Food Truck Startup Costs: What You Need to Know - Square

The popularity of food trucks has exploded in the past decade. What began as a fad has gone mainstream as Americans have embraced mobile restaurants. As a result, aspiring chefs and restaurant-industry entrepreneurs have turned to food trucks as a lower-cost, lower-risk alternative to opening traditional restaurants. However, it’s crucial for aspiring entrepreneurs to know about their potential food truck costs before trying one out. And, of course, one of the most important questions is simple: How much does it cost to start a food truck?

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Perhaps the most attractive aspect of starting a food truck instead of (or as a precursor to) a brick-and-mortar restaurant is the idea that it’s a relative bargain. But your actual food truck startup costs might be greater than you expect, especially depending on where you live.

How much does it cost to start a food truck? Consider these essentials

So, how much does it cost to start a food truck? The answer depends on a lot of factors. Let’s take a look at some of the factors that determine your startup costs and operating expenses.

Licenses and permits are a large part of your food truck startup costs 

To start a food truck and operate for one year, an entrepreneur spends an average of $28,276 on permits, licenses, and legal compliance, according to the U.S. Chamber of Commerce’s Food Truck Index.

The types of permits and licenses required to operate a food truck fall under five categories: administrative, health/menu/food safety, vehicle requirements and safety/hazard prevention, employment, and zoning.

Costs vary by location, but the five cities friendliest to food trucks are Portland (Oregon), Denver, Orlando, Philadelphia, and Indianapolis. The five toughest cities for food trucks are Boston, Washington, D.C., San Francisco, Minneapolis, and Seattle.

Indianapolis has the lowest fees at $590, while Boston comes in at $17,066 (Seattle has the next highest fees at $6,211). Boston is an outlier with its extra-high fees, so if you remove it from the equation and calculate the average permit and license costs of the other top 19 food truck cities, you find that the average fees paid by food truck operators are about $1,864.

In food trucks, as in real estate, location is everything. So if you’re trying to decide where to start your food truck, think critically about whether your city’s permit and licensing fees — on top of all the other costs associated with your business — are cost prohibitive.

The cost of renting versus buying a food truck

Perhaps the biggest (and priciest) question new food truck entrepreneurs face is whether to rent or buy their vehicle. And this will deeply affect food truck costs. You can expect to spend anywhere from $75,000 to $150,000 on a new, made-to-order truck, according to Restaurant MBA, and they take months to build.

Used trucks generally cost between $40,000 and $80,000, and you should be able to start using them almost immediately. The cost of renting a food truck depends on the length of the lease, but if it’s longer than, say, six months or more, it should be around $2,000 to $3,000 per month.

More food truck startup costs that can add up quickly

Obtaining a truck itself is the most expensive item in your food truck startup costs, followed by fees and permits. However, there are a number of additional costs to consider before you can serve your first customer.

Necessary kitchen equipment

The type of equipment you need depends on the type of food you serve, but common appliances are ovens, fryers, grills, and refrigerators. Other equipment may include pots and pans, storage containers, knives, serving implements, and other utensils. Appliances can cost well into the thousands, and supplies like pots, pans, and other tools can cost a few thousand dollars.

When you’re launching your business and dealing with lots of other food truck costs, it might make more sense for you to lease appliances while you figure out what you really need and build up the capital to reinvest in your food truck.

Inventory needed to get off the ground

The basic materials you need to launch your food truck include ingredients for your menu items and serveware like plates, cups, lids, utensils, and napkins. Generally, your food truck startup costs for ingredients depend on your menu, but expect to spend around $1,000 to $2,000 when you take into account items like cooking oil, spices, and more. Serveware startup costs for food trucks are around $300.

Operational costs of a food truck

The greatest food truck costs associated with running your business have nothing to do with the food. Gas, insurance (auto liability, general liability, workers’ compensation, etc.), permits, licenses, maintenance, equipment, and supplies are all major considerations when creating a budget and figuring out how you’ll turn a profit.

As noted above, the average cost of permits and licenses in the top 19 food truck cities is $1,864. Fuel and maintenance costs vary, but average around $500 and $1,000, respectively. There’s also the cost of implementing a restaurant point-of-sale system.

There are some operational costs that you can’t control, like permits and licenses, but there are ways that you can lower your bills. For example, if you buy used equipment instead of new, or if you limit your menu items, you can save money on ingredients.

10 ways to minimize food truck startup costs for your business

Build your menu around versatile, seasonal ingredients

Instead of having lots of different menu items that all require different ingredients, opt for a smaller number of dishes that use some of the same produce, proteins, and spices. Doing that, along with sticking to seasonal produce, cuts your food truck costs and reduces waste. By keeping close track of your inventory, you will also get a sense of what items are most or least popular.

Don’t go overboard at the grocery store

Before you have a strong sense of the quantity of ingredients you should buy, err on the side of underbuying. It’s better to sell out on a given day than to be stuck with ingredients that spoil and go to waste. Even better, selling out builds buzz.

Staff your loved ones

When you’re starting off, ask for help from family and friends. This isn’t meant to be a permanent situation, but it can help you work out the kinks and figure out how many staff members you need at different times.

