The Unexpected Costs of Building a Food Truck
Contributed by Dale Mackey. Photo by Shawn Poynter.
A friend of mine who is thinking about starting a food truck recently asked what surprised me when I first started Dale's Fried Pies. More specifically, he wanted to know if there were costs associated with running the business that I hadn't anticipated when I began, or things that cost more than I expected them to.
5 Mobile Food Business Costs to Plan For
Going in, I priced ingredients, estimated how much I would have to spend on things like property tax and insurance, paid for my business licenses, and researched the cost of renting a kitchen space. But there are plenty of costs that I underestimated or didn't anticipate at all. Have you thought about these expenses as you plan your new venture?
Ongoing Design Work
You've probably thought about your initial branding. Maybe you've found a designer, created your logo and branding yourself, or reached out to a friend who's good at layout and design. But a great logo isn't the end of the process. As you build your website, add more items and services, and create promotional materials and signage, you may find yourself spending more than you anticipated.
When I completed my trailer, I had to update my website and create material that advertised my new mobile kitchen. When I decided to offer pie deliveries to homes and offices, I had my designer create a brochure to clearly communicate that information. These are things I couldn't have predicted from the outset. Allowing yourself some money in your budget for ongoing design will help make sure you're getting the most up-to-date information out to the public.
How to Budget: I try to budget $100 a month for design work. In months I don't use it, it rolls over to bigger projects that may cost several hundred dollars.
Packaging
Whether you serve your product in a branded bag or box (like I do), or just use paper plates and plastic cutlery, the costs of the items needed to serve your food to the public might be higher that you initially intended. For example, each pie that I sell comes in a bag with a sticker labeling the flavor. This packaging is a big part of the look and feel of my business, but getting custom-printed stickers for every pie I sell isn't cheap.
I had to do a lot of searching before I found a supplier who could meet my needs within my budget. Because I buy in bulk, I spend around $0.07 on packaging for each pie, which may not sound like much but adds up. The moral: Make sure to consider not just what food you will serve, but how you will serve it!
How to Budget: Do some research to find the very best price for your plates, napkins, utensils, etc. Buying in bulk will lower your costs significantly. Then, consider how much you plan to sell each month and multiply that by the per-piece item cost of your packaging and round up for extra costs. Right now, I spend about $120 each month on packaging.
Vehicle Maintenance
You've probably already realized that having a mobile food business means that you will have to spend money on gas to get to your events and venues, and that some upkeep will be required to keep your truck or trailer in tip-top shape. But don't underestimate how much you should have in reserve to make sure you are able to quickly fix any problem that might arise.
I've known countless food truck owners who have had to cancel events because of a problem with their vehicles or machinery (generators tend to be the main culprit here). Having a healthy reserve for maintenance means you'll be able to get your vehicle fixed as fast as possible, minimizing days you are unable to serve.
How to Budget: Consider what your most costly likely repair could be. If you know that the tires are getting old on your vehicle, find out how much those tires will cost to replace, then work towards a reserve fund that could cover those costs. Saving $100-200 each month is a good start.
Fees for Events
You're no doubt aware that most farmers markets and big events require some type of fee to participate. However, when I first began, I was surprised that many of the big fees for spring events are due in January or February, which tends to be the slowest time for mobile food service. Make sure you have enough money in your budget to cover these event fees during the slow season.
How to Budget: Take a look at the events you're considering for the following year and find out when their deadlines fall. For example, some of the events I participate in – such as farmers markets – collect on a weekly basis, while others – such as a downtown opera festival that charges food trucks $500 and is held in spring – collect their fees in late winter.
Donations
This isn't a necessary cost, but once you start any new business, you’ll find yourself asked for donations for community events and nonprofits more often than you might think. While you are not obligated to make donations of any kind, it's a great way to give back to your community and advance awareness of your business. Think about how much you are willing to donate in food, gift certificates, or sponsorships each month or year. You can also decide to focus your giving on one specific charity or cause.
How to Budget: Decide what you're able to give overall and let organizations requesting donations know when you've maxed out your "giving budget." One approach is to do your own charitable work and focus your giving there. I concentrate most of my giving on two projects I created. One is The Awesome Squad, which provides mini-grants to young people in my town, Knoxville, Tennessee. The other is Random Acts of Pie, a free pie delivery service – the kind of surprise people actually welcome!