Food Truck Start Up: Start-Up Costs

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Throughout your food truck’s life, you’re going to encounter financial hurdles that require funding. Here’s a look at the funding types for the different stages of your food truck, courtesy of One Fat Frog Restaurant Equipment:

• SEED CAPITAL: this is the money you need if your initial research and planning for the food truck requires substantial sums in cash.

• START-UP CAPTIAL: this is also known as working capital, is the funding that will go towards your equipment, rent, supplies, etc. during your first year of operation.

• EXPANSION CAPITAL: is capital to help your company reach the next level, which may include purchasing better equipment or adding additional trucks to your lineup.

For start-up food trucks, most folks only need to worry about start-up capital because the research and planning isn’t considered large enough to require seed capital. The easiest and most efficient way to estimate your business start-up costs is to list them out. The more detailed, the better, of course. Sit down and brainstorm everything you’re going to need, from food purchases to truck equipment, to professional services such as accounting, advertising, and licenses.

Here’s a look at what the start-up costs can include:

• purchase of the food truck or trailer
• retrofitting, bringing the food truck up to code
• permits and licensing
• professional, legal, and consulting fees
• initial food purchases
• kitchen supplies
• initial office equipment and supplies
• website design and consulting
• initial advertising and public relations

Recurring start-up costs can include:

• insurance
• commercial kitchen rent
• payroll for you and your employers
• credit-card processing equipment
• truck and equipment maintenance
• unforeseen expenses – usually you wanna give yourself 5 to 10 percent in contingency for these expenses

Once you have completed your list, begin researching and calculating how much funding you’re going to need to pay for everything. First make sure you have all of the first-time costs covered so you can get your truck on the road. After you have this develop an operating budget based on your recurring costs for at least six months to a year.

A good way to come up with a good estimate for your start-up costs by researching other local food trucks and talking to the owners about how they figured out their start-up costs. Make sure you ask them about specific expenses. Talking to your accountant is also a good way to get some assistance with determining expenses.

It’s important that you always over-estimate you start-up costs and investment costs. Some experts even advise doubling your estimates to be wicked safe.

One Fat Frog Restaurant Equipment

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