How Much Do Food Trucks Make & What Is Their Profit Margin?

Food trucks come with fairly low startup and operations costs, compared to traditional restaurants and dining establishments. For this reason, more and more entrepreneurs are breaking into the food truck industry. Industry data shows that a well-operated food truck can bring in $23,000 to $100,000 per year or even more.

Are Food Trucks Profitable?

• A food truck can earn anywhere from $5,000 to $50,000 per month, depending on where it’s located.
• Factors such as location, cost of ingredients and supplies, sales volume, competition, and overhead expenses all play a role in the profit margin of a food truck.
• To increase your chances of a successful food truck, reduce costs, partner with delivery services, offer specials and catering, and design customer loyalty programs.

How Much Does the Average Food Truck Make?

On average, a food truck in a larger city or metro area can make anywhere from $20,000 to $50,000 per month in sales. Food trucks in smaller cities and rural towns tend to earn between $5,000 to $16,000 per month. These ranges are quite large because there are a lot of factors that go into food truck earnings, which we’ll discuss in detail below. 

How Much Does a Food Truck Make Per Day?

A typical food truck will likely make $1,000 to $2,000 in net profit per day. Of course, factors like seasonality and time of year will influence this figure so you might make less or more.

How Much Can a Food Truck Make in a Year?

Industry data shows that a well-operated food truck can bring in $23,000 to $100,000 per year or even more. Location, menu offerings, marketing strategy, and factors will play a role in your yearly earnings. 

What Salary Are Food Truck Owners Usually Paid?

Once your food truck becomes a profitable business, you may consider taking a salary. Food truck owners across the U.S. typically pay themselves between $24,000 and $153,000 per year. As a rule of thumb, your salary should be less than 50% of your profit.

How Long Does It Take to Break Even on a Food Truck?

The break even point is when the total cost and total revenue for your food truck is equal so there’s no loss or gain for your business. In most cases, it takes one and a half to two years to break even on a food truck.

What’s the Typical Profit Margin on a Food Truck?

Profit margins on food trucks vary greatly and will depend on a wide range of factors. But usually a food truck will earn a profit margin between 7% to 8%. If your food truck is widely successful, this figure may be closer to 14% to 15%.

What Determines Food Truck Profit Margin?

The most significant factors that will impact your food truck profit margin, include:

• Cost of Ingredients and Supplies: The cost to prepare and serve your food should always be less than the prices you charge on your menu. Unfortunately, achieving this is easier said than done. It’s a good idea to do the math and determine how much each meal will cost per serving and how much you may lose due to displeased customers who want  replacements, ingredients that expire, and seasonal products that are either difficult to obtain or more expensive at certain times of the year. 
• Sales Volume: Not all dishes are created equal. After all, your made-to-order sub will bring in more revenue than your side of french fries or tater tots. To understand your sales value, identify what dishes sell better during specific times of the year. Also, think about your customers and brand voice. Maybe you’re only appealing to a niche audience. Or perhaps you’re targeting the average Joe who simply wants a cheap, quick meal. 
• Employee Wages: On average, a food truck business hires 1.2 staff members. As your business grows, you might need additional staff, especially during seasonal highs or busy times. You will need to account for their wages as well as their time working your food truck plus ordering food, going to the grocery store, updating social media, and more. 
• Competition: If you’re unsure of whether you’re overcharging or undercharging, take a look at your competition, which may include other food trucks and fast food or quick food restaurants in your local area. This can help you gauge if you need to charge more or less. 
• Location: One of the perks of owning a food truck is that your business is movable. If you find that your usual spot is no longer working out, you can always park somewhere else and earn more sales. To determine the ideal locations, consider your customers and when they tend to buy from you as well as upcoming festivals or events.
• Overhead Expenses: Just like most businesses, your food truck will incur a number of overhead expenses initially and throughout the year. These may include business licenses and permits, truck maintenance, parking fees, fuel costs, kitchenware, cleaning supplies, and marketing materials.

How to Calculate Profit Margin on Your Food Truck

To calculate the profit margin on your food truck, you’ll need two figures: total revenue and total expenses. Total revenue refers to the amount you’ve earned from selling dishes at your food truck. Total expenses is the amount you’ve spent to run your food truck. To calculate your profit margin, you’ll use these equations:

Total Revenue - Total Expenses = Net Profit
(Net Profit/ Total Revenue) x 100 = Net Profit Margin

Let’s say your food truck earns $150,000 in total revenue and has $138,000 in total expenses. In this case, your net profit is $12,000 ($150,000-$138,000). Your profit margin is 8% ($12,000/$150,000) X 100=8). You can always use an online profit margin calculator to help you out.