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Rent or buy used equipment

Your food truck startup costs can quickly get out of control, so refrain from buying all-new, top-of-the-line tools and devices. Get by with used or rented equipment until you figure out what you really need (and you might find that you never need the most expensive stuff).

Launch your business in a market with reasonable costs

As the Food Truck Index shows, the cost of licenses and permits varies significantly by city. So, if you aren’t constrained by location, consider launching your venture in a city with lower regulatory fees and a market that isn’t already saturated. If you’d like to consider taking on outside funding through a bank or an investor, put together a business plan so you can account for how that money will be used to grow the business. A business model canvas can also be a good way to sketch out how everything works together.

Explore new revenue streams

Instead of restricting your business to, say, weekday lunch crowds, look into other potentially lucrative opportunities like weddings, graduation parties, and late-night crowds outside bars or concert venues.

Buy in bulk with other food trucks

Bring down costs by purchasing certain ingredients or supplies in larger quantities with your fellow mobile restaurateurs.

Embrace social media marketing

Traditional advertising can be a budget-buster for small businesses, so build an audience on social media platforms by, for example, tweeting information like your location and hours each day and posting photos of your menu items (particularly daily specials) on Instagram and Facebook.

Take care of your truck

It sounds simple, but taking the time to get regular maintenance checks reduces the likelihood that you’ll have to deal with larger, more expensive issues in the future.

Compare vendor prices

If you shop around for airline tickets or mobile service, why wouldn’t you do the same with your business’s vendors? Look around, and if you find better offers, either switch providers or give them the opportunity to match or beat that price.

The final breakdown: How much does it cost to start a food truck in ?

There are a lot of factors to consider when starting up your mobile restaurant business. But at the end of the day, how much does it cost to start a food truck? If you’re renting your truck, the average food truck startup costs you can expect vary between about $46,700 and $187,440. However, your costs may be much higher depending on the city where you’re operating your business, your menu offerings, and the cost of upkeep in your area.

But no matter where you are, you can save a lot of money with some simple tips and reinvestments to make your business stronger.

Garbage disposals are the unsung heroes of many a kitchen. Mounted beneath the sink drain, these devices pulverize food waste into tiny bits so that you can easily wash them away. Less food winds up in your trash can as a result, helping you cut down on funky odors and pests. And the finer the disposal grinds the scraps, the less environmental impact they leave behind.

The least expensive garbage disposals in CR’s latest tests cost around $60. “On the lower end of the price range, you’ll see disposal motors with ⅓ horsepower and a shorter one-year warranty,” says Larry Ciufo, who oversees testing of garbage disposals at Consumer Reports. “Typically, more money buys you more power, less noise, sturdier stainless steel components, and auto-reversing grinders that help prevent jams.” That said, a high price does not guarantee great performance: The most expensive model we tested, the InSinkErator Evolution Excel 1 HP, costs nearly $900 and offers just a middling performance.

Garbage disposals fall into two categories: continuous-feed and batch-feed. 

Continuous-feed disposals are the most common. These are operated with a wall switch and allow you to toss in scraps while they’re operating. They will continue to grind until you flip the switch off, and they require some caution to ensure that fingers and small utensils remain clear of the opening.

Batch-feed disposals are less common and grind food in batches with a twist or a push on a stopper that covers the opening. Because of the stopper, batch-feed disposals are safer, quieter, and require no extra electrical wiring beyond powering the undersink unit. Batch-feed disposals typically offer more horsepower than continuous-feed models but are generally more expensive. Because they operate only when covered, there’s less risk of injury.

We don’t track data for predicted reliability of residential garbage disposals, but they typically last about 12 years, according to the Association of Home Appliance Manufacturers. Your current model might be ready for replacement if you notice it taking longer to grind or making louder-than-usual noises, or if you need to press the disposal’s reset button often.

CR members can read on for ratings and reviews of the best-performing garbage disposals from our tests, listed alphabetically in each category. We find that how well a garbage disposal performs varies even within the same brand. You’ll find models from a single manufacturer at the top as well as the bottom of our ratings. See our garbage disposal buying guide for tips on choosing a garbage disposal, and for test results on more than 60 models, check our full garbage disposal ratings.

How CR Tests Garbage Disposals
Consumer Reports bases the ratings of garbage disposals on several tests.

To test speed, we grind pieces of beef rib bones for 1 minute with cold running water and then weigh how much food remains in the disposal. The more food that’s left, the longer it takes to grind—and the lower the score on this test.

To see how thoroughly the disposals grind food, we toss a mix of bones and raw vegetable scraps into each model and run the resulting fragments through four different-sized sieves to gauge fineness. A garbage disposal that garners an excellent rating in that test turns out food particles fine enough to slip through most of the sieves. The bigger the bits left over, the greater the chance the kitchen sink drain will clog, resulting in a lower score on this test.

For noise, we measure the decibels emitted while the disposals grind a mix of bones and vegetables, using a panel to simulate the buffering effect of a cabinet. In general, we find that the quieter models are heavier due to more insulation.

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