Food trucks can make as much as $500,000 per year. That said, they can also make next to nothing and leave you in debt.
The average food truck income depends on factors like the market size in your region and how good your offer is compared to the competition. If you’re looking to find out whether starting a food truck business is a good idea in your case, you’re in the right place.
In this article, we’ll look into how much does a food truck make and what affects a food truck’s profitability. We’re also going to go over useful insights that can help you get the most out of your venture.
Whether you’re a seasoned entrepreneur or just starting out, this article will provide valuable information on the financial and organizational sides of running a successful food truck business.
Food Truck Profitability: Is Starting a Food Truck Business Worth It?
Food trucks offer an affordable and convenient way to enjoy delicious food while on the go, and matter how you look at it, the business seems to be blooming. The question is: how much can a food truck make?
Average Profit Margins: How Much Do Food Trucks Make in a Year?
Quite a lot, actually. According to a survey conducted by Food Truck Nation in 2019, the average revenue for a food truck in the US is between $250,000 and $500,000 per year. However, some food trucks can earn as much as $1 million annually. Some, even more.
Another study found that the top 25% of food truck businesses in the US earned an average annual revenue of $250,000 to $500,000, while the top 10% earned more than $500,000.
- The estimated U.S. food truck industry market size is $1.48 billion.
- The estimated annual revenue of the U.S. food truck industry is $2.7 billion and continues to grow.
- Adults between the ages of 25 and 44 are the largest customer group, making up 43% of food truck spending.
- There are around 36,324 active food truck businesses in the U.S. as of 2023.
Source: Zippia
Food Truck Owner’s Salary & Profit Margin – How Much Can You Make?
According to a survey conducted by the National Restaurant Association, the median salary for a food truck owner-operator in the US is around $50,000 per year. However, the average income for a food truck can vary widely depending on factors such as the location, the type of food sold, and the number of employees. For example, food truckers in Texas and California can make more than $250,000 per year.
The average profit margin is around 6.2%. It’s important to also factor in the costs of goods that you are selling, operating costs, and potential sales volume.
- Sales: Food trucks can generate an average of $290,556 in annual revenue.
- Total Expenses:
- Food and beverage costs ($72,639 – $101,699)
- Labor costs ($72,639 – $101,699)
- Truck expenses ($2,000 – $5,000)
- Licenses and permits ($500 – $10,000)
- Insurance ($1,000 – $3,000)
- Commissary fees ($6,000 – $18,000)
- Marketing and advertising ($500 – $5,000)
- Net Income: Revenue ($290,556) – Total Expenses ($155,278 – $244,398) = $46,158 – $135,278
- Owner’s salary (estimated 50% of net income): $23,079 – $67,639
Keep in mind that this breakdown is just an example. Numbers will vary greatly depending on your location. Some variables will also change depending on your situation, like having a loan you need to pay off.
You may use the above estimate to figure out potential food truck profits and see if it’s a good deal when compared to a traditional brick-and-mortar restaurant.
Food Truck Success Rate – How Often Do Food Trucks Fail?
According to the Bureau of Labor Statistics, the overall success rate for businesses in the food industry is similar to that of other industries, with roughly 50% of businesses surviving the first five years of operation.
That said, the success rate for most food trucks is about 40%. According to Zippia, roughly 40% of all food trucks are still in business after 3 years. An average small business in the U.S. has a 55% success rate within its first five years of operation.
Similar to the restaurant industry, the food truck industry is varied, and you can greatly improve your chances of success by doing your due diligence.
- In the food business, the success rate for fast food franchises is generally higher than for independent, more varied restaurants due to the established business model and support from the franchisor. Conversely, the success rate for new food manufacturing businesses can be lower due to the high costs associated with product development and the need for regulatory approval.
- According to a 2019 industry report from Food Truck Nation, 60% of food truck owners surveyed reported increased sales in the past year, with over 80% of respondents optimistic about the future of the food truck industry.
- Additionally, the report found that food truck owners who worked more than 60 hours a week were more likely to report higher sales and profitability.
- Your chances for success are much better when you’ve got the right business concept. Get inspired by this list of 25 food truck ideas.
