In the present slow growing economy with more work pressure and short lunch breaks, the present generation has shifted towards the less expensive breakfast and lunches making the mobile food vending a growing proposition. The food truck industry has reported a remarkable growth of 9.3% over the last five years. Gone are those days when food trucks used to sale sandwich, hamburgers etc. Now you can have gourmet cuisine from food trucks at budgeted prices. While the established players in this business are making a lot of money one must have an idea of how much do food trucks make initially for planning to start a business of his own.
Factors affecting the output of the food truck business
Revenue from food truck business is dependent on several factors. It depends on size the market that is how many people are there in the close proximity to walk to your truck location for foods; the competition or the number of food trucks operating in that particular location; identity of the food served and the price you are charging. All these factors have major influence on how much do food trucks make. Like every other business some of the food truck business fails due to lack of vision on these aspects as none get a second chance to make the first impression.
How much do food trucks make?
Average revenue from food trucks is more than we can guess. In fact, there are established food truck businesses that are earning up to a thousand dollars every day. The best example is the Cousin’s Maine Lobster that is doing $8 million business through their trucks and franchises. Although, this is a typical case it also proves that there is no limit to how much do food trucks make. In order to maximize earnings from food truck business you must plan ahead and evaluate the market potentiality.
Making sales assumptions
- In case there are 1000 people around the location of your truck and 50% of them opt for buying lunch, then there will be 500 people distributed among all the food trucks vending at your particular location.
- Now if you consider a market share of 5%, then you will have only 25 buyers. Now, if the price of your lunch menu is fixed at $8 you are going to earn $200 for five days in a week.
- And if you can plan for earning another $500 per day through catering and event management at the weekends, you will be earning a total (200 x 5 + 500 x 2) dollars or $2000 a week and at this rate you are going to earn $8000 in a month.
- So, you must study the market potentiality to trace the Revenue from food truck business and have your sales assumptions ready for making necessary fund arrangements for starting the business.
The cost involvement
In comparison with the carts and kiosks, food trucks call for large initial investment.
- While you can manage to get a used food truck for around $30,000 or so; buying a new food truck may require anything from $75,000 to $100,000.
- Other than the cost of the truck you must also have permits and licenses to maximize earnings from food truck business.
- There are also operational costs like salaries, in case you need someone to assist, and the cost of fuel, utilities, cooking ingredients, printed receipts and many other associated things.
- All these will cost you several thousand dollars depending on how you want to launch the business. Food truck business survives on three prime factors: right location, quality food and sensational advertising.
With all these done, there is no reason for not having a good return on investment.
For starting a food truck business you should have in-depth knowledge of the local laws & licensing requirements, health code standards, commissaries, and the parking restrictions or else you will end up with Average revenue from food trucks. Some of the cities do not have food truck laws on the books although the law is different in different states and cities.
- Before you start battling for the business you must also know the license needed that generally include the business license, food truck license and special driving license for driving the food truck from one location to the other.
- Parking restrictions also widely differ between cities. Some cities impose minimum distance form brick and mortar restaurants. You should also be sure if you can park where the other food trucks have already parked.
- It is also better to be well conversant with the health code and safety measures to be followed including the place of preparing and storing food, waste disposal and the type of fire extinguishing arrangement required to be provided and do not forget the insurance needs that you are required to comply.
Image by Mack Male