Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Updated on May 23, 2023
$48,200 - $207,300
$300,000 - $1 million p.a.
Time to build
1 - 3 months
$23,000 - $82,000 p.a.
How to Start a Food Truck Business
Decide if the Business Is Right for You
Hone Your Idea
Brainstorm a Food Truck Name
Create a Food Truck Business Plan
Register Your Business
Register for Taxes
Fund your Business
Apply for Food Truck Business Licenses and Permits
Open a Business Bank Account
Get Business Insurance
Prepare to Launch
Build Your Team
Run a Food Truck Business - Start Making Money!
Food Truck Business FAQs
Food trucks suddenly seem to be everywhere, popping at festivals and street fairs, outside office buildings, in parks, and all around the neighborhood. If you’re a chef and want to get into the restaurant industry but can’t afford to build out your own space, a food truck could be the perfect fit.
Starting any kind of business, however, takes a lot of work. The key is to have the knowledge that you need before you start so that you avoid the usual pitfalls. Then, to ensure a successful business, move patiently through the development and launch process detailed in this step-by-step guide.
Looking to register your business? A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple.
Starting a food truck business requires funds, time, and effort, not to mention a large set of wheels. Before you jump in, educate yourself to make sure this line of work is a good fit.
Pros and cons
Every business has its pros and cons. You will need to weigh these factors to decide if starting a food truck business is your best choice.
Here are some basic pros and cons of starting and running a food truck business.
Follow your passion!
Choose your own hours
Less risk than a brick-and-mortar restaurant
Competition in the food truck space is tough
Significant startup costs
Need a unique concept to stand out
Could work long hours in a confined space
Low profit margins
Food truck industry trends
Pandemic-driven lockdowns set the industry back in the last two years, but it has begun to rebound as the economy reopens. Reliable recent data is hard to come by, but food trucks still offer tremendous opportunity.
An increased interest in gastronomy has fueled the industry’s growth. The food truck industry is witnessing a number of trends of late, from increasing event partnerships and offering healthier foods and more exotic cuisines, to providing wifi and more vegan options and meat-plant blends.
How much does it cost to start a food truck business?
Start-up costs for a food truck business range from as low as $50,000 to more than $200,000. The truck itself will be the largest investment you will make.
Setting up a business name and corporation
$200 - $200
Licenses and permits
$200 - $300
$100 - $500
Business cards and brochures
$200 - $300
$1,000 - $3,000
Initial marketing costs
$200 - $500
$45,000 - $200,000
Initial food inventory
$1,000 - $2,000
$300 - $500
$48,200 - $207,300
How much can you earn from a food truck business?
Your profit will vary depending on location, daily sales, and ongoing expenses, particularly employee pay. Other ongoing expenses include parking fees, event commissions, insurance, and marketing.
The prices you charge will largely depend on the food that you’re selling, but the average profit margin for a food truck is 6-9%.
The average annual revenue for a US food truck is $290,000. If you operate 6 days a week and can quickly reach $1,000 in daily sales, your annual revenue will be around $300,000. At a mid-range margin of 7.5%, you’ll see a profit of $23,000. If you work the food truck yourself for a reasonable amount of the time that it is open, your margin and profits can be higher.
As your truck builds a reputation, you might triple sales and end up with more than $1 million in annual revenue and $82,000 in profits, all while chasing your dream!
What barriers to entry are there?
There are some barriers to entry for a food truck business. Your biggest challenges will be:
Hitting on a strong concept to stand out from the competition
The huge expense of the truck
There are several licenses and permits required, and mobile vending laws to follow
Food storage is limited, so transporting food supplies is a continuous challenge
Related Business Ideas
If you’re still not sure whether this business idea is the right choice for you, here are some related business opportunities to help you on your path to entrepreneurial success.
Now that you know what’s involved in starting a food truck business, it’s time to hone your idea to prepare for entry into a competitive market.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Why? Identify an opportunity
Since you have no track record in the business, you’ll need to find another way to stand out from the competition.
Research food trucks in your area, see what does well and what might be missing in your market. One trend is toward higher-end gourmet offerings, while another embraces dietary restrictions, such as vegetarian, vegan, and gluten- and lactose-free options. Once you have settled on a concept for your truck, you should test your recipes with friends and family.
What? Determine your products or services
After selecting and perfecting your main dishes, you should begin to think of complementary products to add to your menu. If your main dishes are shrimp and fish tacos, for instance, maybe you also offer guacamole, horchata, and elotes. Once you have solidified your menu, start promoting your truck by posting it on your website and across social media.
How much should you charge for food truck services?
