How Much Does it Cost to Start a Food Truck?

What Are the Total Costs to Start a Food Truck?

The cost to start a food truck varies widely, depending on several factors such as the truck itself, location, equipment, and licenses. The total cost can range from $50,000 to $300,000.

Here’s a quick breakdown of key factors:

• Truck cost: The biggest upfront expense. Prices range based on whether you buy new, used, custom, or lease.
• Equipment: Your kitchen setup is one of the most important elements and can be quite costly.
• Permits: Required licenses and permits vary by region, and some states have more regulations than others.
• • Health Permits range from $100-$1000 
  • Business licenses range from $0-$400
  • Fire permits/inspections can range from $0-$200
• Branding: Creating a memorable brand that attracts customers also requires investment.
• Maintenance: Trucks are mobile businesses, meaning you’ll need to account for maintenance and repairs, including:
• • Auto maintenance
  • Repairs on kitchen appliances
  • Generator maintenance, which can be up to $400 a month

Truck Options: New, Used, Custom, and Leasing

The type of truck you choose will heavily influence your overall startup costs.

• New Truck: $90,000 – $250,000

If you opt for a brand-new food truck, you’re looking at a significant upfront cost, but it comes with the benefit of reliability and a warranty. Some regions are cheaper for building trucks than others. For example, Texas is known for having lower build regulations, which can reduce the cost, while California and Washington have stricter regulations that make trucks more expensive. Make sure whoever builds your truck has approval for their design in the region you’ll be doing business in.

• Used Truck: $50,000 – $125,000

Buying a used food truck can help lower costs, but you may face more frequent repairs and upgrades. It’s important to thoroughly inspect a used truck before purchase to avoid unexpected expenses. When buying a used truck, you must ensure that it can be permitted in the region you want to use it. Many older trucks are grandfathered out of new restrictions, but may lose the grandfather protections in new regions or with new owners. NEVER buy a used truck from Texas for California.

• Custom Build: $85,000 – $200,000

A custom-built truck involves creating a new kitchen setup on an existing chassis, offering the flexibility to design a truck that fits your exact needs. However, costs can quickly escalate based on your equipment and kitchen layout requirements.

• Leasing/Renting: $2,500 – $4,500/month

Leasing or renting a food truck is a great option if you want to test the waters before fully committing. Some companies offer lease-to-own options, where a portion of your lease payments goes towards eventual ownership. When leasing you can’t take a tax deduction on a depreciating asset like you can when you own a food truck. 

Essential Kitchen Equipment and Upgrade Costs for Your Food Truck

Setting up a food truck kitchen requires a range of equipment, from grills to refrigerators. On average, kitchen equipment will set you back $10,000 to $50,000.

• Safety and Ventilation
  Investing in safety equipment like fire suppression systems and upgraded ventilation is necessary for regulatory compliance and long-term safety. These upgrades typically add a few thousand dollars to your setup costs but are non-negotiable in most regions. When buying a new food truck, these features should be included. 
• Warranty Considerations
  When buying new equipment, look for items with manufacturer warranties. These warranties can help minimize repair and replacement costs in the first few years, giving you peace of mind and saving you money.

Food Truck Permits, Licenses, and Insurance

Permits, licenses, and insurance are required for getting your food truck legally up and running. These can range from $500 to $5,000 annually, depending on your location and the specific requirements. For more information about permits check out our blog here: https://www.bestfoodtrucks.com/blog/starting-a-food-truck-regulations 

• Permits & Licenses
  Every region has different requirements for health, fire, and parking permits. For example, cities in California or Washington may have stricter regulations, especially for emissions, making permits more expensive. 

• Vehicle Emissions Compliance
  In some states, particularly California, older diesel trucks are no longer allowed due to emissions standards. DO NOT BUY an older diesel truck for CA. 

• Insurance
  Food trucks require several types of insurance, including liability, vehicle, and equipment coverage. Expect to pay around $2,000 to $5,000 per year for comprehensive coverage that protects you and your business.

Monthly Operating Costs of Running a Food Truck

After the initial setup, running your food truck involves recurring monthly expenses. On average, food truck operators spend $3,000 to $10,000 per month on essentials like food supplies, labor, commissary fees ($1000-$1400), fuel, and utilities.

• Booking Fees for Events and Lunch Locations
  If you’re parking at specific events or high-traffic areas, you can expect to pay a percentage of your daily earnings if an organizer manages the location. These earning percentages can range from 10% on a daily lunch location to 50% at a huge festival.

• Generator Costs
  Food trucks rely on either fuel-powered or electric generators. Fuel costs vary depending on location and fuel type, so it’s important to factor in your truck’s power requirements. Generators require a lot of upkeep. You must service them once every 500 hours. Service fees can range from $300-$600. Learn to do this yourself. 

