How to Start a Food Truck Business

Foodies with an entrepreneurial itch can start a food truck business, complete with a solid marketing strategy and a fully equipped food truck, to pave the way to earn more than $500,000 per year. 

What was previously a huge risk has become a food trend around the world. However, while the mobile food industry’s future does look encouraging, a lot still needs to be done.

You have to create appealing menus, prepare high-quality and delicious food consistently, and be ready to put in long hours to out-hustle the competition. Like any other business, research and planning are the cornerstones of success here.

In this guide, I’ll give you a step-by-step breakdown of how to start a food truck business to get the ball rolling.

The Easy Parts of Starting a Food Truck Business

Starting a food truck business is an excellent choice for budding entrepreneurs with a limited budget. 

Don’t get me wrong; there’s still a decent amount of startup capital required. But when compared to starting a traditional restaurant business, it’s considerably less. Additionally, you’re assured of greater profit margins because of the fewer overhead expenses.

Mobility and flexibility are other advantages.

Selling in a food truck lets you move your establishment from one place to another—something that gives you access to a new customer base regularly and the opportunity to increase your advertising potential.

You also have more flexibility in terms of hours of operation, menu items, and other financial and operational decisions. For instance, you can bring fresh food directly to events and festivals without renting out equipment.

Aside from the tremendous growth opportunities the food truck business offers, owners can also enjoy various tax deductions that are not available to standard restaurant owners.

The Difficult Parts of Starting a Food Truck Business

The not-so-good bits about starting a food truck business mainly revolve around the competition, long hours, and keeping up with the exhaustive list of legal restrictions.

It’s common for several food trucks to serve the same area. While this setup does help attract a large number of customers, it also means more competition. Plus, food truck customers expect affordable food, so you cannot have a steep price tag for your menu items.

As a business owner, running a food truck business can get very taxing. You have to be prepared to work weekends and evenings on top of the usual long hours to boost your revenue. Let’s not forget truck maintenance, location scouting, event booking, and cleaning.

Nevertheless, it’s complying with the local and zonal restrictions that get cumbersome. 

Most localities have special permitting and licensing requirements for food truck businesses, which along with parking limitations, can make it difficult to maximize sales. You have to stay up-to-date with the latest legal ordinances regarding where you can park your truck and how long you can stay at a single location.

You also need to follow the usual legal requirements that apply to other businesses, such as paying tax, hiding regulations, and so on.

Step 1: Research Your Target Market

Planning can make all the difference between a flourishing food truck business and a floundering one. Researching your target market will help you rake in more profits for your business as you’ll have the information to supply a demand.

Flesh Out Your Idea

You need a game plan for your food truck business—one that resonates with your values, goals, and vision. There’s no profound reason to start the food truck business, but you need to consider some crucial questions to flesh out your business idea.

• Do you already have food trucks operating in your city? If yes, what kinds of food trucks?
• What is your favorite dish? If you don’t want to play favorites, do you have any particular food cuisine in mind you want to serve?
• Which cuisine, chefs, or themes inspire you the most?

Study the Competition

Try to pick up a food concept that hasn’t been done by other food trucks or at least isn’t being done in your area yet. 

For this, you have to evaluate available space—your go-to spot so customers know where you are and can find you easily. Naturally, you don’t want to be the fourth burrito food truck here.

Visit food trucks in your area to understand what works with your target audience and what days of the week or times are the busiest. This will help you identify cuisines that have widespread appeal.

For instance, if your chosen space is frequented by office-goers, offering breakfast or lunch-focused food items would make more sense.

Here’s a quick checklist of pointers to research:

• Existing food truck and restaurant businesses and concepts
• The average population demographic 
• Place where food trucks can stop and sell food items
• Busy street times and potential for business

Step 2: Decide Your Food Truck Concept, Business Name, and Logo

Once you figure out your space and cuisines, you can narrow down your food truck’s unique food concept and name. 

The idea here is to have a concept that meets customer demands and reflects your interests and experiences. Your food truck concept, name, and logo should be unique and memorable, descriptive and attention-grabbing, and clearly express your intentions without being too specific to allow for growth.

