A Cost of Starting a Coffee Truck Business

“Quick summary” The popularity of food trucks has been skyrocketing across the globe these days! And one of the main reasons food trucks have achieved such popularity within a short period is due to higher flexibility and lesser costs.

In this fast-paced world, where trends are changing at a breakneck pace. But one such trend that is here to say is the food truck coffee business. Customers are willing to buy from food trucks rather than traditional coffee shops because of the convenience and lesser costs comparatively.

These movable food places have achieved great popularity amongst teenagers due to their better taste, convenience, quality, and affordable rates.

As per the stats, these food/coffee trucks are mainly popular amongst people who fall in the age group of 18-34.

So, if you also have a good hand at making different types of delicious coffees, then it’s time to put those skills to good use. You can kick-start your food truck coffee business with a lesser capital investment while still earning higher returns!

But then comes the most important question: How Much Does It Cost to Start a Coffee Truck?

If you are wondering the same, this blog will provide a comprehensive overview of each cost involved.

Let’s get started.

What is Coffee Truck Business?

Before getting to the critical questions regarding how much it costs to start a coffee truck business or its profitability, let’s understand the basics first.

What is a food truck coffee business, and how does it operate?

Coffee truck business owns a food truck that mainly serves ‘Coffee’ or different varieties via food truck. Unlike traditional brick-and-mortar restaurants, coffee food trucks bring their kitchen on wheels to different locations, providing customers with a convenient and unique coffee experience.

Coffee truck business is one of the rapidly-growing segments in the field of Food Trucks. They provide different types of coffee, such as espresso, cappuccinos, lattes, and various flavored coffees, along with other related products like pastries, sandwiches, and snacks.

It is also cost-efficient for coffee shop owners, as it requires less investment to get started than a traditional brick-and-mortar coffee shop. It’s a win-win for both customers and restaurant owners as a whole.

Such ‘on-the-move cafes’ are set up within customized vans, trucks, or trailers, so that it is available for customers on the go, fulfilling their craving for delicious coffee.

Let’s understand more about the rising popularity of these coffee shops and how much they cost.

Coffee Food Trucks Are On The Rise

Coffee food trucks are on the rise and showing no signs of slowing down.

But, who so?

Coffee has become a quintessential part of the lives of people who have busy and hectic schedules. And these mobile coffee shops offer a convenient and unique way for coffee enthusiasts to enjoy their favorite brews on the go.

Here are some of the benefits of starting a coffee truck business:

• Lesser Costs: As compared to the typical coffee shops or cafes, starting a coffee food truck costs way less, as it requires fewer set-up expenses on the furniture, buying or renting huge brick & mortar stores, electricity, staffing, getting certain licenses, and other maintenance costs.
• Higher Flexibility: As your coffee business is on the wheels, you can easily move from one place to another - attracting a huge customer base. You can change the location of your business, unlike traditional coffee shops. Hence, it helps you in finding the best-suited location for your business, which helps in generating more revenue.
• Increased Adaptability: Coffee trucks are adaptable to changing trends and customer preferences. They can easily modify your menu, introduce seasonal offerings, or respond to emerging coffee trends. If it's successful, they can continue; if not, they can move ahead.
• Higher Profits: You can earn a higher average income for a food truck business because of increased profits through lower overhead costs, efficient operations, targeted marketing, seasonal opportunities, upselling, and scalability. By leveraging mobility, cost savings, and strategic marketing, coffee trucks have the potential to generate higher profitability compared to traditional establishments.

How Much Does It Cost to Start a Coffee Truck

Here comes the most important part of opening a coffee food truck, i.e., cost.

So many factors affect the total cost to start a coffee food truck business, such as state or city, the cost and quality of equipment and supplies, staff salaries, and other things around. Still, to give you a rough estimate - you can expect to spend around $80,000 to $300,000.

One of the main factors that could affect your budget for opening a coffee food truck is the ‘Truck,’ which can cost you somewhere between $45,000 to $160,000. However, you can also go for a pre-owned food truck if you don’t wish to invest a huge portion of money only in the truck. Pre-owned trucks can cost around $20,000 to $80,000, depending on their size and condition.

You also need to incur other expenses to start your coffee truck, which includes costs such as:

• Equipment ($10,000 to $30,000+)
• Truck customization ($5,000 to $30,000+)
• Permits and licenses ($500 to $5,000+)
• Branding and signage ($2,000 to $10,000+)
• Initial inventory ($2,000 to $5,000+)

And much more.

However, these are just average estimates. Read out the full blog to know more about the basic costs associated with starting a food truck business.

Is Coffee Food Truck a Profitable Business?

