How do you create a financial forecast for a food truck?

Many people embark on the mobile catering adventure without a solid forecast, and bitterly regret it. Mobile catering is a formidable but demanding sector, which leaves no room for improvisation. In our experience, 80% of food trucks that close within 2 years had no real forecasts. It’s a concrete simulation of your project’s viability, highlighting strengths, weaknesses and opportunities. It can be used to test various scenarios. What happens if my sales drop by 20%? What if my material costs rise by 10%? Everything becomes concrete.

Reading guide

Why is a forecast essential for your food truck?

Let’s imagine for a moment that you start without a detailed forecast:

  • You buy a truck for €50,000, thinking that’s enough. But in fact, you need another €30,000 to fit it out and buy the equipment. Without cash, your launch is compromised. A forecast would have highlighted your food truck’s financing needs.
  • You’re counting on 100 covers/day at an average bill of €15. In reality, attendance is 30% lower and the average basket 12€. Your income is insufficient to cover your expenses, so you have to dip into your cash flow. The forecast would have encouraged you to refine these assumptions.
  • It’s winter, and your business is down 50%. Without a forecast that takes seasonality into account, you haven’t put any money aside during the high season to compensate. Your cash flow can’t keep up, and you have to lay off staff or even close down.
  • Your material costs soar, and your margin falls from 65% to 50%. Without regular monitoring of the key indicators set out in the forecast, it will take you months to realize this, and you’ll lose a lot of money.
  • You want to invest in a 2nd truck, but the banks refuse to lend. Without the reassuring figures in the forecast, they don’t trust you.

In short, failing to draw up a business plan for your food truck is like driving it blindfolded on a mountain road. It may go well. But the risk of going off the road is immense. So no matter how laborious it may seem, a detailed, well-thought-out and costed financial forecast is a must before you buy any truck.

Key elements of a food truck forecast

A sound financial forecast for a food truck generally includes the following elements:

The initial investment plan

  • Initial costs of acquiring the food truck and fitting it out
  • Kitchen equipment and supplies
  • Company formation costs, security deposits, etc.
  • Initial working capital (cash flow)

Monthly income statement forecast over 3 years

  • Sales forecasts: no. of covers/day, average ticket, no. of days open/month, seasonality, etc.
  • Variable costs: raw materials, packaging, beverages… as % of sales
  • Fixed costs: salaries, fuel, insurance, royalties, external services…
  • Calculate break-even point, net income…

The initial financing plan

  • Partners’ capital contributions
  • Bank loans (truck, cash…)
  • Grants, subsidies…
  • Guarantee sufficient cash flow for the 1st year

1-year monthly cash flow plan

  • Discrepancies between incoming and outgoing payments
  • Cash flow peaks to be expected (high season)
  • Gaps to anticipate and “fill” (low season)

Key management indicators

  • Daily, monthly sales
  • Profit margin on material costs
  • Payroll to sales ratio
  • WCR (working capital requirement)
  • Break-even point

Points of attention

Some indicators are particularly sensitive and need to be fine-tuned:

  • Sales forecasts: it’s tempting to overestimate them. Be careful with footfall and average basket. It’s better to see a progression over time.
  • Variable costs, especially material costs, which have a direct impact on margins. 1 or 2 margin points less can ruin profitability. Calculation basis: 30-35% of sales.
  • Wages and salaries are the number 1 expense item in the restaurant business. Include the manager at minimum minimum wage. Target ratio: max. 30% of sales.
  • Cash flow is the sinews of war. Estimate your initial working capital requirements accurately, and keep a close eye on forecast cash flows.

Example of a food truck forecast

Provide a detailed, costed example of a forecast for a food truck, including tables and graphs to illustrate the various financial projections. Let’s call it “Financial forecast – Food truck ‘Burger Deluxe'”.

