Last Updated on May 23, 2022 by John Moretti
Starting a small business and working for oneself is many people’s dream. The ever-growing trend of street vending is abundant in today’s society and has proven to be a profitable market. Starting a coffee truck business is now easier than ever and can fulfill the dreams of owning a business.
The following steps are required to open a coffee truck business.
- The coffee truck business model
- How to fund a coffee truck business
- The intended clientele
- The coffee truck business budget
- The equipment for a coffee truck
- How to power a coffee truck
- The coffee truck business plan
Opening a Coffee truck business will require lots of market research, planning, and a lot of paperwork. This article will provide essential information and the necessary steps to open a coffee truck business.
How Much Does A Coffee Truck Business Cost To Start?
There are several factors involved with the cost of a coffee truck business. There is the cost of the truck, the equipment, the power source, and the furnishings, to name a few. All these items can dramatically influence the start-up cost of small coffee truck businesses.
I can estimate the start-up cost to be in the ballpark of $10 000 to $100 000, as a used coffee truck with no equipment can cost between $35 000 to $65 000 depending on the vehicle.
A complete coffee truck set up with all the essential equipment will cost me roughly $110 000. If I decide to install high-end equipment, it can cost over $160 000. Another option is to purchase a used coffee truck with all the necessary equipment
Does A Coffee Truck Business Make Money?
Coffee trucks can be very profitable. This will depend on how much hard work is being placed in making them successful. A coffee truck business will give me the freedom and flexibility that is much needed in today’s lifestyle. Hence, it offers financial flexibility and “me” time.
Starting a coffee truck does mean that the initial cost must be covered, and this will be a large chunk of change from the savings account, but there is a way to prepare oneself. A solid business plan will take a lot of the financial guesswork out of the start-up process. Being prepared is the key, as this will help understand what needs to be done and what it will cost.
A coffee truck may have fewer financial costs than a corner coffee shop, but it will require money to get it off the ground and serve the first paying customer. To make money will result in hours of research to gain the knowledge of what is needed for the start-up.
Research has shown that coffee trucks can have a decent potential in annual turnover. The turnover figures will depend on the price per cup and how many days per week the truck is open.
|Business Type||Potential Annual Turnover|
|Small Coffee Truck||$60 000 – $ 110 000|
|Large Coffee Truck||$75 000 – $ 250 000|
|Coffee Trailer||$50 000 – $ 145 000|
The Steps To Open A Coffee Truck Business
The following steps are the basics that will need to be followed to start an operational coffee truck business.
1. What Type Of Coffee Truck Business Model?
I would suggest a few visits to the competition, to see what they offer and how the business is run. I have an idea of what I need for my coffee truck, but seeing one operation, quickly put some of my ideas into perspective. This is a good idea as learning from the competition will put you in the right direction.
If there are no coffee trucks in the area, utilize the internet for more information on the coffee truck business. Conceptualize a favored business model and write down a complete business strategy. Leave some areas that can be improved on in the event of budget constraints. This business model will need to be thorough with a bit of flexibility.
2. How To Fund The Coffee Truck Business?
Getting initial funding for the setup and configuration of the coffee truck business is a big deal, as this will turn the coffee truck idea into a reality. This will be based on the strategy that has been penned. The funding may come from savings, a business loan, or investors.
Starting the coffee truck business can be challenging if it only comes from a savings account. Having an investor is a significant financial aid that should not be overlooked. Below are a few suggestions on how to get more funding:
- Borrow from friends and family
- Personal Savings
- Bank Loans
3. Who Is The Intended Clientele For A Coffee Truck Business?
Knowing who the ideal customers are will assist in the overall decision-making on the type of equipment and setup required. Aim for the following markets to have a higher footfall than most areas.
- Private Events
- Office Parties
- Farmers Markets
- Sports Events
- Charity Events
Understanding the customer is a vital part of the business. Lots of thought should be put into giving the customer the best service. For example, determine if there will be seating around the truck or just standing in shaded areas. The difference in clientele preference will also influence the offered menu, e.g., specialty or themed drinks.
4. The Coffee Truck Business Budget
With a good idea of the truck business, equipment, and who the customers will be, it is time to focus on a budget to turn this dream into a reality. The total amount of money required for the start-up must be accurate. This is when slight flexibility comes into play in finalizing the coffee truck concept.
Many have made a fatal mistake in the coffee industry to assume that the money will just appear. This is a big mistake, and planning a proper budget is essential for a successful venture. Here are some tips for determining the budget:
- Be honest with the amounts
- Stick to the time frame
- Do a lot of research
- Learn the ins and outs
- Ask for assistance
5. The Equipment For The Coffee Truck
Once a budget for the truck business has been established, it is time to focus on the necessary equipment that must go into the truck. This is based on the strategy according to the customers and area that the truck will be servicing.
