How to Start a Food Truck in 9 Steps
- Plan your costs and find a truck.
- Get approved by the Board of Health.
- Get the permits and licenses you need.
- Decide how you’re going to prepare your food.
- Hire employees and get mobile food vendor badges.
- Figure out where to park.
- Start marketing and promoting your food truck.
- Consider using a point of sale system.
- Perfect your day-to-day plan.
Lining the streets and sidewalks of every corner with cheap, tasty eats, food trucks—once thought to be just a fad—have proven they’re here to stay. In the past several years, the multi-billion dollar food truck industry has become increasingly popular as sidewalk chefs reinvent street food, launching the gourmet food truck craze. These food-on-wheels businesses have consumers chasing the town for delicious cuisine like $15 lobster rolls from Nauti—the mobile version of Luke’s Lobster—to high-end plump dumplings from Rickshaw Dumpling Truck. So—if you’re thinking about starting your own business and are wondering how to start a food truck, there seems to be no better time.
In fact, from 2007 to 2012, the industry saw an 8.4% growth rate, according to Los Angeles-based industry-research firm IBISWorld—and it doesn’t seem to be slowing down anytime soon. Although the actual number of these businesses is difficult to determine since it includes food trucks, food carts, and kiosks which are popular in malls, airports and stadiums, the proof is in the lines of hungry people waiting in front of carts and trucks in towns all over America.
Therefore, if you’re thinking about starting a food truck, you likely want to know what you need to get everything set up and running. We’re here to help. In this guide, we’ll walk you through, step-by-step, how to start a food truck. Plus, we’ll include tips and tricks from Debbie and Derek Kaye—who run the booming New York City food truck business, Eddies Pizza Truck & Cart.
How to Start a Food Truck Business
As you probably realize, starting a food truck business is not as simple as buying a truck and cooking up some food. With any new entrepreneurial endeavor, and particularly food businesses, there is a lot of planning and preparation required even before you get into the details of the actual operation.
This being said, before we break down our steps on how to start a food truck business specifically, let’s briefly discuss some of the actions you’ll want to take first—when you start a food truck, or any other business:
- Write a business plan: Although you may want to get your food truck up and running as soon as possible, a well-thought-out business plan will certainly help you in the long run. By thinking out your long-term plan ahead of time, you’ll have a guide to follow as you continue through the process of starting your food truck.
- Choose your business legal structure: Before you start thinking about trucks, cooking, and where to park, you’ll need to decide how your business will legally be structured. Will you operate as a sole proprietorship, a partnership? A business attorney or online legal service may be useful in helping you make this decision.
- Register your business: Once you’ve determined your legal structure, you’ll want to register your business name, if necessary, as well as register for federal, state, and local taxes. You’ll more than likely need to get an EIN, or employee identification number, from the IRS.
- Open a business bank account: After you’ve registered for your taxes, you’ll want to open a business bank account as the first crucial step in separating your business and personal finances. This account will be the base for you to manage and organize your funds as you go through the process of starting a food truck.
At this point, you’ll be in good shape to actually get your business off the ground. Therefore, let’s break down how to start a food truck:
Step 1. Plan your costs and find a truck.
First, you’ll need to think about costs.
How much does it cost to start a food truck? Unfortunately, it’s hard to give an accurate estimate for startup costs because there are so many possibilities in what you’ll need to get started. First, you’ll have to find the right truck for your business and you’ll likely have to get it custom made to fit your needs, which can cost anywhere from $20,000 and $40,000. You’ll also want to consider costs such as:
- Ingredients and food
- Salary and benefits for employees
- Technology to operate your truck
- Marketing and advertising, and more
As you may imagine, however, your actual truck will be the largest and most pressing expense you’ll need to pay for. This being said, before settling on a truck, you’ll want to have a few layout options, keeping in mind, of course, what specifically you’ll need for your food truck business.
You might consult various food truck vendors or other business owners to get a sense of what different layouts look like and which one might work best for you. It’s important to also keep in mind that things tend to break a lot more on a truck, cautioned Debbie Kaye, so you’ll want to make sure you consider this in your planning process and have enough finances on hand in case the inevitable happens.
With this in mind, you might also think about your various food truck financing options—such as different loans and business credit cards—to cover many of your startup costs.
