How Much Does It Cost to Start a Food Truck?
Running your own food truck is the goal, but how much will it cost? We break down the potential costs so you can learn how to finance your dream.
Food trucks have become a staple in cities around the world and continue to grow in popularity in the U.S. Maybe opening a restaurant location seems out of reach or you crave the excitement of a mobile business? Whatever your reason, you’re considering dipping your dumpling into the world of food trucks. But how much does it cost to start a food truck?
From equipment and licenses to insurance and the truck itself, there are significant startup costs associated with opening your own food truck. We’ll break down each category of expenses you need to consider before preparing your menu.
Licenses & Permits
One of the largest upfront costs for a food truck is getting all the required licenses and permits to sell food. These expenses will vary depending on where your truck is located, but in general how much is a food truck permit? The average cost of permits, licenses, and legal compliance to start and operate a food truck for a year is around $1,900.
There are multiple types of licenses and permits you will need to legally operate a food truck, including health and food safety permits, administrative licenses, hazard prevention, and zoning.
Renting or Buying a Food Truck
How much does a food truck cost? When it comes to the food truck itself, you have the option of buying an entirely new vehicle or renting one. A brand-new food truck is made to order and can cost anywhere from $75,000 to $175,000 and take months to build. Used trucks, however, generally cost between $40,000 and $80,000 and allow you to go into business as soon as you're ready.
If you choose to rent a food truck, the cost will depend on the length of your lease. In general, for a lease of over six months, your rent should be $2,000 to $3,000 a month.
Many food truck owners rent space at a commercial kitchen, known as a commissary, where they prepare and store food. Renting kitchen space is so common that many cities require proof of commissary as part of the food truck application process. This is why you should consider kitchen space when determining how to write a food truck business plan.
Renting commissary space can cost about $1,500 a month, and space may be difficult to find in high-demand markets with many food trucks and other small restaurant businesses. If you can’t find a commissary space, consider looking into renting a commercial kitchen from a church, community center, or restaurant.
Food Truck Parking
Where do food trucks go when they’re not open? You will have to park your truck somewhere overnight, and if you don’t have the space at your home, you’ll need to rent a parking space.
Some commissaries offer parking space to food trucks for an additional fee. Where you are permitted to park depends on the city’s rules, but plan on about $500 to $1,000 a month for parking.
The type of food you choose for your truck will determine what type of equipment you need to cook and serve it. Appliances like ovens, grills, fryers, and refrigerators are often essential staples of a food truck, as well as smaller items like pots and pans, storage containers, serving implements, and utensils.
Large appliances can cost several thousand dollars each, although you can save money by purchasing used instead of new. You may even choose to lease appliances while you build capital. Your other supplies and tools will cost a few thousand dollars, too.
Before you open your food truck and start serving, you need inventory. Not only does that include the ingredients for the items on your menu, but also dishes, cups, napkins, and utensils.
The startup costs for ingredients depend on your menu, of course, but you can expect to spend around $1,000 to $2,000, especially when you account for items like spices and cooking oil. For plates, cups, napkins, and all the items you need to serve your food to customers, budget for between $300 to $500.
Like licenses and permits, some of the greatest costs associated with how to start a food truck have little to do with food. Operational costs, such as insurance and maintenance, are major parts of running a food truck.
For insurance, you want to invest in automotive liability, general liability, and any insurance associated with employees, such as workers’ compensation. You can get estimates for these costs from your insurance provider.
You also need to keep your food truck fueled and maintained, which will run around $1,500.
Tips for Minimizing Food Truck Costs
If you find yourself overwhelmed by the cost of starting a food truck, look for ways you can save. You can’t control costs like licensing, but there are areas where you can reduce spending:
- Build your menu around versatile, seasonal ingredients, allowing you to have a smaller inventory.
- Rent or buy used equipment instead of purchasing new.
- Consider starting your food truck in a city with lower licensing and permitting fees.
- Rent your food truck out for events, like weddings and parties, to bring in additional revenue.
- Partner with other food truck owners to buy supplies in bulk and share.
- Invest in truck maintenance so you can avoid larger repairs in the future.
- Compare supplier prices to look for the best deals.
Total Food Truck Startup Costs
So, in total how much does it cost to start a food truck? If you choose to rent a food truck, you should estimate around $25,000 to $35,000 for your startup costs. However, if you choose to buy a truck, that number will be significantly higher — around $75,000 for a used truck and over $100,000 for a brand-new custom truck.
Regardless of the option you choose, it’s essential to meet all requirements and have everything you need to get your business going and start feeding customers. With the right plan, you can establish a food truck business that’s the next big hit in your city.
On the long to-do list for starting your own business, financial considerations can feel the most daunting. But with the right tools and planning, you can make your food truck dream a reality. We hope this guide, along with our other new business resources, gives you the support you need to make it happen.