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Most Profitable Industries for Small Businesses in 2019

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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The economy is growing and the market is (mostly) thriving, so if you’ve been thinking of launching your own small business into the world, the time just might be right. But if you’re an entrepreneur, there can be such a thing as too many ideas. You might have a dozen or more brilliant concepts but perhaps you don’t know how profitable a certain industry is likely to be.

We’re here to help. Working with data from the U.S. Census Bureau, Bureau of Labor Statistics and software company Abrigo, we’ve pulled together the most profitable small business sectors. Whether you’re a small business owner interested in where you rank or an entrepreneur doing market research, there are some important insights ahead.

Most profitable industries

The Census Bureau ranks, among other things, profitability by sector in its Annual Survey of Entrepreneurs. Here are the top 10:

Industry

% businesses reporting profits

Finance and insurance

73.1

Professional, scientific and technical services

70.9

Management of companies and enterprises

70.5

Real estate and rental and leasing

66.9

Health care and social assistance

65.9

Construction

65.1

Wholesale trade

63.8

Administrative and support and waste management

63.5

Manufacturing

61.7

Retail trade; accommodation and food services (tied)

60

Source: U.S. Census Bureau 2016 Survey of Entrepreneurs

Management of companies and enterprises topped the list as well when Abrigo looked at the most profitable small businesses by net profit margin for a 12-month period ending April 30, 2019. Net profit margin is calculated by taking a small business’ revenue minus all expenses, including interest and taxes. As part of its services to the banking and accounting industry, Abrigo collects financial information on private companies that is then anonymized and aggregated by industry.

Industry

Net profit margin (%)

Management of companies and enterprises

22

Lessors of real estate

20.9

Financial investment activities

19.4

Commercial and industrial machinery and equipment rental and leasing

17.7

Accounting, tax preparation, bookkeeping and payroll services

17.7

Legal services

17.4

Agencies, brokerages and other insurance-related activities

16.4

Activities related to real estate

15.7

Offices of real estate agents and brokers

13.9

Support activities for mining

13.3

Source: Abrigo

Fastest-growing occupations

Clues may also be gleaned from the Bureau of Labor Statistics’ employment projections in the decade between 2016 and 2026. Clean energy and health fields dominate this list of the 10 fastest-growing occupations:

Occupation

% change in employment

Solar photovoltaic installers

104.9

Wind turbine service technicians

96.3

Home health aides

47.3

Personal care aides

38.6

Physician assistants

37.3

Nurse practitioners

36.1

Statisticians

33.8

Physical therapist assistants

31.0

Software developers, applications

30.7

Mathematicians

29.7

Source: Bureau of Labor Statistics

Steps to getting started

But before you start a business, you’ll need to put in some leg work. We’ve rounded up four key steps that are essential to starting a business. Here’s what it takes to get your business off the ground.

1. Do your research

If you’re reading this article, congratulations. You’ve already started tip No.1: doing your research.

To start a business, you’ll need to do your homework — a lot of homework. That means thorough market and competitor research, as well as an analysis of financial feasibility, before you start making any business moves. You want a good answer to the question: “What does your business do, and what sets it apart from competitors?”

Some questions to get you started include:

  • What’s the demand for your product or service?
  • How big is your potential market?
  • Which competitors are already out there, and how many are there?
  • What do these consumers already pay for your product or service?

2. Make a plan

You won’t get very far without a well-researched, clear and solid business plan. This plan is a map — it will outline where your business is right now, where it’s going and how you will get there. If you’re not sure what a good business plan looks like, the U.S. Small Business Administration has a few templates and samples to help you get started. Most business plans will have the same information, but how you structure it will depend on how much detail you want to use.

3. Figure out financing

This is one of the most crucial steps to making a successful business. You need funding to grow, but you may not be able to get it as easily as an established venture. The first step is to figure out how much funding you need. That will determine where you get it from: if you’ll be self-funded, need to find investors, or apply for a loan. Your funding will obviously have an enormous impact on what your business will look like in the future, so it’s important to make figuring out how you’ll get capital one of your first steps.

4. Make it legal

This is not the most exciting part of starting a business, but everyone has to do it. You can make the process more painless by figuring out early what permits, licenses and forms you’ll need to fill out in order to become a business in the eyes of the law. Figuring out what paperwork you need early on in the process is one way to stay on top of things and make sure there aren’t any legal surprises later on.

A closer look at top industries

Specialized services

Industries such as legal services and mining activities are regular fixtures on the list compiled by Abrigo and formerly Sageworks — Sageworks became part of Abrigo after it was acquired in 2018 — said Libby Sharman, Abrigo’s vice president of marketing. One reason for this is steep barriers to entry or high degrees of education required. Keeping the talent pool small benefits these businesses.

