How to Start a Food Truck Business

Opening a food truck can be easier, faster, and cheaper than launching a brick-and-mortar restaurant. Food truck entrepreneurs are drawn to the industry because of its ease of entry and relatively low overhead. This complete guide will walk you through each step of the process—from nascent idea to knowing when it’s time to expand—and answer some of the most common questions about starting a food truck. 

How to start a food truck.

Starting a food truck business indeed has its charm, with the freedom of the open road and the joy of crafting delicious food for your community. But there’s more to it than just cooking up a storm and finding a parking spot—let’s dive into the essential steps to successfully launching your own food truck venture.

1. Conduct market research.

If you want your food truck to be profitable (and we assume you do), market research is the best place to start. Market research will help you understand your customers, your competition, and the food truck business on the whole. Here are some things to research to start your food truck business right:

• Existing food truck businesses and their concepts (in your market and outside of it)
• Existing restaurant concepts (in your market and outside of it)
• Government data
• Population demographics
• Local food truck associations
• Culinary schools
• Trade publications
• Trade organizations
• Spaces where food trucks can park and sell their products
• Times when streets/parking lots are busy

2. Choose a concept for your food truck.

After you’ve conducted your market research, it’s time to decide on a concept for your food truck. This is a critical stage in the planning process because it not only determines the type of food you’ll serve, but also sets the tone for your entire brand. Your concept should be unique enough to differentiate you from the competition, yet appealing to your target demographic. In other words, you’ll want to find your niche. Some questions you can ask yourself that can help you find your niche include:

• Did you grow up with a specific cuisine tradition that you could introduce to your market? (If so, you’ll want to revert to market research to ensure the market is ready for it.)
• Can you use your family or cultural cuisine traditions to put a fresh spin on something familiar?
• Do people in your network know you as the person who makes a killer X food?
• Are you passionate about a particular cuisine or have a unique recipe that you think will be a hit?
• Do you know how to take something complicated and simplify it, so that it works in a food truck?
• When you performed your market research, were there any “no brainer” holes in the market, where you thought, “How do we not have a ______ food truck?”
• Do you have an idea for a food truck that could complement an established food truck in your market? If so, would that food truck owner be interested in collaborating and/or selling in the same location?
• Do you have an exceptional, attention-grabbing way to market something that people already know? The Big Gay Ice Cream truck in New York is a standout example. Their marketing made the ice cream truck a sensation that eventually led to a brick-and-mortar store. 
• Have you checked social media to see what foods trend well in your area? More and more people are sharing their food on social media. Getting a sense of the pulse might give you an idea for what people get excited about in your area—or what they might be likely to share.
• Following up on the previous question, do you have an idea for really cute food (that also tastes good) that people would want to photograph?

Remember that consistency is key. Everything—from your truck’s design, menu offerings, to the way you interact with customers—should be aligned with your chosen concept. This helps to create a memorable brand that people will recognize and return to. For instance, if you’ve decided to run an Italian-themed food truck, your menu might feature pizza and pasta, your truck might be decorated with the colors of the Italian flag, and you might play Italian music to set the mood.

Choosing your food truck’s concept is not just about the food. It’s about creating an experience that resonates with your customers. So take your time with this step. Brainstorm ideas, seek feedback, and refine your concept until you’re confident it’s the right one. And always remember, as trends change, be ready to adapt and evolve your concept to meet your customers’ shifting tastes.

3. Write a business plan for your food truck.

After you’ve nailed down your food truck concept, it’s time to create a business plan. This document is an essential blueprint for your business that outlines your goals, strategies for achieving them, and the resources required. The business plan will not only help you stay organized and on track, but also be critical when seeking financing or investors. Here’s what your food truck’s business plan should cover:

• Executive summary – This is a brief overview of your business, summarizing your food truck concept, target market, and unique selling points.
• Company description – Provide detailed information about your food truck, including the type of food you’ll serve, your location, and your hours of operation.
• Market analysis – This section should include the findings from your market research. Discuss your understanding of your target market, competition, and any gaps or opportunities you’ve identified.
• Organizational structure – Detail the structure of your business. Are you a sole proprietor, or do you have partners? If hiring staff, what roles will they fill?
• Services and products – Describe in detail what you’ll be selling. Be sure to highlight any unique dishes or services you’ll be providing.
• Marketing and sales strategy – Outline the strategies you’ll use to attract and retain customers. This could include social media marketing, partnerships with local businesses, attendance at community events, and more.
• Financial projections – Provide a forecast of your anticipated revenue and expenses. This section should show that your business will be profitable and sustainable.

