How Much Money Can My Food Truck Make? [Free calculator included]

The food truck industry has been on a remarkable run over the past decade.  Zippia put together a great report on some of the key numbers in the food truck industry.  Here are a few industry highlights from the report:

Number of Food Trucks in the United States

There are 35,512 food trucks in the United States alone. 

Food Truck Industry Annual Revenue

U.S. based food trucks generate $2.7 billion in annual revenue. 

Food Truck Industry Growth Rate

The U.S. food truck industry has experienced a 12.1% average annual growth rate since 2016. 

This includes a slow down in 2020 due to COVID, but the industry is back on a growth trajectory post COVID. 

Based on that growth rate, I am sure there are many aspiring food truck entrepreneurs out there that are considering starting their own food truck business.  So I wanted to write an article that would answer all of the key questions I would have if I were starting my own food truck business.  

At ProjectionHub, we are all about the numbers, so we put together a couple of spreadsheet tools that I will reference in the article that will help you determine how much you can make with your own food truck concept. 

1. Food Truck Sales Calculator - This is a free template that will help you calculate how much your particular food truck concept could generate in sales.  It is free, so go grab that now and follow along.  
2. Food Truck Financial Model - This template will help you create a full set of financial projections for your food truck and help you forecast your profitability.  This template will be what you need if you are looking to get a loan or raise investment for your food truck startup. 

With that, let’s dive in!

How to Start a Food Truck Business

Like I said, I am not a chef, I am an accountant, so I will leave the "cheffing" to you and focus on the numbers side of starting a food truck business.  The key topics I plan to cover are:

• Food Truck Startups Costs
• Food Truck Sales
• Food Truck Operating Costs
• Food Truck Profits

Let’s start with how much you are going to need to spend to even get into the business.  Oh, and if you could use a free food truck business plan template, we got you covered.

Food Truck Startup Costs

The average cost to start a food truck business is $93,495 according to POS Bistro.  

As with any business you can go the budget route, or the premium route.  2nd Kitchen estimates that startup costs for a food truck business will range between $50,000 on the low end and up to $175,000+.  

The primary startup costs for a food truck business are:

• Food Truck
• Permits and Licenses
• Inventory
• Insurance

I did some research on each of these costs. 

Average Cost to Buy a Food Truck

The average cost of a food truck is $82,500 based on a study from POS Bistro. 

This would be the cost of the truck and outfitting it with all of the kitchen equipment that you need for your concept.  

Average Food Truck Permit Cost

The average food truck in the U.S. pays $28,276 on permits, licenses and ongoing legal compliance according to Food Truck Nation. 

This seemed really high to me, but I think that this depends on your location.  Some states and cities have put a high price on the permits required to open a food truck in an effort to make sure their city streets are covered in food trucks.  By keeping the permit cost high, cities can control how many food trucks will operate. 

Average Cost of Inventory for a Food Truck

The average food truck will spend $3,000 on initial inventory.  

You really only need to buy about a week’s worth of inventory initially, and then from there you should be able to cash flow additional inventory purchases from your sales. 

Average Cost of Insurance for a Food Truck

The average cost of insurance for a food truck is $3,000 annually according to POS Bistro. 

Even though this is an ongoing cost, we include it in startup costs because you might need to pay for the first year or 6 months up front when you start. 

So with those startup costs in mind, now we want to know how much a food truck can generate in sales in order to recoup that initial investment. 

Food Truck Sales

The food truck industry generated $2.7 billion in annual sales according to Zippia.  

Before we try to calculate how much your unique food truck concept might be able to generate, let’s talk about some averages for the industry.    

Average Food Truck Annual Revenue

The average food truck in the U.S. generates $76,056 in annual revenue.  

I was able to calculate this by simply taking the total industry revenue of $2.7 billion and dividing by the 35,500 food trucks in the U.S.  

Now I thought this number seemed pretty low, so I wanted to do a bit more digging.  Here is what I realized.  Many of those 35,500 food trucks are not operating the food truck on a full time basis.  Some may only operate seasonally.  Some may only operate on the weekends or for special events etc.  So I was able to find some additional information from a Food Truck Empire survey of roughly 300 food truck operators that operate the truck on a full time basis.  This data was more encouraging. 

• 21% of full time food truck operators generated over $200,000 in annual revenue
• 64% of full time food truck operators generated between $100,000 and $200,000 in annual revenue
• 15% of full time food truck operators generated less than $100,000 in annual sales

Forecasting Food Truck Sales

Before you buy a food truck or finalize your menu, you should run through an exercise to determine how much your food truck or trailer would be able to generate in sales.  The following process will allow you to project your food truck sales for your specific concept, food truck design and menu.  

Our free food truck sales projection calculator and the below video will help you walk through this process. 

