Food trucks are a culinary experience in themselves. The food is uniquely and exclusively served on the street, and the prospect of being able to relocate to busier areas is a great prospect for businesses. Of course, every good business owner weighs the cost of operations and upkeep –which there are several for food trucks. This isn’t just the case with your average taco or burger truck with a fryer in the back, but even for those selling prepackaged ice cream. At the same time, insurance for food trucks is another thing to think about. Is it car insurance or business insurance? Well, it’s honestly a bit of both. You’ll want to have your truck insured as a registered vehicle on the road while also seeing that your business and practice are protected. This post takes an in-depth look at the costs of running and owning a food truck and ties into the question of getting insurance for it.
Food Trucks at First Glance
Everyone loves food trucks. What’s better than having the picnic come directly to you? Community parking lots can be turned into food courts for a day with different food trucks coming together. The classical ice cream trucks still play their merry tunes as they go along their way. As the customer, you’re only concerned with how much the food costs. As a business owner, or maybe because you’re curious, you have to wonder how much running a food truck really costs. We’re not just talking about the cost of fuel and oil changes. There are several costs that food truck owners have to take into account. These costs that every food truck has to deal with are:
- Food truck itself – A good food truck can cost anywhere from $50,000 to $200,000 on the market. Several factors go into the pricing of a food truck, including whether it’s new or used, the kitchen capabilities and hardware, and the existing vehicle profile. Some food truckers elect to buy a trailer to haul around and then operate out of them at stops.
- License and registration – There are several licenses, permits, and registration that a food truck has to go through. In addition to the usual vehicle registration (which can cost anywhere from $75 to $150), there is business registration, a permit to serve food, a fire safety permit if a grill is present, a specific license and parking permit for a food truck, and an adequate amount of car insurance. These are typically annual expenses anywhere from $125 to $1,000.
- Mobile kitchen and cooking supplies – Food trucks aren’t just vendors but chefs on wheels. So, they’ll need a full kitchen setup. These food truck utilities can run from anywhere from $4,000 to $8,000. This also factors in plates, napkins, utensils, and to-go packaging –anything needed to run a successful eatery. Serverware at food trucks is often disposable, so it would be a regular expense required to run one.
- Sales and commerce technology – Card payments are now at the forefront of the majority of transactions today. Card readers and a portable cash register are necessary in order to turn a profit. Food truckers also favor systems that organize their orders and transactions. These can cost anywhere from $2,000 to $4,000. There is also the matter of keeping them in working condition and up to date on the latest digital interfaces.
- Employees and labor – Food trucks are rarely a one-person show; they require a good team of employees streamlining the food service experience. With such a physical job, labor costs are going to be a factor. How much exactly you will pay for a workforce depends on your food truck’s financial goals and size. Be sure to factor in your own pay as well when calculating the amount.
Total Food Truck Registration and Insurance Cost
To more clearly highlight all the registration and permits a food truck needs, here is a detailed list of all the expenses and estimated costs:
- Business registration – This will allow you to operate commercially in a certain area or jurisdiction. Food trucks need to be registered as a business in the area they are servicing. This shows that your truck meets the requirements to operate as a business. Again, this can cost anywhere from $75 to $150.
- Vehicle registration – Like any other vehicle, a food truck has to have valid registration with the state it is licensed in. This is so you are able to drive it from location to location. This can cost anywhere from $75 to $150, depending on the city and state.
- Food truck license – A specialized annually-renewed food truck license is also required for operations. So, this would be an annual expense in the life of a food truck owner. This costs anywhere from $250 to $1,000 a year.
- Food truck parking permit – This permit also validates any storage of the food truck in addition to parking in approved areas. This is another annual expenditure that food truck owners have to account for. This costs anywhere from $200 to $1,000 per month, depending on where it is stored.
- Event appearances – Some events charge for pitching with fees up to $500 –be prepared to pay the venue owners for any appearances.
- Car insurance – You’ll naturally need general liability car insurance for the same reasons as every other driver does. At the same time, you may need commercial car insurance since the truck is being used for business and worker’s compensation for any employees.
Food Truck Auto Insurance
The most basic car insurance you can get for a food truck is a general liability and commercial coverage. General liability coverage limits should be at least the state’s minimum requirements (though much more always helps). As a business, it is suggested that your general liability coverage limit is around $1 million. Food trucks tend to pay around $560 a year for liability coverage. Commercial auto costs around $1,620 a year for the same $1 million in coverage. Since worker’s compensation is always a good call for business, we’ll factor that in too. Worker’s compensation costs about $1,270 annually and insures your workers from injuries on the job and lost wages. Combining all these together, it would cost $3,550 annually to insure. Of course, this assumes that you have a good driving record and the truck has a good history. How much you pay for food truck insurance also depends on the kind of truck you have. An example would be a grill truck paying more than an ice cream truck. Some report having to pay upwards of $10,000 per year for food truck insurance. That’s why it also helps to shop around national and local providers for the best coverage.