2. Get approved by the Board of Health.
Next, in order to figure out how to start a food truck, you’ll have to sort through the rules and regulations you’ll need to abide by. As a food-based business, there will definitely be more considerations to take within this regard.
Therefore, you’ll likely want to first determine what Board of Health regulations you need to follow. It probably isn’t surprising to learn that just like health department inspectors check food at restaurants, the same goes for food trucks. Most inspections are conducted to at least verify the following:
- Proof of ownership, identification and license of the vehicle
- Proof of District-issued Food Manager Identification Card
- Food is stored and kept in proper temperature
- Records of food purchase
- Health and fire codes are met
3. Get the permits and licenses you need.
After figuring out your health requirements, the next step involved in how to start a food truck is getting the necessary permits and business licenses. Once again, because starting a food truck business means handling food and serving it to customers, there will likely be a variety of regulations and permit requirements to sort through. Additionally, the specific licenses and permits you need will depend largely on your state and city.
In fact, some cities, including New York City, have limits on the number of truck permits issued at a time. Therefore, you’ll want to visit your city’s website to find out exactly what you need to do to get the proper documentation. This being said, however, you’ll want to keep in mind that this process may take time and will also likely include fees and proof of a health department permit, tax certification, and liability coverage.
4. Decide how you’re going to prepare your food.
Once you’ve figured out the behind-the-scenes details—permits, licenses, regulations, costs—and of course, decided on your actual truck, it’s time to think about your product.
After all, a crucial part of learning how to start a food truck business is deciding what kind of food you’re going to make and sell, how that process will work, what you’ll need, and what your menu will look like. As you think about these things and start making decisions, you’ll want to remember that unlike starting a restaurant with a brick-and-mortar location, a food truck has limited space— so it can be difficult to prepare food inside.
Therefore, you’ll want to decide whether it’s best for your business to prepare food ahead of time before heading out for the day’s work or if you can feasibly prepare everything on site. Additionally, when perfecting your recipes, you’ll want to make sure the food on your menu can be repeated in large quantities, taste consistently good, is easy to serve, is easy to eat, and can travel well.
5. Hire employees and get mobile food vendor badges.
With a food plan in mind, the next thing you’ll need to do when starting a food truck is think about hiring staff. In a small environment like a food truck, you obviously won’t be able to have too many employees, but depending on your food, process, and the demand you may face, you’ll want to consider hiring help.
When you first start out, you may be able to work with friends, family, or a partner, but if your food truck grows quickly, some part-time or full-time employees will likely be helpful. Plus, when it comes to food truck employees, you’ll need to go beyond the typical process of hiring and onboarding a team member.
To explain, aside from all the licenses and permits you need to get as a business owner, each of your employees needs to have a mobile food vendor badge in order to legally work and serve food in your truck. And, unfortunately, it takes about four months to get this badge.
“It is really frustrating to hire someone and tell them they can’t begin working for four months,” says Kaye. “It is quite the backwards system that the food truck association has been trying to work on getting fixed, but no luck so far. If [you’re] caught without the badge, it is a $1,000 fine.”
Therefore, if you anticipate you’ll need staff for your food truck, you’ll want to get this process out of the way and hire your first employee from the get-go. “It’s even more frustrating,” says Kaye, “because if your business loses an employee, you have to wait four months for a new employee to obtain their badge, which means that you might not have enough employees to work lunch and dinner services.”
6. Figure out where to park.
One of the benefits (and also challenges) of starting a food truck business is the mobile-element. Your business is mobile, which means you have the ability to go (to a certain extent) to where your customers are, as opposed to a brick-and-mortar restaurant which is limited to that location. However, in order to have success as a mobile business, you’ll also need to figure out where the best places to be are to attract customers, and perhaps just as importantly where you can and cannot park your truck.
Just as is the case with licenses and permits, the restrictions around parking for your food truck are going to be specific to your city—and therefore, you’ll want to consult your local regulations to determine what your options are.
This being said, it’s very likely that if you’re in a larger location, like New York City, this process will be all the more difficult.
“Technically there is a book that lists where you can and can’t park,” says Kaye, “however there is a loophole in the system and trucks can be moved by the police at any time from any spot. It is quite frustrating.”
These strict rules and regulations on New York City’s streets had the Kayes paying fines up to $1,000 a month at one time. According to Kaye, finding parking has only become more complicated as more gourmet food trucks are appearing around the city.
