How Much Do Food Trucks Make?

It’s no secret that food trucks have become a well-liked dining and business option in the culinary world. The growth of the food truck business has caused several people to wonder how much food trucks make as a profit.

The mobile kitchen market has expanded by about 12% annually since 2016.

Food trucks are getting popular among chefs and other restaurateurs because of their minimal overhead and versatility. 

Some newcomers, nevertheless, might be curious about food truck profit margins and all the expenses that should be taken into consideration.

How Profitable are Food Trucks?

Ideally, a food truck’s average annual revenue in the US ranges from $250,000 to $500,000, according to a Food Truck Nation poll conducted in 2019.

Some food trucks, though, have the potential to make up to $1 million a year. Some can even more.

However, another different survey result shows that the top 25% of US food truck companies made an average yearly income of between $250,000 and $500,000, and the top 10% made more than $500,000, which makes the food truck business lucrative.

What are the Costs to Start a Food Truck?

Although they are adaptable enterprises, food trucks can still have start-up expenditures of $50,000 to $250,000. 

You must take into consideration all the important components of the restaurant business, including labor, supplies, insurance, and marketing.

There are several additional costs, particularly for food trucks. The price of a commercial kitchen and parking licenses may also need to be taken into consideration. You might always want to ignore this but ensure you take it seriously. 

Average Food Truck Costs

Once the firm starts to turn a profit, the operational costs of a food truck will account for 85–90% of your monthly sales. 

To offset labor, food, or marketing losses, you may need to keep investing for the first year or longer.

Having sound financial planning is essential to the long-term viability of your food truck, even if you can deliver top-notch food and service you still have to consider the following:

• Operating Costs $13,000 – $65,000
• Commercial Kitchen – $1,500/month
• Parking – $500-$1,000/month
• Insurance – $500-$8,000/month
• Utilities – $1,000-$1,200/month
• Marketing – $500- $5,000 (3-6%) of sales
• Food Costs $5,000-$25,000 (30-35% of sales)
• Labor $2,500-$25,000 (24-40% of sales)
• Loan Repayment

Understanding Your Upfront Expenses

The vehicle itself will be your initial outlay if you own a food truck. Your location and whether you decide to buy or lease a truck will have a significant impact on your initial outlay:

1. Leasing Costs

Typically, renting a food truck costs less upfront than buying one. Additionally, you have the extra luxury of having the truck equipped with everything you need. 

Depending on the terms of the lease and the size of the truck, leasing costs can vary greatly. Although some estimates range from $1,000 to $5,000 each month, it’s also feasible to locate trucks that cost more or less than that.

2. Purchasing Costs

Leasing is more of a short-term investment than buying a food cart. Prices typically range from $50,000 to $175,000. 

However, used food carts can occasionally be obtained for less. If the cart isn’t fully equipped with everything you need for cooking, there can be additional expenses for equipment. 

Though more customization is possible with truck ownership, this can help with marketing and effectiveness.

Other Food Truck Expenses to Consider

There are other expenses a food truck company should consider, they include:

1. Startup costs for the design of websites, business cards, food truck wrap, POS and mobile technology systems, and all other necessary licenses and permits. 

2. Operational expenses are ongoing and comprise food expenses, labor costs, supplies for takeout packaging, marketing, utilities, truck payments, and lot rent.

While the average overall cost of permitting a food truck is $28,000, operations and beginning costs can vary greatly depending on your business’ size, staff size, cuisine variety, and even state. 

For instance, a mobile food license in Chicago may cost $700–1000 over two years, compared to $74–200 in New York.

How to Maximize Your Food Truck Profits

A strategy to control costs and attract customers is necessary for a successful food truck.

• Set the price of your menu prices to cover food and overhead expenses.
• Pick a place that will increase traffic
• Use social media to market
• Maintaining and remaining inspection-ready for your food truck
• Be prepared for unforeseen circumstances, such as equipment problems and climatic changes.

Owners of food trucks that follow these approaches can expect to make early profits of approximately 8% and even more in the future.

However, you should put starting costs, operational costs, and cost of goods sold on a food truck financial projection worksheet to forecast your profitability.