Remember, your business plan is not set in stone. It should be a living document that you revisit and revise as your business grows and evolves.

4. Secure financing.

When you’re just starting out, you might not yet qualify for a business term loan, but there are a variety of financing options to help you get your food truck up and running. Here are some of your best bets:

Equipment financing

You can use an equipment loan to help purchase the truck or car you’ll use for your food truck business and any commercial cooking equipment that you need. Even your point-of-sale (POS) system can be paid for with equipment financing. Because an equipment loan is secured by the equipment itself, the loan offers lower risk to lenders. In turn, it’s easier for borrowers to qualify. 

Line of credit

A line of credit allows you to borrow against a predetermined sum of money. You can borrow as much as you want (up to the total amount), repay, and repeat as many times as you need. A line of credit can be a key asset for new food trucks, as they often have changing capital needs. This financing option keeps you protected from unexpected financial hurdles, so you can keep your business finances as flexible as the location of your food truck. 

Business credit card

Napkins, plastic silverware, ingredients, cleaning supplies—running a food truck means making necessary purchases. With a business credit card, those purchases work in your favor. Many business credit cards allow you to earn rewards on business spending, and if you don’t yet qualify for other forms of financing, there are ways to leverage business credit cards to meet your capital needs. 

ACH loan

Unlike other forms of funding, ACH loan decisions are based on your daily bank balances instead of your credit, making an ACH loan an option for borrowers with less-than-ideal credit. Often referred to as a “cash flow loan,” an ACH loan provides rapid funding when you need to increase working capital. 

Bootstrapping 

Most businesses rely on bootstrapping, the practice of relying on your own resources, to grow at some point or another. Depending on how much you have saved, you may be able to self-finance and get your food truck up and running through bootstrapping. Once your food truck starts cooking with gas (metaphorically or literally), find ways to maximize your profits while minimizing your costs. This strategy will give you a cushion that you can reinvest in the business. 

Crowdfunding

Crowdfunding allows you to secure capital for your business from a large number of people. Crowdfunding also allows you to acquire funding without giving up equity or traditional repayment terms. Instead, supporters can earn different rewards depending on the price tier of their investment. Popular crowdfunding sites like Kickstarter and GoFundMe can bring your business to a larger audience, but with the growing number of projects on the platforms, it can be difficult to stand out. And remember, if you go the crowdfunding route, it’s imperative that you can follow through on the rewards as promised.

5. Get your truck (or car).

You can’t run a food truck without a truck, car, or vehicle/food trailer combo. You can purchase your food truck through several different avenues. 

• Your network – The first place to start is always within your network. If you can purchase a used truck or car from a friend or family member, you’re probably going to get the best deal, lowering the startup cost for your food truck. 
• Used car dealerships – At a used car dealership, you may be able to find used vans, cars, or trucks that can be paired with a food trailer. 
• Food truck manufacturers – You can avoid the need for any truck modifications or labor-intensive build-outs by purchasing from a food truck manufacturer. These companies specialize in food trucks and often build custom models. The flip side of getting exactly what you need when you need it is that this will be one of the more expensive routes. 
• Auctions – Sometimes, a food truck goes out of business. When it does, you have the opportunity to make someone else’s misfortune your well-priced gain. Look into the auctions in your area. You may be able to secure your food truck below market value. Be sure to decide what your maximum price is before you go in, so you can avoid getting swept up in the moment and inadvertently overpaying. 
• Kitchen food trailer sellers – If the car or truck you already own is powerful enough to tow a food trailer, you can consider purchasing one from a kitchen food trailer seller. This choice will give you the customization options of a food truck manufacturer and can sometimes come at a lower cost. 

6. Get food truck licenses and permits.

Securing the proper licenses and permits is a critical step in starting your food truck business. While specific requirements will vary depending on your location, there are a few common licenses and permits that most food trucks will need:

• Business license – This license is required for all businesses and can usually be obtained through your local city or county government office.
• Employment Identification Number (EIN) – This is a unique number assigned by the IRS to identify your business for tax purposes. If you’re planning on hiring employees, this number is crucial. You can apply for an EIN through the IRS website.
• Food service license – In most jurisdictions, you’ll need a food service license (or health department permit) to prepare and sell food. This often involves a health inspection of your food truck.
• Employee health permit – Many jurisdictions require an employee health permit to ensure that your staff understand and follow proper food handling and sanitation practices. This typically involves training and certification for all your food truck employees.
• Fire certificates – If you’re cooking on your truck, you may need a fire certificate. This generally involves a fire department inspection to ensure your cooking equipment is safe.
• Commercial driver’s license – If your food truck is over a certain size, you (and any other drivers) may need a commercial driver’s license. Check with your local Department of Motor Vehicles for specifics.
• Mobile food facility permit – Depending on your location, you may require a mobile food facility (MFF) permit. This permit allows you to operate a food truck or cart in public spaces, following the local health department’s guidelines. It often involves an inspection to ensure your mobile facility meets all food safety regulations.
• Parking permits – Depending on where you plan to park and sell, you may need special parking permits. Check local regulations regarding parking on public and private property.

