The question of food truck vs. restaurant has been top of mind for awhile now. But ever since the pandemic, more and more businesses are starting to see the benefits of starting a food truck. If you are currently weighing your options to decide which one is better for you, this article will break down the associated start up costs so you can determine which is the right move for you.
The Cost of Starting a Food Truck vs. a Restaurant
With a 40% chance of succeeding in the first year, starting a restaurant can be a high-risk venture like any other business considering the investment involved. However, food trucks are generally considered less risky due to the lower capital investment they require.
Below is a breakdown of the different start up and operating costs that a food truck will incur:
Kitchen and Food Supplies
When Purchasing food and inventory supplies you will need about $1000 to $2000. You can also buy kitchen equipment that costs $25,000 to $100,000.
Vehicle Maintenance
The cost of fuel will be $500 depending on your location, and if you are moving from one place to another, you need to consider the distance. Oil and tire changes and other routine maintenance will cost you about $1,000 to $5000. Other requirements that you must have, like a fire extinguisher, can range from $100 to $300.
Business Licenses, Permits, and Insurance
Depending on your State, County, or city, your business license can cost about $100 to $500. Getting a health permit will cost you from $800 to $5000. Insurance coverage is essential for your business, and you will need to consider the insurance cost on your property, vehicle, and even business liability. You could spend from $2000 to $4000 yearly, and it can vary depending on the level of coverage.
Staff and Other Expenses
Some businesses can choose to work with family members or hire staff. If you decide to hire staff, you need to consider staff wages, benefits, and other compensation.
The cost of the internet needed to run the POS is from $100 to $200. The cash register can cost from $200 to $1000.
Restaurant Expenses
Starting a restaurant can cost $100,000 to $300,000, depending on your concept. Here are the expenses involved:
Utilities Cost
The rent cost will include a one-month security deposit plus the first month’s rent estimated at $10,000 to $12 000. Utilities like the internet, water, gas, electricity will run to about $2,500. If you decide to remodel your restaurant and kitchen, it can cost $25000 to $35 000. Restaurant’s decor and furniture will depend on the size of your restaurant. Now you can spend up to an estimate of $40,000.
Kitchen, Food and Beverage
Kitchenware, including utensils and dishes, can run up to $80,000 while food and beverage estimates at $8000. If you include a bar in your restaurant, the cost will increase.
Insurance, Licenses, and Permits
Depending on your insurance coverage, the cost estimates at $6000. This can include property, injuries, and general liabilities. Health permits and liquor and business licenses can run about $5000 to $20000.
Marketing, Advertising and Other Costs
If you are using signage, it will cost you up to $15000, printing $5000 to $10,000, menus $5000, and the opening event $15,000. Depending on the size of your restaurant, you may need more than one POS system. This will cost you about $20,000.
Make the Right Move for Your Business
The decision to open a food truck vs. a restaurant can be determined by the costs involved. Starting your food truck business is cheaper, but you need to count the cost involved to prepare adequately. At Legion, we manufacture the best food trucks in the nation. Contact Us.