One should keep in mind before putting their hard-earned money into something or opting for a start-up: Income. One of the biggest concerns of people who are willing to own or start a coffee/food truck is the profitability and the average income of the food truck business.

So, let’s find out, would it be profitable to start a coffee food truck? Well, here’s the answer.

Starting a coffee food truck can surely be a profitable business idea, but it's essential to set realistic expectations when it comes to profitability. In the short run, food truck businesses, including coffee trucks, may face initial challenges and higher startup costs.

However, despite the initial challenges, coffee food trucks have the potential to be highly profitable in the long run. The coffee industry, in general, is known for its consistent demand, as an average US citizen consumes approximately 3.5 cups of coffee per day.

With a well-located and well-branded coffee food truck, you can tap into this demand and potentially sell a significant number of cups of coffee each week.

So, with consistent taste, proper branding & marketing backed by robust customer services - you can operate a highly profitable coffee truck business.

10 Things to Consider Before Starting Your Own Coffee Truck!

Starting your own coffee truck is a popular and cost-efficient business idea. However, every business (Including a coffee truck) still requires comprehensive planning and consideration of so many important things to get started and run a profitable coffee truck. And, also, how much do these things cost?

Below, we will list the top 10 crucial considerations you need to keep in mind before starting your coffee truck, along with estimated figures on how much it costs. We have included everything - right from operational and payroll expenses to equipment and maintenance; we have got you covered.

Keep reading!

1. Planning and Preparation

Planning and preparation play a significant role in any business, and coffee trucks are no exception. That’s why it's necessary to keep in mind the planning and preparation costs while starting a coffee food truck.

Here are some things you need to consider before starting your coffee truck:

• Food Truck/Van: The main expense in starting your coffee truck is getting a food truck/van. As we discussed, food trucks take up a considerable huge percentage of total startup expenses.
• Licenses & Permits: It is necessary to know the laws & regulations of the states you’re going to operate in. Having this knowledge helps you determine which licenses you need to get in your state and city. You also need to consider factors such as the cost of permits and licenses that are applicable if you are going to operate in multiple locations throughout the city as well as the state.
• Miscellaneous Expenses: Don't forget to include miscellaneous costs such as accounting services, legal fees, business insurance, and contingencies.

2. Operational Costs

After starting your coffee truck business, you also need to incur ongoing operational expenses. The total operational costs would range from $3000 To $10000. It's essential for coffee truck owners to carefully monitor and budget for these operational costs to ensure the business remains profitable.

Here are some of the coon operational costs for your coffee truck business that you need to need to deal with:

• Ingredients and Supplies: $500 to $1,500 per month, depending on the sales volume and menu offerings.
• Labor Costs: $1,000 to $4,000+ per month, depending on the number of employees and their wages.
• Fuel and Vehicle Maintenance: $300 to $800 monthly, depending on the distance traveled and vehicle condition.
• Insurance: $1,000 to $2,500 annually, depending on coverage and risk factors.
• Rent or Parking Fees: $200 to $500 monthly, depending on the location and parking arrangements.
• Marketing and Advertising: $200 to $1,000 monthly, depending on the scale and strategy.
• Utilities: $50 to $200 per month, depending on the usage and additional equipment.
• Miscellaneous Expenses: $100 to $300 per month, depending on the business's needs.

Note: These are just estimated costs to start a coffee truck, and the numbers will vary based on so many factors such as The size of the business, location, number of customers, number of staff members, distance, etc.

3. Ingredients

The most basic yet crucial part of this business is ingredients. You’d not want to compromise in terms of the quality of these ingredients or the coffee you’re going to serve the consumers.

A Quick Tip: It is mandatory to have enough supplies and ingredients in your inventory to ensure consistent and satisfactory customer services

Given below is a list of all essential ingredients along with their expected cost:

• Coffee Beans: The cost varies depending on the type and quality of beans you choose - average cost: $10 - $20 per pound.
• Milk (Dairy and Non-Dairy): The cost depends on the type of milk (whole, skim, almond, soy, etc.) and brand-average cost: $3 - $5 per gallon.
• Syrups: Flavored syrups like vanilla, caramel, hazelnut, etc. Cost varies by brand and size-average cost: $10 - $15 per 750ml bottle.
• Sweeteners: White sugar, brown sugar, honey, artificial sweeteners, etc. Cost varies by brand and packaging-average cost: $2 - $5 per pound.
• Whipped Cream: Canned whipped cream cost varies by brand and quantity; average cost: $3 - $8 per can.
• Cups and Lids: Disposable coffee cups and lids can cost you around $0.10 - $0.25 per cup and lid.
• Stirrers and Straws: Wooden or plastic stirrers and straws can cost $2 - $5 per pack.
• Napkins: Paper napkins for customers can cost around $5 - $10 per pack.

