Build a Budget For Your Food Truck Business
When you start a food truck business, there are a lot of expenses you’ll need to plan for. Even if you’ve worked in the restaurant industry before, you probably don’t know all the things you’ll need to plan for when it comes to a food truck. Because of the difference in the businesses, consider the following expenses and budgeting for your new business.
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There are a lot of things you’ll need to purchase up front that aren’t cheap. First and foremost, you’ll need a truck. You can’t have a “food truck” without it. These can cost anywhere from $20,000 for a used truck to over $100,000 for something new. The truck you choose will depend on a lot of factors. Consider how long you plan to use it, how hard you plan to run it, and how large you need it to be. These can all help you choose the right truck from the start.
After you have the truck, you need to outfit it with the equipment you need to cook the food you plan to sell. If you’re selling pizza, you’re going to need some ovens. However, if you’re selling snow cones, freezers are more your style. Figure out the equipment you need. The cost for this will vary significantly, depending on what you need, how big your truck is, and whether you buy new or used.
The Legal Stuff
You’ll need to make sure you budget for all the legal stuff. This includes city, country, and/or state permits. These permits cost varying amounts, depending on where you live. In general, you can expect permits to cost anywhere from $200-$800. Yes, this is a big range — make sure to check with your city to find out the exact amount. Remember that this cost is per year or two years. This is dependent on your area and the laws governing food trucks.
On top of permits, you’ll probably need to get insurance. Most areas will require some sort of insurance for your business, especially since it’s in a vehicle. The type of insurance you have and the amount covered varies by state and city as well. Plus, you may decide that you want extra coverage that isn’t absolutely required. Talk to your insurance broker to make sure you have the coverage you need. Some basics you should consider are liability, worker’s comp, and vehicle insurance.
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There are a number of ongoing costs you’ll need to budget, as well. Are you paying employees? You’ll have to budget payroll. Consider hiring a payroll company to take care of the payroll issues. It costs more, but many employers find it worth the extra cost. Purchasing ingredients is crucial, because if you don’t have these, you don’t have much of anything. You’ll also need to pay for marketing regularly. If you’re not marketing your business, you might as well not have it.
You’ll need to purchase paper products. What you need again depends on what you’re selling. However, a good start is plates, cups, napkins, and plastic silverware. You’ll buy these items regularly, since they’re used by your customers every time they come to your food truck. If you take credit cards, you’ll also need to pay for your monthly fees on the credit card processing.
Other costs will occur frequently that you’ll need to budget. One of the most expensive things you’ll need to think about is your gas cost. Depending on how often you move the truck, you may find yourself going through gas at an alarming rate. This won’t be a monthly cost, it will most likely be a weekly or even more often, cost.
You’ll also have to do maintenance and repairs on the truck. Regular oil changes will help keep the truck running longer. Tire changes and rotations, as well as other regular maintenance is important. However, you’ll probably come across other large repairs at some point, especially if you purchased a used truck. Your equipment may need repair or even replacement on occasion as well. It’s crucial that you budget for this.
Budget for Extra
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It’s extremely important that you budget for extra expenses. If you don’t, you’ll be scrambling when problems come up. Consider adding an extra 5-10 percent of your budget each month for unexpected happenings. This gives you a buffer if there’s a problem. Some things to consider are extremely large repairs to the truck or equipment, having to hire a new employee, legal fees, and more. Each of these can cause a lot of trouble if you haven’t put money aside for problems.
How to Make a Budget
So, now that you know what you need to plan for, how exactly do you do this? Once you have all the numbers, you need to put it into a budget. There are many ways you can do this. The most basic would be to use an Excel spreadsheet. To do this you would simply enter each of your expenses and how much they cost. You would also have to make sure to add your income, so you can keep track of your income vs expenses. This will help ensure that you know when you’re in the red and when you’re in the black.
Another option is to use a business budgeting program. There are many available software options. Budget software will help you insert budget items and calculate financials based on what you need. Your budget will become clearer as you work through the software. If you’re planning to spend money on your budget planning, you could also work with an accountant to create your budget. This will help you keep track of everything that goes in and out.
Running a food truck is not an easy job, but it is extremely rewarding. If you are careful to budget everything that comes into the business or goes out, the business will have a better chance of thriving.