchen facilities you need built into the truck.  It is possible to get used trucks and the price range is pretty wide.  A quick search found used truck prices from $20,000 to $110,000 but that doesn’t include any changes to the kitchen equipment or layout that you may need or customization of the outside of the vehicle.  There is also the option of renting a mobile food truck and prices, depending on where you live, can be $1000 – $3000/month.  With rental trucks though you will also likely be limited to the kitchen facilities that the vehicle is already equipped with.

Next up are your basic business startup costs which include things like your state and federal business licenses, city licenses, your health permit, and food handlers licenses for any employees.   Most likely you will also need to rent either commercial kitchen space or a commissary depending on the regulations for your city.  Throw in some business liability insurance and vehicle insurance too and you’re easily looking at $500-$2000/month depending on your location which does not include the cost for the truck itself, labor, gas, or ingredients.

All of this may sound expensive but keep in mind that it’s nothing compared with the costs of starting and operating a restaurant.  A food truck is a phenominal way to reach a different customer base every day (or even every hour!) and trucks are nimble enough to change – be it location or menu options – as the market changes.  Not to mention that food trucks can add to their revenue stream by offering catering for special events.   How much fun would it be to attend a wedding where a gourmet food truck pulls up for dinner.  You know that wedding – and that food truck – would not soon be forgotten!

Part 2 later this week will take a look at the logistics of getting a food truck business up and running.  In Part 3 I’ll take  a look at the role that rising gas prices play in the food truck world and in Part 4 I’ll share with you my food truck business idea.  I’m convinced it’s brilliant but I’m not the right person to start it for a variety of reasons (not least of which I’ve already got my hands full at the moment between my own small business, a new book, a blog, etc…) so if you think the idea will work in your market feel free to take it and run! 

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2 comments on “Starting A Food Truck Business Part 1 – The Basic Startup Costs

  • RAI on said:

    HI I AM TRYING TO START A SMALL FOOD TRUCK BUSINESS IN ATLANTA GEROGIA AND I WONDER IF THATS A GOOD PLACE TO START A BUSINESS AND IS IT A GOOD TIME TO START ONE.

    • smallfoodbiz on said:

      Rai – The question you ask is at the crux of starting any small food business (or really any business in general). I unfortunately can’t answer that question specifically as I’m not in the Atlanta area and don’t know the specifics of that market. The best I can do is answer as follows:
      1. Is Atlanta a good place to start a food truck business? For this you will want to take a look at your specific market and see if the people in your area like food trucks and you also need to look at the laws specific to Atlanta (or any surrounding suburbs you think you might want to take your truck).
      2. Is now a good time to start a food truck business? This again depends on your personal situation and what your research above uncovers. I did recently write this post (http://smallfoodbiz.com/2011/08/09/is-now-really-a-good-time-to-start-a-business/) that takes a look at whether now is a good time to open a small business given the unstability in the economic markets.

      Lastly, I am just a few weeks away from publishing Food On Wheels – a book that is dedicated to the hows and whys of starting up a food truck business including how to figure out if your city is the right area to start one and other factors important in the decision making. You can read more about the book (http://smallfoodbiz.com/2011/07/11/how-to-start-a-food-truck-business/?preview=true&preview_id=718&preview_nonce=b4fc8ea3d0) and if you want you can sign up to be added to the newsletter that will alert you to when the book is published and available on Amazon (http://smallfoodbiz.us2.list-manage.com/subscribe?u=5a9d907f8977f988e3e48e9ef&id=de2051380a)

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