Ultimately, the success of a food truck business may come down to careful planning, hard work, luck, and dedication. Make sure you review your food truck business plan before committing.
How Long Does It Take for Food Trucks to Become Profitable?
According to a survey conducted by the National Restaurant Association, it takes, on average, two years for a food truck to become profitable.
However, the time it takes to become profitable can vary widely depending on location, menu, operating costs, and, most importantly, the person in charge
Overall, it’s largely up to you and the extra work you put in before committing to starting a food truck business. Starting any business on a whim is unwise, to say the least. As we’ve mentioned many times before, it’s key to carefully manage and factor in the expenses and revenue to keep yourself and your money safe.
- Median salary for a food truck owner is roughly $50,000.
- Average profit margin for a food truck is around 6.2%.
- Some 40% of businesses survive the first three years of operation.
- Truck owners who work more than 60 hours a week reported higher earnings.
- On average, it takes two years for a food truck to become profitable.
Food Truck Business Costs: Are Food Trucks Profitable?
Food truck business startup costs can vary depending on various factors such as the size and type of the truck, equipment and supplies needed, and the cost of permits and licenses in your area.
How Much Does a Food Truck Cost?
The cost of purchasing or leasing your own food truck can range from $15,000 to $100,000 or more, depending on the size, age, and condition of the vehicle. Then you also have to outfit the truck with cooking equipment, refrigeration, and other necessary features can cost anywhere from $10,000 to $50,000 or more. Another cost to consider is styling the truck in accordance with your food truck branding.
Food Truck Operating Costs: Supplies, Inventory, and Food Costs
The supplies and inventory costs for food trucks can vary widely depending on the menu, the volume of food sold, and the season. Here are some estimates of the typical supplies and inventory costs for a food truck:- Food costs: The cost of food ingredients will vary depending on the menu and the volume of food sold. For example, a food truck that specializes in burgers may spend around $500 to $1,000 per week on ground beef, buns, cheese, lettuce, and tomato.
- Paper products: Paper products such as plates, cups, napkins, and utensils can add to the overall cost of supplies. A typical food truck may spend around $100 to $300 per month on paper products.
- Cleaning supplies: Cleaning supplies such as disinfectants, degreasers, and trash bags can add to the overall cost of supplies. A typical food truck may spend around $50 to $100 per month on cleaning supplies.
- Fuel: The cost of fuel will depend on the size of the food truck and the amount of driving required. A typical food truck may spend around $500 to $1,000 per month on fuel.
- Maintenance and repairs: The cost of maintenance and equipment repairs, such as oil changes, tire replacements, and other vehicle repairs, can vary widely depending on the age and condition of your truck. A typical food truck may require several thousand dollars per year for maintenance and repairs.
Food Truck Start Up Costs: Permits, Insurance, and Licensing Costs
Obtaining permits and licenses can range from a few hundred to several thousand dollars, depending on your location and the type of permits needed. Food truck insurance can cost around $3,000 to $5,000 per year.
The licenses and permits required for food trucks can vary widely depending on the location and the type of food truck operation. However, below are some common licenses and permits that you’ll likely need: - Business License: A business license is required for any business operation and can cost between $50 to $400.
- Mobile Food Vendor Permit: Most cities need you to have a valid mobile food vendor permit. It can cost between $100 to $1,000 annually.
- Health Department Permit: A health department permit is needed to operate a food truck and ensure that the food served is safe for consumption. The cost of a health department permit can range from $100 to $500 per year.
- Fire and Safety Permits: Fire and safety permits may be required to ensure that the food truck meets fire safety regulations. The cost of fire and safety permits can range from $50 to $500 per year.
- Parking Permits: You may need parking permits to operate in certain areas. The cost of parking permits can vary widely. This might seem like a small cost, but it might add up quickly, especially in central areas.
- State Sales Tax Permit: You’ll likely need a state sales tax permit to collect and remit sales tax on the food sold. A state sales tax permit can range from $10 to $100 per year.
- Loan Repayments – Most of us don’t have a couple of hundred thousand to throw at a food truck attempt. Make sure you count in external costs, such as loan repayments.
