Professionals Guide to Starting a Food Truck

Starting a Food Truck

While the food truck craze has settled down in 2019, starting a new food truck is still a great option for up-and-coming chefs. Not sure where to start? Buying and outfitting a food truck can be a daunting task, but it’s definitely manageable if you take it one step at a time.

In this walkthrough, we’ll guide you through the entire process, from finding a quality truck to setting up your kitchen. By the end of this deep dive, you’ll be ready to hit the road and cook up a storm.

Buying or Renting

A barebones food truck can cost tens of thousands of dollars, but that doesn’t include the kitchen installation and any other customization. By the time your truck is ready for primetime, you will have invested anywhere between $50,000 to $200,000. You can definitely do a food truck on a budget, but you also need to make sure that the transportation is reliable and the kitchen equipment is built to last. From start to finish, the average food truck buildout will be in the $70,000 to $120,000 range.

If you’re planning to buy a food truck, you’ll probably need to apply for a business loan. Before shopping for the truck, find out what kind of financing you qualify for, as well as what permits and licenses are required in your city/state.

After getting approved for a loan, you can choose to buy new, buy used, or lease a truck temporarily. Leasing is a smart option for aspiring chefs that want to give the food truck lifestyle a try, or for established chefs who want to experiment with a new culinary concept. It’s way less daunting when you’re not locked into a massive loan, and only have to worry about making monthly payments. You might be able to find a newer, fully outfitted food truck this way, without making a huge upfront investment. The only downside is when the lease expires, you’ll need to find a new truck to use. Check to see that your lease agreement has a lease-to-own or renewal option.

Once you’ve decided whether to buy or lease, it’s time to track down a food truck dealer. Of course, you can make a purchase via an online platform like Craigslist, but you may end up with a truck that needs costly repairs. There’s a lot more risk when buying from a private party, which is why we recommend using a company like FoodTrucks.net or Prestige Food Trucks. You can search through their current food truck inventory, order a custom truck, and lease vehicles as well.

Buying New vs Used

The difference between buying a new or used food truck can be massive. In most cases, you’ll be buying a basic truck and converting it into a rolling kitchen, which can cost $60,000 or more. That expense is pretty much baked into the food truck investment (unless you’re leasing an existing food truck). If the cost of buying a truck is $40,000, your food truck will cost at least $100,000 to get off the ground. This is why it generally makes more sense to buy a used truck, and then using the rest of your money on equipment, licenses, insurance, and other startup expenses.

Here are some additional pros and cons of buying new vs. used:

  • New trucks tend to have more potential for customization
  • Buying new will save you money on repairs, and you don’t have to investigate a previous owner’s wear and tear
  • New trucks have longer warranties
  • Used trucks have less options for customization, so the buildout process is less complex

Setting Up Your Kitchen

Starting a food truck businesses that reach profitability has a lot to do with the kitchen equipment you invest in. For chefs who can afford it, we highly recommend going with a reputable food truck manufacturer for this part of the process. Typically, you can call the manufacturer and tell them what kind of food you want to cook, what your budget is, and what equipment you like to use. From there, the company will create a custom blueprint for your food truck and share it with you, so you can make adjustments before they start construction.

When customizing your food truck, you should decide whether you’ll need a sandwich grill, countertop fryer, refrigerated prep table, and a pizza oven. Perhaps you’re not cooking pizza, but you are serving ice cream, so you’ll need plenty of freezer space. It all depends on your food truck concept.

After a few months, your dream food truck will be built and nearly ready for the streets. The last thing you need to do is apply for business permits and insurance for the truck. Then, you can start selling those gourmet grilled cheese sandwiches that’ll change the world.

Customizing Options

During the design process, there are a few customization options that are worth considering for your truck:

  • Security Awning: This sliding cover protects your food truck from vandalism and theft when it’s not in operation. Typically, the awning covers all windows, doors, and valuable electronics like speakers and TVs. You can also use the awning as a branding surface for your business, even when you’re not serving food.
  • Flat Screen TV: This is a relatively affordable add-on for food truck owners that want to market their specials, show HD photos of their food, or re-play press coverage to entice prospective diners. If you’re going to invest in a TV, we also recommend installing speakers so that you can attract crowds with some upbeat music.
  • Retractable Awning: Protect customers from sun, rain, or snow while they’re waiting in line. This is well worth the initial investment, especially if you’re serving food in an area with unpredictable weather.
  • Vinyl Wrap: Most food truck owners will want to work with a professional designer to create a logo for their business, as well as a graphic that wraps around the truck. Typically, it includes illustrations, photos, menus, and cutouts for the windows.
  • Gas vs. Diesel: There are pros and cons to choosing either engine type, but many owners like a diesel engine because it offers more power. Diesel trucks also get better mileage and are designed to last longer than the average gas engine. However, they tend to smell worse and run louder than a gas engine.

Permitting and Insurance

Starting food truck businesses is tough, but definitely doable. Once you’ve got a functional truck, the last piece of the puzzle is permits, licenses, and insurance. Here’s what you’ll need to get rolling:

  • Business Operation License: This permit allows you to run a food truck business in your area. The government needs to know that you’re running a business, so that they can track your profits/losses and tax you accordingly. They also want to know that your business meets certain standards for health and safety. When applying for a business license, make sure that you know the timeline for renewing it, so that you don’t miss an important deadline and accidentally use an expired license.
  • Employer Identification Number (EIN): Any business that hires employees needs an EIN. This allows the IRS to identify the business when employees file their taxes. Even if you’re the only one running the show, we highly recommend applying for an EIN to stay compliant.
  • Parking Permit: Depending on your city, you may need a special permit to be able to park a food truck in busy neighborhoods. Get in touch with your county clerk to find out where food trucks are allowed to park, and if there are proximity bans in neighborhoods that have a lot of restaurants.
  • Health Permit: Any business that serves food requires a health department inspection and approval. Not only is running a food truck without a permit illegal, it’s also dangerous, and many customers will turn away if they don’t see a letter grade on the truck. Every city/state has its own application process, but you should expect to apply for a new health permit every year. You may also need employees to obtain food handler permits before they can serve food.