A Complete Guide on How Much Food Trucks Make.

“Quick summary” Food trucks have become a popular and profitable business venture for many entrepreneurs.

However, the amount of money a food truck makes can vary greatly depending on various factors.

Not having to pay facility rent or deal with dining room maintenance would be an obvious way to save money, but how much money are these food trucks making? Are food truck entrepreneurs making money or barely getting by in the face of so much competition?

The average food truck income per day or month is difficult to forecast due to location, food type, operational expenses, and the owner's business acumen.

While some operators of food trucks are successful, others find it tough to generate business profit.

This blog will look at several topics to simplify food truck financials.

The revenues of food truck owners will vary based on different factors!

The amount of money a food truck can make can vary greatly depending on location, type of food, and operational costs. Food trucks that operate in high-traffic areas serve popular or unique foods and keep their costs low can expect to make more money.

Location: Location is crucial in determining how much a food truck can make. Food trucks that operate in high-traffic areas such as downtown business districts or popular events can expect to make more money than those in less populated areas.

Additionally, food trucks that operate in areas with a high concentration of food trucks may face more competition and lower profits.

Type of Menu: Another important factor to consider is the food the truck serves. Food trucks that serve popular, trendy, or unique foods can expect to make more money than those that serve more common or basic food items.

Additionally, food trucks that offer various menu options may charge higher prices and make more money than those with a limited menu.

Expenses: The average cost of food truck operations can also affect profits. Factors such as the cost of ingredients, labor, and equipment can impact how much a food truck makes. Food trucks that can keep their costs low will be able to make more money than those that have higher expenses.

How much does it cost to start a food truck business?

The cost to start a food truck can vary widely, ranging from $50,000 to $200,000, depending on the truck's size, the equipment and appliances installed, and other factors such as location and permits. On the lower end, a basic food truck with used equipment can cost around $50,000, while a high-end truck with all the bells and whistles can cost $200,000 or more.

• Truck: The truck's type and size will also affect the overall cost, whether you buy a new one or use the old one. 
• Equipment: The type and quality of the kitchen equipment, appliances, and storage needed will affect the cost.
• Permits and Licenses: The cost of obtaining necessary permits and licenses varies by location.
• Marketing and branding: The cost of creating a brand and promoting the truck, such as signage, business cards, and promotional items, will affect the cost.
• Food and supplies: The cost of ingredients, packaging, and other necessary supplies for the menu and your food truck business will affect the cost.
• Labor: The cost of hiring and training employees will affect the cost. How many employees you will need to manage your food truck business is another important consideration affecting the cost of starting a food truck. 

Related Blog: How to start a food business?

Planning for your first year in the food truck business! 

The first year is said to be the base year for your newly found food truck business. So, make sure you keep your expenses to a bare minimum while even making the best out of them. 

• Make a list of all expenses: Create a comprehensive list of all the expenses you can anticipate in the first year of business, including truck purchase/lease, equipment, permits, licenses, insurance, marketing, branding, food and supplies, labor, and maintenance.
• Research costs: Research the cost of each item on your list and get quotes where possible.
• Create a budget: Based on your research, create a detailed budget for the first year of operation and stick to it, including start-up and operating expenses. 
• Plan the future: Plan for unexpected expenses, such as equipment repairs or marketing campaigns, so you won't have to worry later on, and you have everything in control.
• Seek funding: If necessary, consider seeking funding from sources such as loans, grants, or investment capital to cover your start-up costs.
• Monitor expenses: Regularly monitor them and compare them to your budget to ensure you stay on track financially.

Average food truck costs to get started!

The average costs included to start your food truck business are as follows:

• Truck: The average cost of a food truck can range from $50,000 to $100,000, depending on the size and equipment included.
• Equipment: The average cost of kitchen equipment, appliances, and storage for a food truck can range from $10,000 to $50,000.
• Permits and licenses: The average cost of obtaining necessary permits and licenses can range from $500 to $2,500, depending on location.
• Insurance: The average cost of insurance coverage for a food truck business can range from $1,000 to $5,000 per year.
• Marketing and branding: The average cost of creating a brand and promoting the truck can range from $2,000 to $5,000.
• Food and supplies: The average monthly cost for food truck ingredients, packaging, and supplies can range from $2,000 to $5,000.
• Labor: The average food truck cost in hiring and training employees can range from $20,000 to $30,000 per year, including wages, taxes, and benefits.
• Maintenance and repairs: The average food truck's monthly income for maintenance and repairs can range from $500 to $1,500.
• Other operational costs - Operational costs would include electricity bills, parking, fuel requirement, etc., which cost around $500 to $2000.  

