Although the exact cost to start this business will depend on certain factors, note that your startup cost for a coffee truck business ranges from $9,000 to $180,000. The expenses will go towards purchasing the truck itself as well as the coffee equipment.
Reports have it that around 70% of Americans consume coffee at least weekly. Keep in mind that food trucks, which tend to encompass coffee trucks and coffee carts, are renowned as a viable and booming industry, with an encouraging quantity of food trucks operating in the US tripling in just a decade.
You have to understand that starting a coffee truck business comes with a good amount of expenses. You have to take into consideration the expenses that come with the initial cost of the truck, equipment, licenses, and permits, coupled with the ongoing costs of supplies, insurance, and marketing.
Estimated Cost to Open a Coffee Truck
-
Vehicle (Truck)
Your coffee truck will function as a mobile unit that sells products directly to customers on-site. The truck itself is one of the most expensive items to purchase when starting a coffee truck business. This will cost around $10,000 to over $80,000.
Note that you can purchase a used truck for less, but the condition and age of the truck will need to be extensively analyzed by a trusted mechanic to guarantee proper functioning.
-
Equipment
After you have obtained the truck, you will have to get the interior properly fitted with the equipment needed to ensure that it becomes a functional coffee truck.
This will be dependent on the menu and type of beverages offered to patrons. Keep in mind that the type and cost of your equipment will depend on the sort of coffee business you are looking to establish, but as a general guideline, you can expect to spend around $15,000 – $20,000.
The most important piece of equipment is a commercial-grade espresso machine, a grinder, as well as other items like a milk steamer and the necessary cups, utensils, and paper products.
-
Food and Beverage Inventory
Before serving up lattes, you have to verify that you possess all the appropriate supplies and this entails ensuring you have an adequate food and beverage inventory.
Note that the exact inventory you carry will vary based on the sort of coffee and beverages you plan to serve, the size of the truck, and the precise items you require for your coffee truck. Owing to that, the expenses that come with the food and beverage inventory can range from around $2,000 to $10,000, or even more if you take into account kitchen tools and other items.
-
Point of Sales System
In this modern age, it is very effective to invest in a reliable Point of Sales system. You can choose between a terminal or a handheld device, although this will have to depend on your needs and budget.
Reports have it that the average cost of a POS system is around or above $1000, but this can be quite higher especially when taking into consideration the features that you need. If you are looking to purchase a POS system, you will often have to pay an upfront cost, which could include:
- Software licenses: Up to $1000
- Hardware: Around $500 – $1500
- Software updates: Up to a few hundred dollars per year.
- Monthly service fee: from $25-$100 per month
-
Insurance
Prior to opening your windows to start selling coffee from your food truck, you have to ensure that you’re properly insured.
Owners of this business carry numerous forms of insurance to shield their business, clients, and workers. The cost of insurance will most definitely depend on the sort of policy, the amount of coverage, and the geographical area where the food truck operates. The price of insurance for food truck operators includes:
- General Liability: Around $4,000 per year.
- Workers’ Compensation: Around $2,000 annually.
- Automobile Insurance: Around $200-$500 per year.
The total cost of insurance for a food truck can fall within $5,500 – $10,000 per year. It is necessary you compare prices and coverage from a wide range of insurance companies to guarantee you are obtaining the best possible rate.
-
Marketing Materials
You will also want to take into account the expenses that come with marketing your business. Reports a viable marketing campaign will cost around $2,000 to $20,000 or more. Aside from the cost noted above, you’ll also have to take into account the expenses that come with advertising, including online, radio, and television ads, along with any associated staff or labor costs to support the campaign.
-
Website/App Development
When considering the expenses involved here, note that the main focus encompasses the development, design, deployment, and maintenance of digital products. Most often, the expenses that come with website and app development are noted by complexity, technology, and quality.
