Have you always wanted to start a food truck business and make money from your delicious recipes? But, maybe you don’t have much money, and can’t afford to make big investments in new equipment and other resources.
Or, perhaps you’re interested but aren’t quite sure what is involved in starting your own food business.
With the increasing popularity of food trucks, more resources have become available for new startups. Here’s how you can start a food truck business without any money.
How to Start a Food Truck Business With No Money
The food truck industry is growing more every year and has become a popular favorite for private events, or other special events.
A local park in my city even had a food truck festival where local businesses brought in their food trucks and other vendors showed up for some great family-friendly festivities.
And, while it may look fun and rewarding to own a food truck, there are many things you will have to take care of before you even start creating your first dish.
Here’s a quick list of what you may need to start your food truck:
- Loans, credit cards, or other means to borrow or buy supplies/equipment
- Proper licenses and permits
- A truck, van, or cart to store and sell your food
- Equipment, tools, and other food supplies
- Cash or card reader
- Business or separate bank account
- Business card or credit card
If you’re thinking of starting a food truck, but aren’t quite sure if it’s fo you, then I recommend watching this behind-the-scenes video.
This post may contain affiliate links, meaning I may receive a commission if you purchase through my links. I only recommend products I have personally tested or have thoroughly researched. All opinions are my own. Please read the full disclosure for more information.
Requirements to Open a Food Truck Business
The average cost to run a food truck business will vary depending on the type of food truck concept you want to have. Whether your concept is Tex-Mex, cold drinks and smoothies, burgers and hotdogs, or some other concept, each food style will have different costs and may require different licensing as well.
While the initial start-up costs will vary between $50,000 to as much as $200,000, there are many ways to reduce this total cost.
First though, before you start searching for funding to invest in your business, you will want to create a business plan using S.M.A.R.T. goals.
More on SMART goals in a minute.
How to build a solid business plan to start a food truck (more on planning later as well):
- Decide what your food concept will be (what will you serve?)
- Decide how you want to invest in your business (buy, rent, become a business partner, etc.)
- Research what local, federal, or state licenses and permits you need
- Determine if you have a target market and how to reach them (farmers markets, big events, outside of certain shopping areas, etc.)
Some food truck entrepreneurs may even start as partners, or even work for another food truck company as they work to build enough capital to invest in their own food truck business.
This can also be a great way to learn, and avoid many beginner mistakes to save time and money.
And, if you choose to go this route of starting as a worker for another food truck before establishing your own, you may even be able to borrow, rent, or otherwise get a great deal on tools and equipment.
This can greatly lower the total cost of starting up your own food truck.
According to Square, a popular payment system for small businesses, the average cost to run a food truck business is around $28,000 a year.
So, before you start making plans for your business, you will want to make them SMART goals.
S: Specific
M: Measurable
A: Achievable
R: Relevant
T: Time-bound
If all your goals are done with the SMART method, you are as much as 90% more likely to reach that goal, according to an article by LinkedIn.
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How to Get Funding for Your Food Truck Business
While there are ways to get much of your equipment cheap, or even for free, you will still need to have some funding for other things as well.
Decide what you are willing to save money on by renting or other means, and what things you will want to buy new.
1. Run a food stall at a farmer’s market to gain funding
Starting small and scaling up is an excellent way to not only save money but also test your food truck concept.
You can test new dishes and pricing at a farmers market, free of risk, which saves you time and money until you can afford to purchase the equipment for a food truck.
2. Apply to get a restaurant loan or bank loan
One of the simpler and quicker methods to fund your start-up food truck is to consider food truck loans.
If you have good credit, anything higher than 690, you may want to consider this as an option as you are more likely to get a better interest rate on loans.
3. Start with a minimum viable product method
This method means you get to test the ‘viability’ of your food truck concept on a smaller scale first.
Using the minimum necessary resources, such as a food cart or food stall, you can test whether you have a suitable concept and audience to scale up to a truck.
Regardless, this method is much less risky and requires much lower start-up costs. Plus, you are more able to determine if this is a business suitable to your aspirations.
2. Join a restaurant incubator program
Incubator programs are comprehensive programs for start-ups so they can safely grow and scale into successful and profitable companies.
These programs offer competitive advantages to new entrepreneurs in the food service industry by helping with funding, equipment sourcing, and more.
There are also scholarship opportunities available to students looking to further their culinary careers. I stumbled across these two $5,000 scholarships from Webstaurant Store that you may be eligible for.
You can learn more about incubator programs at the National League of Cities.
Ways to Reduce Initial Costs of Running a Food Truck
It can take up to 2 years for a food truck business to become profitable, which is why it is important to lower your initial costs as much as possible. You can do this by renting, financing, and more.
1. Food Truck Financing
If you choose the food truck financing route, you will want to aim for lower interest rates on loans, if possible.