Good quality equipment is essential as breakdowns and faulty equipment can be devastating for the coffee truck business’s image. Below is are examples of possible equipment required for the coffee truck.
- Espresso Machine
- Espresso Grinder
- Coffee Grinder
- Commercial Coffee Maker
- Hot Water Urn
- Water Filter
- Water Pump
- Bartender Rinser
- Panini Grill
- Toaster Oven
Food Prep Equipment
- Work Tables
- Espresso Tamper
- Steam Pitchers
- Long Spoons
- Cutting Boards
- To-Go Coffee Cups
- To-Go Coffee Lids
- Coffee Sleeves
- Coffee Totes
- Coffee Trays
- Creamer Dispensers
- Under-counter Refrigeration
- Triple Sink
- Handwashing Sink
- Sanitization Chemicals
- Test Strips
- Brooms and Mops
6. How To Power The Coffee Truck
The coffee truck must have a reliable power source to run the equipment. Depending on where the coffee truck will be situated during the day, there may be a power outlet accessible with an extension cord. If not, then the following options are available.
- Solar Power
Each of these has financial drawbacks but is vital to the business’s success. Work out precisely how much power is needed for the truck before selecting a power source. This can be done by reading the spec sheets on the equipment and determining the amount of power that will be consumed.
7. The Business Plan For A Coffee Truck Business
A business plan will be essential for starting a coffee truck business. The business plan will provide financial and other requirements that must be obtained to be a successful business. Set up a business plan for the coffee truck using the above information. The business plans should include the following:
- Coffee Truck
- Equipment and installation
- Power source
- Licensing and permits
What Permits And Licenses Are Mandatory For A Coffee Truck Business?
As for all businesses in the US, specific permits must be obtained before trading can commence. The permit process will differ depending on the city and state that the coffee truck will be trading. The one fact concerning permits is that they can be very cumbersome to obtain, but it must be done. Consider it as part of the business model.
Permits must be attained for each city where the coffee truck operates. This will require many different permits and other paperwork to make the truck law-abiding. Rather acquire the necessary permits than face receiving a citation.
1. Permits From The Buildings Department
A coffee truck is not exempt from the Buildings Department even though it’s not a building. The Buildings Department should be contacted before the coffee truck is built. Contact the local department to determine the requirement that must be met for a permit.
The Buildings Department has the jurisdiction to decide if the coffee truck is safe for the owner, the vehicle, the public, and the customers.
The Buildings Department will inspect the electrical system, water system, plumbing system, and structure of the coffee truck before a permit is issued. They will be very stringent as a truck can move around, and equipment and wiring can be damaged if not secured correctly.
The truck may need to be fitted with certain devices or constructed with specific materials to be “up to code.” Contacting the department beforehand to get the necessary requirements will save money and time.
2. Permits From The Health Department
The Health Department is mainly concerned with preventing foodborne illnesses; thus, they will be just as strict as the Building Department. The Health Department will need to see the coffee truck menus to establish if the correct equipment is used. They will also require detailed food preparation plans, food storage plans, serving area cleanliness plans, and waste disposal plans.
The Health Department will establish a minimum requirement list, such as separate sinks for washing up and a separate sink for hygiene. Contacting the Health Department beforehand will again save time and money.
Having the correct Health Department permits will be a necessity. Still, it does mean the truck is up to standard and that the public being served is not at risk. Obtaining these approved permits should put the owner’s mind at ease.
3. Permits From The Fire Department
The Fire Department permit will be required before the coffee truck can start serving customers. This department will require fire extinguishers and an evacuation plan in an emergency. The Fire Department permit ensures that the owner and the public are safe. Contact the local Fire Department for all their specifications.
4. The Food Handler Certificate For A Coffee Truck Business
Even if the coffee truck is not selling food items, a valid Food Handler certificate must be obtained before it opens for business. To get this certificate, a Health Department permit must first be acquired. The Food handler certificate is for the county to know where food and beverage will be sold and who will sell them.
5. A Business License And TAX-Number For A Food Truck Business
The owner of the coffee truck must register the business and get a tax identification number (EIN). This is standard practice for most businesses and will prevent the coffee truck business from being shut down.
6. A Street Vending Permit
Many cities will also require public access or street vending permit. This will fluctuate from place to place and require the following documents to be handed in with the application.
- The Street Vendor Application
- Detailed site plan
- Definition of use
- Health and Fire Department permits
- Business license
- Payable fees
- Granted access from the neighboring business
7. The Zoning Requirements For A Coffee Truck Business
There are many zone types in the city. These can be residential zones, commercial zones, and industrial zones. Depending on the location of the coffee truck, different zones may have a specific requirement that must be abided by to operate on the site. This will vary depending on operation time, location, and available areas.
