Did you know that food trucks were once called “roach coaches?” This is because the original food trucks were a boring gray truck selling greasy food at dirt cheap prices. An even more compelling reason for the name was that the cooks were often unshaven, surly, and not-so-pleasant cooks who wished they had a better job.
That was then when the food trucks were akin to a backyard business with no high income prospects whatsoever. Today, you know that the food trucks look glorious, tempting, and chic. They are manned by friendly, chatty, and professional staff including a well-trained chef whose dishes are restaurant-quality and oh-so-delicious!
Does this mean that it’s a sure business to enter into? Here are the last year’s figures on food trucks. It will help you decide if putting up a food truck will be profitable enough for you.
- The busiest day for a food truck in on a Monday
- It’s a cash business with over 70% of the food trucks only accepting cash, no credit
- The most successful food trucks are in New York and L.A.
- Over 90% of those who buy from food trucks say it is not a fad and they plan to continue buying from these trucks
- 70% of those who have never bought from a food truck remain hesitant
- Three out of every 4 who buy from food trucks will eagerly try a new product or food from a new food truck
In short, it’s too early to pinpoint loyalties to any food truck brand which means it’s a good time to open a new food truck business. Also, since it is a cash business, you have money coming in everyday to cover your daily expenses. You also have a big market that have yet to try a food truck product and with the right marketing, it is possible to convert non-food truck persons.
The Costs Involved
Okay, so food trucks are a good idea as a new business however it is important to look at the costs and profit margin. In 2009, IBISWorld pegged sales from food trucks to reach a staggering US$1.2 billion and predicted a growth of 8.4% every year.
Compared to street carts and kiosks, the food truck has a heavy initial investment. For a used food truck, you can expect to spend around $30,000 without refurbishing. A brand new food truck could cost anywhere from $75,000 to $100,000. Other costs would be permits and licenses, salaries, utilities, fuel, packaging, raw materials, cooking ingredients and tools, printed material like receipts, menus, flyers, etc. Thus, depending on your standards, you could spend up to $200,000 to get your food truck business started or as low as $50,000 if you cut some corners.
With regards to daily sales, you need to initially target big spenders and those who buy from food trucks. Big spenders are willing to buy $100 worth of food a week according to a Gallup poll. They add that 10% of these buyers go as high as $300 a week.
With the right location, advertising, and food, the food truck business will succeed. Skip any one of these 3 factors and you might not see an ROI for a while.