Make sure you also know what your financing options are before you decide to commit to a long contract. Shop around for loans and rates before making that final decision.
You can check out this financing guide to help you with the process.
2. Renting Equipment
This is a great go-to option that allows you a lower-cost alternative that doesn’t put you in the hole. You also reduce your risk by not taking on credit.
Renting also gives you a chance to try out different equipment brands and styles before you decide to buy, and can afford your own equipment.
3. Borrow from Family Members
Borrowing from family can also be a good alternative to taking out a loan, especially if you have supportive family members.
If you choose this route, you will want to treat this method of financing just like you would a normal loan. If your business is doing well, you can start paying your family back a little at a time.
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Licenses and Permits Needed to Start a Food Truck
Not all locations will require the same permits and licenses. So you will want to check your local laws and state laws to make sure you are running your business legally.
The total estimated costs for the proper licensing can range from around $726-11,276 annually depending on what all you decide to do in your food truck business.
This cost will go down after the first year as some of these expenses may be one-time fees, or may be every two years or longer. This is also partially why it can take up to 2 years for a food truck business to become profitable
Here are the estimated costs for the necessary permits and necessary licenses you’ll need:
- Business License ($0-500, one-time fee)
- Vehicle registration and other vehicle fees ($50-500 yearly)
- Food Truck Permit ($100-1,000 per year)
- Employer Identification Number if you plan to hire employees (free service provided by IRS)
- Health Permit ($0-1,000 per year)
- Food Handler’s Permit ($100-500 per 2-5 years)
- Food Service Permit ($100-1,000 per year)
- Fire Permit ($25-500 per year)
- Insurance ($23 and up, monthly)
- Liquor License, if you choose to sell it ($75-6,000 every 2 years))
Once you have checked with your local health department to see which permits and licenses you will actually need, you will want to start budgeting for those costs and set a time frame for when you apply for those.
A way you can avoid some of these licenses or permits is to open a food stall at a Farmer’s Market first, rather than starting with a truck. Most Farmer’s Markets don’t require very many certifications to sell.
However, depending on what types of foods you sell, you must still follow the necessary guidelines and ensure you have the proper licensing and permits for your specific products.
It would be smart to have a calendar for renewal dates of permits and licensing to avoid late fees. And, to avoid missing renewal times and getting in legal trouble.
Tools, Equipment, and Supplies Needed for a Food Truck
Depending on what your food truck concept is will determine what kind of equipment, tools, and supplies you will need.
There are many ways to get the equipment you need from buying new to renting, or borrowing.
Whatever your budget is, there are ways to stick to it as you grow and scale your food truck biz.
Food Truck Equipment and Supplies Checklist
As previously mentioned, there are different ways of getting the supplies you need for your food truck business based on your particular budget.
And the type of equipment you may need will vary depending on what your menu looks like.
Here is a list of recommended cooking supplies you may need for your business:
- Griddle/ Flat top grill
- Range
- Microwave
- Toaster
- Deep Fryer
- Vent Exhaust Hood (essential if you produce grease vapors
Recommended Warming Equipment:
- Countertop food warmer (good for all types of heated foods)
- Fry Dumping Station (good for any fried foods)
- Soup warmer, crockpot, etc (great if you serve chili dogs!)
Recommended Food Prep Equipment:
- Cutting Boards
- Knives and rack
- Skillets, Frying Pans, and Pots
- Thermometers
- Blender (I love my Ninja Blender that I got as a Christmas Gift)
- French Fry Cutter
- Work Table (might be included as part of your refrigerator set up)
Recommended Food Serving Supplies:
- Serving Utensils (Ladle, Spoons, Tongs, Spatulas)
- Condiment Pump
- Squeeze Bottles
- Seasoning Shakers
- Paper Food Containers (Boats, Plates, Cups)
- Take Out Containers (Small, Large, Soups/Liquids)
- Napkins
- Disposable Gloves
- Aluminium Foil or Plastic Wrap
Other Recommended Equipment:
- Refrigerator (best if it comes with a worktop)
- Cold Prep Refridgerator (for serving and short term cold storage)
- Drink Fridge or Cooler
- Freezer (best if it comes with a worktop, or fits under a counter)
Cleaning Equipment:
- Multi-Compartment sink
- All-purpose cleaner and reusable or disposable towels
- Sponges, towels, wipes (disposable or reusable)
- Trash Cans and bags
- Broom, Dustpan, and Mop
- Anti-Fatigue/ Anti-Slip mat (for both safety and comfort)
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Great Locations to Set up Your Food Stall
There are tons of great places to set up your truck or stall to not only make a profit but also build your brand.
However, you will want to always make sure you are in compliance with local regulations and ordinances, and check with owners and businesses before you set up during an event. For the most part, you can set up just about anywhere, as long as you are not obstructing areas where normal vehicles are not allowed either.
You will also want to avoid parking in commercial zones, established restaurants, private properties, and residential areas. Here are some other places to park your food truck.
