How Much Do Food Trucks Make?

Food trucks can be very profitable business endeavors, especially with careful planning. Because the overhead cost of running a food truck is lower than the cost of running brick-and-mortar food stores, they have a strong potential to bring higher profit margins at lower investment and risk.

How much your food truck will make depends on multiple factors, such as your location, costs, frequency of operations, and type of food served. In the United States, annual food truck revenue ranges from $308,000 to $492,000, with the average being $364,000.

How much profit do most food trucks generate?

Most food trucks generate about $308,000 to $492,000 of revenue per year. Meanwhile, food truck expenses such as cost of goods sold (COGS), wages, utilities, and legal compliance amount to about $204,000 to $312,000 per year. This means that a well-planned food truck business can earn anywhere from $104,000 to $180,000 in net profit per year if all food truck startup costs have already been accounted for.

Food truck revenue varies by state. In general, food trucks fare better in large states with metropolitan areas than in lower-populated rural areas. Food truck revenues are highest in New York, which has a median food truck revenue of $492,545, and lowest in Minnesota, which has a median food truck revenue of $308,538.

Factors that can affect food truck profits

Food trucks have a strong advantage over restaurants in that they have more flexibility in choosing when and where to operate. Therefore, the external factors that affect food truck profitability are easier to maneuver.

Costs

Evidently, food truck operating costs have a high impact on profitability. Aside from your startup costs, you will need to account for ongoing operational costs, such as COGS, wages, utilities, fuel and maintenance, rent (if you don’t own your truck), parking and storage rent, commissary kitchen rent, insurance, legal compliance, and marketing. Expect to spend about $204,000 to $312,000 per year or $17,000 to $26,000 per month.

Fortunately, food truck owners have a high degree of control over how much to spend on operations, particularly COGS and wages. Effectively implementing inventory and employee strategies can help you cut down costs while still ensuring that you provide high-quality products and services.

Improving COGS

There are multiple ways to keep COGS under control. Implementing effective inventory management strategies, leveraging historical sales data, and negotiating with suppliers will help you maximize the value of your stock at a minimal cost.

One of the best ways to improve COGS is to implement periodic automatic replacement (PAR) levels. PAR is a system of inventory management that tells you how much stock to keep at a given time to fulfill demand while accounting for fluctuations.

For example, your historical data shows that if you sell 100 tacos per week, you should keep just enough ingredients for at least 120 tacos. This reduces unnecessary waste while letting you account for possible demand increases.

Other ways to minimize COGS is to negotiate with suppliers. Loyalty, friendliness, reliability, and timely payments go a long way. If you build a strong positive relationship with your suppliers, they’ll be more amenable to negotiating better payment terms.

Improving labor costs

Food truck labor costs are already lower than restaurant labor costs because food trucks require fewer staff. Unlike restaurants, which need a full team of servers, cooks, and cleaners, food trucks can function with just cooks who alternate as cashiers. Many food truck owners join the team themselves to provide additional manpower.

You can further maximize the value of your labor costs by implementing effective shift scheduling methods. Use a shift scheduling software to create and manage schedules instantaneously. This way, you can easily see when employees are available to work, and employees know when they are needed.

7shifts is a great shift scheduling tool. It helps you create optimized schedules, ensuring that you are never overstaffed or understaffed. You pay the exact amount of money necessary for operations to continue, minimizing labor costs.

Location

There are two levels of location to consider when running a food truck: your specific location, which is where you operate your truck, and your geographic location, which is the region you operate in.

Specific location

Unlike restaurants, food trucks have the advantage of mobility. Instead of being locked in a specific location, they can move from area to area, free to go where the customers are. Locations that attract more activity include commercial districts, residential areas, and areas near public transportation.

However, the expectation of convenience means that food trucks in bad locations suffer more than restaurants in bad locations. Restaurant diners might go out of their way to visit an establishment because they know seats and parking are available.

Meanwhile, food trucks are rarely the customer’s main destination. Food truck customers expect the truck to be nearby for convenient food access as they carry out other objectives in the same area.

Location will also affect costs. The spots with higher foot traffic will typically charge higher fees for parking and permits. It is important, then, to identify a location that generates enough revenue to offset these overhead costs.

Geographic location

The population, culture, and infrastructure of your state, county, town, or city have a high bearing on revenue. New York food trucks, for example, generate the highest revenue of any state. The statistics come primarily from New York City, where lifestyles are fast and convenience is imperative. The city is crowded with tourists and locals alike and massively accessible through public transportation—a combination that creates a wealth of high-foot-traffic areas.