Choose Your Food Truck Concept

Do your preliminary research to select a food truck concept that combines your unique style with community concerns. Here are a few popular food truck concepts:

• Fusion dishes combine two distinct cuisines. Example: Sushi burritos, Tex-Mex, etc.
• Gourmet sandwiches that use non-traditional ingredients or have a theme.
• Pizza 
• Organic and healthy foods, such as Acai bowls, interesting salad combinations, and cold-pressed juices.
• Regional cuisines that deal in local specialties like breakfast tacos in Texas, lobster rolls in New England, etc.

Brainstorm a Catchy Name

Choosing a good name for your food truck business is a straightforward process, but it does involve some creativity.

• Use something descriptive. Your prospective name should clearly describe your food, theme, and concept. This is necessary to ensure your customers know what to expect immediately.
• Use something memorable and easy to pronounce. Food truck businesses heavily rely on word-of-mouth publicity. It’s why you should brainstorm names that roll off the tongue easily. I recommend sticking to four-word-long names—or less—and avoiding confusing or overly long names. 
• Use something unique. Operating with a name that’s already taken by another food truck or restaurant may cause you to get fined for violating a trademark. To avoid this problem, you can use the free U.S. Patent and Trademark Office online research tool to check if the name has already been used.
• Use something scalable. Yes, your business name should be catchy, fun, and in sync with your food truck concept. But it should also be able to grow with your business once you add more trucks, new menu items, or maybe even open a traditional restaurant.

Create Your Food Truck Logo

Your business logo should reflect your food truck‘s name and concept. It must be exciting and eye-catching to compete with your competition, but it should also be versatile for use on your business cards, menu, social media, and marketing material.

Considering how important your logo is when it comes to sales, you want to hire a talented designer who can come up with something that appeals to today’s “Instagramable” crowd. Fiverr is an excellent place to source talented yet affordable graphic designers.

Step 3: Write Your Food Truck Business Plan

Next, you have to start working on a viable business plan for your food truck business.

This will help you chalk out your business details and see the bigger picture before investing in it. A business plan is also the document you present to potential investors to raise funds, so you must carefully lay out your vision and financial plan.

Create Your Business Plan

Since every business has its own unique needs and owners their own goals and objectives, there are no clear-cut rules for making a business plan. But there are a few standard sections that remain the same, regardless of the industry.

• Executive Summary: This section establishes your company’s identity, short-term and long-term goals and depicts the kind of food you want to sell and why.
• Company Description: This section covers why you want to start a food truck business and how it’ll be different from your competition.
• Market Analysis: This section explains your target demographic and creates your ideal customer profile.
• Organization and Management Plan: This section presents a clear organizational system of your business and lays out your internal structure and employee ranks.
• Service or Product Line Description: This section covers your menu and options for seasonal or future menu alterations.
• Marketing and Sales Strategies: This section will cover your advertising plan and marketing tactics that you plan on using to create brand awareness.
• Funding: This section will list the funding sources for your food truck and how much you need to get your business started.
• Financial Projections: This section will show your investors the projected growth and financial plan for your company’s future in the upcoming five years.
• Appendix: The last and final section is where you can add any additional information that didn’t make it into the main body of your business plan. This can be anything—blueprints, photos, logo designs, and so on.

Step 4: Procure the Necessary Licenses and Registrations

Food truck licenses and permits cost between $100-$500, depending on your location. Generally, you need two types of licenses and permits: business license and food service permit.

However, you may also need additional permits depending on the state you live in. 

Research Applicable Licenses and Permits

Different cities have different guidelines, so it’s best to contact your local government to get accurate information on all the requirements you need.

For instance, in California, food truck owners also need a mobile permit, food safety certification, workers’ compensation, a health permit, business insurance, and a food handler permit for employees.

Additionally, you may need a DBA (Doing Business As) certificate for your business license if you plan on operating under your food truck name. Registering your business and applying for tax permits to ensure you get an employee identification number (EIN) if you’re hiring employees may also be necessary based on your state.

Parking Permits and Regulations

Food trucks cannot just park anywhere. Every city has different regulations that limit parking opportunities, which is why it’s advisable to conduct in-depth research before you start operation.

While you’re at it, find out whether you’ll need to visit your motor vehicle department for proper vehicle registration.

Below are a few tips to help you determine whether your food truck is parked in the right place:

• Reach out to your county clerk to get a list of places where parking isn’t allowed
• Contact your local motor vehicle department to learn about parking restrictions
• Find out how much you need to pay for parking meters
• Look for secure overnight parking spots for your truck

Commercial Kitchen Requirements 

You may have to use commercial kitchens to prepare food depending on your state and local regulations. 

