Opening a food truck may seem like an attractive opportunity for entrepreneurs, but it’s important to be aware of the initial costs and potential profitability before taking the plunge.
What are the initial costs of opening a food truck?
Opening a food truck requires a substantial initial investment, as several items of expenditure need to be taken into account to launch the business in the best possible conditions.
Acquiring a food truck is the biggest cost when starting up a business. The entrepreneur can either invest in a new vehicle, or buy a used one.
For a new truck, you should expect to pay at least €65,000 to €70,000 plus VAT, depending on the layout and options chosen.
Prices for a second-hand food truck are in the region of €45,000 (excluding VAT) for one that’s already fitted out and functional.
If you decide to buy a used truck, you may need to adapt its layout to make it a functional workspace, suited to the activity it will be used for. This must comply with certain standards:
- The vehicle must be fitted with professional kitchen equipment;
- The truck must comply with health and safety standards;
- Electrical, plumbing and gas work may be required, especially for a second-hand food truck;
The average budget for this upgrade can vary between €10,000 and €20,000, depending on the condition of the vehicle purchased.
Benefit from the support of a food truck design professional to keep costs down.
You’ll also need to factor certain regular costs into your projected budget: vehicle insurance, business permits and licenses, location rentals (markets, village squares, etc.), fuel costs and other expenses (accounting, marketing strategy, etc.). A thorough market study and a solid business plan will give you the peace of mind you need to launch your business.
What is the average profitability of a food truck in France?
In addition to the initial costs of opening a food truck, the average profitability of this activity in France can be a first indication of what to expect before embarking on this adventure.
A food truck’s financial performance can be influenced by its location, the type of products offered and customer loyalty. Annual sales for a food truck in France are generally between €50,000 and €250,000:
- The location of the food truck, which must be a strategic place with high footfall, because the more passers-by there are, the more potential customers there are.
- The type of products sold also influences sales: more elaborate dishes or sought-after specialties mean higher selling prices.
- A food truck that builds customer loyalty with a quality offering will benefit from stable, regular revenues.
The net margin of a food truck is often between 15% and 30%: if a food truck generates monthly sales of €12,000, the net profit would be between €1,800 and €3,600. To assess the profitability of a food truck, you need to take into account the various monthly expenditure items, i.e.vehicle depreciation, location costs, fuel, cost price of products, etc. The break-even point is reached when revenues exceed all fixed and variable costs.
What mistakes should be avoided to ensure the profitability of a food truck?
To guarantee the profitability of your food truck, it’s essential to take certain steps, because launching your business without knowing the state of the market, the management required or the marketing strategy to adopt doesn’t give you any idea of the risks involved.
Planning errors
Launching a food truck without understanding your target market could make things very difficult for you. Make sure you know local tastes and existing competition before you launch.
What’s more, many entrepreneurs underestimate initial and operating costs, which can quickly compromise the profitability of a food truck. That’s why it’s a good idea to draw up a detailed budget forecast, including all costs and contingencies.
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Poor management
Poor inventory management can lead to wastage and, consequently, financial losses: set up an inventory tracking system and adapt your offer to the seasons.
What’s more, choosing the wrong equipment or neglecting your vehicle’s weight limits can lead to costly problems.
Also, make sure your prices are neither too low nor too high, as this could affect the profitability of your food truck: calculate your costs and adjust your prices accordingly.
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Marketing strategy issues
As far as marketing strategy is concerned, choosing the wrong location is a mistake that can greatly affect your sales: target high-potential areas such as business districts, tourist zones or university campuses.
Note also that too large a menu can unnecessarily increase storage costs and generate more waste. A simple menu with controlled recipes will be much more efficient and profitable.
Don’t forget to network! A good location and an attractive menu are a good start, but the more visible you are, the sooner your food truck will be profitable!
Ecomag France, your partner in getting your business off to a good start
Ecomag France specializes in the design and manufacture of food trucks: our mission is to support our customers throughout their food truck project. To do this, we convert new or used vehicles into food trucks, as well as fitting out vehicles supplied by our customers.
To create tailor-made food trucks and achieve a result that meets the expectations of each of our customers, we coordinate different trades: painting, lettering, bodywork, furnishings, etc.
At Ecomag France, we have all the skills you need to make your project a success!