The cost of your inventory can vary as per the number of ingredients; you can expect an average investment of $1000 to $2500 in your inventory if you want it to be filled with ample goods and ingredients.

4. Employee Salaries

Running a coffee truck involves hefty expenses for employee salaries, insurance, training, and other related expenses. So, while considering costs, you need to take all the costs associated with hiring and retaining staff.

The salaries or wages of an employee working on a coffee/food truck can depend on different factors such as job role, experience, location, and business size.

Here are some general figures you need to pay when you hire staff for your coffee truck business:

• Cashiers and servers often earn on an hourly wage basis in addition to tips. You can expect to pay your cashier or server $8 to $15 per hour.
• For Baristas, usually, you can expect to pay $8 to $12 per hour with limited experience. This amount increases to $10 to $15 per hour if the barista you hire has ample experience and skills.
• The typical hourly pay for a supervisor is $13.91, ranging from $10.36 to $20.09, while for a manager, it is $16.63, ranging from $12.40 to $23.22.

Employee earnings are also affected by location. The state and location have an impact on the wage rates. For instance, a worker in New York City will make more money than a worker in a tiny Midwest town. Employers are required to pay employees the minimum wage as outlined by federal and state regulations.

So, consider every factor in mind and decide the pay accordingly.

5. Fuel, Parking & Maintenance Costs

The cost of your fuel and parking depends on the distance you are going to drive your truck and where you choose to park it and sell your food and beverages. However, you may need to keep changing your budget regularly because, at some places, you can park for free, while at other locations, you need to pay a certain amount.

• Fuel Expenses: An average food truck would provide you with a mileage of 8-10 miles per gallon, and the fuel prices may vary as per the current city/state you’re in, and the fuel prices would fluctuate over time.

  For instance, you can assume the average fuel price is $0.30/gallon, which would make your fuel expense $30/week if the food truck travels 100 miles.

• Parking & Maintenance: costs are also something that should be considered while starting a food truck. While some cities/states have dedicated parking spaces or zones for food trucks that are charged on an hourly basis, other cities and states may require permits.

  On average, you can expect to pay $50 to $200 per month for parking. However, these charges can vary based on location and locality.

• Regular Maintenance: The maintenance cost of your food truck is also necessary if you want your food truck to run smoothly over the years and extend its life. Maintenance costs include tire replacements, engine maintenance, regular washing, thorough cleaning, oil change, etc.

  It’s suggested to invest approximately 10-15% of your food truck’s purchasing price in its annual maintenance. It means you can expect an approximate monthly maintenance expenditure of $500-$1200.

6. Equipment & Supplies

Equipment & supplies for your food truck are some of the crucial things that you need to keep in mind and will take up a considerable amount of the total budget.

Given below is a list of all the necessary equipment that is required to start a food/coffee truck:

• Espresso Machine: $2,000 - $10,000 or more.
• Grinders: $200 to $2000.
• Oven: $500 - $5,000 or more.
• Deep Fryer: $500 - $2,000 or more.
• Commercial Mixer and Grinders: $500 - $3,000 or more.
• Food Processor: $200 - $1,000 or more.
• Commercial Blender: $100 - $500 or more.
• Freezer: $1,000 - $5,000 or more.
• Sinks: $200 - $1,000 or more.
• Storage Units: $100 - $1,000 or more.
• POS System: $1,000 - $5,000 or more.
• Cutting Boards: $20 - $100 or more.
• Heat Lamps: $100 - $300 or more.
• Exhaust Hood and Ventilation System: $3,000 - $10,000 or more.
• Fire Suppressors: $500 - $2,000 or more.

These are some inevitable pieces of equipment and machines if you’re willing to start a coffee food truck.

Note: Bear in mind that these are just approximate figures, and the actual cost of this equipment and machines vary as per their sizes, working, and the specifications you’re looking for.

7. License & Permit

Starting a business requires obtaining a variety of licenses and permits in order to operate legally (coffee truck operations are not an exception).

Based on the size and scope of your business, you must also consider the expense of getting the essential permits and licenses for running a coffee truck.

Sure, here are some of the common licenses and permits, along with their approximate costs:

• Zoning Permits: $100 to $500
• Tax Registration (EIN): Free
• Health and Safety License: $50 to $150
• Food Permit: $100 to $1,000
• Beverage Permit: $300 to $1,500
• General Business License: $50 to $400
• Commercial Driver’s License (CDL): $75 to $100
• Signage Permit: $50 to $200
• Proof of Ownership, Proper Identification, and Vehicle License: Costs vary depending on the state and vehicle type.

These are just the approximate costs; the exact cost to start a coffee truck will vary based on location. Depending on your location, you may need to obtain additional permits from local municipal officials.

