How to Start a Food Truck Business

Food will never go out of fashion because every human needs to eat.

Does that guarantee success for anyone entering the food business? Not at all!

The food truck business is still a business. Like any business, it requires careful research, planning, and execution.

A passion for the industry is important, too.

If you’re a foodie who wants to spread delicious flavors in your neighborhood, we want to encourage and guide you by explaining everything you need to consider when entering the food truck industry.

Food Truck Concept Development

Internal clarity on what your food truck will offer is important.

You need to decide what type of food you will sell, and your unique perspective on food. Your unique selling proposition (USP) should answer the question: “Why should someone buy lunch at my truck?”

There are several ways to differentiate your food truck concept. Use the below as inspiration:

• A focus on a specific cuisine. Although being an ‘everything’ food truck is tempting, people can be skeptical when you claim to be an expert in different cuisines. Specializing in one cuisine helps nail your brand identity as people make your food truck synonymous with the cuisine.
• Catering to people who follow a strict diet. People may be following a strict diet for health or religious reasons. Positioning yourself as a safe option for a specific dietary requirement helps monopolize a demographic.
• A location-based food truck. Food trucks generally do well at college/university campuses, business complexes, or public spaces like hospitals. Your USP could be the convenient food access.
• A ‘one thing’ food truck. You could choose a hyper-niche. Instead of specializing in a cuisine, you (literally) specialize in one dish. This reduces some of the complexities of sourcing ingredients by hiring specialized chefs.
• What food are you passionate about? By basing your mobile food unit around your passions, you’ll be more likely to go the extra mile.

Your target market should also influence your concept choice. Are there specific food preferences in the neighborhood? Or is there a niche or need currently not being met?

You may already know the neighborhood you serve. Still, you can check out existing food trucks (and even traditional restaurants and cafes) in your area to get a better idea of what’s already available.

Build a Prototype Menu

The next step is creating a list of menu items. Remember, you are a food truck, not a restaurant, so your menu items don’t need to be extensive. 

Consider a core menu of five to seven food items with standard soft drinks and juices.

Once you’re happy with the menu, take it for a spin and offer free samples to test the waters. But here is where the law can be a little hazy.

Depending on your local laws, you might need a food service license to cook food for distribution to the public, even if it’s free.

You can skirt the legalities by inviting your friends and family to taste your food because it’s a regular dinner invite. If your neighborhood holds regular community events like school fairs or BBQs, use these as opportunities to take your food for an unofficial test.

Alternatively, you can hire chefs to create the samples if you have the funds. This might be a viable option if you plan to hire chefs when your food truck business launches.

Using chefs is advantageous because they will prepare the food in a registered kitchen. This allows you to distribute free samples without fear of the law and gauge feedback. Still, it is your responsibility to disclose any allergies. It is also worth checking for any further compliance needs. These vary by state.

The first-hand feedback you collect puts you in a better position to make menu decisions.

You can ask people to rate what they ate out of 10, observe facial reactions (initial reactions never lie), and ask how much they’d be willing to pay for your food.

Once you’re happy with your menu, it’s time to start thinking about the business side of things.

Choose the Right Business Structure

The best way to start your food truck is to form a limited liability company (LLC). This straightforward step in your food truck business plan offers personal liability protection.

Personal liability protection means your personal money and assets (like cars and property) remain protected should your food truck business struggle to pay off any debt. This means your creditors can’t make you legally sell these to pay them back.

While these are unpleasant considerations, the best and most successful business owners always plan for the worst-case scenario.

It’s important to note that LLC laws differ by state, affecting aspects like formation requirements, annual fees, business licenses, and operational guidelines. Understanding these variations can help you avoid legal hurdles and set your business up for long-term success.

Write a Food Truck Business Plan

Business plans aren’t only for large corporate organizations. Every business needs a plan for the following reasons:

1. They clarify your financials, including the costs to start the food truck and the expected revenue.
2. The first thing we spoke about was having a concept in mind. You should write the concept down in your business plan. Having your vision, goals, and ambitions on paper gives you a clear direction and makes decision-making less complex.
3. Your business plan should outline your target audience. So, write down everything you learned about your target customers through primary research (the food tastings) and secondary research to gradually build a persona of your audience. It’s important to visualize your audience. It keeps you on track and ensures you’re always producing food that matches their taste.
4. Similarly, write down what you know about your competitors. These are things like who they are, where they operate, their prices, and the types of food they sell. Knowing your competitors gives you the space to reflect on how you can approach things differently to stand out in a good way.
5. Funding organizations (like banks) need a business plan before they consider lending to you. Bank lending might not be a priority right now, but it could become one when you start scaling. A robust business plan documenting your progress is a surefire way to win over your local bank manager.

