ComplianceLegalFinanceNovember 04, 2020

4 steps for how to start a successful food truck business

Food truck businesses are the fastest growing segment of the food industry. Check out these 4 tips on how to enter this new business opportunity and succeed.

Thanks to their affordable prices, unique menus and ability to meet customers where they are, the food truck business is the fastest growing segment of the food industry.

How fast? Between 2007 and 2012, the street food industry, which includes roving restaurants, grew 8.4%. Between 2010 and 2015, the food truck vertical alone grew 9.3%. (To compare, sales in the conventional restaurant industry were expected to grow only 3.8% in 2015.) On average, each truck makes $290,556 in revenue.

Dazzled by these numbers, foodies and entrepreneurs around the country are scrambling to get their piece of the $1 billion street-food pie. Starting a food truck makes good business sense: overhead is relatively low, staffing needs are minimal, and you can operate from multiple locations.

But starting a food truck business is no easy endeavor. The unique combination of sanitation, health and transportation regulations, as well as the fierce competition for customers and parking spots, makes it a much different enterprise from any other business, including running a traditional brick-and-mortar restaurant.

Here are four things to consider before starting a food truck business.

Food truck licenses & permits

Perhaps the most challenging aspect of starting a food truck business is keeping up with the multitude of mobile vending laws, and obtaining all the required credentials. Each state’s requirements are different, as are each city’s. If you plan to drive your truck from one city to another, you will need the appropriate license for each location.

Some destinations will be more welcoming to your food truck business than others. On one end of the spectrum is Utah, which recently enacted a new law allowing food trucks to apply for a single license that applies to multiple locations.

Then there are places like Chicago. The city prohibits food trucks from operating within 200 feet of existing restaurants. Chicago food trucks have to change location every two hours and vendors must report their location via GPS every five minutes or else face serious fines. (You might not be surprised to learn that Chicago has a mere 70 food trucks in operation, compared to almost 150 craft breweries and more than 7,000 restaurants.)

Before you even think of starting a food truck business it’s important to research local general license and permit requirements to ensure it will be a practical endeavor.

You’ll also need to look into local food truck laws regarding food handling, parking and zoning, as well as the inspection process for vehicles and food safety. Some cities don’t have food truck laws on the books. In this scenario, be cautious before investing your time and money into a business that could be ruled illegal once the local government gets around to regulating the industry.

As your business grows, it’s prudent to continue to monitor local rules and regulations as these may change based on the whim of state and local legislators.

Determining your food truck business niche

According to the U.S. Chamber of Commerce Foundation, there are more than 4,100 food trucks operating in almost 300 cities across the country.

Competition is high and some regions are already hitting a food truck saturation point. It’s important to develop a niche that will ensure your food truck business stands out from the rest of the pack.

Here are some questions to help you figure out your niche:

  • What is the food truck industry like in your region? 
  • Who is your competition and what are they doing right? What are they doing wrong?
  • What kind of customer base would you like to attract? What do they like to eat, and how much are they able or willing to spend? 
  • What kind of foods do you want to serve?
  • How can you offer customers something different than the area’s existing cuisines? (For example, you would have to make some pretty amazing tacos if you plan on opening a taco truck in Los Angeles.)

Picking the best location for your food truck

Real estate isn’t the only industry to preach the benefits of “location, location, location.” In the food truck world, finding a good parking space can make or break your business.

The first step is determining where you’re even allowed to set up shop. Tons of factors will affect this, from local laws and parking ordinances to the mercy of landowners and property managers. Then there’s the competition. Existing food trucks, as well as local restaurants, will have plenty to say if you park in what they consider their territory.

Get creative. Who owns the empty lot across the street from the new brewery? Which locations might a sports fan pass on the walk from the parking lot to the stadium? Are there any special events coming up that welcome vendors?

After figuring out your options, you have to decide which schedule will best serve potential customers. Catering to an office park will likely require a different schedule than serving late-night concert-goers.

Financing your food truck

While start-up costs are typically lower for a food truck business compared to a traditional brick and mortar restaurant, they’re not exactly cheap. Be prepared to invest at least $40,000 and up to $250,000 to get your food truck business started.

A truck will set you back at least $5,000. Bringing it up to code could cost up to $50,000. And promotional and professional services, including branding your vehicle, building a website and developing a public relations and social media strategy, could run another $18,000.

Then there's the cost of staff, food and fuel, as well as inspection, permit and licensing fees.

A small business loan can be a big help in protecting your personal savings and your sanity. To apply, you’ll need a detailed business plan that includes a market analysis, sales strategies and financial projections.


Starting a food truck can be a rewarding business venture, but it has to be done correctly. After you’ve obtained all the necessary permits, developed your niche and secured your financing, you’ll be literally up and rolling in an exciting, and potentially very lucrative, new profession.