According to experts, the hourly rate for website and app development falls between $30 to $150. The average web developer’s salary is $75.37 per hour. Other development costs include;
- Basic website (5-8 pages): $3000 – $8000 USD
- Complex website (more than 8 pages): $8000 – $25,000 USD
- Mobile app (basic): $7,000 – $70,000 USD
- Mobile app (complex): $30,000 – $150,000 USD
Factors That Determine the Cost of Opening a Coffee Truck Business
1. The Type of Coffee Truck
A major factor that will determine the overall cost of opening a coffee truck business in the United States of America is the type of coffee truck in question. A coffee truck is a large motorized vehicle, such as a van or trailer, equipped to cook, prepare, serve, and/or sell coffee and other prepackaged food.
Sandwiches, hamburgers, French fries, and other regional fast food fare is common. Some coffee trucks may also sell cold beverages such as soda pop and water.
Coffee trucks, along with portable food booths and food carts, are on the front line of the street food industry that serves an estimated 2.5 billion people every day. As expected, these different types of coffee trucks come with different cost implications which ultimately will determine the overall cost of opening a coffee truck business.
2. The Choice of Location of Your Kitchen
In the United States, coffee trucks are subject to the same range of concerns as other food service businesses. They generally require a fixed address to accept delivery of supplies. Also, a commercial kitchen may be needed for coffee and other food preparation.
This means that aside from the fact that you will be purchasing and equipping your coffee truck, you are also required to spend a bulk of your startup capital in renting and equipping a kitchen facility where you are supposed to prepare the food you will sell from your coffee truck.
The choice of location of the kitchen will determine the cost you are expected to pay for rent. If you decide to rent a kitchen facility in a city center, as against the outskirts of town, then you must be ready to pay more.
3. The Required Licenses and Permits
In the United States of America, you cannot open a coffee truck business without first applying for the mandatory licenses and permits.
You would need food and drinks handler certificate, commercial vehicle operator’s registration, permits for each municipality being operated in (downtown, various suburbs), and kitchen permits and appropriate driver’s licenses for drivers (commercial driver’s license), assistant’s licenses for assistants, and a health inspection amongst others.
These license and permits cost money and it will influence the overall cost of opening a coffee truck business in the United States of America.
Please note that there may be several inspections you must pass before you can be issued your licenses and permits and this will cost you money. In order to get the overall cost of licensing and permits, we will advise that you reach out to your city government. You also need to consider state and federal requirements.
4. The Size of Coffee Truck
The type of coffee truck you want to use for your business is also a major factor that will determine the overall cost of opening a coffee truck business. Typically ranging in size from 14 feet to 34 feet, food trucks have room for the operators to cook and serve on the vehicle itself.
Though you may still be required to prepare and store your food at a commissary, food trucks offer many aspiring street food vendors the perfect way to serve their tastiest creations.
If you choose to buy a 14 feet coffee truck without a kitchen, you are going to be spending less when compared to someone who decides to buy a 34 feet coffee truck with an in-built kitchen. This indeed will greatly influence the overall cost of opening your coffee truck business.
5. The Menu and Service Offerings
Another key factor that will determine the cost of opening and operating a coffee truck business in the United States of America is the menu and service offerings of the coffee truck. The fact that there are different types of coffee trucks means that these food trucks are designed to serve different menu.
You will agree that a coffee truck that sells snacks and other baked food will be more expensive to open than a coffee truck that sells gourmet popcorn.
6. Hours of Operation of the Coffee Truck
In business, the longer your door is open, the higher the cost that you are going to incur especially as it relates to paying for utility expenditures, fueling of the truck and paying the workers. This is because in the United States, people are paid based on the number of hours they put at work.
For example, the cost of operating a coffee truck that operate 12 hours a day and 7 days a week will be far different from the cost of operating a coffee truck that only operates 8 hours a day and 6 days a week.
7. The Cost of Hiring and Paying a Business Consultant and Attorney
If you want to get your business started on the right foundation, it will be a wise decision to hire the services of a competent business consultant and perhaps an attorney. For example, a business consultant will help with drafting a workable coffee truck business plan, a marketing plan and strategy, comprehensive SWOT analysis, and other advisory services.
