Pros and Cons of Opening a Food Truck Business | Fora Financial Blog
Pros and Cons of Opening a Food Truck Business
December 07, 2018

Pros and Cons of Opening a Food Truck Business

In 2008, Roy Choi sold Asian-infused tacos from his truck in Los Angeles. Although Kogi BBQ wasn’t the first food truck in American history, Choi sparked a movement that’s continuing to thrive today. According to IBISWorld, the food truck industry is worth nearly $1 billion and has grown by 7.3 percent in the past five years. Currently, there are more than 4,000 food trucks in the U.S. with more than 14,000 people employed in the industry.

Are you interested in opening a food truck business of your own? In this post, we’ll list the pros and cons of opening a food truck business, so you can decide if serving food on wheels is right for you.

Should You Start a Food Truck Company?

Pro: You Can Create Your Own Menu

Most chefs dream of the ability to create their own menu and serve food that they invented. A food truck is a great opportunity to showcase your culinary skills and produce a small themed menu. Whether you have family recipes that have been passed down for generations, or a new creation that your friends rave about, you get the freedom to develop your own food.

Con: You’ll Work in a Small Space

Food trucks are small, and once you add in kitchen equipment, the space feels even smaller. Each city has requirements on food truck sizes, and most aren’t large. For instance, Madison Wisconsin mandates all food trucks be no larger than 120 square feet (10’X12’). You’ll be in the small space for hours at a time, so you must be okay with working in cramped quarters. If you’re claustrophobic, starting a food truck business might not be the best option for you.

Pro: You Get to Be Your Own Boss

For many people, being their own boss is a dream come true. There’s no one telling you what to do, how to do it, and where to be. On the flip side, there’s also no one writing your paycheck. You must be motivated and willing to work hard, even if you don’t make a lot of money in the beginning.

Con: You Must Abide by Local Zoning Laws

Even though your restaurant is mobile, you can’t park anywhere you’d like. Cities have local zoning restrictions, which designate commercial and non-commercial zones. Due to this, most food truck owners plan their schedule months in advance so that they can get permits to park in certain locations. Also, some cities don’t allow food trucks to park in the same spot two days in a row, so it takes careful planning to stay compliant.

In addition, it’s important to remember that in many cities, food truck owners must adhere to parking restrictions and pay for parking just like normal cars. Due to this, make sure that you allot money in your budget to afford parking fees.

Pro: Less Risky Than Opening a Brick-and Mortar Restaurant

For all small business owners, minimizing risk is a top priority. Since food trucks cost less to operate than restaurants, they are less risky and provide way to get into the restaurant industry. Many chefs start food trucks and go on to open successful restaurants. On the flip side, some food truck owners realize they don’t want to own a restaurant due to the considerable risk, and instead invest their time and money into growing their food truck empire.

Con: Your Food Truck Will Like Need Remodeling

According to the Balance, a food truck and kitchen equipment can cost $30,000 to $100,000. Some food truck owners don’t have enough capital to buy a new vehicle, so they opt for an old truck they can remodel. This can be a costly and time-consuming process. Furthermore, each state has different construction standards for a legal mobile food unit, so it’s important to fully understand the requirements in your state before you purchase a vehicle or remodel it.

In addition, while buying a used truck can save money in the beginning, the repairs can be costly if the vehicle breaks down. Not to mention, you won’t be able to serve customers when the vehicle is getting repaired and you’ll lose out on revenue.

In Conclusion: Every City is Different

Every city has different laws and opportunities for food truck owners, so it’s important to understand your market before jumping in. Conduct research and determine if your city offers incentives for small business owners and if they allow parking on city streets. It’s a good sign if there are food trucks already established in your city, but you’ll want to ensure your market is not oversaturated with food trucks. Even if you’re the best chef in the city, it’ll be difficult to attract customers if other trucks are taking up the available parking spaces.

Fora Financial

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

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Fora Financial is a working capital provider to small business owners nationwide. In addition, the Fora Financial team provides educational information to the small business community through their blog, which covers topics such as business financing, marketing, technology, and much more. If you’d like to see a topic covered on the Fora Financial blog, or want to submit a guest post, please email us at [email protected].
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