Yes, a food truck is generally a profitable one. However, you still need to consider several factors since these things always impact the overall outcome. Of course, it all comes down to how much you earn compared to the potential revenues of your food truck.
Despite the hype, there is also strong competition from other food trucks, but also restaurants in general. So if you’re wondering how much profits you can make with a food truck, you’d have to first consider all the operating costs to run such a business. Let’s dive in!
Average Earnings and Considerations
What is the average turnover for a food truck? A 2017 study surveyed 300 full-time food truck owners in 5 US states and found that the average turnover for a food truck was $152,000.
The food truck industry has experienced exponential growth over the last few years, becoming a prominent feature in the culinary world. Each day, an average food truck serves up a variety of unique and tantalizing dishes, from gourmet burgers to international cuisine.
To help potential food truck owners figure out how much they can expect to make, we’re exploring a few critical elements of the business: startup costs, monthly costs, profit margins, and the pros and cons of the food truck model.
Startup Costs
- Getting a truck
- Used food trucks: These trucks have already been converted to mobile kitchens or they were purpose-built for mobile food prep.
- New food trucks: These trucks are purpose-built, but they don’t have any previous owners.
Operating Costs
The monthly expenses of operating a food truck will total 85-90% of your monthly sales once the business becomes profitable. For your first year or more, you might have to keep investing to make up for losses in labor, food costs, or marketing. While you can deliver great food and service, the proper financial plans solidify your food truck’s long-term success.
Profitability Insights
Factors affecting food truck profitability
- Generally speaking, a food truck makes a profit margin of around 43%.
Future trends
- Future trends in the food truck business are expected to include more creative and varied menu selections, a stronger focus on technology and online ordering, and an emphasis on sustainable and health-conscious menu items.
Industry Averages
- The food truck industry generated $2.7 billion in annual sales according to Zippia. The average food truck in the U.S. generates $76,056 in annual revenue.
Profit Potential
- While the earnings of food truck owners can vary greatly depending on factors such as location and menu offerings, it is not uncommon for successful food truck businesses to make six-figure incomes.
Realistic Earnings
To determine potential earnings, evaluate competition and pricing. Consider seasonal peaks and marketing reach when pricing meals. Also, calculate truck capacity and customers per shift.
Initial Investment
- Expect to invest $50K-$150K initially for the truck, equipment, permits, and licenses.
- Operating costs include food, fuel, insurance, staff, maintenance, and marketing.
An average food truck can make $250K-$500K annually.
Location and Operating Strategies
- Location impacts earnings. High-traffic areas and events like concerts and festivals can increase profits.
- Partnering with breweries and bars also expands your customer reach.
- Operating costs like food, staff, marketing, and maintenance affect profitability too. It’s essential to find a place with a large customer base to maximize earnings.
Starting a Food Truck
A successful food truck can bring in over $500K yearly, with around $40K in startup costs. Opening a food truck involves:
- Getting necessary permits and licenses
- Purchasing and customizing your food truck
- Developing menus and sourcing ingredients
- Hiring staff
- Scouting locations with foot traffic
- Marketing your truck
Challenges
- Breaking into the crowded food truck market. Long hours on maintenance and operations are demanding. Zoning laws must be followed. High permit costs in some cities limit trucks.
Tips for Success
- Trucks with gourmet or ethnic cuisines often thrive. Unique menus or dietary offerings also do well, like fusion concepts. Excellent service and food can overcome a lack of creativity.
- Reduce costs, offer specials and catering, partner with delivery services, and build customer loyalty to maximize success.
Profit Variances
- In large cities, monthly sales average $20K-$50K. Smaller towns see $5K-$16K on average. Profits average $1K-$2K daily, influenced by season.