How to Start a Food Truck (or Cart) Business

Denise Elizabeth P
Senior Financial Editor & Contributor
Last Updated: September 27, 2021
Date Published: September 22, 2021

The food truck scene has really blown up in the last decade or so and they seem to be taking the restaurant business by storm.

For food lovers who have a talent for whipping up drool worthy recipes but may not have the funds to start an actual restaurant, a food truck can be more attainable.

In a nutshell, a food truck is a large vehicle that is equipped with a kitchen for serving food.

Purchasing a brick-and-mortar restaurant is expensive and very competitive, but food trucks are not only more affordable, but they are more likely to succeed when done correctly.

If you have been looking for a way to turn your love and talent for cooking and baking into a viable business, we have a few steps to help you succeed from the get-go!

Let’s get started!

How to Start a Food Truck Business:

food trucks

What are your Local Food Truck Rules, Regulations and Laws?

Each city is going to have their own rules and regulations regarding food service and this does not exclude food trucks or food carts.

Before investing any money or time into this venture, make sure you do some initial research on the local food truck laws and regulations.

  • What business licenses and or permits do you need?
  • Where can you setup your food truck and where can’t you setup your food truck or food cart?
  • Are there any certifications needed operate a food truck?
  • What are the health guidelines and requirements for food handling and safety?
  • What food handling requirements are there for employees?

Food truck rules and regulations generally fall under three major categories: health, zoning, and vehicle requirements.

Make sure you look into all of these categories and that you are able to meet all of the requirements.

What is the Food Truck Scene like in your area?

Now that you know what is legally required for you to open a food truck, you want to find your place in the market.

To do this, spend some time evaluation the food truck and food cart scene in the area where you want to setup.

  • What food trucks are doing really well and why?
  • Are there already too many of one type of food truck? For example, Mexican food, sushi, etc.
  • How are people pricing their menu?
  • How is the accessibility? Is there parking, outdoor or indoor seating areas, etc?
  • What hours are they operating and what are the busiest times?

In order to succeed, you need to enter the scene with your own, unique food truck.

What will make you stand out from the crowd?

What will draw customers to your window?

This leads us to the next section: building your brand.

Build your Brand

After learning about the local regulations and laws and scouring the food truck scene, you are now ready to work on your own brand.

You’ll need to work on a name and logo, design for your food truck, and most importantly, your menu.

Take into consideration everything you’ve learned about the food trucks you observed and how you can add your own unique twist.

Narrow down the type of cuisine you want to offer.

Here are a few popular food truck cuisine concepts to get you started:

  • Fushion dishes – this is a mix of two type of cuisines such as Japanese-American or Tex-Mex.
  • Regional cuisine – this is cuisine that is native to your region. For example, BBQ is popular in Texas or Lobster Rolls are a must on the East Coast.
  • Comfort foods – think fried foods, mac and cheese, burgers, and so on.
  • Pizza – this one is pretty self explanatory
  • Organic or health type foods: smoothies and bowls, salads, juice, etc.
  • Cold foods: sandwiches, salads, etc.
  • Baked goods and desserts: cakes, cupcakes, other types of pastries and sweets or perhaps even breads.

You may want to hold off on naming your food truck business and designing your logo until you’ve decided on the type of cuisine you will be serving.

When choosing a name, you want to select a name that is easy to remember, descriptive to the type of cuisine you are serving, and a name that can grow with your business.

You will also need to check and see if your domain name is available for your business website:

Find a domain starting at $0.88

powered by Namecheap

For more help with choosing a name for your business, visit our post here.

 

food truck kitchen

Officially Register your Business

To legally do business, you have to register your business with your local Secretary of State.

The first step is to decide on a business structure, also know as a business entity.

Your business is not legally recognized until you complete the appropriate formation paperwork with the government and state.

There are several business structures to choose from including sole proprietorship, limited liability company (LLC), Corporation, etc.

You will want to consult an attorney if you are not sure which business structure to choose.

You can also use a formation service that will handle the entire process for you.