It's important to note that these are just rough estimates, and the actual costs for your food truck business may be higher or lower depending on various factors, such as the size and location of your business.

Related Blog: How much does a POS system cost?

Forecasting your food truck's sales

Forecasting food truck sales involves estimating future sales based on various factors. 

To forecast food truck sales consider the following process:

Average preparation time: You can easily set up a simulation in your kitchen at home and clock how long it takes you to prepare each dish. Assume that each item takes, on average, 4 minutes to complete.

Average distribution every hour: If your average dish takes 4 minutes to prepare, the food truck might serve up to 15 clients per hour, multiplied by the number of cooks. If you have two cooks who can serve 15 clients per hour, your food truck can accommodate 30 customers per hour.

Count your working hours: Work out how many hours you typically put in each day. You can multiply the number of hours you work every hour by the number of hours in a day.

Calculate the average value per customer: Again, establish the prices and base your estimate of this spend per customer on previous method sales or even sales made by competitors.

Determine your average come per day, month & year: To determine your sales, multiply the number of daily clients by the projected average ticket price to determine your daily, monthly, and annual income.

The average food truck revenue!

The average yearly revenue of a food truck business can range widely, depending on factors such as location, menu offerings, operating costs, and customer demand. 

However, a rough estimate is between $50,000 and $200,000 per year. This range considers high-performing trucks with strong sales and those with lower revenue. 

On the lower end, a food truck operating in a less busy location with lower operating costs may bring in $50,000 to $80,000 annually. 

On the higher end, a truck with a prime location, popular menu offerings, and high demand could generate $150,000 to $200,000 or more in annual revenue. It's important to remember that this is just an average, and actual revenue can vary greatly.

Related Blog: How much does a pos system cost?

Food truck business profit margin per month

The monthly profit margin of a food truck business can vary greatly, but it typically ranges from 5-20% of gross revenue. Food and labor costs, overhead expenses, and local competition will influence this margin.

For example, a food truck with a lower overhead cost and higher demand may have a profit margin of 15-20%, while a truck with higher overhead costs and lower demand may only have a profit margin of 5-10%. It's important to keep in mind that these are rough estimates, and actual profit margins can vary greatly.

Again, these are approximate figures and can vary from business to business.

Related Blog: How to drive restaurant profit growth with a POS system?

How much does a food truck owner make? 

The salary of a food truck owner can vary greatly, depending on the individual's experience, operating costs, revenue, and profit margins.

In many cases, food truck owners may not draw a traditional salary, instead using their profits to cover living expenses and reinvest in the business. 

According to a survey, the average food truck owner earns between $25,000 and $150,000 yearly.

It's critical to keep a portion of the truck's income on hand for future investments in the business or to set aside as a reserve for costs and maintenance. Because of this, the owner's compensation for a food truck is typically less than 50% of the revenues.

Expected timelines for food truck business to generate profits! 

The amount of time it takes for a food truck business to become profitable can vary greatly and depends on several factors, such as average food truck costs, revenue, competition, and demand. 

On average, it can take 6 months to 2 years for a food truck business to become profitable. However, depending on their specific circumstances, some businesses may become profitable sooner or take longer. It's important to remember that this is just an average, and actual time to profitability can vary greatly.

Check out some tips to boost food truck sales! 

Here are some tips to boost food truck sales:

• Offer high-quality food and excellent customer service.
• Have a strong social media presence and promote your business online.
• Utilize technology through a best-in-class POS system, such as online ordering and robust payments.
• Offer unique menu items that set your truck apart from others.
• Establish a loyal customer base through frequent customer engagement and special promotions.
• Target high-traffic areas and events to increase visibility and attract customers.
• Partner with local businesses and restaurants to cross-promote each other.
• Seek out positive online reviews and respond to customer feedback.
• Maintain a clean and well-maintained truck, both inside and out. 
• Make unique combos and add them to your menu to increase average orders and profitability. 

Conclusion

Here, we are wrapping the blog on "How much do food trucks make." This blog proves helpful and gives you a rough estimate of the cost to start a food truck business, profitability, margins, and other things.  

Starting a food truck business is a huge step and will need a solid market understanding, a lot of patience, and a detailed business plan. 

There are problems in this market, just as in any other industry, and only some people thrive. To enhance your food truck profitability, consider a few things, from conducting market research to selecting the best location and having a safety net.

It's all about finding balance, and if you do things correctly, there's no reason why you cannot avail profit from your food truck business.

For further guidance, you can reach out to our experts at OVVI, and they would love to offer a helping hand.