Before starting your food truck business, consult with your local government to ensure you understand all of the licensing and permit requirements. It’s also a good idea to consult with a lawyer or business advisor, who can provide guidance based on your specific circumstances. Violating local regulations can result in hefty fines or even the closure of your business, so it’s essential to get this step right.

7. Purchase your supplies and equipment for your food truck.

After getting your food truck and securing all necessary licenses and permits, the next step is to purchase your supplies and equipment. This phase is critical as the tools and resources you choose will directly impact your operations, quality of food, and the overall customer experience. Here are some things you’ll need:

• Cooking equipment – Depending on your menu, this could include grills, deep fryers, ovens, and stovetops. When selecting your kitchen equipment, consider both the amount of space available on your food truck and the volume of food you’ll need to prepare during peak times.
• Refrigeration – To keep your ingredients fresh, you’ll need a refrigeration or cooling system. This could be under-counter fridges, freezers, or sandwich prep tables with refrigerated bases.
• Small wares – These are your utensils, pans, pots, knives, and other tools needed for cooking. Ensure these are high-quality and durable, able to withstand heavy use.
• Serving supplies – This includes napkins, utensils, plates, cups, and straws. You might want to consider eco-friendly options here as a way to reduce your environmental impact.
• Cleaning supplies – Maintain cleanliness with items like brooms, mops, cleaning chemicals, and sanitizing solutions. Remember, a clean food truck is not only a legal requirement, but also more appealing to customers.

Remember, investing in the right equipment and supplies will have a significant impact on your food truck’s success. Make sure to do your research, compare prices, and read reviews before making any major purchases.

8. Select a POS system.

Choosing the right point-of-sale (POS) system is a critical decision for your food truck business. The POS system you choose will help you not only process sales, but also manage inventory, track revenue, analyze sales data, and maintain customer relationships. Here are some factors to consider when choosing a POS system for your food truck.

• Mobility – Given the on-the-go nature of a food truck, your POS system should be mobile-friendly. A system that functions on a tablet or smartphone can offer the flexibility and convenience that a traditional cash register cannot.
• Speed – During peak hours, you’ll want to serve your customers as quickly as possible. A POS system that processes transactions quickly can significantly increase your operation’s efficiency.
• Reliability – Your POS system should be reliable even in areas with weak or no internet connection. Look for a system with offline capabilities to ensure you can still process sales without a network connection.
• Integration – If you plan on using other business software (Ex: accounting or email marketing tools) make sure your POS system can integrate with these applications for seamless data management.
• Customer support – Technical issues can arise unexpectedly, and when they do, you’ll want immediate support. A POS provider with round-the-clock customer service can be an invaluable resource in these situations.

Remember, investing in the right POS system can contribute significantly to the smooth operation of your food truck business, so consider your options carefully.

9. Protect your business.

Prepare for the unexpected by protecting your food truck business with the proper insurance. There are a few different insurance policies that every food truck should have.

Food truck insurance

• General commercial liability insurance – Often referred to as business liability insurance, general commercial liability insurance protects your business from a variety of claims that can be made against the food truck. It covers instances like bodily harm and property damage. 
• Commercial property insurance – A food truck is an equipment-dependent business. Commercial property insurance protects what’s inside your food truck like stoves, food, and computer equipment in the occurrence of fire, theft, or natural disaster. 
• Workers’ compensation insurance – There’s a chance that one of your employees may be injured on the job, and you’ll want workers’ compensation insurance if they are. Workers comp covers medical costs and a portion of compensation if one of your employees suffers an injury or becomes ill at work. 
• Commercial auto insurance – Don’t forget to insure the truck. Commercial auto insurance protects you against vehicle- and collision-related claims, including damage to your vehicle, driver injury, injury to someone else, and damage to someone else’s property. 