Food truck owners spend an average of $28,276 on permits, licenses, and ongoing legal compliance during their first year of operation.
This doesn’t include the cost of the truck, equipment, ingredients, employees, and a prep kitchen. Once all is said and done, it can cost over $125,000 to start a food truck business.
Source: Abby McCain, Zippia
Food Truck Marketing and Branding – How to Make More Money?
Developing a brand and marketing strategy can cost several thousand dollars or more, depending on the scope and scale of your efforts. The upside is that good marketing can boost total sales and monthly revenue. The downside is that it’s going to take some extra work and money.
Marketing and branding are essential components of any successful food truck business. Here are some best practices to consider:
- Develop a brand identity: Develop a unique and memorable brand identity that reflects your business’s values, mission, and menu. This can include a logo, color scheme, food truck slogans, and overall visual style.
- Establish online presence: Social media platforms such as Instagram, Twitter, and Facebook can be powerful tools to promote your food truck business. Post high-quality photos of your food, share updates about your location and menu, and engage with your followers.
- Build a restaurant website and mobile app: If you’re missing out on online deliveries, you might be missing out on a lot of revenue. Recent findings show that 70% of restaurant customers would rather order directly from a restaurant rather than from a third-party app. If you’re not a fan of the massive fees that come with most third-party apps, consider using a restaurant website builder that allows you to establish an entire restaurant online ordering system.
- Participate in events: Participate in local food truck festivals, community events, and farmer’s markets to increase your visibility and reach new customers.
- Utilize email marketing: Restaurant email marketing enables you to Collect email addresses from your customers and send out newsletters with updates, special offers, and promotions. It’s a simple way to keep your audience engaged and up-to-date with new foods.
- Consider trying SMS marketing: restaurant SMS marketing is a great way to reach your customers immediately. Reminding your customers of how tasty your food is can be an effective way of getting extra orders.
- Offer loyalty programs: Offer restaurant loyalty programs and discounts to encourage repeat customers and build brand loyalty.
- Collaborate with local businesses: Collaborate with other local businesses, such as breweries or coffee shops, to cross-promote and increase visibility.
- Utilize food review sites: Encourage your customers to leave reviews on popular food review sites such as Yelp, Google Reviews, and Tripadvisor. You can easily gather and manage customer reviews using a restaurant feedback system.
The days when the food truck business was all about the location are long gone. You’d be surprised how many customers go through internet reviews before ordering as much as a glass of water. A good location is great, but you also want a strong online presence.
If you’re just starting out, be smart about your online marketing budget. I could throw some magical numbers like 6 or 19 percent of your budget, but in the end, it all comes down to how efficient you are with your marketing budget rather than how much you spend.
A solid marketing strategy can get you going Figure out which marketing channels bring you the best returns and focus on them. Consider hiring freelancers through services like Fiverr or UpWork. There are also certain subreddits you may use to find a freelancer who could help you run your marketing.
Overall, effective restaurant marketing and branding can help your food truck business stand out from the competition and reach new customers. By utilizing these best practices, you can build a loyal customer base and increase your revenue over time.
Food Truck Employee Costs – How Much Are Labor Costs?
The employee costs for a food truck can vary widely depending on the size of the operation, the number of employees, and the type of employees. Here are some estimates of the typical employee costs per year for a food truck:
- Wages and salaries: Depending on the number of employees and the salaries paid, the wages and salaries for employees can range from a few thousand dollars to tens of thousands of dollars per year. For example, a food truck with two employees working full-time at $15 per hour would have an annual employee wage cost of around $62,400.
- Payroll taxes: Employers are required to pay various payroll taxes, such as Social Security and Medicare taxes, which can add up to around 7.65% of employee wages. For example, on an annual wage cost of $62,400, payroll taxes would add up to around $4,768.
- Benefits: Depending on the size of the operation and the benefits offered, the cost of benefits such as health insurance, retirement plans, or paid time off can range from a few thousand to tens of thousands of dollars per year.