Research online or ask your local food truck community to recommend a commercial kitchen or commissary. This can either be a catering kitchen, designated food truck commissary, or a brick-and-mortar restaurant.

Step 5: Raise Funds for Your Food Truck Business

Starting a food truck business can be anywhere between $40,000-$200,000, depending on your location, the appliances you use, and the type of truck you purchase.

In this step, you must first figure out your estimated startup costs and then secure funds accordingly.

Calculate Projected Startup Costs

The most significant part of your startup budget will go towards buying your food truck vehicle. Obviously, you must select one that serves your business well. To help you make the right decision, you should consider the following factors:

• Do you want to lease or buy the truck?
• Do you want to buy a new or used vehicle?
• Which food truck dealer do you want to work with?
• What kind of customizations would you need for your truck?

In addition to buying a food truck, you have to purchase insurance for the vehicle and business to cover any potential damage and liabilities.

Once you zero on the food truck to purchase, you’ll need to stock it. For this, you need the following equipment and supplies:

• Cooking equipment (grills, fryers, microwaves)
• Warming and holding equipment (countertop food warmers, soup kettles)
• Food Prep equipment (work tables, knives, cutting boards, cookware, kitchen utensils)
• Serving equipment (disposable take-out supplies, food trays, napkins, cups, cutlery)
• Refrigeration equipment (under-counter refrigeration, ice machines)
• Janitorial equipment (hand sinks, floor mats, trash cans, floor care products)

Then you’ll have to account for one-time and recurring costs, such as legal fees, payroll, rent, fuel, website, and so on.

Reach Out to Financial Bodies

Good news! There’s a list of financial options you can choose from. 

You can apply for a personal loan, equipment loan, or a microloan from Small Business Administration (SBA). You can also take advantage of crowdfunding websites like Kickstarter or reach out to potential investors.

Be sure to carefully map out how you plan on using the funds, as well as how you’ll repay them. Your financial protections should include the gross revenue you need to bring in every month to cover expenses and any loan payment.

Step 6: Ensure and Customize Your Food Truck

Buying a food truck isn’t enough. You also have to get it insured and customized.

Get Vehicle Insurance 

Complete food truck insurance includes five kinds of insurance. Here’s a breakdown of each of them:

• Commercial vehicle insurance: Covers damage and liability claims from vehicle-related accidents.
• Property insurance: Covers the truck and equipment in case of collision or theft.
• General liability: Covers injuries and property damage that’s not vehicle-related.
• Workers’ compensation: Covers lost wages for employees due to work-related injuries.
• General auto insurance: This insurance varies by state but generally runs about $2,400 per year.

A host of factors affect your total insurance cost, ranging from the type of truck you own to the hours and days of operation to the location and events you attend.

Customize Food Truck

Food trucks have to be customized to include built-in grills, ovens, and other items, depending on your concept. Although the specifics may vary, certain equipment like a generator and cooktops are a must.

Research the cost of painting your truck bright colors to reflect your branding and logo. You want customers to recognize your food truck from afar.

You’ll also need a menu board that reflects your brand and theme to attach to the side of the truck. Not only should your menu board be bold and easy to read and understand, but it should also highlight your bestsellers, new items, and specials, complete with brief food descriptions, to attract customers.

QuickSprout Tip: Avoid using the dollar sign on your menu board. This will make customers focus on how well you describe your food instead of the cost.

Step 7: Advertise and Market Your Food Truck Business

Finally, to the last stage of starting a food truck business!

Since your food truck won’t have a permanent physical address, you need to have top-notch marketing and advertising strategies in place to boost your brand awareness and gain more customers.

Here’s a list of some marketing ideas:

• Create a website that features regular locations, food item photos, customer testimonials, and an ‘About me’ section.
• Create social media profiles to notify customers about upcoming events and interact with people.
• Participate at community events like catered parties and local food truck festivals to gain familiarity with customers.
• Offer customized merchandise (t-shirts, travel mugs, stickers) to customers.
• Find the unique locations and visit them regularly to establish name recognition.

Starting a food truck business is a fun, fulfilling, and time-consuming process with tons of opportunities for growth and profit. Initially, you may find it demanding, but with a solid business plan and marketing and advertising strategies in hand, the business will ultimately turn out to be rewarding.