Expenses to Consider for Your Food Truck Business | World Insurance

Up until the pandemic, the food truck industry was one of the best-performing divisions of the food service sector. So many people love to experiment with gourmet food with more speed and convenience than offered at traditional restaurants. Food trucks continue to find creative ways to generate income, such as collaborating with local breweries and banding together for food truck festivals. If you’re eager to actualize your dream of joining the industry, there are a few expenses to consider for your food truck business plan. 

Funding and Financing Your Food Truck 

Like any business, you’ll need access to funding to obtain everything needed to launch your food truck business. Think beyond the truck and the appliances within. Consider a traditional restaurant and the finances it requires to keep the business alive and well. You will need to account for fixed costs – such as your truck’s loan, employee salaries, and license fees – as well as variable costs – such as utilities, food costs, and gas mileage. Developing a solid financial plan will help you determine how to price your menu. 

Acquiring Permits to Operate Your Food Truck 

Retail and food service codes vary by state. Also, to make sales, you’re going to want to park in prime spots where you’re most likely to attract customers, yet these spots typically require permits granted by the municipality to operate legally. These often require license fees and, depending on the location, can require a yearly fee or a percentage of your sales. These permit requirements can change over time, so joining your local restaurant or food truck association can keep you informed of any alterations.  

Insuring Your Food Truck Business 

Your financial investment needs to be protected, and there’s no better way to ensure your food truck and employees are safe than by investing in the appropriate insurance policies. Some important policies to consider include: 

• Food Truck or Food Trailer Insurance: Whether you’re interested in an all-in-one food truck or are hitching the kitchen to the back of your vehicle, you need to make sure it’s protected from collisions. Bear in mind, that some commercial vehicle insurance policies cover food trucks, as well. 
• Commercial Property Insurance: You’ll also need to protect the contents within your food truck, including stoves, food, and cash registers, or computer equipment. This policy will cover your belongings in the event of a crash, theft/vandalism, harsh weather, or grease fire.
• Commercial Liability Insurance: Commercial auto policies provide liability coverage for damage caused while on the road, but commercial liability insurance will cover business incidents, such as a customer falling ill from your food or damage incurred to another’s property.
• Workers Compensation: To cover your employees’ medical bills and lost wages resulting from an accident or injury, you will need a workers’ compensation policy. It can also protect your business in the case of potential lawsuits filed by employees. 

Mobile businesses are naturally subject to higher risks due to the frequency of travel, limited security protocols, and increased exposure to inclement weather. Therefore, it’s vital you consider the policies noted above. 

If you’re looking to take advantage of this popular business venture, it’s important you know the expenses to consider beforehand. If you discuss your options with your independent insurance agent, you may be able to cut costs by bundling insurance policies.

This article is not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.