Are Food Trucks Profitable?
If running your own food place is your passion, but you are on a budget, then foodtrucks allow you to establish a business with a much smaller investment. However, most entrepreneurs tend to underestimate the profits that can be generated using afoodtruck. The annual profit range you can expect from a mobile kitchen can vary greatly. One survey found that a foodtruck can make as much as $200,000 annually.
Only a few respondents said they make less than $50,000 per year. So it goes without saying that owning a food trailer and putting time and effort into establishing it eventually pays off for the owners.
Since the profit range varies greatly, several factors can affect a foodtruck’s profitability. So if you want to make your foodtruck business as profitable as possible, knowing these factors and overcoming them can improve profitability. This article will explain all the factors that affect the profitability of a food kitchen, and we will also help you understand how you can make the most of your foodtruck business.
What factors affect the profits generated by a foodtruck?
Like a traditional restaurant, a foodtruck is influenced by several factors that may cause it to generate more or fewer profits. Now the benefit of a foodtruck is that you can control factors such as the location where you set up your truck to get more sales and thus generate more profits. With that said, here are all the factors that can affect foodtruck profits:
Location of your foodtruck:
A significant factor influencing how much profit your mobile kitchen can make is its location. Since it’s a mobile setup, you can pitch at a sports event, festival, concert, or commercial location to get more sales. Now festivals are more profitable for foodtrucks than other occasions such as concerts or sports events. So if you carefully choose your foodtruck’s location and set up yourtruck at a suitable event at the right time, you can generate some serious profit.
It is not uncommon for foodtrucks to make upwards of $2000 in net profit per day when selling at a major festival. So if you can keep track of the significant festivals and manage to cash into other major events, your profits will be higher if you exclusively target business districts or office buildings.
The type of food being sold:
Another major factor you should consider to predict the profitability of a foodtruck is the food you sell. Foodtrucks are mostly known for selling hotdogs and fries. While there is nothing wrong with selling hotdogs getting innovative with your product choice can generate more profit.
Foodtrucks can sell coffee, smoothies, cupcakes, desserts, and even barbecued food. As you get innovative with your food choices, you will realize that you can set the price of certain food items to improve profit margins.
Similarly, selling seasonal food items such as ice cream can limit you from reaching your truck’s true earning potential. Picking the type of food that is in demand all year round means you can maximize the amount of money you make. Besides, food items are more profitable than ice cream since they sell at a higher price.
The costs incurred:
As mentioned earlier, you won’t have to spend anywhere near as much to run a foodtruck as you usually spend on a traditional restaurant. However,
there are obvious costs associated with a foodtruck that can influence how much money you get to take home.
There may be cases where a foodtruck may generate decent revenue; however, once the expenses are deducted, the remaining amount may not be that impressive. So your ability to manage the expenses of running a foodtruck can affect the overall profitability of the business.
Something as simple as adjusting the portion of the food and tracking waste to see if you are ordering too many supplies can reduce your foodtruck cost.
Your marketing efforts:
As more and more entrepreneurs have started entering the foodtruck industry, the competition in the industry has increased significantly. So the
marketing efforts you put into promoting your mobile kitchen can affect how much profit you can get.
Now, you may be worried that ramping up marketing efforts might add to the cost of running your foodtruck; however, you can market your business at little to no cost by utilizing social media. All you have to do is regularly showcase your food and the truck to make it more recognizable. You can also keep your audience updated about your truck’s location, so they know where to get their favorite food from.
Full-time vs. part-time:
One of the most significant factors that directly affect the profits of a foodtruck is whether you are doing it as a full-time thing or as a side hustle. This one is a no-brainer since full-time foodtruck owners spend more time selling the food their profit margins tend to be higher than part-time vendors.
Even if you are a part-time seller, you can still make a decent profit; however, when it comes to earning more profit, full-time foodtruck vendors take the lead.
How can you increase the total sales of your foodtruck business?
The most basic way of increasing your foodtruck profit is by making more sales. Similar to the profits, the sales of your foodtruck business can be improved by making adjustments to how you run it.
Leverage social media:
As mentioned in the previous part of the article, social media is one of the most powerful marketing mediums for foodtrucks. There are many
examples of viral foodtrucks on social media. Even if your foodtruck doesn’t achieve the same level of fame online by increasing your truck’s social media presence, you are getting free exposure for your business.
Partner with food delivery services:
While foodtrucks are mobile, they can’t beat the convenience of the good old food delivery model. Even if you don’t have a dedicated
delivery staff, you can ramp up your food sales by partnering with delivery services. Food delivery services allow you to make more sales and reach new customers. You can also serve customers in a wider geographic area by delivering food via food delivery services.
Expand your fleet of foodtrucks:
A single foodtruck can only cater to so many customers simultaneously. One way around this limitation is to expand your fleet of foodtrucks and get more foodtrucks. Your sales can increase significantly by getting multiple custom foodtrucks to serve food at different locations.
Now, if you want to test the waters with multiple foodtrucks before investing in more trucks, you can always rent more foodtrucks for a certain period. Renting additional foodtrucks will allow you to see if investing in buying more trucks is feasible.
Use technology to sell more:
Apart from partnering with food delivery services, you can also enroll in apps that allow users to track foodtrucks within their area.
Foodtrucks are known for offering affordable foods, and customers always look for a foodtruck to buy food from. These apps allow you to get noticed every time someone near you activates the app to look for foodtrucks.
Foodtruck apps can especially be useful if your truck moves around a lot. In fact, in some cases, these foodtruck finder apps may even become the only promotion you need to get more sales.
Learn more about your customers:
Treat your foodtruck as a full fledged business and learn more about your target customers. First, you must realize whether the food items you offer appeal to a specific demographic. Then you can adjust your menu to make it more appealing to your target customers.
As per research, the major demographic buying food from foodtrucks is between the ages of 25 and 44. While this is a broad gap, you can narrow your target customers to their preferences. Notice the most sold foods at your foodtruck and try to incorporate similar foods into your menu. You should also ask for feedback from your customers and try to improve based on the feedback you receive.
Conclusion
There is no denying that there is serious money to be made in the foodtruck business. Even if you run a foodtruck business part-time, you can still make around the same amount as some full-time jobs.
As you have learned in this article, multiple factors can impact how much profit you generate through your foodtruck. And now that you know all those factors after reading this article, you can improve the profitability of your own foodtruck business.