Overall, obtaining licenses and permissions may necessitate a considerable financial investment.

8. Insurance Coverage

Insurance plays a significant role in protecting your business from legal concerns, and you need to spend some proportion of your total capital on getting the necessary insurance coverage.

Here are some of the general insurance coverage you will need for your food truck business:

• Commercial Auto Insurance: This type of insurance covers your coffee truck in case of accidents, colloids, or any damage that is caused to your truck/van while you’re on the road.
• General Liability Insurance: This insurance provides coverage if a third party faces any injury or property damage because of your coffee truck.
• Product Liability Insurance: This type of insurance is helpful if your customer gets sick because of food, coffee, or other beverages.
• Worker’s Compensation Insurance: It is mandatory insurance and offers reimbursement if your employee is insured at the workplace.
• Property Insurance: This insurance provides coverage for the food truck business's physical assets, including machinery, equipment, food truck, inventory, etc. This insurance provides coverage and protection against loss due to fire, theft, vandalism, etc.

However, these insurance charges can vary on multiple factors such as the type of coverage, value of vehicle and equipment, level of risk associated with the type of operations that’ll be conducted, and business’s past. In general, you can expect an expenditure of $2000-$4000 per annum.

9. Creative Branding and Design

In these digital times, creative branding, digital marketing, and appealing designs are quite crucial for your coffee truck business. These digital marketing tactics play a significant role in attracting customers to your Coffee Truck Business while driving sales and revenue.

It's crucial to consider marketing expenses when starting a new coffee truck business. This price can range from hundreds to thousands of dollars, depending on the kind of scope of marketing, your marketing company, etc.

An article on Entrepreneur.com stated that "an effective marketing strategy can cost anywhere from $2,000 to $20,000 or more.

Here are the approximate costs for the marketing expenses to start your coffee truck business:

• Branding design and creation: $500 to $5,000+
• Flyers and business cards: $100 to $500
• Vehicle wrap and signage: $1,000 to $5,000+
• Event participation fees: $100 to $10,000+
• Sponsorship and collaborations: Costs vary widely
• Initial promotions and discounts: Costs vary widely
• Website development & optimization: $1,000 to $10,000+

Note: These costs are approximate and can vary based on various factors. Getting specific quotes from relevant service providers is essential to get accurate cost estimates for your marketing expenses.

However, with the correct techniques and planning, you can effectively promote your brand and attract more clients.

10. Social Media Marketing & Influencer Marketing

Social media marketing can be a cost-effective way to reach a wider audience and build brand awareness for your coffee truck business. Careful planning, creativity, and consistent efforts can help you make the most of your social media marketing budget.

The costs for social media marketing and influencer marketing for a coffee truck business can vary depending on the scale of the campaign, the platforms used, the number and popularity of influencers, and the desired outcomes.

Here are some approximate cost ranges for each marketing approach:

• Content Creation: $100 to $500 monthly for high-quality images, videos, and graphics for social media posts.
• Social Media Management: $300 to $1,000 monthly for hiring a social media manager or using social media management tools to schedule and engage with posts.
• Social Media Advertising: $200 to $1,000+ monthly for paid advertising on platforms like Facebook, Instagram, and Twitter. Costs can vary based on the target audience, ad type, and ad spend.
• Influencer Marketing: Hiring influencers based in your niche & locality plays a crucial role in boosting your business visibility and revenues ultimately. However, there are different types of influencers, and their charges also vary accordingly.

1. Micro-Influencers: $100 to $500 per post. (Having 10K to 50K followers)
2. Mid-Tier Influencers: $500 to $2,000 per post. (Having 50k to 1Mn followers)
3. Macro-Influencers: $2,000 to $10,000+ per post. (Having & more followers)

Keep in mind that these are rough estimates, and costs can vary based on negotiation, the length of the campaign, and the specific influencers or social media marketing agency you work with.

Conclusion

To wrap up, it is obvious that coffee food truck businesses are quite common, and their popularity is increasing at a breakneck speed.

The reasons behind its exponential increase in popularity are mobility, flexibility, adaptability to trends, along with cheaper & better quality coffee on the go. These added benefits make it more convenient for food truck owners to operate a profitable business and for customers to enjoy hot and fresh coffee by wasting less money and time!

All these considerations and costs might seem daunting, but these are just initial investments in starting a successful coffee truck business.

Amongst all this, don’t forget to get a reliable POS system to streamline the payments and track customer data while even getting know-how about your income and expenses for the coffee truck business.

If you are looking for the best POS system with out-of-the-box features at affordable rates, then reach out to OVVI. Our team will understand your requirements and guide you accordingly.