How To Start & Successfully Run a Food Truck Business

FrySmith's Eric & Brooke

FrySmith's Eric & Brooke

By Brooke | FrySmith Food Truck

How To Start A Food Truck

I get calls, emails and visits all the time from people who want to start their own gourmet food truck. Starting your own business is tough, but starting a mobile kitchen is especially difficult since there aren’t many resources out there. For aspiring food truckers (and curious truck enthusiasts), here’s a little series of posts about the process of getting on the road in your own mobile kitchen.

The Food
Before starting any venture you need to have a solid business plan and the first thing you should ask yourself in the food truck business is, “What type of food should I sell?” There has to be a market for your grub, or if you’re starting something new like Frysmith, you have to take a gamble that people will want your funky food concept. Before starting Frysmith, we had numerous taste-testings and anonymous surveys to judge demand and find the perfect mix of tasty and affordable. But, we still had to take a gamble that enough people would want to eat fries with stuff on top as a meal!

The Competition
Once you’ve narrowed down what you’d like to sell and are confident there is a market for it, be sure to check out the competition. If your concept is similar to a truck already in existence, by all means visit that truck! And don’t go just once. Go several times, preferably in the same week. See how much business they’re doing on different days. This is something you should do if you’re planning to open any truck. Too many people only visit trucks during special events and aren’t getting an accurate idea of the business volume.

In the Los Angeles food truck scene, new trucks seem to pop up every week. It’s impossible to know about every truck coming down the pipeline, but you can always search the food blogs to see if any truck similar to your concept has announced they’re opening soon. After investigating your competition, you may want to alter your concept and business plan.

Customers & Locations
Figure out which demographic would be most interested in your product and where you can find them. For the Frysmith truck, we quickly determined that younger people of the male persuasion would want to eat fries as a meal (especially if alcohol was involved). So, the first locations we contacted were bars. We then moved on to colleges, theaters and other venues that had high concentrations of our demographic. We didn’t think lunch would be in demand, but once we leaked that we were opening, a lot of those menfolk started requesting that we stop by their workplaces. Definitely keep lines of communication open between you and your fans as they’re a great source of location ideas.

Choosing where to go is the hardest part of running a food truck. If you’re like Frysmith and plan to go to different spots all the time, it’s especially stressful, but you don’t have to start from scratch all the time. One savvy trucker I know visited all the popular lunch areas before she opened and made a spreadsheet of where different trucks went. It’s a little more difficult now that there are almost 100 nouveau food trucks in Los Angeles, but it’s a good idea to scout popular locations beforehand. We spend hours each week determining where to go, often mixing popular locations with new ones.

The Cost Of Running a Food Truck

In the first part of Frysmith’s How to Start a Food Truck, I went over some business basics, such as identifying your product, your demographic and your locations. This post will get into the answer to the question everyone always asks me, “What are the costs?”

Buying vs. Renting
Depending on cooking equipment and the size of the kitchen, a new food truck costs in the neighborhood of $120,000, Many trucks cost a bit more and some less (for example, you’ll save a bit if you build a new kitchen in an old truck as we did with Frysmith). Conversely, renting a truck will run you in the neighborhood of $2,000 a month (this can vary a lot, too, depending on its condition). Renting has the obvious benefit of less risk and start-up capital. However, if your food can’t be made in a rental truck or a professional kitchen you rent or sublet (it’s against the law to make food at home), you’re going to need to buy or lease.

Used Trucks
When we conceived of Frysmith, the standard rental truck was out of the question because it didn’t have enough fryers. So, we needed to find a used custom truck that fit our needs or build one from scratch. In Los Angeles County, buying a used truck can be dicey because even if it currently is health permitted, when the truck changes ownership, it has to be up to the latest code. The code changes frequently, which means the two-year-old truck you buy today might need an extensive renovation to meet current standards. To find a used truck, check out Craigslist or one of the many truck builders in Los Angeles (link here).

Building Custom
If you can’t find an existing truck that fits your needs, you’ll have to build from scratch. For us this turned out to be a painful, lengthy process that we only recommend if your product demands it! After investigating the workmanship of several builders and getting quotes and time estimates, we decided on one whose work we liked and who said they could deliver in 4-6 weeks. That was in April 2009. We didn’t get our truck till the end of November! Most builders will tell you it takes 4-6 weeks to build, but in reality most trucks take half a year or more to complete.

If you decide to build from scratch, use a local builder who is familiar with all the health code requirements and with the inspectors at the health department. This will help speed the plan check process and the inspection later down the line.

