Some restauranteurs enter the food truck business because it’s less expensive than running a brick-and-motor eatery. There’s more to food truck profitability than just the truck, though. Monthly expenses will vary based on the cuisine you offer. Top food trucks in Canada offer fare that ranges from cupcakes to burgers and grilled cheese. Below are the numbers you’ll need to research to forecast your costs of operation and return on investment accurately.
Buying a Food Truck
Buying a new, customized food truck can save on prep time. You’ll be able to set up the service area precisely as you want. Calculate interest fees if you’re financing the vehicle. If your budget is tight, you can cut costs by researching used food trucks for sale.
Stocking Your Food Truck
Ordering just the right amount of food will take some practice. Order too much, and you’ll end up with waste and lost profits. Prepare less than you need for the day’s crowd, and you’ll lose out on potential sales.
Getting Your Permits and Licenses
You’ll need to follow all city laws and health codes to launch a food truck business. Business licenses, health permits, and food handling certifications are usually on this list.
Renting Commissary Space
Local laws may require that you rent space in a commercial kitchen called a commissary. You’ll cook and store food, clean dishes, and get rid of your trash in one of these facilities. Some commissaries also offer a place to park and charge your truck.
Paying Rent or Event Fees
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Most likely, you’ll pay rent for a parking spot, too. Earning income at local events and fairs is an option that can increase sales and profitability. These venues usually charge a participation fee, plus a percentage of your sales.
Insuring Your Business
You’ll need to insure the truck against accidents, damage, and liability. Protect yourself with liability insurance, too. If you hire staff, add workers compensation costs to your insurance tally.
Maintaining the Food Truck
Add food truck maintenance costs to your profitability review. Account for normal wear and tear and unexpected major repairs. Expenses like oil changes, brakes, and new tires can add up quickly.
Staffing the Food Truck
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Friends and family may help out, however budget for hiring additional staff. Be sure to add employee hourly rates to your profitability checklist.
Marketing Your Business
Marketing needs will depend on the foot traffic around your food truck. Profitable food trucks have loyal fans who will need to know where to find your truck. Experiment with free marketing like social media platforms to save money.
Projecting Food Truck Income
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Finally, estimate the income you can earn with the truck each month. Calculate whether your revenue will cover costs and if there will be any profit remaining.
These are the critical numbers to review to determine the profitability of your food truck. Run the numbers to make sure you can get a return on your investment before you launch a food truck business.