Starting a food truck business is exciting, but it also comes with financial challenges. One important factor is fixed costs—expenses that stay the same every month, no matter how much you sell.
These ongoing costs include vehicle payments, insurance, and more. The list can get long, so careful budgeting is essential. But there’s one overlooked expense that might surprise you…
Common Fixed Costs for Food Trucks
Running a food truck is like building a house. Some costs stay the same, no matter how busy you are. These are the basic expenses that keep your truck running. Understanding them is like having a guide for your finances. Knowing your fixed costs helps you plan and budget. This way, you can focus on what matters most—serving great food and keeping your customers happy.
| Expense Category | Cost Range |
|---|---|
| Vehicle Payments | $500 – $1500 per month |
| Insurance | $3000 – $5000 per year |
| Permits and Licenses | $1000 – $3000 per year |
| Parking and Storage Fees | $500 – $2000 per month |
| Loan Payments | $500 – $2000 per month |
| POS System Fees | $50 – $100 per month |
| Website Hosting | $10 – $30 per month |
| Accounting Software | $20 – $50 per month |
| Phone/Internet | $50 – $100 per month |
| Equipment Leases | $200 – $500 per month |
| Marketing Retainers | $500 – $2000 per month |
Vehicle and Equipment Costs for Your Food Truck Business
Vehicle and equipment costs are one of the biggest fixed expenses when running a food truck. These costs will change depending on whether you buy a new or used truck, and the type of equipment you need to operate your business.
Truck Purchase Costs
- New food truck: Costs between $50,000 and $175,000.
- Used food truck: Costs between $30,000 and $70,000.
Essential Equipment Costs and Fixed Monthly Costs
To fully equip your food truck, you’ll need the following items: – Commercial-grade cooking appliances: $15,000 – $30,000 – Refrigeration units: $1,000 – $5,000 – Generator: $3,000 – $10,000 – POS system: $1,000 – $3,000 – Initial smallwares and utensils: $1,500 – $3,000
After your initial purchase, there are monthly fixed expenses to factor into your budget: – Monthly loan payments for the truck and equipment: Between $1,000 and $2,000, depending on the total financing amount. – Insurance for the vehicle and business: Around $300 to $500 per month.
Ongoing Maintenance Costs and Additional Fixed Equipment Costs
Regular maintenance is important to keep your truck running smoothly: – Routine maintenance like oil changes, tire rotations, and inspections: Costs between $1,000 and $2,000 per year. – Funds for major repairs: Set aside about $2,000 to $5,000 annually for unexpected repairs.
You may also have extra one-time costs for certain needs: – Truck wrapping/exterior design: $2,500 – $5,000 – Interior retrofitting: $5,000 – $15,000 – Kitchen fire suppression system: $3,000 – $5,000 – Initial license and permit fees: $1,000 – $5,000
Licensing and Permit Fees for Operating a Food Truck
Starting a food truck business involves a few key costs, and one of the main expenses will be licensing and permits. These fees range from $100 to $1,500 per year, depending on the city or state. Here are some examples of food truck licensing costs in different cities:
- Boston, MA: $1,265 total for various permits and licenses
- Rochester, NY: $1,396 total
- New Orleans, LA: $815.25 total
Breakdown of Common Fees
Food truck owners must pay for several key licenses and permits. These can include:
- Business license: $25-$150
- Vehicle license: $10-$40
- Health permit: $100-$200
- Fire permit: $50-$110
- Food truck permit: $400-$1,000
Additional Costs
Besides the basic licensing fees, you may face other expenses, including:
- Plan review fee: $595
- GPS contract: $299 + $89/month
- Vendor ID badge: $5-$24
- Sales tax deposit: $50
Insurance Costs
Running a food truck without insurance is like driving without a seatbelt—you’re putting your business at serious risk. Insurance is the safety net that protects your business from unexpected problems. From my experience, food truck insurance is more than just an expense—it’s an investment in peace of mind. It lets you focus on what matters: serving great food and growing your business.Typically, food truck owners can expect to pay between $3,000 and $7,500 a year for full coverage. Think of it as the shield that keeps your wheels rolling smoothly, no matter what life throws your way. Below is a list of the main types of insurance you’ll need and their costs:
- General liability insurance: $500-$2,000 per year
- Commercial auto insurance: $2,500-$4,200 per year
- Property insurance: $300-$600 per year
- Workers’ compensation: $800-$1,500 per year per full-time employee
What Affects Insurance Costs?
Several factors determine insurance rates for food trucks, including:
- Location and operating areas
- Annual revenue
- Number of employees
- Claims history
- Equipment type and value
- Policy limits and deductibles
Marketing and Advertising Strategies for Your Food Truck
Marketing and advertising are crucial for the success of a food truck. Generally, the marketing budget is 3-6% of total revenues. Below are some common marketing expenses you should plan for:
Key Marketing Costs
When I started my food truck business, I realized that marketing and outreach were more expensive than I expected. Social media ads on Facebook and Instagram cost between $100 and $500 each month. Setting up a website with basic design and hosting cost between $500 and $2,000, plus ongoing maintenance fees of $20 to $100 per month. I also invested in printed materials like business cards and flyers, which cost around $200-$500. A full truck wrap, to make my truck stand out, cost $2,000 to $5,000. Participating in local events added another $50 to $500 per event. These fixed costs were important for building visibility, but I had to budget carefully to ensure long-term success.