How to Calculate your Food Truck Sales Projections

1. Find the average amount of time to make your menu items - you can simply set up a simulation in your kitchen at home and time yourself for each item. Let’s say that some items take 2 minutes to prepare because you are simply assembling pre-cooked ingredients while some items might take 6 minutes to cook. Maybe your average across your most popular items is 4 minutes. 
2. Calculate the number of customers you can serve per hour - If your average item takes 4 minutes to prepare, that means the food truck could serve a maximum of 15 customers per hour per cook.  Then simply multiply by the number of cooks or food prep staff you expect to have on the trailer.  If you have 2 cooks that can serve 15 customers per hour, then your food truck has a capacity of 30 customers per hour.
3. Determine how many hours per day you will operate - For example, you might serve lunch for 2 hours and dinner for 3 hours.  
4. Estimate at what percentage of capacity you will operate - Now that you know how many hours you will operate, you need to estimate at what percentage of capacity you will normally operate.  Maybe for lunch you have 1 busy hour at 100% of capacity and one hour at 70% capacity, so your average operating capacity is 85%.  You will need to do the same for dinner.  One way to estimate this might be to go watch a competing food truck and just watch how busy they are and for how long.  How many customers did they serve etc.
5. Project how many customers you expect to serve - Simply multiply the maximum number of customers you could serve per hour x the number of hours of operation x the average percentage of capacity that you operate at.  In this example that would be 30 customers x 5 hours x 85% = 127 customers per day.
6. Set your pricing and estimate your average spend per customer - Again you could do some competitive research by watching what customers order at other food trucks and then estimate how much you expect the average customer to spend at your food trailer.  Maybe you expect a $7 entre plus a $2 drink for an average customer spend of $9. 
7. Calculate how much money you food truck can make per day  - Now you just need to multiply your 127 daily customers x your $9 average ticket to project $1,143 in average daily sales.  
8. Compare your food truck sales projections to industry averages - Once you do this, you should compare your projected sales to what we found as an industry average.  Based on 3 different sources ( Mashed, Food Truck Empire, Quora ) we found the following:
   

1. Minimum daily food truck sales = $200
2. Maximum daily food truck sales = $2,500
3. Average daily food truck sales = $1,000
   

How to Improve your Food Truck Sales

There are a number of things you can do to increase your food truck sales.  Using our food truck revenue calculator I am going to show you how the following improvements can have a dramatic impact on your sales projections. 

1) Increase your capacity by reducing the time it take to prepare an order

• Add more cooks
• Add more cashiers
• Add more point of sale systems to take orders
• Prepare more of your product beforehand
• Optimize your menu for speed of delivery

2) Increase your capacity utilization by finding a better location

3) Increase your average spend per customer

See how these improvements can improve your food truck sales.

Food Truck Operating Expenses

The average food truck has expenses of between 91 and 94%.  

Unfortunately, you don’t get to take home all of the revenue.  Food trucks have significant expenses as well.  We were able to determine our food truck expense estimate based on the fact that most food trucks generate a profit of between 6 and 9% of revenue. So what are the major expenses for a food truck? 

Major Food Truck Expenses Include:

• Food Cost
• Labor Cost
• Fuel Cost
• Insurance Cost
• Permit and License Cost
• Commissary Kitchen Cost

I did some research on each of these expenses. 

Average Food Cost for a Food Truck

The average food cost for a food truck is between 25 and 38% of revenue according to Mobile Cuisine. 

This isn’t just the cost of food for food trucks, this is what you should expect for food costs for any type of restaurant. 

Average Labor Cost for a Food Truck

The average labor cost for a food truck is between 30 and 35% according to Mobile Cuisine. 

As it relates to labor cost, one thing that I found to be interesting is that the food truck industry only employs 40,500 people in the U.S. according to Zippia. With 35,500 food trucks in the U.S. this means that the average food truck only has 1.2 employees.  This probably means that most food truck owners are working in the truck along with 1 other employee. So your labor cost can include what you pay yourself as the owner.  

Average Fuel Cost for a Food Truck

The average fuel cost for a food truck is $1,000 per month according to 2nd Kitchen. 

Obviously this can vary quite a bit.  Fuel prices have been quite variable lately, plus it will depend on how far you have to drive your truck each day.  If we assume the average food truck gets 10 miles per gallon, you aren’t going to want to store your food truck too far from where you normally serve customers, otherwise this fuel cost can really add up. 

Average Insurance Cost for Food Truck

The average cost of insurance for a food truck is $3,000 annually according to POS Bistro. 

Average Permit and License Cost for a Food Truck

The average food truck in the U.S. pays $28,276 on permits, licenses and ongoing legal compliance according to Food Truck Nation. 

Again this is going to be quite variable depending on your location, so you will want to do some specific research on the city you intend to operate in. 

Average Commissary Kitchen Cost for a Food Truck

The average monthly cost for access to a commissary kitchen for a food truck is between $500 and $1,200 per month according to POS Bistro.

Food Truck Profit

With your sales forecast and expense projections completed, it is time to see how profitable your truck might be.  First, let’s look at some industry averages.  

Average Profit Margin for a Food Truck

The average profit margin for a food truck business is 6-9% of revenue according to Upserve. 

Average Annual Profit for a Food Truck

The average annual profit for a food truck business is between $9,000 and $13,500.  

We made a few assumptions to calculate the average food truck profit.  We assumed that the average annual revenue was $150,000.  We know it can be much more or much less.  We also assumed that the owner is getting paid an average salary through the “labor cost” expense line item.  So as the owner of the food truck you would earn your salary + the profits.  

‍How Profitable will your Food Truck? 

Now that we have a solid understanding of our food truck sales forecast, you might want to know how profitable your food truck can be.  Our food truck financial projection spreadsheet will help you enter in your startup costs, operating expenses and cost of goods sold in order to project your profitability.  

Once you fill in all of your own assumptions, you will be able to see your forecasted food truck financials. You can see an example of our profit and loss at a glance below.

If you have any questions or need help with your own projections, please reach out and we can help!