• Cleaning Fees:
  Many food truck owners use cleaners at their commissaries. This allows them to drop off their truck after a busy day and come back to it spotless in the morning. Cleaning fees range from $50-$100 per cleaning. 

Marketing and Branding Costs: Making Your Food Truck Stand Out

Creating a memorable brand is essential for your food truck’s success, especially with the competition in the market. Expect to invest in branding, from your truck’s appearance to your digital presence. Food truck wraps cost $5000-$8000. Make sure your wrap is memorable. Orange, yellow and red are eye catching and easy to see. Be sure you include contact information on both sides of the food truck and make sure you include “WE CATER.” Make sure you do some Market Research in your region. Check out your competition and what your market needs most.

• Website, Social Media, and SEO
  A solid digital presence is absolutely necessary for attracting customers. The initial setup for a website, social media accounts, and search engine optimization (SEO) typically costs $1,000 to $5,000.

• Design & Truck Wrap
  Your truck’s appearance is your biggest advertisement, and investing in a truck wrap design can make a huge difference. Truck wraps usually cost between $2,500 and $10,000, depending on the complexity of the design.

Hidden Costs You Might Overlook When Running a Food Truck

There are several hidden costs that food truck operators often forget to factor into their budget. Here are a few to watch out for:

• Emergency Repairs: Whether it’s your engine or your kitchen equipment, breakdowns are inevitable. Engine repairs can easily cost $12,000 or more, while kitchen equipment repairs range from $3,000 to $6,000.

• Aesthetic & Cleaning Costs: Regular cleaning and cosmetic maintenance, such as fresh paint or equipment upgrades, can cost $500+.

• Credit Card Processing Fees: Mobile payment systems come with fees, typically 2.6% + $0.10 for walk-ups and 2.9% + $0.30 for online payments.

• Seasonal Revenue Variations: Be prepared for slower sales during off-peak seasons or in regions with harsh winter weather or super hot summer temperatures. 

Financing, Leasing, and Grant Options for Food Truck Entrepreneurs

Starting a food truck can be financially challenging. The reality is that there are very few options when it comes to getting financed. Banks have traditionally not looked at food trucks as a viable business option for funding. We’ve seen some food trucks find money with local grants and a few with really good credit have been able to get a loan through the SBA. 

• Financing Options
  Consider business loans, crowdfunding, or lease-to-own programs for your truck. These options allow you to spread the cost over time.

• Government Assistance
  Look into SBA (Small Business Administration) loans or local small business grants. These programs are designed to help entrepreneurs like you get started.

Maximizing Profit and Return on Investment (ROI) for Your Food Truck

Once you’re up and running, it’s important to focus on profitability.

• Speed of Service:
  Menus must be created to serve a lot of people in a short amount of time. Lunch service for food trucks is normally around two hours. If you can only serve one person every five minutes you’ll only do 24 tickets. A great lunch is between 70-120 customers. Can your menu serve 40-60 people per hour?

• Revenue Projections
  Your revenue will vary depending on your location, the events you attend, and catering opportunities. Busy events and catering gigs can significantly boost your earnings.

• Cost vs. Profit
  One way to maximize profit is to minimize costs through efficient menu planning. Offering a limited but well-curated menu can reduce food waste and lower your monthly expenses. Having proteins that can be used in multiple dishes helps to minimize waste. 

Catering events are a profitable endeavor. Catering has a higher per person average and allows you to bring the right amount of food leaving no waste. Landing catering gigs require you to respond quickly to customer emails, have a menu/proposal easily accessible and ready to send and have great pictures. Using BFT’s catering system will increase your chances of booking catering events. How to book more catering events through BFT. 

Tips for Reducing Startup and Operating Costs

• Used vs. New Equipment
  If you’re on a tight budget, consider leasing equipment or buying used items. Just make sure they’re in good working condition to avoid unexpected repair costs.

• Streamlining the Menu
  A focused menu not only simplifies prep but also minimizes food waste. Menus where you’re assembling food instead of cooking food speed up operations. Offering fewer, high-margin items helps keep your operation efficient and profitable. Making sure you have some “line-buster” items that can speed customers through your line is a great way to increase profit. 

• Start Small
  If a full-scale food truck seems overwhelming, try starting with pop-ups that are permitted (Farmer’s Markets) or small events to test your concept before investing in a full truck setup. You can also invest in a small cart. We recommend Revolution Carts for prepackaged items and limited cooking options. 

Conclusion: Food Truck Startup Costs

Starting a food truck can be both exciting and daunting, especially when it comes to understanding the costs involved. By planning your budget and exploring ways to cut costs—whether through used equipment, streamlined menus, or permitted pop-up events—you can set yourself up for success. 

With the right approach, your food truck could quickly turn into a profitable and rewarding business. So, get started, plan wisely, and let your culinary creativity shine on the road!