Note: Some states require access to a commercial kitchen. Keep that in mind when preparing your business plan. 

Location Scouting

Areas like public parks, business districts, and college/university campuses may have designated food truck areas for which you can make a permit application.

In general, it makes sense to set up shop in the following places:

• High-traffic areas.
• Near popular event venues, markets, and festivals.
• Any area where your target audience frequents.

But, please, make sure you have permission because (depending on your state) there are laws and regulations to follow, such as securing a necessary business license, not being a certain distance from other food trucks and restaurants, and safety considerations like not being parked near fire hydrants and bus stops.

Sourcing a Truck

When sourcing a truck, there are two questions to ask:

1. Can I afford it?
2. Can it do what I want it to do?

You don’t need cash upfront to purchase a track. Many dealerships will offer flexible payment plans, so purchasing a brand-new van may not be a farfetched dream!

Additionally, a new van is less likely to have mechanical faults and will probably have a spotless exterior. You can rebrand the exterior with your business name, colors, logo, and other visual branding elements.

While longevity is promised, new vehicles are more expensive, and monthly repayments will most likely include interest.

Secondhand trucks are much more affordable because their value has depreciated. With thorough research, you can secure a sturdy and reliable second-hand truck—but don’t buy too old a truck in the temptation to secure a ‘bargain.’

Generally speaking, the older a truck, the more susceptible it is to damage and breakdowns. This also depends on how well previous owners cared for it.

If you identify a secondhand truck you like, do the necessary due diligence, such as researching its history, including previous owners, usage, accidents, and servicing.

While the price needs to be right, so do the features:

• Does it allow enough space for my needs?
• Are the cooking and serving areas adequate?
• Does the truck come with the necessary appliances? For example, a grill, refrigerator, and fryer. If you’re getting a second-hand truck, ensure these work and are in good condition.

Open a Business Bank Account

Make life easy by opening a business bank account. A business account makes it easier to:

• Report financial projections.
• Identify expenses eligible for tax deduction.
• Avoid the temptation to use business money for personal reasons or vice versa, as, depending on your business structure, this can also be against the law.

Apart from removing administrative headaches, a lesser-known advantage of having a separate bank account is that it builds your business credit. 

Having a separate bank account makes obtaining business credit cards with higher credit limits and securing funding from banks or other lenders easier. That’s why every business needs a business bank account, doesn’t matter if you’re starting a vending machine business, or an online business like a credit repair business.

Understanding your Fixed and Variable Costs

A budget and cash flow help to identify monthly costs, both fixed and variable. It tells you how many sales you need to make to break even and profit.

Here are some of the common fixed and variable costs to consider.

Fixed costs	Variable costs
Truck purchase/lease	Food and ingredients
Truck Insurance	Fuel costs
Licenses and permits	Disposable supplies (e.g., napkins, cups)
Equipment purchase and maintenance	Staff wages (if paid hourly)
Branding design for the truck	Utilities (if prepping food off-site)
Monthly parking/storage Fees	Cleaning supplies
Point of sale (POS) system and software	Marketing (e.g., paid ads, social media)
Business bank account fees	Credit card processing fees

You can get a business credit card to help you with some of these expenses.

Selecting the best business credit cards can help by offering rewards, cash back, and financing options that make purchasing equipment, stocking up on ingredients, and covering other startup costs easier. With features like expense tracking and built-in reporting, business credit cards help you stay organized and avoid overspending. 

Understanding Tax

Taxes are a silent killer. Get organized with your taxes before you start making sales unless you like paying more tax than you need to!

Start by meticulously tracking all your business expenses. A business expense is anything you spend on your food truck. Some are obvious, like ingredients and equipment. Others are more obscure and less obvious, even things as small as bin liners for waste disposal should be expensed!

The more (legitimate) deductions you add, the fewer taxes you pay.

At the same time, you should track your income. This is easier than expense management because your POS system will have a detailed record of every sale your truck makes.

It’s worth hiring an accountant unless you feel confident enough to do your taxes. An accountant can set everything up for you using accounting software to ensure taxes are done properly.

It’s worth the investment, and don’t forget you can expense your accountancy fees too!

Getting the Right Licenses and Permits

Operate on the right side of the law by securing:

• A business license. This is where you register your truck with the local authorities and get permission to run the business.
• A health department permit that secures your permission to handle and serve food. The department will thoroughly assess your truck for food safety standards. This includes things like food refrigeration, sanitation, and storage.
• A mobile food vendor permit. This is dependent on your city. The permit permits you to operate in public spaces.
• A parking permit for where you operate your food truck.
• A sales tax permit that allows your food truck to collect sales tax from potential customers when they buy your food.