Low-Cost Marketing Strategies
Building an email list became my secret weapon. I still remember when I launched my first promotion and sent it to my subscribers. The orders came pouring in. It felt like having a direct line to my loyal customers. Social media also played a big role. Interacting with my audience through Instagram stories, live videos, and posts helped create a personal and engaged community.
Collaborating with local businesses? That was a win-win. I partnered with a nearby coffee shop, and we offered discounts to each other’s customers. Our customer bases grew together. Offering specials and promotions during slow periods attracted new customers looking for something fresh. Word-of-mouth referrals from happy customers were like free advertising. There’s nothing better than a recommendation from a friend!
Commissary and Storage Fees for Food Truck Operations
Commissary and storage fees are a major fixed cost for food trucks, usually ranging from $400 to $1,500 per month. These fees cover important services needed for food truck operations, such as:
- Commercial kitchen space for food preparation
- Refrigerated and dry storage
- Waste disposal and grease trap cleaning
- Truck washing and sanitization
- Overnight parking
Food truck owners can expect to budget around $600–$800 per month for commissary fees. Sharing commissary spaces can help lower individual costs.
Employee Salaries
Employee salaries are a significant fixed cost for food trucks. The average hourly wage for food truck employees is between $15 and $16 per hour. For a food truck with two full-time employees working 40 hours per week, the total annual labor cost is between $62,400 and $66,560.
| Role | Salary Information |
|---|---|
| Shift leads | $29,156 per year |
| Kitchen team members | $12.26 per hour |
| Food service workers | $44.72 per hour |
| Owner-operators | $50,000 per year (median) |
| Payroll taxes | 7.65% of wages |
| Workers’ compensation insurance | $100 per month per employee |
| Training costs | Vary depending on the role’s complexity |
| Employee benefits | If offered |
| Total Annual Employee Costs | $70,000 to $100,000 (depending on number of staff) |
Expert Opinion:
“In my experience working with food truck businesses, cutting fixed costs is one of the most effective ways to boost long-term profits. Finding a balance is key. Negotiating lower rent or parking fees, optimizing staffing schedules, and doing preventive maintenance are all great ways to cut costs without sacrificing quality or service. It’s also important to regularly check the performance of fixed assets like insurance policies and loan rates to make sure you’re not overpaying. Using energy-efficient equipment can reduce utility bills and support sustainable practices, which may attract eco-conscious customers. Every little saving adds up, helping food truck owners keep strong margins and a solid financial base.”
————
Dr. Rebecca Green, Financial Consultant for Food Service Businesses
Ways to Reduce Fixed Costs
Cutting fixed costs can significantly boost profits in a food truck business. Here are some practical, cost-saving tips to help improve your bottom line.
Negotiate Lower Rent/Parking Fees
To cut fixed costs, one of the best strategies is to negotiate lower rent or parking fees. I once had a food truck parking spot that was really hurting my budget. After talking to the property owner, we agreed on a discount, which helped lower my monthly expenses. Working with other food trucks to share the rent can also make a big difference. It saves money and creates a sense of community, which draws in more customers. When I teamed up with a taco truck, we reduced our rent and both businesses benefited over time.
Switch to Energy-Efficient Equipment
When I started my food truck, switching to energy-efficient equipment was a great decision. I replaced traditional lights with LED bulbs and upgraded to Energy Star-rated appliances. This change saved me hundreds of dollars each month on utilities. After installing energy-efficient fridges, my power bills dropped by almost 30%. It made a big difference. The long-term savings were also clear. These small changes helped keep my costs down and attracted eco-conscious customers. I didn’t expect this, but it turned out to be a great marketing advantage.
Conclusion
Starting a food truck business can be tough, but with the right strategies, it can be very rewarding. If you understand your fixed costs and find ways to manage your budget, your truck can stay on the road and your business can stay profitable. Success isn’t only about serving good food. It’s also about managing your resources and adapting to challenges along the way. Keep pushing forward and don’t be afraid to get creative!
FAQ:
- What is a fixed cost for a food truck?
A fixed cost for a food truck is an expense that remains constant regardless of how much food is sold or how many customers are served. Examples include monthly truck loan payments, insurance premiums, permits and licenses, and parking fees. These costs do not fluctuate with sales volume. - What are some common examples of fixed costs for a food truck?
Common fixed costs for a food truck include:- Truck loan or lease payments
- Insurance (vehicle and liability)
- Business licenses and permits
- Parking or commissary rental fees
- Equipment financing or leasing costs
- How do fixed costs differ from variable costs for a food truck?
Fixed costs remain the same regardless of sales or operations, while variable costs change based on production or sales volume. For example, ingredient costs (variable) increase as more food is prepared, but insurance premiums (fixed) stay the same. - Why is it important to understand fixed costs when running a food truck?
Understanding fixed costs is crucial for budgeting, pricing menu items, and determining profitability. Since fixed costs must be paid regardless of sales, knowing these expenses helps food truck owners set realistic financial goals and ensure they can cover their overhead. - Can fixed costs change over time for a food truck?
Yes, fixed costs can change over time, but not frequently. For example, insurance premiums may increase after a policy renewal, or loan payments might end once the truck is fully paid off. However, these changes are not tied to daily operations or sales volume.
