Are Food Trucks Profitable?
Are Food Trucks Profitable?
Yes, food trucks are profitable.
If you are thinking about setting up a food truck, you’ll want to know whether it will be profitable or not.
Indeed, you want to set yourself and your food truck business for immediate success. We feel the best way to avoid financial disaster is to have a plan. This requires a bit of research, some brainstorming, and a lot of feedback from family and friends.
You shouldn’t feel that you are alone in this process. Utilize everything and everyone around you to start your food truck. While they may know that starting a food truck may have many benefits, utilizing their thoughts and ideas and offering a little pushback to your ideas.
Previously, we discussed what it takes to start a food truck. However, in today’s post, we will focus on creating a profitable food truck – and you can set your food truck up for success.
Can You Make Money With a Food Truck?
It’s important to state that food trucks can make money. Food trucks can be profitable. We’ve seen hundreds of successful food trucks turn a fat profit in various cities across the United States and Europe.
Their profit margins may vary, but they have one thing in common: High sales volumes.
Your job, therefore, is to increase your sales volume as much as you can. We’ll be discussing more of that later and more specifically in other posts.
Food Truck Profits Come Down to a few Factors.
Profitable food truck businesses come in all shapes and sizes. Small food trucks can bring in big profits and vice versa (Big food trucks can bring in small profits).
So, what does food truck profit come down to?
Below we will list the several critical factors for your food truck to make a profit.
- Delivering food your customers love
- Choosing the right location
- Costs
- Revenue
- Writing a business plan
Delivering food to your customers
Serving food that your customers will love to eat will drive your sales. A menu that misses the mark will siphon off prospective customers. Finding the right menu for your customers will be the first step in your food truck’s success.
Before you set up your business, you will want to figure out just what you’re planning to serve your customers.
You may have to see what’s already being served. What menu items are saturating the marketplace. If everyone in your area seems to be serving fish tacos – maybe you can look to differentiate your food truck business by offering something else.
Choosing the right location
The benefit of a food truck business is that you are highly mobile. You might consider working at several locations during the day or the week. This is pretty common; after all, you want to go where your potential customers will be. Additionally, you may attend one-time events during the summer or a particular season.
Whatever route or location you choose, picking the right spot to sell your food will be the key to your success.
Of course, some locations may be better than others – that’s okay.
Unlike a traditional brick-and-mortar restaurant, choosing the right location to set up your food truck is a constant job. Since many of your customers are transient, you’ll have to employ a variety of ways to stay connected, including having a website and social media.
Food Truck Costs
Food truck startup costs will be your initial investment. However, running your food truck on a day-to-day operation will also have costs. These daily or weekly costs can vary depending on how often you utilize your truck or how many sales you have.
Your operational costs can eat into your profit margins. While you need to spend money to make money, you will always want to keep your cost as low as you can. This means creating efficiencies and reducing waste in every aspect of your business.
As you get more experience, create efficient systems, and understand your customers, you’ll want to put all that into reducing your costs and increasing your profit margins. For a more thorough discussion, read our post, How Much Does a Food Truck Cost?
Food Truck Revenue
Your food truck revenue will be the key to your long-term success. Additionally, your income and revenue will be primarily based on your sales volume and the average receipt price.
The sales volume may be determined by how many days your food truck is serving customers or the customer volume you have while you are serving.
Writing a Business Plan
Articulating your thoughts and planning out your business before you fully launch will help you make better decisions. For more information on writing your food truck business plan, read our post How to Write a Food Truck Business Plan.
How Much Money Can You Make as a Food Truck Owner?
The key to this question is figuring out how many days of the week you will be working. For example, will you only work weekends? Will you work five days a week or every day?
When you do work, will you work for 6 hours or work for 12 hours a day?
Food Truck Revenue Example:
Let’s explore a simple revenue example for illustration purposes. If you average 115 customers a day and your average sales ticket is $14.59, what will be your total daily revenue?
115 X $14.59 = $1677.85
Your total costs (including labor and inventory) are $975. At this rate, your total profit would be $702.85.
As you can see, ultimately, your food truck revenue is eventually driven by sales volume, average ticket receipt, and your costs.
How to Drive More Sales
You want to spend some of your profit margin driving future sales when considering the discussion above. Let’s outline a few areas of focus as it relates to driving more food truck sales:
- Offering Great Food
- Customer Service
- Customer Access
- Predictability
- Marketing
- Increasing Average Receipt Prices
Offering Great Food
When we are focused on the business side of starting a food truck, it’s easy to forget about the product or menu.
But you have simply got to hit a home run when serving food. The chances are that customers in many cities have too many options for buying fantastic food.
Offering your customers a high-quality food truck menu is an outstanding opportunity to make them repeat customers.
Your mobile food business depends on repeat business and good reviews – therefore, every sale counts.
That means every plate that goes out your window needs to be delicious and perfect. Remember, every customer can either be your biggest promotor or a heavy wet blanket on your image and marketing effort.
Therefore, you want to spend a lot of time developing a menu that your customers will love and that you can make a nice profit on.
Customer Service
Delivering great food with excellent customer service will win over customers. Your warm welcome, smile, and chit-chat will be a big win for you to provide exceptional customer service. While excellent customer service isn’t the only thing your food truck needs to succeed, it plays a vital role in boosting sales.
Customer Access
Your customers need to be able to access your business quickly. Choose a food truck location with plenty of parking or a convenient road to access your business. The easier it is to access your food truck, the more customers you’re likely to have.
Predictability
Your food truck customers – especially your fans – need to know where to find where you are serving. One of the best ways to gain a loyal following is to serve food at a predictable location and time.
While securing a stable spot can be challenging, it can make all the difference when trying to grow your business and fan base.
Marketing
Your food truck’s success will depend on getting the “word out” that you serve food at a particular time and location. Marketing may include your social media efforts, email marketing, website development, and even a food truck wrap.
Increasing Average Receipt Prices
In the end, your profits may depend on increasing your average sales receipt prices. This may mean getting each customer to order more every time they are at the window. This could mean upselling or cross-selling. It may also mean offering higher-priced items that your customers will love.
Increasing your sales and average receipt prices will drive your food truck sales and revenue.
Further Reading: Start a Food Truck With No Money
Are Food Trucks Profitable?
Additional Questions:
How can I increase my food truck revenue?
There are a variety of strategies you’ll want to employ to boost your food truck revenue. If you currently have a food truck and are operating, you’ll first want to take control of your costs. The chances are that you have extra costs that are siphoning your profits.
Next, you want to see if you can work an additional day. For example, if you wish to increase your food truck revenue but only work three days a week, you may consider working an extra day or two.
Your food truck menu plays a crucial role in your revenue generation. Consider adding menu items that boost sales and increase your profit margin.
Should I start a mobile coffee truck instead?
Starting a mobile coffee truck is another good mobile business. Many coffee entrepreneurs have turned to the mobile coffee business idea and have found success. Starting a coffee truck business is perhaps a lower-cost coffee business you may want to explore.