Many small business owners choose an LLC (limited liability company) because it provides limited liability protection to you as the owner and it benefits from pass-through taxation.

LLCs are actually a really great choice for a food truck business.

For example, say your food truck business gets sued or goes under, your personal assets are separate and protected.

If someone comes after your food truck assets, your personal assets like your vehicle and house are protected!

Learn all about LLCs here.

Here is a quick Business Formation Checklist to get you started:

  1. Select a business entity type: Sole proprietor, LLC, Corporation, etc.
  2. Obtain an EIN (Employer Identification Number) from the IRS – once your online application is complete, you will receive an EIN instantly.
  3. Register your business locally in the State in which you will be conducting business. This is done with the Secretary of State in the State in which you will be doing business.
  4. Obtain any business licenses or permits required in your State to operate a food truck or food cart business. These can also be found at your local Secretary of State website or by simply doing a Google search.

food truck business

Fund your Food Truck Business

Startup costs for a food truck business are not cheap and can range anywhere from $5,000 – $125,000.

Some common startup costs include:

  • The actual food truck itself (buying a used food truck rather than a brand new one is a great way to save some money in the beginning)
  • Vehicle inspection and bringing the truck to code
  • Generator
  • POS Software and iPads or equipment for receiving payments
  • Truck design which includes: paint, wrap, logo, etc.
  • Supplies: utensils, cups, plates, etc
  • Initial food purchase
  • Any business licenses and business license fees
  • Fuel
  • Insurance
  • Website
  • Food truck lot fees or rent

If you don’t have a little nest egg set aside for your business, you can consider raising funds or getting some sort of small business financing like a loan or line of credit.

Some popular funding options include:

  • Equipment loan/financing programs
  • Business Credit Cards
  • Business lines of credit
  • Personal loan from friends or family
  • Crowdfunding such as GoFundMe
  • ROBS – rollover for business startups (use your retirement account to start your business)

Although food trucks can have larger initial startup costs than other business ventures, there are options for funding your business.

If you don’t’ have enough money to buy a new or used food truck, you can consider leasing a food truck until you can afford to buy your own.

Get Insured

Because you will be serving food to customers, you want to make sure that you have the proper insurance should someone get sick or should any legal issues arise.

You just never know what could go wrong and it is always a good idea to be covered.

You should definitely get general liability insurance which will cover most incidents that could occur.

If you aren’t sure what type of insurance coverage(s) you need, you should contact an insurance agent specialist.

Not having insurance for your food truck business can easily put you out of business if something does go wrong and you are liable.

food truck cart

Marketing

In order to build a client base, you are going to have to market yourself.

Spend some time building a website, business cards and perhaps flyers that you can hand out.

Maybe even just going door to door in neighborhoods is a great way to pickup new clients.

Introduce yourself and invite the neighbors in the area to come try your new food truck.

Your marketing materials should clearly share what your food truck has to offer!

Promotions like “buy one get one free” or “10% off your first order” can entice customers to come try your food.

Customer Reviews

Websites like Yelp and Google are often how people decide where they want to eat….or not.

If a restaurant or food truck has bad reviews, it can really hurt your business.

Furthermore, people are more likely to leave a negative review rather than a positive review, so you want to incentivize customers to leave a positive review.

Customer reviews are an excellent way to build credibility and grow faster.

Encourage your customers to leave you a Google or Yelp review or leave a review.

You can incentivize them by offering a discount on their next meal or perhaps enroll them in some sort of loyalty program exclusive to those who leave a positive review.

Build a Great Reputation

The best way to do this is by providing an excellent experience at a reasonable price.

Showing up on time, great customer service, quality meals and service, and following through on your promises is also part of building a great reputation.

Happy customers will be returning customers and they will also be the ones that send you referrals by word of mouth.

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  1. IRS.gov "Limited Liability Company (LLC)" Page 1 . September 22, 2021

  2. SBA.gov "Choose a business structure" Page 1 . September 22, 2021

  3. SBA.gov "Business Structures - Limited Liability" Page 1 . September 22, 2021