The Commissary
One of the other main expenses intrinsic to food trucking is the commissary, the lot where you’re required by law to store the truck. If you decide to rent your truck, you might rent directly from the commissary or from someone who keeps a fleet of trucks there. In Los Angeles County alone, there are over 20 commissaries (link here). At the commissary you can buy propane as well as food and supplies. Some commissaries may require that you buy a certain amount or all of your food from them. This varies from lot to lot, but all commissaries’ service fees cover water, electricity for plugging in your fridge at night, ice for cooling drinks, waste disposal and, of course, the rent for your parking space. Fees vary and are usually around $1,000 per month.

Insurance, Government Fees and Licenses
Like a brick-and-mortar food establishment, mobile food businesses need to pay the state (sales tax), county (health permit fees), and city (business license). Unlike a stationary business, the truck will also have to carry multiple city licenses if they do business in multiple cities. For example, Frysmith has licenses for five cities! That adds up fast! In addition to standard business insurance like general liability and worker’s comp, a food truck is also required to have vehicle insurance with at least $1,000,000 in liability coverage. A benefit of renting is that the rental truck owner will usually pay for insurance coverage, the health permit and the business license for at least one city.

Traveling
Another food-truck related expense is the cost of traveling. Older trucks get about 10mpg, so gas bills pile up rapidly, especially if you service a large area. In addition, while going back and forth from a service, you have to pay employees to basically just sit there for up to an hour or more (not unusual if you get stuck in traffic)! Some truckers have employees meet them on location, but this is also risky as employees can be late/get lost, not find parking, or get parking tickets! Many truckers just bring employees along for the ride and cough up the extra pay rather than risk being short-handed.

While this part of How to Start a Food Truck covered the costs intrinsic to the mobile food business, the last segment will cover rules and regulations that pertain to them, as well as a few more tips to starting your own gourmet food truck.

Food Truck Rules & Regulations

In the first two parts of our series on how to start your own mobile food business, we covered basic business concerns and the costs intrinsic to running a food truck. In this final post, we’ll go over rules and regulations, at least those regulations found in Los Angeles County!

Permits & Licenses

Every truck in Los Angeles County needs a health permit to operate. Rental trucks should already have one, but if you had a truck built or bought a used one, your truck (or “mobile food facility”) will need to be approved by inspectors in the county’s Vehicle Inspection Program. After initial inspection, they’ll also check you out at your commissary to make sure your vehicle is clean, has working equipment and is actually being parked at a commissary. Lastly, inspectors will also visit you on the street, making sure you’re following food safety protocol.

In addition to having a health permit for your truck, the health department also requires that you have a certified food handler on staff. This is obtained by taking an approved food safety course, passing a test, and getting a certificate sent to you in the mail. Other things you’ll need to obtain are a seller’s permit (for sales tax) and a business tax license for the city or cities you plan to operate in.

Regulations

The most frequently asked questions I encounter involve parking: “Where are you allowed to park?” “How long can you park?” “Do you have to pay meters?” The County of Los Angeles only has one rule about parking, and it’s actually a state rule. If a truck is parked for longer than one hour, they must have permission to use an appropriate restroom that’s within 200 feet.

Other than the bathroom issue, parking rules vary by city to city. In the City of Los Angeles, you merely have to follow parking rules as stated on the street signs (and you do have to pay the meters). Other cities have more stringent restraints. For example, Torrance has a limit of 15 minutes in one location. Santa Monica has a limit of 30 minutes.

Luckily there are organizations to help food truckers sort out these rules and regulations. The Southern California Mobile Food Vendors Association (SoCalMFVA) provides support and a unified voice for this growing industry. The Loncheras Association (www.loncheros.com) has supported the traditional lunch and taco trucks in the past. And support is often needed, whether it’s legal backbone when other interests want to shut you down or encouragement from a community of fellow hard-working business people and food enthusiasts.

Before getting into the food truck business, honestly ask yourself if you can handle its unique challenges. With Frysmith, we typically spend 70 hours per week getting supplies, prepping food, driving to locations, trying not to get heat stroke, negotiating times to accept deliveries, emailing, planning our weekly locations, doing payroll, and a multitude of things that keep cropping up that we still haven’t gotten around to doing. And from what I gather from other truckers, that’s the norm! This business isn’t for people who want to make money quick. It’s for people who love food, have always wanted to own their own business and aren’t afraid to work their butts off!

If you have any further questions about food trucking that I haven’t answered in this series of posts or aren’t in the links below, feel free to email us at info@eatfrysmith.com. Happy trucking!

SocalMFVA
LA County Health Department Vehicle Inspection Program
Operational Guidelines from LA County Health Department (PDF)