Food truck insurance costs

Basic food truck insurance, including each of the elements outlined above, starts around $2,000 per month. Costs go up for more comprehensive coverage. 

10. Find a place to park.

All you need to do is drive around and find somewhere with an open spot in a well-trafficked area, right? We wish. Because a food truck is a commercial entity, parking is a bit more complicated than that, and food truck locations can be incredibly important to the success of a business. 

Restrictions on where you can park a food truck.

Research any local government restrictions or ordinances before you roll up to your new spot. Some cities may require you to procure a specific permit to park your food truck, and there may be some streets or areas that are off-limits to food truck entrepreneurs. 

The second, softer restriction is a social one. Before you swipe another food truck’s regular spot, assess the costs and benefits of doing so. Sure, that may be a hot spot where you’ll sell out of your desert tamales in an hour, but it may come with a heavy social cost. You don’t want to make enemies as the new truck on the block. 

Solid food truck locations.

According to Restaurant Engine, these are some of the best food truck locations:

• Street parking
• Food truck parks
• Business districts
• Large office buildings
• Farmers markets
• Bars/nightclubs
• Festivals
• Events
• Sporting venues
• Gas stations
• College campuses

11. Forge strategic partnerships.

Strategic partnerships can benefit every business—from the Instagram micro-influencer to the Fortune 500 company. Forging a strategic partnership with another food truck (or better yet a group of food trucks) can benefit all parties involved. 

Strategic partnerships offer an opportunity to expose food trucks to each other’s loyal customer bases and provide a more robust culinary experience, which can draw more customers. If your food truck already has an existing fan base, then you have value to offer to your potential partners, but there are ways to form these beneficial partnerships for new food trucks, too. 

Remember when we asked if there were any existing food trucks in your market that your cuisine could compliment? (It’s okay, you can scroll up if you want a refresher.) Now is the time to revisit that question. If there’s a hamburger food truck in your area, and you plan to specialize in milkshakes, parking together offers your customers the opportunity to have a decadent hamburger and milkshake lunch or dinner, merging the classic American diner experience with the modern convenience of two food trucks parked side by side. 

12. Market yourself.

Now that you’re ready to rock ‘n’ roll, it’s time to focus on marketing your business. Every successful food truck relies on marketing. Social media is going to be your best friend. You can announce your upcoming locations, specials, partnerships, and any other exciting news on Twitter, Facebook, or Instagram. As you build your business, you may find that your customers tend to engage with your food truck on one of these platforms more than others, but as you start out, it’s advisable to use a combination of the three. How else are you going to figure out which one they use the most?

Prominently display your social media accounts and whatever hashtag you’ve chosen for your business (Side note: You should choose a hashtag so people can ‘gram their lovely food truck eats.) so that customers know how to find you and who to tag. 

It’s pretty simple to list your business with Google and well worth doing. Follow the instructions for how to add your food truck to Google My Business, so your customers can find you via Google search—a likely first step many will take after hearing about a business. It also allows you to start collecting reviews, so you can build that word of mouth. Many regional publications, like Time Out, also have directories where businesses can apply to be listed, increasing their reach. 

Don’t forget to let local news outlets know you’re coming to town. Drafting a press release for your new business can be pretty simple, and it allows you to generate buzz. Try connecting with local publications, influential bloggers, Instagram influencers, and industry publications. 

Discuss possible co-marketing strategies with your strategic partners. Posting together, tagging each other, or even doing the occasional Instagram takeover can help you market to each other’s audiences. 

Starting and running a successful food truck business is a complex but rewarding endeavor. It involves careful planning, strategic decision-making, and proactive marketing. From investing in the right equipment and supplies, choosing a reliable POS system, and ensuring adequate insurance coverage, to identifying the perfect parking spots and forging beneficial strategic partnerships, every step is crucial. Marketing yourself effectively, particularly through the use of social media platforms, is also key to your food truck business’s success.

Despite the considerable startup costs, the potential for high gross annual returns makes the food-truck business a lucrative option for aspiring entrepreneurs. As your business grows, don’t shy away from expansion opportunities that may come your way. Whether it’s opening additional trucks or transitioning into a brick-and-mortar establishment, there are numerous ways to take your successful food truck venture to the next level.

FAQs

_{Information provided on this blog is for educational purposes only, and is not intended to be business, legal, tax, or accounting advice. The views and opinions expressed in this blog are those of the authors and do not necessarily reflect the official policy or position of Lendio. While Lendio strives to keep its content up-to-date, it is only accurate as of the date posted. Offers or trends may expire, or may no longer be relevant.}