How to Forecast Future Food Truck Sales and Profit

If you’d like to predict how much your food truck will make in sales and profit in the future, follow these steps.

• Estimate Average Spend Per Customer: This is where you determine how much each customer spends on average, based on your menu prices. It’s a good idea to use mid-priced items rather than the cheapest or most expensive ones. Don’t forget to consider average spend during different times, like lunch and dinner or Monday vs. Saturday. 
• Estimate Yearly Food Truck Sales: Once you figure out weekly sales projections using your average spend per customer and average weekly customers, you can multiply them by 52 weeks to come to your yearly sales projection. Or you can divide the year into seasons to account for seasonality.

Don’t hesitate to work with an accountant or other financial professional to help you with your forecasting. You can also turn to other food truck owners in your area for guidance. In case your forecast indicates a negative financial outlook, you might like to consider exploring small business loans from online lenders such as Lendzi.

Why Do Food Trucks Fail?

In a perfect world, all food trucks would be successful. The reality, however, is that some food truck businesses don’t make it in the long term. Here are the most common reasons for food truck failure. 

• Lack of Planning: If you go with the flow instead of carefully planning your business strategy, processes, and budget, it will be difficult for your food truck to gain traction and succeed. Proper planning and implementation is key to a successful food truck operation.
• Choosing the Wrong Menu Items: The type of food you sell can make or break your food truck. Ideally, you’d choose dishes that are unique yet high in quality and in demand. If your food items are too niche or unfamiliar, you may have trouble succeeding. 
• Excess Cost of Operations: Oftentimes, food trucks fail because they can’t get their operational costs under control. When you budget for your initial and ongoing expenses, don’t forget easy-to-overlook costs like car insurance, permits, gas, legal fees, liability insurance, marketing, storage, and vehicle maintenance. 
• Poor Location: Location is everything, when it comes to food trucks and many other types of businesses. After all, a poor location can lead to limited customers or wrong customers. Think about your target audience when you choose your locations. Where do they hang out most? Farmers markets? Bars? College campuses? Fairs and festivals? Designated food truck parks?
• Overdoing It: At the end of the day, the food trucks who thrive keep things simple. While it may be tempting to offer an extensive menu with intricate dishes, doing so doesn’t make sense for a food truck. Instead, opt for a concise menu with straightforward options.
• Inadequate Marketing: Marketing is essential for your food truck business, even after you’ve been around for a while and established a loyal customer base. Take advantage of the power of social media, SEO, and other marketing channels to get your name out there and promote your offerings to new and prospective customers. Remember that marketing is an ongoing, rather than one time endeavor.

How Can Food Truck Profits Be Improved?

If you’re unsatisfied with your food truck profits, consider these tips.

• Cut Costs: To reduce your costs, you can shop around and find food vendors with lower prices. Also, maintain your food truck to reduce the risk of serious repairs and breakdowns that can lead to disruptions and lost revenues. In addition, figure out how you can optimize the way you store ingredients and prepare food.
• Partner with Delivery Services: Now that third-party delivery services are more popular than ever before, you might want to partner with them to expand your client base. Many customers will pay extra for the convenience and put more money in your pocket as a result. 
• Invest in Multiple Food Trucks: As you begin to see success from one food truck, you might want to use some of your profits to grow your business with additional food trucks. This will give you the opportunity to bring your offerings to multiple markets. 
• Offer Specials: Get creative and think about what types of promotions you can offer to your customers. If you have a Mexican food truck, for example, consider a Tuesday taco special. If your food truck specializes in dessert, a late night cookie deal might make sense.
• Sign Up for a Food Truck Finder: There are many apps and interactive maps that let customers find food trucks in their area. Enroll in an app, like Street Food to expand your reach.
• Provide Catering: With a catering service, you can keep busy, even during slow times. Promote your catering to wedding planners, offices, and others who are looking for unique options for their special events.
• Reward Loyal Customers: Show your regular customers your appreciation through special deals or frequent buyer programs. Not only will they continue to buy from you, they’ll likely spread the word about your food truck.

Final Word

There’s no hard answer to “how much do food trucks make.” But you can perform a few calculations and look at some estimated figures to get an idea of your earning potential. Don’t forget that your food truck’s success will be based on your location, strategy, brand, and work ethic. With a bit of creativity, research, and determination, you can ensure it succeeds.

If you need funding to start your food truck business or expand it, learn about the best food truck financing options we have selected on our list.