How To Start a Successful Food Truck

Sep 21, 2020
10 minute read

Have you always dreamed of working in the restaurant business? If you’re a food lover and thrive in the energetic atmosphere of the foodservice industry, a food truck might just be the perfect way for you to make your mark in the culinary world. 

While starting a new restaurant can be cost prohibitive for many aspiring restaurateurs, starting your own food truck is more within reach for first-time entrepreneurs. From the creative menu offerings to the fast pace, there are lots of things to love about being a food truck entrepreneur. 

However, like any new business, it’s important to understand the challenges and drawbacks you might come up against. Armed with the right information, you’ll be well on your way to getting your food truck on the road. 

3 benefits of starting a food truck

Over the past decade, you’ve probably noticed an increase in the number of food trucks in your area. What used to be a rare novelty has become a common sighting everywhere, from big cities to smaller towns. The market size of street vendors in Canada has reached $325M. Unlike many other industries that are dominated by a few large corporations, the food truck business is filled with entrepreneurs just like you. A few perks of the business are:

1. Lower startup and operation costs

A major benefit of starting a food truck is that the startup and operation costs are far lower than you would pay to start a brick and mortar restaurant. 

2. Flexibility

Operating a food truck also offers a unique level of flexibility that you might not find with a traditional restaurant. You can take your business to different locations in your community based on where the largest number of potential customers will be. You can also offer on-site food truck catering for weddings or events.

3. Creative freedom

By starting your own food truck, you’ll get the opportunity to bring your creative vision to life through everything from the menu to the truck wrap to your business branding.  

4 unique challenges of starting a food truck

Although there is a lot to look forward to when beginning a new food truck, there are also some challenges you should keep in mind as you decide if this is the right business for you. Some of these include:

1. Initial cost

While these costs are much lower than those required to start a restaurant, it isn’t cheap to buy a food truck. You’ll also run into additional costs to get it fit for business. We’ll explore the various costs in more detail below, but keep in mind that the startup cost for a food truck in Canada is typically between $40,000 and $200,000. 

2. Regulatory compliance

Food safety is extremely important, since improper handling and storage of ingredients by a food truck or restaurant can cause serious foodborne illness. We’ll go over health and safety regulations by province below.

3. Legal limitations

Once your vehicle meets all of these requirements and has been inspected by the appropriate health authority in your province or territory, you can apply for the licences required to operate your food truck. These are issued at a municipal or regional level, rather than a provincial level. 

Your municipality will likely require you to obtain both a special vehicle licence for your food truck as well as a food vending permit.

Your permit will outline where and when you can legally operate your food truck. There are usually restrictions on the number of food trucks allowed in a given area at the same time. 

Familiarizing yourself with the particular regulations as they pertain to your city will prevent any unforeseen disappointments. 

4. Time commitment

To ensure success and make a return on your investment, you should expect to spend many hours at your food truck. You might be surprised by just how much time you end up spending in a tiny food truck on prep and cleaning for only a few hours of foodservice. After all that, you will still be responsible for the administrative aspects of the business, such as bookkeeping and ordering ingredients. Unlike, for example, a home-based business, it’s not as easy to shuffle your schedule around. 

Food truck costs and finances

The first step before starting any new business is to research the industry and the costs associated with entering it. Once you have a sense of what costs you should expect to encounter, you’ll be able to build this information into your business plan and avoid any unexpected bills. 

Food truck startup costs

While a new food truck can cost as much as $100,000 or more depending on size and equipment, even a used truck may cost around $15,000. When you buy a food truck that isn’t brand new and set up for foodservice, you can expect to spend at least another $15,000 to retrofit it or make sure that it meets all the regulatory requirements needed to operate.

Your costs may be lower if you opt for a food cart or non-motorized refreshment vehicle instead. If you require a larger vehicle, you can also choose a food trailer. These offer more space but are less mobile.  

In addition to the cost of the truck, you may need to purchase specialized equipment for your mobile kitchen. The price for this will vary depending on the equipment you need and whether you buy used or new. A big part of the appeal of a food truck is its appearance, so you might want to consider a well designed and attractive truck wrap, which can set you back over $3000. 

Additional startup costs include:

  •  Graphic design and branding
  •  Initial inventory such as ingredients
  •  Permits
  •  Creating and hosting a website
  •  A point-of-sale (POS) system

In addition to these initial startup costs, it’s also important to anticipate the ongoing costs you’ll be responsible for as a food truck entrepreneur:

  •  Insurance fees
  •  Payroll for any staff you hire
  •  Ongoing inventory replenishment
  •  Regular maintenance and repairs
  •  Internet fees
  •  Commissary fees

While your final costs will vary depending on the details of your food truck as well as variables such as location, spend some time identifying the prices for your particular business. Keep in mind that the lower end of the anticipated startup food truck cost is $40,000, so you should expect to spend at least this much.

Financing options

To fund your business, you can explore options such as equipment loans, personal loans, grants, securing investors, or even crowdfunding.

For example, you can launch a crowdfunding campaign that gives supporters credit to your food truck once it’s open. This way, you can secure the