Buying A Food Truck? Here Are Your Options
- Jul 29, 2018
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Buying a food truck is a time consuming and expensive process that requires a lot of communication with manufacturers. In this article, we'll guide you through the most important aspects to make the task a bit simpler for you.
Where to Start
Before you go any further, the first thing you need to do is make sure that you truly understand the financial obligation of a food truck. Purchasing a food truck is typically cheaper than opening up a restaurant, but there is still a lot of investment involved. A customized food truck ready to be operated generally ranges from $60,000 to $250,000, with most businesses budgeting around $130,000.
You should be aware of the cost before you go about applying for a loan or financing. You should also know your credit and where you stand as far as downpayment expectations and how much the bank is likely to give you. A business plan will be necessary in order to get funding from more institutions, and writing a good business plan requires researching your market, knowing local ordinances, getting parking permits, and detailing the equipment you'll need.
Following approval for financing, you then need to determine your final budget and begin shopping around for a food truck that fits your needs. Typically, you'll either buy new, buy used, or lease.
Used vs. New
When buying a food truck, choosing between new and used is by far one of the hardest decisions you will have to make. There are advantages to each decision, but ultimately it comes down to your budget.
A new food truck can be customized to fit your business' needs and the risk of a major repair is greatly reduced since you'll be the first owner from the factory floor. You also don't have to worry about how the previous owner treated it and, generally, you'll get a great warranty on your fresh and clean truck.
With a used food truck, the biggest advantage is obviously that a used food truck will obviously get you more for your money. Retrofitting has already been done, so you'll be able to know if the layout is going to work before committing to the purchase. You can also eliminate the need to select equipment yourself since it's already installed. However, you have to consider if that equipment will work for your needs.
The third option that tends to get a bit less attention is the possibility of leasing your food truck. This is a great route for you to take if you're new to the foodservice industry or if you are just experimenting with the food truck side of things. By leasing, you will be able to make smaller payments and still enjoy a brand new, high-end food truck that works for your needs.
Since purchasing a food truck is by far the biggest financial burden of a new business, leasing can be a wise decision as it eliminates this cost. Of course, the main disadvantage is what will happen when the lease runs out a few years down the road and your business is booming.
Like any business that exposes some potential risk to the public, you’ll want to make sure you have the proper insurance coverage for your food truck business. This includes:• Public Liability
• Vehicle Coverage
• Damage and theft
• Income Protection
Make sure that your public liability insurance coverage is comprehensive. This is true for all of the insurance you need for your food truck, but the wide exposure of food trucks to public liability means that a single lawsuit could potentially wipe out your business if you don’t have the proper coverage.
Consider your options, look at your business plan and budget, and figure out what's best for you.
Custom design and equipment sales: Serving food that’s hot or cold, savoury or sweet, ICE Group can help you set up your truck to feed a lunchtime corporate crowd or a field full of festival goers. Take your complete mobile catering business anywhere, contact ICE Group today on 02 4228 0100.