Compare that to Minnesota, the state with the lowest median food truck revenue. Minnesota has a low population density, few metropolitan areas, and a dependence on car-centric infrastructure. Most people aren’t walking from place to place, limiting viable food truck spots to a scant few commercial and residential areas. Another factor is climate. Minnesota is known for its hot summers and frigid winters, which means the weather repels customers from eating in outdoor venues for at least six months a year.

Another example is Alaska. Like Minnesota, Alaska has a low population density and a harsh climate. Many of its establishments rely on tourism for revenue, which leads to lower sales in the off-season. Additionally, Alaska is located far from the center of trade in North America, with many of its population clustered in remote locations. Because everything is pretty far, businesses have to pay more for the fuel, transportation, non-local food ingredients, and other supplies.

Before starting a food truck, consider whether your geographic location is conducive to the kind of customer behavior that allows food trucks to thrive. There should be areas of high foot traffic and sustainable weather for outdoor eating.

Frequency of operations

Not all food trucks operate full time. Some operate exclusively on certain dates, times, or events. Sometimes, being selective about operations can increase profitability. It helps you take advantage of active hours while minimizing the overhead costs of wages, utilities, fuel, and parking.

The best way to maximize profitability is to align operating hours with a specific target market. Study their eating habits, then operate when they are available. For example, if you aim to attract working professionals, you can set up shop in business districts during weekday lunch hours or near nightlife establishments on Fridays. When the active hours die down, you can close up and cut costs.

You can also generate additional revenue by taking advantage of events. Instead of just parking in busy locations, you cater to events that already have a high volume of activity, such as food festivals and outdoor community events. Some food trucks also offer private catering for birthday parties, corporate parties, and weddings.

Just like with your choice of location, you shouldn’t expect food truck customers to build their routine around you. Instead, build your routine around the customers. The less friction it takes to access your food, the more profitable your food truck will be.

Seasonality

As mentioned above, the weather has a strong bearing on food truck profitability. Food trucks don’t provide the advantage of shelter, which means the chances of customers going out of their way to buy food in bad weather are slimmer than they would be with restaurants.

The better the general weather in a season, the more profitable your business tends to be, and this trend is not just about customer openness. Bad weather will prevent you from operating entirely. Bad snow days in winter force food trucks to close up shop, reducing the number of viable operating days within the season.

Seasons also affect operating expenses. Winter makes you spend more on heating, while summer does the opposite. You might also incur maintenance costs from weather-related damage, such as heat damage during the summer.

Type of food served

Again, the buying behaviors of food truck customers differ from restaurant customers. Restaurants have the advantage of ambiance and comfort. Their customers are more willing to wait for service, and more open to indulging in complicated dishes.

Meanwhile, food truck customers are forced outdoors, where no seats or comfortable eating spaces are guaranteed. They’ll want something simple and easy to consume on the go. Usually, food truck menu items require minimal use of utensils.

Naturally, simpler dishes generate food trucks more revenue. Tacos, burgers, sandwiches, hot dogs, french fries, ice cream, and coffee are all profitable food truck menu items.

The compatibility of food with seasonal weather also affects revenue. People might be averse to buying ice cream in the winter or hot dishes in the summer. Drop or lower your stock of ill-fitting menu items to align with weather effects.

Advertising

As mentioned above, customers are less likely to go out of their way to buy food from a food truck than from a restaurant. However, good promotions can show your target customers that you are a viable option. Effective advertising can broadcast your locations and schedule to ensure that the people in the area know where to look for you.

Social media is one of the most effective ways to advertise your food truck. Statistics from Toast show that 59% of customers use Facebook to discover new restaurants. 62% of customers even say they check a restaurant’s social media profiles before committing to dine with them.

Social media gives you more space to show what your brand is about—not only can you promote your products and your brand voice, but you can also get engagement from past customers to prove your trustworthiness.

Which food truck items make the most money?

The most profitable food trucks sell menu items that are affordable, easy to cook, and easy to consume.

Tacos

Many of the highest-rated food trucks on Yelp are taco trucks. And for good reason: aside from being affordable, tacos are easy to make, carry, eat, and customize. Taco fillings come in a wide variety, but preparation techniques remain relatively similar. This means you can cater to a diverse range of customer tastes without overloading your cooks with complicated recipes.