The standard rules for street vendors are to leave at least five feet of space for pedestrians and a specified distance from curbs, parking entrances, other vendors, bus stops, and business entrances. All the rules and regulations will be stipulated in the application forms for the said zone.
The application will require a site plan where these areas have been addressed for the coffee truck. The zoning permit may be declined if it is deemed too close to access areas or if it may infringe on any safety laws for the specific zone.
Recurring Coffee Truck Costs
There will be a cost associated with the operation of the coffee truck. These are a few of the expenses that will be incurred during the process of the mobile business:
- Fuel – is essential in a coffee truck as you will be regularly moving to different locations. The costs will increase if a generator is used to power the equipment.
- Insurance – monthly and yearly insurance must be paid to keep the business protected from any incident.
- Permits – yearly renewal fees must be paid.
- Payroll – depending on the truck’s size, staff will require remunerations.
- Website fees – exposure is critical
- Advertising – Brand awareness
- Stock – replacing used inventory is essential
How To Market A Coffee Truck Business
The key component for a successful business is marketing and exposure. The positive exposure will increase profits, and profits will lead to growth. Here are a few approaches that can be used to market a coffee truck business:
1. Coffee Truck Website
Having a website for a business will increase its exposure, have affiliated links on the local business sites, and purchase advertising spots in local newspapers. Use Shopify, Wix, or Squarespace for an affordable website.
2. The Coffee Truck Menu Display
The menu can be displayed on the coffee truck in prominent characters. This will make it more visible, and it’s free advertising. Using well-designed images that will attract potential clients.
3. Social Media Advertising
Most of the potential clients will be on social media, so supplying them with a feed showing the day’s unique offerings is a proven concept.
4. The Coffee Truck Logo
The coffee truck logo is the image that potential clients will know and begin to trust. Branded merchandise will remind customers of the delicious coffee they love to drink. It will assist in marketing the brand.
The Coffee Truck Business Pros And Cons
A Coffee Truck business will have its highs and lows. Here are a few to be prepared for in the coffee truck world.
- Mobility – If the site does not deliver enough customers, relocate to a busier area.
- Flexibility – Work my preferred hours, adjust the menus, and move around.
- Taxes – Tax deductions can be achieved as home office space is utilized, the vehicle is used for work purposes, and rental costs.
- Responsiveness – If money is needed for a vacation in Hawaii, then earn a little more by utilizing the coffee truck.
- Competitors – There will be many competitors on the streets fighting for clients. Be prepared to work hard to make a success of it.
- Long Days – The coffee truck and equipment must be maintained and cleaned after business hours to keep up with the business’s image.
- Zoning- Many municipalities will restrict the number of mobile vendors, so be vigilant and get the correct zoning permission as soon as possible.
Developing The Coffee Truck Business Brand
A major consideration that must be made is what will make my coffee truck stand out. What am I going to do differently? A regular cup of coffee can cost under $2 at a convenience store, so what will attract clientele to the coffee truck. Here are a few ideas that will assist in developing a Brand for a Coffee Truck.
- Organic Product: Offering a product that can be sustainably grown is an advantage in today’s health-conscious world. This can be utilized in all aspects of the business, from dairy products to coffee beans and food.
- Environment: The environment around the coffee truck is important as it will attract and delude potential customers. Having a truck that offers a quick cup of coffee on the sidewalk or a relaxed atmosphere where a client can grab a seat and enjoy the view.
- Truck image: When someone sees the truck on the road, can they identify it as an ordinary coffee truck? Or can they identify it as my coffee truck brand?
How Are The Customers going to pay
Working with a cash-only system will surely turn many potential clients away in this digital world. Many customers will not carry cash around and only pay by card or tapping system. Having a cash register is essential for receipts. Installing a reliable POS (point of sale) method is the way to go.
There are many unique POS systems on the market. Some will require internet, and others will be able to track inventory. Here is a list of companies that offer great POS systems.
Starting a coffee truck business will provide an income and a flexible lifestyle. Research is a vital first step in opening any business, especially if it is mobile. There are various ways of obtaining funds to start a coffee truck business, but having an investor can be beneficial.
The coffee truck must be able to cater to the specific area where it will be trading, and having the correct equipment for the particular site is crucial. The coffee truck will need to have a power source of some kind to run all the equipment, and this must be reliable.
The permits that are awarded to the business will range from the Buildings, Fire, and Health departments of the respective city from which the truck will be trading. The permits can be a little cumbersome but are an essential requirement.
If it is your dream to own a small business, I highly recommend starting a coffee truck business. Coffee is the most loved beverage in the world, and a coffee truck will deliver it to the client’s doorstep!