Up until the pandemic, the food truck industry was one of the best-performing divisions of the foodservice sector. People love to experiment with gourmet food with more speed and convenience than offered at traditional restaurants. Even amid this crisis, food trucks are finding creative ways to generate income, such as pairing with local breweries and promoting their presence in towns across the state. If you’re eager to actualize your dream of joining the industry, there are 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. You’ll need to 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 foodservice codes vary by state, but in Massachusetts, you need to purchase a yearly food retail permit for $300 for your food truck. 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 legally operate. 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, 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 or 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 for 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 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 for your food truck business plan. If you discuss your options with your independent insurance agent, you may be able to cut costs by bundling your insurance policies. At TJ Woods Insurance, we have the expertise to pair your new food truck business with all the relevant commercial insurance policies. If you interesting in getting into the foodservice industry, be sure to contact us today.