Also, an attorney will help you with registering the business, drafting contract documents and offering you all the legal expertise that will help you start the business on the right foundation. You will agree that these services will cost you money and it will indeed influence the overall cost of opening your coffee truck.
8. The Cost of Branding, Promotion and Marketing of the Coffee Truck
The cost of branding, promoting and marketing the coffee truck is yet another key factor that will determine the overall cost of opening a coffee truck business in the United States of America.
If you need massive results as it relates to winning a fair share of the available market in your city, then you must be willing to pay for effective branding, promotion and marketing. It is not cheap to hire an expert in branding, promotion and marketing that will help you compete with brands that are already determining the market direction of the coffee truck industry in your city.
So, if you add the cost of paying a branding and marketing expert, it will sure increase the cost of opening your coffee truck business.
9. The Cost of Equipping the Coffee Truck
Another factor that will determine the cost of opening a coffee truck business is the cost of equipping the coffee truck and the kitchen. You will quite agree that aside from the basic things that are expected to be found in a coffee truck, an entrepreneur may decide to spend more than expected to equip the truck to look unique.
Before you can open a coffee truck business, you should buy gas cookers, deep fryers, fridge, deep freezer, microwave oven, storage hardware (bins, rack, shelves, food case), counter area equipment (counter top, sink, ice machine, etc.), furniture (table, stools and sofas), telephones, filing cabinets), store equipment (cash register, security, ventilation, signage), serving utensils (plates, spoons, foils, glasses, flatware) and backup power generating set amongst others.
All these will cost money and it will influence the overall cost of opening a coffee truck business in the United States of America.
10. The Cost for Insurance
The cost for paying for insurance policy cover is yet another important factor that will determine the overall cost of opening a coffee truck business in the United States of America.
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. Thus, it is imperative to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your own coffee truck business.
11. The Cost for Registering the Business
The cost for registering the coffee truck business is yet another cost that will influence the overall cost of opening a coffee truck business in the United States of America. Although, the cost of registering a business is affordable, it will no doubt add to the overall cost of opening a coffee truck in the United States of America.
12. Sourcing Your Ingredients
Another major factor that will determine the cost of opening a coffee truck business in the United States of America is the source of your ingredients. The fact that there are different types of coffee trucks means that the ingredient they use in preparing their meals, drinks or snacks will be different. Sourcing their ingredients will cost more hence increasing the budget of opening the business.
13. Cost of Recruiting and Training Your Staff
Labor and fuel costs are a significant part of the overhead for a coffee truck business. The fact that you are opening your coffee truck as a new business means that you are expected to recruit and train your staff to conform to the kind of coffee truck you want to operate.
The training will help you sell the corporate culture of your organization to your new employees. It will cost you money to hire trainers that will help you train your new hires and that will add to the overall cost of opening a coffee truck business.
- Staff/Manpower
When it comes to starting a standard coffee truck company business on a large scale, you would need the services of the following professionals;
- Manager (Owner)
- Human Resources and Administrative Manager
- Kitchen Supervisor
- Cook
- Kitchen Assistant
- Accountant/Cashier
- Truck Driver
- Assistant Truck Driver
14. The Cost for the Purchase and Customizing of Uniforms
Another factor that will determine the overall cost of opening a coffee truck in the United States is the cost for the purchase and customizing of uniforms. As expected, servers, chefs and drivers all have different uniforms and these uniforms will cost you money which is why it must be part of your budget if you are looking towards opening a coffee truck in the United States of America.
15. The Cost for Grand Opening of the Coffee Truck
It is a known fact that no coffee truck opens its door for business without first organizing opening party to officially launch the business. This means that the cost of the grand opening of a coffee truck is part of the factors that will determine the overall cost of opening the business in the United States of America.
You can choose to do a soft opening if you are operating on low budget or you can choose to go for grand opening party. The bottom line is that it is a cost that must be part of your budget.