Tacos are responsible for bringing food trucks to the mainstream in the United States. Chef Roy Choi started Kogi Korean BBQ in Los Angeles, serving a fusion of Korean-style barbecue and Mexican burritos and tacos. A lesson to take here is that if you appeal to the cultural tastes of the people in your community, you’ll have a better chance of standing out.

Barbecue

Barbecue is one of the most profitable food truck items. Not only are they affordable and easy to prepare, but they also emit a powerful aroma that easily attracts customers to your truck. Serving barbecue in skewers or slices in takeout boxes makes it easier to eat, helping it sell better with on-the-go customers. All you need is a running grill, some meats, vegetables, sauces, and seasoning.

There are also many styles of barbecue you can try out. Each culture has its own take, such as Korean barbecue, Jamaican jerk, Brazilian churrasco, Latin American barbacoa, and American Southern-style meat. Find a style that stands out from your competitors, then appeal to the tastes of the local culture.

Pizza

Pizzas are similar to tacos in that they come in a wide variety of flavors but don’t require learning too many preparation techniques. Pizzas are also easy to prepare and serve, requiring little more than an oven, flour, water, tomatoes, cheese, and your choice of toppings. It’s very rare for pizzas to go to waste—you can reheat unsold slices within the day and still maintain a little freshness.

Consider selling pizzas in areas that promote large group gatherings, such as bars, clubs, and community events. This way, you can serve your pies in bulk and maximize sales. You would still have the option to sell by the slice in case individuals or smaller groups drop by.

Burgers

Burgers are a popular American staple. They are as portable as they are filling, and like many items on this list, versatile and easy to prepare. A good burger requires very few ingredients to make well, which cuts down your costs to maximize revenue.

Because burgers are pretty filling, your best bet is to appeal to the lunch crowd. Park outside commercial districts in the early afternoons to give workers fast access to full meals in between jobs.

French fries

No matter when or where you sell them, fries will reliably make money. In their complete simplicity, they appeal to a wide variety of tastes and make effective snacks for people who want something fun to munch on without getting too full. You can make french fries using real potatoes or heat up frozen slices.

It’s best to add french fries to your menu to complement larger meals. However, french-fry food truck stalls can do well if you add customization options, such as sauces, seasonings, and toppings. To make the most of your ingredients, you can also try selling other potato-based sides, such as hash browns, chips, and baked potatoes.

When can I expect ROI on my food truck?

New food trucks typically generate a return on investment after 18 to 24 months. Profit margins in the food business typically run on the lower end—you’ll need to continuously pay for startup costs and operating expenses before you can enjoy profits commitment-free.

However, if you understand the factors that affect food truck profitability, it’ll be easier to ideate sales strategies that cut down costs and generate revenue at a sustainable level.

How to improve food truck sales

If you understand the factors that affect profitability, driving more food truck sales will be a breeze. All it takes is a solid understanding of your customers’ buying behavior, market trends, and competitors.

Conduct market research

Another way to improve food truck sales is to conduct market research. Research efforts like surveys, focus groups, and interviews can help you identify strengths, weaknesses, and areas of opportunity. Then, you can use the evidence collected to improve sales strategies.

When conducting market research, it’s important to have an objective that is specific and actionable. Examples of potential research goals include:

• Determining which menu items are the most popular
• Identifying which locations customers frequent most often and when
• Understanding how much each customer is willing to pay for a menu item
• Gauging customer satisfaction

For example, you can create a customer feedback survey to gauge satisfaction. Ask participants to rate the quality of the food and service, then leave room for them to explain their ratings. Ask questions about what they enjoyed about the food truck, which menu items they liked best, and what areas they feel require improvement. From there, you can gather common responses and incorporate them into your business strategy.

Create buyer profiles for target audiences

The key trick to food truck success is understanding how your customers behave. If you create a buyer’s persona for your target audience, it will be easier to determine where to park, when to operate, what food to serve, what marketing content to run, and where to place them.

The great thing about food trucks is that you don’t have to be too focused on a single segment. Because you’re free to move from location to location, you have the flexibility to target multiple types of customers.

When creating a buyer’s persona, it’s important to note the following factors:

• Demographic information: Basic information about your target, such as age, gender, level of education, and profession.
• Psychographic information: In contrast to demographic information, psychographic information goes deeper and describes your customer’s lifestyle, values, interests, and goals.
• Pain points: Identify the main reasons they want convenient access to food. What problem do they have that your product can solve?
• Locations frequented: Where can you find them?
• Free hours: When is your customer typically free?