- Workers’ compensation insurance: Employers are required to carry workers’ compensation insurance. The average cost is around $100 a month per employee, which can add up to several hundred to several thousand dollars per year, depending on the number of employees and the location.
- Training and development: The cost of training and development, such as food safety training and customer service training, can vary widely but may add several hundred to several thousand dollars per year to the overall cost of employee compensation.
The employee costs for a food truck can be a significant expense, particularly if you decide to launch multiple food trucks. It’s key that you carefully manage your employee costs to ensure that you can maintain profitability and success over the long term.
- The annual wage for two employees may cost you around $62,400.
- Payroll taxes can cost you as much as $4,768
- Additional benefits might cost you anywhere from a few to tens of thousands of dollars.
- Workers’ compensation insurance generally costs around $100 a month per employee. This cost may vary greatly depending on location.
- Training costs may add up to a couple of hundred more.
Do Food Trucks Pay for Locations? Parking Fees and Other Expenses
The cost of location for a food truck can vary widely depending on the location, time of day, day of the week, and season. Here are some general estimates of the costs associated with different types of locations:
- Food trucks pay rent at events: Private events such as weddings, corporate events, and festivals can provide a lucrative revenue source for food trucks. The cost of participating in a private event can range from a few hundred to several thousand dollars, depending on the event size and location.
- Food Truck Parks: Some cities have designated food truck parks, where multiple food trucks gather in one location. The cost of participating in a food truck park can range from $200 to $500 per day.
- Street Vending: Street vending can be an excellent way to reach customers in high-traffic areas. The cost of street vending can vary widely, depending on the location and time of day. Some cities require a permit or license to sell food on the street, which can cost several hundred dollars or more.
- Private Property: Food trucks can also park on private property, such as parking lots or business properties. The cost of parking on private property can vary widely, depending on the agreement with the property owner. Some property owners may charge a flat fee or a percentage of sales.
Overall, the cost of location for a food truck can vary widely depending on the specific location, the time of day, and the season. It’s essential you carefully research and negotiate the costs associated with each location to ensure you get the best deal possible.
Best POS for Food Trucks
Another cost you need to factor in is a point of sale system. There are many different POS systems that are suitable for food trucks. Here are some popular options:
- Revel: Revel POS is a cloud-based POS system that offers a wide range of features that are useful for food trucks, including mobile ordering, inventory management, and customer management. It is known for its user-friendly interface, customization options, and customer support.
- Clover: Clover is a POS system that offers features such as mobile payments, inventory management, and employee management. It is known for its versatility and can be customized to suit the specific needs of food trucks.
- Lightspeed: Lightspeed is a cloud-based POS system that offers features such as sales reporting, inventory management, and customer management. It is designed to be user-friendly and can be used on a variety of devices.
In the end, what is best will depend on the specific needs of your business. Make sure you choose the best food truck POS system for your particular case.
Main Challenges of Starting a Food Truck Business
Starting a food truck business can be an exciting and rewarding venture, but it also comes with its fair share of challenges. Luckily, it’s no rocket science. If you do your due diligence, work long hours, research special events, and carefully select your menu items, you can expect your business to become profitable soon.
Below are some of the challenges that you are likely to face when starting a food truck business.
- Finding the right location: Finding the right location to park your food truck can be challenging, especially in areas where there is a lot of competition.
- Meeting health and safety regulations: Food trucks must meet strict health and safety regulations, which can be costly and time-consuming to implement.
- Obtaining necessary permits and licenses: Obtaining necessary permits and licenses to operate a food truck can be a complex process, with requirements varying by city and state.
- Managing inventory: Managing inventory can be challenging, especially when it comes to keeping track of perishable items.
- Weather conditions: Weather conditions can have a significant impact on your business, especially if you operate in an area with harsh winters or summers. For example, you might be encouraged by high daily sales in the summertime, but have you accounted for the seasonal sales changes?
- Marketing and building a customer base: Building a loyal customer base can take time and effort, and marketing your business effectively can be challenging, especially when starting. By maintaining a solid brand, you can later transfer your loyal customer base to your restaurant if you ever decide to open one.