Sourcing a Supplier

Our recommendation? Go local.

Local farmers, butchers, and fishmongers are good options because:

• They’re local, and we should always support local businesses!
• They are likelier to supply fresh food. Local businesses that distribute to other local businesses regularly don’t need to add preservatives and other chemicals to make the food last longer.
• They provide flexible delivery options. Large, multinational suppliers might lock you into minimum contracts, spending, and delivery frequency. Demand for food trucks can fluctuate across a year with four seasons, so you want to partner with a supplier who understands that and gives you the desired flexibility.
• They can provide flexible payment options.

Apart from going local, you should choose a supplier specializing in the food you sell. This is one way to guarantee quality. As always, do your background checks and read their reviews before committing.

Insurance

Like tax, insurance is another boring yet necessary evil. Make sure you secure the following insurance:

1. Public liability insurance: Covers claims for bodily injury, property damage, and personal injury.
2. Product liability insurance: Protects against claims related to products sold, manufactured, or distributed by your food truck.
3. Employers’ liability insurance: Covers costs associated with employee injuries or illnesses while on the job. This is legally required if you have employees.
4. Commercial auto insurance: Covers your food truck for accidents, third-party bodily injuries, property damage, and damage to attached equipment.
5. Equipment breakdown insurance: Covers food truck equipment, such as freezers, grills, and refrigerators in case of unexpected breakdowns.
6. Commercial property insurance: Protects your business property, including the truck itself and its contents.
7. Stock insurance: Covers your ingredients and materials in case of loss or damage.

We know there is a lot to consider, and some of it is scary, too. Hopefully, nothing will go wrong, but insurance is a necessary safety net. Should anything go wrong, having proper insurance can determine the survival of your food truck.

Hiring Needs

Full transparency: You’re unlikely to find loyal staff who spend years working at your food truck like you would in a corporate setting.

In addition to chefs, who are your best bet as long-term employees, you are likely to attract students needing a summer job or single parents.

In the beginning, you might not even need staff. But here is a list of common food truck roles to give you a better idea of what to expect:

• A cashier who handles the transaction.
• A service window attendant who takes orders.
• A ‘runner’ who distributes orders.
• Chefs and cooks.
• A food truck driver (unless that’s you).
• A food truck manager. This is someone who oversees the above staff members.

It all depends on how hands-on or off you want to be. In the beginning, you will need to be deeply involved. But once things settle and your revenue is healthy, you can make the entire operation less dependent on you.

Marketing Needs

What good is a food truck business if nobody knows it exists? Given the local nature of a food truck business, here’s what you need to consider.

Google My Business

Food trucks are hyper-local businesses. It’s rare for someone to travel far distances for a food truck. People usually scope out local trucks. This makes a Google My Business (GMB) crucial to your online presence.

An optimized GMB includes:

• Your food truck’s name
• Address
• Operating hours
• Contact details
• Your menu

This helps your food truck appear in local searches. For example, if you operate a Chinese food truck in Brooklyn, you’ll want to appear in the search results whenever someone in Brooklyn searches “Chinese food near me,” “Food trucks near me,” or similar.

Once the essentials are optimized, keep adding:

• Fresh pictures of your food and happy customers
• Customer reviews

Short-Form Videos

Short-form videos (90 seconds or less) are all the rage and perfect content material for food and hospitality businesses. Get yourself an Instagram and TikTok account to post short-form videos.

Here are some short-form video ideas to get you started (with examples):

• Food preparation
• Menu highlights
• Day in the life of running a food truck
• Customer reactions and reviews
• Your story

Short-form videos are easy to digest and humanize your brand, making them useful for community building.

Invite Food Influencers

You could grow your following by buying followers, but inviting local food influencers to try your food is a cheat code for building your truck’s social media following. Food influencers already have a large and loyal following. As a result, an endorsement from an influencer is all it takes to turn your fortunes overnight.

Here’s an example of the type of content influencers create for businesses in the food industry.

Final Thoughts

Food is a personal venture. Food makes people feel things. What someone eats can make or break their day. We have no doubt you’re buzzing with enthusiasm and ideas to showcase your delicious food far and wide to make people feel a certain way and give them a flavor of the dishes that mean so much to you.

At the same time, it is important to give equal weight to the practical and logistical aspects of food truck operations. This includes everything from marketing and business structure to the boring (but critical) insurance and licensing hurdles.

With everything in place, you give your truck the best chance at success.

Good luck!