One of the best ways to build a buyer persona is to study the people frequenting your choice of location. Certain locations will attract specific demographics, such as college campuses and students, business districts and employees, and residential areas and families. You can use social media to gauge trends among different demographics or run geo-targeted surveys to gauge common sentiments.

Let’s say you run a taco truck that targets college students. Your buyer’s persona profile would look something like this:

• Demographic information: College students aged 18 to 24.
• Psychographic information: The target students are educated, socially conscious, and tech-savvy. Because many do not have jobs yet, they have less money to spend on food.
• Pain points: The students want access to food that is affordable, easy to consume between classes, and filling enough to provide energy throughout the day.
• Locations frequented: College campuses, libraries, coworking cafes, or college bars.
• Free hours: During lunch, late afternoons, and weekends.

Knowing this information, you would price your food according to what your target customer can afford. You would also park your truck near the college campus during lunch hours, then near libraries or coworking cafes in late afternoons to accommodate the students doing school-related work.

Meanwhile, a profile for farmer’s market visitors would look different:

• Demographic information: Farmer’s market visitors are typically women in the 35 to 55 age range. They tend to be homemakers who are in charge of household meals.
• Psychographic information: Farmer’s market customers are socially-conscious individuals who value health, community, environmentalism, and quality. They visit farmer’s markets to source higher-quality ingredients and engage with the local community.
• Pain points: Farmer’s market customers want food they can eat as they shop for produce and other products. The meal should meet their standards of quality, value for money, health, and sustainability.
• Locations frequented: Farmer’s markets, community events.

Because farmer’s markets only happen occasionally, you have fewer opportunities to serve this target market. However, because you have a strong understanding of their values, you have a clearer idea of how to tailor your sales strategies to earn their loyalty.

For example, you can ensure that your marketing materials focus on your products’ health benefits and your contributions to the local community. You can also leverage their community-centric values and cultivate more personal connections, then offer private catering services to tap into their network of like-minded individuals.

Study the competition

Aside from studying your customers, you should also study your competitors. Make a list of the restaurants, cafes, and other food and drink establishments near your locations of interest. Identify what they offer, then analyze how your menu items compete. Do other establishments offer similar food, and can you provide alternatives at a better price, quality, or speed?

There are many ways to study your competition. You can check out their social media pages to assess how popular they are and determine the reasons customers stay loyal. You can also look through reviews on Google, Facebook, and Yelp to gauge overall customer sentiment or identify issues customers want solved.

Let’s say you intend to start a coffee truck in the business district, targeting office workers in need of energy for the workday. You’ll find that there are already cafes in the surrounding areas.

To stay competitive, review customer feedback to identify gaps in service that competitors miss. For example, if the other cafes function as coworking spaces, they may have higher prices and slower service. You can stand out by offering flavorful coffee to-go at a reasonable price.

Work for events

Working for events is one of the best ways to increase sales as a food truck. Festivals, community events, and local markets are packed with people who plan to stick around in a set location. Activity is guaranteed, and you have a clear picture of how long to operate.

If you work with the event organizers, you can easily benchmark how many attendees the event will attract. This information allows you to more accurately estimate how much inventory to bring, cutting down costs.

Events are also opportunities to network. Themed events attract a certain type of customer—food festivals attract culinary enthusiasts, while local community events attract families and people who prioritize cultivating community connections.

You can glean your customers’ values based on what the event is about and then incorporate these values into your sales or marketing strategies. For example, if you’re working at a food festival, your marketing materials should promote the quality and presentation of your food. Meanwhile, if you’re working at a community event, you can print promotional materials that show your food truck engaging with the community to build a reputation of trustworthiness.

Then, you can distribute your social media profiles or website to the customers who buy from you. Because you appeal to their values, you have a stronger chance of making an impression. You can then reach out to offer private catering services.

Truck on in the food business

Starting a food truck is a cost-effective way of dipping your toes in the food business. While food trucks typically charge lower prices than restaurants, the low startup and operating costs help you generate more profit at a much lower barrier to entry. As long as you understand the factors that affect expenses and revenue, creating a solid business strategy is easy.

A core part of making money as a food truck entrepreneur is properly managing your employees. With 7shifts, you can align your team on weekly schedules, communicate with ease, and monitor labor costs in real time. The app streamlines shift management to help you reclaim time for running and improving your business.