Do you run a food truck business and want to know its profit potential? If YES, here is a detailed breakdown of how much money food truck owners make monthly.
In recent times, a lot of entrepreneurs have decided to startup their own food truck business in the hopes of making profits and being their own boss. Food trucks are also a lot easier to set up and manage when compared to traditional restaurants.
But is a food truck really that profitable? Granted, a food truck business has a much lower starting cost, but so are the menu prices; a food truck business basically prices their food at the same cost-profit percentage as a restaurant does, so the money they’re making back is coming in at the same rate over time, if done well.
Food trucks have the ability to go to various locations and set up “shop” where they want, however, they also have to deal with permits and restrictions that are similar to the permits that restaurants deal with, only that they have to deal with them on a regular basis, and they clearly aren’t getting any customers in the many hours that they are not on the street, which may be a few hours in lunch and a few more if doing dinner.
So at the end of the day, a successful food truck might make around the same yearly salary as a similarly-successful restaurant; and it’ll take just as many years and hours of hard work to break even and get out of debt.
How Much Money Food Truck Owners Make
The amount of money a food truck can make on a monthly or yearly basis will largely depend on a lot of factors. It is no surprise that location, type of truck in addition to your success in building a customer base are some of the major factors that can affect the profitability of food trucks.
Food truck owners that operate in major, high-traffic metro cities have been able to pull in a range of $20,000 to $50,000 sales each month; however, these are usually the more specialty-based, ‘high end/gourmet’ market truck operations.
On the other hand, those stationed in some of the not-so-major, but still feasibly populated metro cities, or the more ‘entry market’ styles offering hot dogs, deli sandwiches, simpler lunches, et al, will end up pulling in notably less. The general range for these can be anywhere between $5,000 to $16,000 a month.
Of course there are outliners, those unfortunate enough to not operate or market their truck effectively and plummet their chance for sales, or big city trucks that get really famous and popular and end up pulling $1-2 million a year; but again, those sorts of stats should be ignored at this point in time.
According to research that was carried out by foodtruckempire.com in 2017, it found out that 21.52% of food trucks made over $200,000 on an annual basis, 30.04% made between $150,000 to $199,999, 34.08% made between $100,000 to 149,999, 10.67% made $50,000 to $99,999 3.59% made less than $50,000.
It should be noted that respondents in the survey were full time food truck owners and operators. You have to bear mind that a certain percentage of people who go into the food truck industry will fail, some will earn average incomes, and others will be extremely lucrative.
These numbers show, however, that if you’re able to find a decent market and work hard to make good food, which people will pick up on and come back for more, then one can find yourself up to a strong yearly salary after getting established.
3 Factors Affecting the Profitability of Food Trucks
1. Seasonality Considerations
The weather of the locality where a food truck operates can play a very important factor when it comes to the profitability of a food truck business. Food trucks that are located in areas that are “warmer” have a better chance of selling their food throughout the year compared to people who sell their food in states that witness winter.
If you plan to operate a food truck in an area that has serious winter, make sure to build lower numbers into your business planning. You may need to rely on things like catering gigs instead of a daily meal service to increase revenue during this time of the year.
2. Gross versus Net Revenue
Gross revenue and net revenue are not the same and should not be confused as the same thing. Gross represents the total amount of food sales on a truck. If you sell $200 worth of hamburgers in a day, that’s your gross number, it is not your real profit.
This is because there are other costs that are involved that can significantly bring down the gross revenue such as food costs, gas, regular vehicle maintenance, insurance and labor.
3. Frequency of Service
It is quite obvious that the more you get out and sell your food, the more money you will earn. For instance, if you regularly run a lunch and dinner service, you will make more at the end of the year than if you only serve breakfast.
In addition, if you work weekends and holidays, you will also make more per year than if you took those days off to rest. Even though you will need to maintain a balance so that you will not be too stressed out, the truth till remains that if you want to make more money, you will have to attend more events.
In conclusion, food trucks have the ability to pull in major bucks for their owners, for instance, Cousin’s Maine Lobster makes over $800,000 per year business with just one truck. The company has since grown to start a franchise business and an e-commerce business and now has a valuation of many millions of dollars per year.
Another well above-average success story is from M&R Specialty Trailers and Trucks customer MShack. In the first 12-months of owning a food truck, the company generated $300,000 in revenue and only invested $60,000 total on the truck.
If you are willing to put in a lot of hard and smart wok, then you will find out that owing a food truck can be quite profitable.