Initial assumptions

  • Concept: Gourmet burgers made with local produce
  • Location: Downtown, business district
  • Opening days: Monday to Friday, 11:30am-2pm and 6pm-10pm
  • Average ticket: €14 incl. tax
  • Average number of covers per service: 40 at lunchtime, 35 in the evening

Initial food truck investment plan

Position

Amount

Buying a used truck

35 000 €

Kitchen fittings

20 000 €

Cooking equipment

10 000 €

Storage equipment

5 000 €

Hardware

2 000 €

Furniture and signage

3 000 €

Guarantee deposits

3 000 €

Set-up costs

2 000 €

Initial working capital

20 000 €

Total investment

100 000 €

Position Month 1 Month 2 Month 12 Total Year
Sales excluding VAT 24 640 € 26 180 € 27 830 € 325 000 €
Sales of goods excluding VAT 24 640 € 26 180 € 27 830 € 325 000 €
Cost of goods sold 7 392 € 7 854 € 8 349 € 97 500 €
Purchase of raw materials 7 392 € 7 854 € 8 349 € 97 500 €
Gross margin 17 248 € 18 326 € 19 481 € 227 500 €
External expenses 5 150 € 5 150 € 5 150 € 61 800 €
Water, gas, electricity 400 € 400 € 400 € 4 800 €
Fuel 800 € 800 € 800 € 9 600 €
Maintenance products 200 € 200 € 200 € 2 400 €
Administrative supplies 100 € 100 € 100 € 1 200 €
Insurance 500 € 500 € 500 € 6 000 €
Location rent 1 000 € 1 000 € 1 000 € 12 000 €
Rental expenses 200 € 200 € 200 € 2 400 €
Banking services 50 € 50 € 50 € 600 €
Telecommunication costs 250 € 250 € 250 € 3 000 €
Accounting fees 300 € 300 € 300 € 3 600 €
Marketing and advertising 750 € 750 € 750 € 9 000 €
Royalties and licenses 600 € 600 € 600 € 7 200 €
Taxes 912 € 940 € 973 € 11 295 €
Personnel expenses 6 000 € 6 000 € 6 200 € 72 600 €
Gross wages 4 000 € 4 000 € 4 200 € 48 600 €
Social security charges 2 000 € 2 000 € 2 000 € 24 000 €
Operating income 5 186 € 6 236 € 7 158 € 81 805 €
Depreciation and amortization 1 250 € 1 250 € 1 250 € 15 000 €
Profit before tax and exceptional items 3 936 € 4 986 € 5 908 € 66 805 €
Corporate income tax 1 180 € 1 495 € 1 772 € 20 041 €
Net income 2 755 € 3 490 € 4 135 € 46 763 €

Provisional income statement – Year 1

[suggestion Graph: Sales and net income trends – Year 1]

Cash flow plan – Year 1

Months Revenue Expenses Balance
January 27 000 € 35 000 € -8 000 €
February 28 000 € 26 000 € -6 000 €
December 31 000 € 27 000 € 22 000 €
Total 350 000 € 328 000 € 22 000 €

[suggestion Graph: Cash flow trend – Year 1]

Key management indicators - Year 1

  • Average sales per day: €1,083
  • Average ticket sales: €14.50 incl. VAT
  • Average number of covers per day: 75
  • Gross margin: 70%.
  • Ratio of material costs to sales: 30%.
  • Ratio of personnel costs to sales: 22%.
  • Break-even point: €21,000 monthly sales
  • Year-end cash position: €22,000

Summary

This one-year financial forecast shows a viable project with :

  • Forecast sales of €325,000
  • 70% gross margin to cover expenses
  • Net income of €46,763, i.e. 14% net profitability
  • Cash flow quickly balanced
  • Sound management indicators (payroll ratio, break-even point, etc.)

The points to watch are :

  • Rigorous monitoring of material ratio (max. 30%)
  • Business variability (seasonality, weather), which impacts cash flow
  • High WCR in the first few months to be financed (inventory, timing differences in receipts)

So much for this complete example including the main financial dashboards for one year. We’ve tried to use realistic, consistent figures to illustrate the approach and orders of magnitude.

Our experts can help you build this forecast step by step, anticipating the specific features of a food truck (marked seasonality, weather impact, fuel costs, location constraints…). The idea is to start from your concept (type of cuisine, sector, target, truck capacity…) to build the most customized forecasts possible. Don’t hesitate to contact us!

Need more information?

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