If you look at food trucks and wonder if one of them could be yours, maybe a food truck business guide is what you need. Opening a food truck can be an exciting venture in California. But, just like any other business, you need a proper plan.
The food truck industry witnesses a yearly growth of 3.4%. It costs lower prices to start than a full-fletched restaurant, and you can keep the prices minimal to attract more customers. Nowadays, people want good food at affordable prices.
With the right industry knowledge, a solid business plan, and the right restaurant CPA in Oakland, you can march toward success.
How much does a food truck cost?
Well, if you do not already have the truck, then the biggest purchase awaiting you is the food truck itself. Along with that, there are other expenses as well.
The truck
The average cost of a food truck is anywhere between $50,000 and $175,000. You will only find one costing $50,000 if it has been previously used. The problem with getting a used vehicle is ensuring that it is maintained and all the parts work. The inspection alone can cost you.
Fuel costs
Most trucks get roughly 5 miles per gallon, so multiply your weekly mileage by the cost per gallon and add that to your monthly overhead.
Operating costs
Operating costs may include gas, insurance, permits, licenses, and maintenance. These vary depending on your location.
Permits and licenses
There are several licenses and permits you have to obtain before you can open your food truck for business. Getting all of them can cost you anywhere between a few hundred to a few thousand dollars.
Type of cuisine
The price of your raw materials will vary depending on the type of food you are going to serve in your food truck. For example, Asian foods are more expensive than American foods.
Food, kitchen, and associated supplies
Buying food, kitchen, and other supplies costs around $4,000 to $8,000. The most important factor in a food truck business is the food itself. To determine how much kitchen supply you need, you have to conduct thorough market research. Determine the location of your food truck service and find out the average number of orders food trucks there receive.
In addition to that, you will need to consider food preparation and storage costs. Many food truck owners use a commissary kitchen, which is a shared kitchen used by various vendors in the same area. A service like this usually costs $1,000 in most California cities.
Finally, there are additional supplies you need to consider. These include smallware (pots, pans, spatulas) and serveware (plates, bowls, eating utensils, napkins, etc.).
Getting insurance
Choosing the right insurance policy and coverages for a food truck business can be tricky. It is recommended that you consult with an expert on this.
Here are five insurance policies that you might need:
- General liability: protects your business from accidents.
- Auto liability: protects against damage and liabilities in transit.
- Contents Coverage: insurance for non-permanent items.
- Truck or trailer coverage: protects against damage caused by collision, theft, etc.
- Worker’s compensation: covers employees’ medical expenses.
If you decide to rent a commissary kitchen with other vendors, consider getting restaurant insurance to protect yourself.
Set a budget
Starting your own business is exciting, but things can get out of hand when you do not set a budget. Make sure you determine in advance how much you are going to spend on everything and that you do not exceed it.
New entrepreneurs are more likely to spend excessively on labor costs and inventory.
Having a restaurant CPA is highly beneficial as they do not just update your books but help with financial planning as well. Hire one today!
