The Hidden Cost of Opening & Operating a Food Truck (Part 2)
In part one of this series, we looked at the hidden costs associated with just getting into business and bringing our brand up to speed with the necessary tools to give people a place to find us when we’re not open. We got a website, registered our legal business name, designed a company logo and bought business cards.
This installment will focus on the costs associated with our food truck. Now, not everything will be the same for you depending on your food concept and local requirements but this should give you a good idea of exactly how much it’s going to cost to get started…
- The Truck – this is the bulk of your start-up expense. We purchased our truck from a food truck builder called Food Trucks South. We researched several different options and chose this company because they could hit the delivery window (6-8 weeks) that we requested with the equipment we needed to execute our menu. Delivery on the truck was late by 3-4 weeks and there were some hidden costs but overall, they communicated well throughout the process and delivered a quality product. Our truck build cost $80,000.
- The Wrap – most of the trucks that are being converted into food trucks don’t come with all the colorful graphics you see when they are finished. The graphics are put on the truck with a vehicle wrap. Pricing will vary depending on the size of your truck and if you are doing a full or partial wrap. We opted for the full wrap to get our all over black color. We paid just over $3,000 for our wrap.
- Artwork – even though you may already have a logo, you’re going to need to incorporate that logo into a new piece of artwork to complete the wrap. The company doing the wrap with typically have an artist that will do the layout and proofing for you but it comes at a cost. Expect to pay upwards of $500 for just the artwork layout, especially if you make a lot of revisions along the way.
- Truck Transport – your food truck builder should have a relationship with a company that complete the transport of your truck. If you’re buying from someone who is getting out of the business, you’ll want to do your research on who can get you the truck the quickest and least expensive way. Our builder called a transport company that specialized in long hauls of oversized items. While transport was included in our original quote, you could expect to pay upwards of $3,000 for delivery of your food truck.
- Insurance – this one is a must. You need to check with your builder or seller to see when you take ownership of the truck once a purchase or agreement has been made. You’ll want to make sure this investment is insured. We worked with Progressive Commercial to insure our food truck and we pay about $1,200 each year to maintain insurance. In addition to motor vehicle insurance, it’s also a great idea to have a liability policy in case anyone gets hurt or sick and blames you. We started with the Food Liability Insurance Program and eventually graduated to Liberty Mutual once we opened our restaurant. We paid $299 our first and second years in business and were covered for everything we needed to be.
- Cooking Equipment – our truck price included the major appliances (make sure yours does too) like fridge, freezer, sandwich prep station, range, oven and fryers. What it didn’t include was all the tools necessary to make use of those appliances. We purchased pots, pans, utensils, quart containers, a French fry cutter, knives, spatulas and more! We found The Webstaurant Store to be the least expensive option even when compared to Amazon and other online outlets. Here’s a link to the actual invoice so you can see everything on that purchase that got us started. Just more than $1,800 of stuff.
- Service Items – the invoice linked above also includes all the service items we needed like napkins, straws, plastic ware, boats and cups. You can decide what’s right for your menu concept but make sure your service items translate to your food.
- Gas – this one seems obvious but we didn’t realize how much gas our truck was going to use! Our core business is lunch service 4 days a week and that meant filling our gas tank at least once each week at a $60 charge. In addition to fuel for the truck, we also buy propane for the cooking equipment. That’s another $50-$60 every 8-10 days of operation. Our truck was designed for the generator that’s included to run off the fuel from the truck but if yours isn’t directly tied into the gas line, make sure to factor your generator in to your numbers.
- Registration – the state of Pennsylvania requires us to renew our registration every year. That costs about $450 every time renewal comes around.
- Title Transfer & Sales Tax – since you’re buying a vehicle, you’ll need to consider the title and plate transfer fees along with state sales tax. This will vary depending on your state but we had to pay 6% sales tax in Pennsylvania and a $50 title transfer fee.
- Health Inspection – this will vary depending on your state or local laws but in Pennsylvania, we paid just over $250 for all of the health inspections necessary for us to do business. We also had to submit plans for the truck, a complete equipment listing and a 5-7 page application to the Department of Agriculture.
- Commissary Kitchen – most health departments will require you to do your prep work and food storage in a commissary (or shared) kitchen that is approved by the health department. If you already have a restaurant kitchen, you won’t have to worry about this additional expense. Because we serve such a small, mostly rural, market, there were no commissary kitchens within a reasonable distance. We ended up partnering with a few local churches that had commercial kitchens in their basement. This cost us about $25/week which was a steal!
- Parking Spots – this one will depend on your area and who you decide to partner with on parking arrangements. We were very lucky and only had to pay to park in one spot that we used ($50/day). We ended up partnering with local business owners who were willing to let us park in their lots for a few hours one time a week in exchange for a free lunch when we did. Try to partner with places that already have a ton of traffic driving by on a daily basis. Not only will it increase your daily sales as people make impulse decisions to stop and grab a bite to eat but it will also increase your exposure for catering and other event related calls. Your truck is a moving billboard!
- Fire Extinguishers – this was one of those things that seem obvious but that we forgot about until it was time to hit the street. Money was low at the time so this hidden and forgotten cost hurt a little more than normal. The size and type of extinguishers necessary for our truck cost about $500.
- Garbage Cans – if you’re lucky enough to park in a location with outdoor seating, you’ll want to be sure and have a garbage can so your customers can throw away their napkins, cups and boats once they’ve enjoyed your delicious food. You can pick one up at any home improvement store or Wal-Mart for $30-60 depending on size and weight. Don’t forget the bags too!
- Water – this isn’t a direct and immediate cost that you will realize but filling up your food truck with water for service can lead to surprise on your water bill. Ours doubled which meant an increase of about $35.
- Electricity – if you’re going to store food in your truck appliances overnight and into the next day of service, you’re either going to have to keep the generator running all night (not recommended) or plug in your truck. We found it necessary to plug in more nights than not and this hiked the electric bill by about $300 each month!
I think that about covers it. We started this series by encouraging you to measure twice and cut once. Hopefully you have a much clearer picture on exactly what you need to measure before you start cutting your teeth in the food truck business.
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