With this in mind, you’ll want to take extra care to determine the rules (and any possible loopholes) for your particular location. Once you understand where you can and cannot park your food truck, you can start thinking more strategically about where the best places will be for you to park to attract and serve customers.
7. Start marketing and promoting your food truck.
With the regulations and operational tasks taken care of, the next important part of learning how to start a food truck business is marketing and advertising. First, you’ll need to plan and execute some marketing tactics to inform the local community of your food truck’s existence.
You might plan a “grand opening,” or see if you can take part in a local event to draw up attention and customers. You’ll also want to consider starting a website and social media presence, as well as advertising around town.
Moreover, as a mobile business, whose location can change on a daily basis, it’s important to keep your customers aware of where you’ll be. Whether this means making an established schedule on a weekly basis or simply keeping your customers up to date on your website or social media accounts, you’ll need to keep this in mind. The Kayes, for example, typically go to the same spot every Monday and Tuesday and use Facebook, Twitter, and Instagram to build a loyal customer base.
8. Consider using a point of sale system.
Although you may very well be able to run your food truck with a paper-based order system and a cash drawer, you might consider investing in a point of sale system to automate the process. With your food truck POS system, you’ll be able to manage orders, accept payments (including credit cards), as well as track inventory, create loyalty programs, and more.
In fact, there are a variety of POS systems on the market designed specifically for food trucks.
By using one of these systems, you’ll be able to manage everything in one place, speed up and simplify your processes, and therefore, better serve your customers. This is especially important for food trucks, who often experience a rush of customers for a few short hours a day—meaning customers can end up waiting in long lines. In this case, you might consider using a pre-order system to help your food truck handle this kind of rush in business.
Marcus Lemonis of CNBC, for example, suggests using a pre-ordering system and unclogging the lunch rush by offering discounts for off-peak times like 12:00 to 12:30 or a little bit before 2:00 pm where customers can pre-order and cooks can better prepare for the rush, cutting wait times significantly.
9. Perfect your day-to-day plan.
With all of these steps completed, you’ve learned how to start a food truck—and now that you’ve gotten things up and running, you’ll want to begin to perfect your day-to-day plan.
What does that mean exactly?
Well, according to Kaye, running a food truck business is much more difficult than people think because most people see food trucks only operating during lunch hours.
“What people don’t think about is that to get our spot, we arrive at 6 a.m.,” she explains. “That means we get to our kitchen by 4 a.m. to prep and drive to the spot. After lunch we drive back to our kitchen and have to clean the truck and the dishes. So for just a few hours of service, we work a 12- to 15-hour day.”
Therefore, like the Kayes, you’ll want to think about how your day-to-day will look—how you’ll work with your employees, where you’ll be from day-to-day, which days will require more time or investment than others. By planning ahead of time, even if just at the beginning of every week, you’ll be able to maximize your time and hopefully, your business as well.
Along these lines, you might also want to think about if your strategy will simply consist of parking around town or if you’ll consider taking part in local events, or even start catering.
The Bottom Line
Ultimately, learning how to start a food truck is going to take significant time, effort, and investment.
This being said, however, if you begin the process with a solid plan, consider how much it will cost to start your food truck, and remain positive and resilient along the way, you may be able to find the success experienced by seasoned-food truck owners like the Kayes.
And—although the competition has gotten tougher (with the boom in popularity of food trucks)—if you’re able to carve out a niche, you have a great chance of success without the high costs of opening up a restaurant.
Moreover, if your plans are to open a restaurant eventually, a food truck can be a great starting point. For instance, Laura O’Neill and her co-founders, Ben and Pete Van Leeuwen, started Van Leeuwen Artisan Ice Cream truck in the spring of 2008. Since then, the trio has received so much success, their business now includes over 20 locations, including both storefronts and trucks in New York and L.A.
According to O’Neill, the food trucks allowed the co-founders to explore different locations to figure out who the customers were and what kind of food they liked to eat. Therefore, in a way, it allows you to test out your food creations before having to commit to a costly lease and other high overheads.
Plus, as you figure out how to start a food truck and get your business up-and-running, you might ultimately decide the mobile business life is the way to go and continue to invest in different trucks around your city or state—the possibilities are endless.