This can also be an opportunity for you to develop a partnership or relationship that allows you to continue returning to these same locations.
- Farmer’s Markets
- Sporting Events (pro-level, college, high-school, 5K races, and other recreational events)
- Near shopping areas along busy streets (make sure you are visible)
- Near gas stations
- Near parks, plazas, and other event spaces
- Public streets
How to Make a Food Truck Business Plan
Once you comply with local regulations, laws, rules, and any other legal matters, you will finally be able to implement your food truck business plan.
If you haven’t already, you will need to decide how, when, and where you want to start and launch your food truck.
Here are a few decisions you will have to make to implement your plan:
- Determine how you will fund your business, and how much is needed
- Decide how and where you will get your equipment, tools, supplies, etc.
- Choose a target market and implement a marketing plan
Choosing a Target Audience for Your Food Truck Business
Not knowing or deciding who the target audience is, is one of the most common mistakes that cause entrepreneurs to fail in their businesses.
When you are searching for your target market, you will need to know where they are coming from. This includes their demographics, how much they are willing to spend on a meal, how often they may buy from a food truck vendor, and more.
What you want to know about your potential customers:
- Demographics (location, age, nationality, family status)
- Food preferences (Coca-Cola vs. Pepsi, a can of soda vs. bottle, etc.)
- Typical spending budget for a full meal (<$10, <$20, <$30, etc.)
- How did they come to buy from you (saw your truck, noticed an ad, social media, etc.)
If you already have a customer base that you have built up from a food stall, or at your local Farmer’s Market, then you have a great opportunity to do some market research this way.
You can ask customers to do a short survey in exchange for a discount, free products, or whatever else you feel is a suitable exchange.
You can also ask them if they would like to participate in the survey while you prepare their food, as this gives them something to do while they wait.
Creating a Marketing Plan for Your Food Truck
Before you start posting on social media, and spending money on ads, flyers, and other methods of marketing, you will want to make sure you are really clear on who your target market is.
Once you have conducted market research on your target market, you can start to create a marketing plan. One question you will want to answer during your market research is how your customers have come to find out about your business and why they chose to buy from you.
Additionally, depending on your target market, this may determine
When creating your marketing plan, you also need to decide how often you plan to set up your truck or stall and estimate what your expected and average income will be each day. This will obviously vary depending on when and where you ‘set up shop’.
But, it is important to start tracking your progress each time as this will help you determine which locations, times, dates, and more are the most profitable.
You can track your progress on a spreadsheet and use a chart to help visualize your progress with profits, partnerships, and more.
10 Steps to create an effective marketing plan for your food truck business:
- Determine the products and pricing (know what your break-even amount is too)
- Decide which main locations you want to sell at (Farmer’s Markets, fairs, sporting events, college campuses)
- Create a list of potential partners or venues to work with regularly
- Determine how often and when you will set up shop (lunch, nighttime)
- Create social media accounts for your business
- Purchase business cards, merchandise, posters, etc. to sell or give to customers
- Set SMART goals for profits, debt payoff, and more
- Use email marketing to retarget previous customers, offer discounts, and communicate with partners (I recommend ConvertKit or MailerLite)
- Use email, social media, and physical advertising to promote your business to new and old customers
- Implement your marketing plan
Every time you get a new customer, encourage them to follow you on your social media for a discount or free offer on their next purchase. Or for the meals/products they are currently buying.
Not only does this rapidly increase your social media following, but it encourages them to engage more with your business so they can keep coming back, sign up for your email list, and continue to support your business.
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Setting Up a Payment System
Having an online ordering system already set up for your business can save you some accounting stress, and is an essential way to offer different payment methods for customers. And, since you will have an online payment system set up, you will more easily be able to track expenses, profits, debts, and more.
Many small business owners trust Square to help them with payment processing and online ordering. Not only is Square convenient and easy to use, it also allows you to text and print receipts, and more.
The Square POS system allows for fast checkout and convenient ordering for both you and the customers. Plus, customers can easily add in tips and put in their email information for receipts. You even have the option to provide online ordering with custom QR codes to allow you customers more time to browse and buy which saves you time so you can make more money.
You can even set up online services and products for customers and other businesses to buy additional products from you.
Here’s a list of some of the most recommended Square products you can use in your business:
Final Thoughts on Starting a Successful Food Truck Business
Starting a food truck business can be a rewarding way to make income on your terms. However, there are many costs to getting started, so even if you want to start a food truck business with no money, you will need to find ways to fund your business. There are plenty of alternatives for funding, and sourcing equipment, and you can even start on a smaller scale by holding a food stall at local markets.
Regardless of how you choose to start your food truck business, you will need to make sure you are legally compliant with laws, rules, and other regulations. And, even though it can take up to 2 years to make your business profitable, it is a great way for you to build a brand and business at your own pace.
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