- Maintaining and repairing the food truck: Food trucks require regular maintenance and repairs, which can be costly and time-consuming. Nothing stays brand new for long. Make sure to keep this in mind and have some money upfront.
It’s always best to be prepared in advance. Search around the web, ask around, and make all the necessary phone calls to find out more about what you have to expect regarding costs and difficulties in your location.
In the end, starting any business requires careful planning, hard work, and dedication. Make sure to understand and prepare for these challenges to increase your chances of success.
Key Takeaways
- Food trucks can make anywhere from $250,000 to well over $500,000.
- An average food truck owner’s salary is roughly $50,000
- How much food trucks make depends on many factors, including location, size of the market, the quality of your services, and marketing.
- A food truck can cost $15,000 to $100,000 or more, depending on the size, age, and condition of the vehicle.
- Food truck owners can spend an average of $28,276 on permits, licenses, and ongoing legal compliance during their first year of operation.
- The annual wage for an employee is around $31,200
- On average, it takes 1.5-2 years for a food truck business to become profitable.
Frequently Asked Questions (FAQ)
How to Start a Food Truck Business?
Below are some of the essential steps to starting a food truck business:
- Craft a Detailed Business Plan: Dive into market research to understand food truck profit margin. This plan should encompass insights on the average income food truck operators make, your intended target audience, financial projections, and marketing strategies. Remember, without a robust plan, your food truck owner salary might not meet expectations.
- Business Registration: Look for food truck name ideas and get it officially registered with your state’s secretary of state. Additionally, secure any specific licenses and permits you need for your locale.
- Acquire a Suitable Food Truck: Either purchase or lease a truck, ensuring it adheres to health and safety standards and possesses ample space for cooking and storing supplies. Always be in line with the rules and regulations of your region.
- Design and Customize Your Truck: Collaborate with professionals to tailor the truck’s exterior and interior, making it both functional and attractive.
- Equip Your Truck: Procure or lease vital equipment and supplies. This includes cooking tools, utensils, and food ingredients.
- Create a Standout Menu: With knowledge about the average income food truck operators make, design a menu that’s both distinctive and cost-effective, ensuring your food truck profit stays healthy.
- Recruitment: Depending on your operation’s size, consider hiring chefs, cashiers, and servers to ensure smooth operations.
- Secure All Necessary Permits: Get the mandatory health department permits, sales tax licenses, and any other requisite documentation to legally run your food truck.
- Effective Marketing: Build a strategic marketing plan that spotlights your offerings and connects with your target customers, influencing your food truck owner salary positively.
Setting up a food truck business is undeniably a significant commitment. While it’s vital to be well-prepared, understanding elements like food truck profit margins can provide a clearer picture of what to anticipate. Yet, always remember, the journey will inevitably offer lessons along the way. Prepare as best as you can, and be adaptable to the dynamics of the food truck industry.
How Much Do Food Trucks Make a Month?
Food trucks can make an average of $5,000 to $20,000 per month in revenue. Keep in mind, however, that the profit margin for food trucks is dependent on factors like location, number of employees, and the food served.
How Much Do Food Trucks Make a Year?
Food truck salary ranges from $50,000 to $250,000 per year in revenue, with the larger number indicating the absolute top. Food trucks that have been in business for longer are more likely to be making more.
A 2017 Food Truck Empire survey found that some 50% of trucks made over $150,000, and 45% made anywhere between $50,000 and $149,999. Only 3% of food trucks made less than $50,000 per year.
How Much Do Food Trucks Make at Festivals?
Depending on factors like the size of the festival and the number of attendees, food trucks can make between a few hundred and $5,000 per day. The general rule is that the bigger the festival and the better the fit (e.g., music festivals), the bigger the revenue.
How Much Do Food Trucks Make in Florida?
Food trucks in Tampa Bay, Florida, can make an average of $120,000 to $200,000 annually.
How Much Do Food Trucks Make in Texas?
Food trucks in Texas can make an average of $200,000 to $500,000 per year in revenue.
How Much Do Food Trucks Make in California?
Food trucks in California can make an average of $250,000 to $500,000 per year in revenue
