Food Truck Start-up Costs - A Realistic Breakdown

At the Meetup on Monday, mobile vendors had the pleasure of speaking to Jerome Chang, owner of Cathcart & Reddy and the former DessertTruck. Chang gave us an exclusive interview last month, detailing the costs, trials, and tribulations of opening a food truck in New York City. Whether you’re purchasing a brand new food truck, hiring a t-shirt printing company to do custom apparel for your staff, or simply purchasing ingredients from local markets, it all carries a cost. Here, he provides us with a more detailed breakdown of the costs associated with the launch of a new food truck venture in the city of New York.

As some of you may know, Mobile Food Vending Unit Permits (i.e. food truck permits) have a government wait list that’s backed up by many years. While a legitimate two-year truck permit will only cost you $200, if you want to get your business started in this decade, it will cost you around $15,000 to purchase one from a secondary seller.

While it’s customary to start employee’s hourly salaries off at $12 at his brick and mortar location, the average rate for the truck was $16 due to the time it took for employees to obtain their mobile vending licenses and to consistently provide the manpower necessary to work the long hours on the truck itself.

A cost breakdown by Jerome Chang:

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  • Truck — $50,000 (purchase cost plus basic retrofitting)
  • Mobile Food Vending Unit Permit (bought on the black market) — $15,000 (2-year permit)
  • Commissary — $500 (per month); $6,000 estimate per year
  • General Liability Insurance (for the business) — $3,500  (per year)
    • "You need general liability insurance to operate in a commercial kitchen."
  • Mobile Vendors License$103 ($53 for the class, $50 for a 2-year license)
  • Truck Insurance — $2,000-$3,000 (per year; $2,500 estimate per year)
  • Commercial Kitchen — $2,000-$5,000 (per month; $36,000 estimate per year)
  • Workers Comp — $7,000  (per year for 3 employees)
    • "You’re combining two things insurance companies hate - moving vehicles and hot food.
  • Accountant — $350 (per month; $4,200 estimate per year)
    • "Most business owners are doing a million things. Having an accountant look at your books objectively is highly recommended."
  • PR professional — $1,500 (for 3 months; $6,000 estimate per year)
  • Grand total food truck start-up costs for year 1:

             =  $130,303

Please note that the expense list does not include variable costs such as gas, vehicle repairs, food and paper products, marketing materials, and a host of other possible sundries. Budget for incidentals and miscellaneous expenses accordingly.

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