Prices will depend on what you sell. When people buy from a food truck, they tend to look for tasty, inexpensive dishes. But if you’re able to offer a unique, high-end, and high-quality product, you can command a premium price.
Research food trucks in your area to learn more about pricing in your market. Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Who? Identify your target market
Your target market will depend on what you’re offering, and where. Choose your locations based on where you expect your target demographic to spend time. For example, if your main dish is vegan pizza, your main demographic is likely to be college students and twenty-somethings. The best place to park your truck might be near the local university or in a trendy arts and nightlife district.
This may take some trial and error to determine your ideal audience and the relevant locations to have your truck. After you get started, word-of-mouth referrals will be your biggest source of business.
Where? Choose a food track location
Choosing the right location for your food truck is critical to your success. The right location can help you reach your target audience, boost sales, and create a strong brand image. Here are the factors to consider when choosing the best location for your food truck.
Understand Your Target Audience
First and foremost, you need to understand your target audience. Who are your potential customers? What kind of food do you sell, and who is likely to buy it? For instance, if you sell healthy vegan meals, your potential customers may be fitness enthusiasts and health-conscious people. Understanding your target audience will help you determine where you should park your food truck.
Research Potential Locations
Once you have identified your target audience, the next step is to research potential locations. Look for places where your potential customers are likely to be present. This could be near office complexes, schools, universities, parks, bustling shopping districts, or even events and festivals.
Foot traffic is crucial when it comes to selecting a location for your food truck. Locations with high foot traffic such as tourist attractions, busy streets, or popular parks increase your visibility and chances of getting customers.
Check Local Regulations
Before deciding on a location, make sure you check local regulations regarding food trucks. Some cities have specific zones where food trucks are allowed to operate, while others may have restrictions on the hours of operation.
Check out the competition in the areas you’re considering. While it’s not a bad idea to be in an area with other food trucks or restaurants (as these areas attract foodies), you also don’t want to be in a place where you’re directly competing with a lot of similar cuisine.
Parking and Accessibility
Ensure there’s ample space for you to park your truck and that the location is easily accessible for both foot and vehicle traffic. Make sure there’s also enough room for customers to line up without blocking sidewalks, streets, or other businesses.
Availability of Amenities
Consider locations that have access to amenities like public restrooms and seating areas. This can increase the comfort level for your customers and encourage them to stay longer, possibly increasing your sales.
Experiment and Adapt
After you’ve made a selection, don’t forget to keep evaluating your choice. You may need to try a few different spots before you find the one that works best for you. Also, consider rotating locations depending on the time of day, week, or season.
Step 3: Brainstorm a Food Truck Name
Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.
Here are some ideas for brainstorming your food truck business name:
Short, unique, and catchy names tend to stand out
Names that are easy to say and spell tend to do better
The name should be relevant to your product or service offerings
Ask around — family, friends, colleagues, social media — for suggestions
Including keywords in the name, such as “truck” or “tacos”, boosts SEO
Choose a name that allows for expansion: “The Rolling Kitchen” rather than “Pizza Pit Stop”
Avoid location-based names that might hinder future expansion
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Step 4: Create a Food Truck Business Plan
Every business needs a plan, a rough outline that helps guide a startup through the launch process while maintaining focus on key goals. A business plan is also crucial for helping potential partners and investors understand your company and vision:
Executive Summary: Brief overview of the entire business plan; should be written after the plan is complete.
Business Overview: Overview of the company, vision, mission, ownership, and corporate goals.
Product and Services: Describe your shop’s services in detail.
Market Analysis: Assess market trends such as variations in demand and prospects for growth, and do a SWOT analysis.
Competitive Analysis: Analyze main competitors, assessing their strengths and weaknesses, and create a list of the advantages of your services.
Sales and Marketing: Examine your companies’ unique selling propositions (USPs) and develop sales, marketing, and promotional strategies.
Management Team: Overview of management team, detailing their roles and professional background, along with a corporate hierarchy.
Operations Plan: Your company’s operational plan includes procurement, office location, key assets and equipment, and other logistical details.
Financial Plan: Three years of financial planning, including startup costs, break-even analysis, profit and loss estimates, cash flow, and balance sheet.
Appendix: Include any additional financial or business-related documents.
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Make Logos, Business Cards, Social Designs and More!
Registering your business is an absolutely crucial step — a prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s done, you have your own business!
Choose where to register your company
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to food trucks.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Choose your business structure
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your food truck business will shape your taxes, personal liability, and registration requirements, so choose wisely.
Here are the main options:
Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
Limited Liability Company (LLC)– Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate on a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.
Step 7: Fund your Business
Securing financing is your next step and there are plenty of ways to raise capital:
Bank loans: This is the most common method, but getting approved requires a rock-solid business plan and strong credit history.
SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
Personal: Self-fund your business via your savings or the sale of property or other assets.
Bank and SBA loans are probably the best option, other than friends and family, for funding a food truck business. You might also try crowdfunding if you have an innovative concept.
Step 8: Apply for Food Truck Business Licenses and Permits
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
Before you begin making money, you will need to have somewhere to keep it, and that requires opening a bank account.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your food truck business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer business account options, just inquire at your preferred bank to learn about rates and features.
But it is a good idea to look at a few options, as banks vary in terms of offerings, and you want to find the plan that works best for you. Once you choose your bank, you just need to bring your EIN (or Social Security Number if you decide on a sole proprietorship) and your articles of incorporation or other legal documentation that proves your business is registered.
Step 10: Get Business Insurance
Business insurance is an area that often gets overlooked but is vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business, and your life.
Here are some types of insurance to consider:
General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
Business Property: Provides coverage for your equipment and supplies.
Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
Worker’s compensation: Provides compensation to employees injured on the job.
Property: Covers your physical space, whether it is a cart, storefront, or office.
Commercial auto: Protection for your company-owned vehicle.
Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of any of the above insurance types.
Step 11: Prepare to Launch
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Essential software and tools
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You may want to use industry-specific software such as Restaurant365, square, and toast for your accounting, HR, payments, customer management, and other processes.
If you are unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.
Develop your website
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
Some of your business will come from the casual passerby or online visitors, but you should still invest in digital marketing! Getting the word out is especially important for new businesses, as it’ll boost customer and brand awareness.
Once your website is up and running, link it to your social media accounts and vice versa. Social media is a great tool for promoting your business because you can create engaging posts that advertise your products:
Facebook: Great platform for paid advertising, allows you to target specific demographics, like men under age 50 in the Cleveland area.
Instagram: Same benefits as Facebook but with different target audiences.
Website: SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales. Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Buy Now”. This can sharply increase purchases.
Google and Yelp: For businesses that rely on local clientele, getting listed on Yelp and Google My Business can be crucial to generating awareness and customers.
Take advantage of your website, social media presence, and real-life activities to increase awareness of your offerings and build your brand. Some suggestions include:
Competitions and giveaways – Generate interest by offering prizes for customers who complete a certain action, such as 10% discount for groups of five or more.
Signage – Put up eye-catching signage at your store and website
Flyering – Distribute flyers in your neighborhood and at industry events
In-Person Sales – Offer your food truck service at local markets and trade shows.
Post a video – Post a video about your food truck. Use humor and maybe it will go viral!
Seek out referrals – Offer incentives to generate customer referrals to new clients.
Paid ads on social media – Choose sites that will reach your target market and do targeted ads.
Create infographics – Post infographics and include them in your content.
Focus on USPs
Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your food truck meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your food truck business could be:
A unique dish found nowhere else
All locally-sourced ingredients
An impressive culinary background
Speed and accuracy of service
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a food truck business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in food trucks for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in food trucks. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.
Step 12: Build Your Team
Initially, you may not need to hire any employees if you start small, with a single truck and a business run out of your home. But as your business grows and you add more trucks, you will need to add employees for various job roles. The potential employees for a food truck business include:
Cooks & Cashiers
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Step 13: Run a Food Truck Business – Start Making Money!
You should consider creating a niche market for yourself at first by specializing in certain foods. This will jumpstart your word-of-mouth marketing within your niche market. As a food truck, however, you may not want to stick with one niche for long. You may want to expand your product offerings, particularly if you get more than one truck.
You’re now ready to start your food truck business. You might want to bookmark this page, just in case.
Food Truck Business FAQs
What food trucks make most money?
Some of the most profitable food trucks include those that serve gourmet burgers, tacos, barbecue, sushi, and pizza. You have to park your truck in high foot traffic areas to be successful.
What is the secret to food truck success?
When food trucks fail it is usually due to poor inventory management. They tend to order too much food and lose a lot of money when it goes to waste. Successful food trucks are managed efficiently and create an identity and food that people remember. They stand out from the competition.
What are the most popular types of food trucks?
The most popular types of food trucks are those that serve quick and convenient food items that are easy to eat on the go. Some of the most popular types of food trucks include those that serve burgers, tacos, sandwiches, pizza, and desserts.
What are some ways to differentiate your food truck business from competitors?
One way is to offer unique and creative menu items that are not typically found at other food trucks. Another way is to focus on high-quality ingredients and preparation methods to make your food stand out.
How can you ensure that your food truck is visually appealing and attracts customers?
Focus on creating an eye-catching design that reflects your brand and menu items. Consider using bright colors, bold graphics, and signage to make your truck stand out.