They also may not require steep overhead costs, added Sharman. In the case of businesses involved in support activities for mining such as exploration, “they’re not necessarily buying and maintaining all the heavy equipment necessary for running a mine,” she noted. Low overhead costs may also apply to some of the professional industries on the list, firms where their primary expense is the people they have in revenue-generating roles. Without much overhead to account for, “they can have a higher than average profit margin. So many of these industries, legal, accounting, there’s so much training [for business owners] to get to that point, their experience is going to be a calculable asset relative to other small businesses.”

Machinery and equipment rental and leasing

“Construction may be a significant driver of profitability for this industry,” Sharman said. Smaller, local stores that provide machines to rent are more likely to be able to charge a slight premium because of their convenience or react quickly to the inventory needs of their local clientele. According to industry research firm IBISWorld, a key factor of success in this industry is the ability to control stock, so keep this in mind.

Construction equipment rental

This business provides construction equipment rentals to local contractors and property owners alike. Swift delivery and pick-up and a commitment to customer service will set you apart from larger competitors.

Medical equipment rental

Medical equipment rental businesses are also a part of this sector. Customers can rent everything from a hospital bed to a breast pump from these businesses.

Activities related to real estate

This has been one of the hottest growing sectors in the country recently, both for residential and commercial real estate (albeit one predicted to grow slightly slower in the near future, in the case of the latter). “These shops can also benefit from a low overhead since there is no inventory carrying costs or high-tech needs in the business,” Sharman said.

Under the umbrella of real estate are other types of work:

Property management

Property managers deal with the operation, control, and oversight of real estate, often acting as a go-between for landlords and tenants. The key to building a property management company is building a robust client base — so network, network, network.

Property appraisal

Property appraisal is generally an area of steady work (particularly if you live near a hot real estate market). Different areas and markets will often have different licensing needs, so make sure you do your research before beginning your training.

Traveler accommodation

This is the sector that includes short-term lodging. Aside from a place to sleep, these businesses might offer other perks like food services or recreational activities. Location is key for these businesses — hotels in touristy areas are always a good bet, but filling a niche in a less-trafficked locale means there’s less competition. U.S. travel bookings and revenue swelled to nearly $800 billion in 2017, according to Deloitte. Even though the accounting giant predicted growth in 2019 as well, it warned of challenges ahead. Here’s how small businesses can fit into this global business.

Bed and breakfasts

Bed and breakfasts aren’t always the cheapest option for accommodations, but they can offer travelers character and charm that chain hotels can’t compete with.

Resorts

Small, seasonal resorts occupy a similar niche to bed and breakfasts. “Given their smaller operating levels and boutique experience, they may be able to charge a premium to guests and avoid franchise fees, which protect their profit margin,” Sharman said.

Motels

Location and upkeep is everything — weary travelers are more likely to choose a well-maintained and attractive motel near major roads to turn in for the night.

The bottom line

No single factor will determine whether your small business is profitable. Decisions you make as a business owner, conditions in your particular city and in the country as a whole may affect the success of your enterprise. The important thing is to leverage your particular expertise and follow best practices for developing a solid business plan. These will help you weather the inevitable ups and downs of starting and running your own business.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Kate Rockwood
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Kate Rockwood is a writer at MagnifyMoney. You can email Kate here

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Business Budget Template: What to Include

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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Setting a budget for your small business can prevent excessive spending and put you on a path toward profitability.

An effective budget would show you how much you need to generate in sales to cover costs, as well as how much you can afford to reinvest in the business. Additionally, you could use a budget to figure out when you’d have the means to hire employees.

It may seem like a daunting task to comb through your business’s finances but sitting down to create a budget for your small business would be time well-spent. Continue reading to understand what budgeting entails and how to find a business budget template to get started.

Why does your business need a budget?

A business budget puts your monthly expenses in writing, including your office lease payments, travel costs, website hosting fees, marketing expenses and the cost of supplies. Documenting these regular costs would help you set aside money each month to cover the bills and spend only what is left over.

A budget would give you a detailed look at where your money is going. You would be able to see how much you need to earn in sales to not only break even but become profitable.

As your business changes over time, your budget can help you be flexible in your spending. If a big, one-time expense comes up, you could look at line items on your budget to see where you could make cuts to cover the unexpected purchase.

Your budget should include all business expenses, even the small ones, so you don’t underestimate your financial needs. In the next section, we’ll discuss how to find a budget template for your business.

Creating your business budget

Before writing your business budget, there are a couple of financial statements you need to understand related to how your business earns and spends money.

Profit and loss statement

A profit and loss statement, or income statement, would illustrate whether your business is making or losing money. You would need to subtract your expenses from your income to determine this. If your revenue exceeds your costs, then your business is profitable. But if costs are higher than revenue, then you’re likely making a loss.

When doing the math, include all recurring income and expected income in your total revenue. Same with expenses – include recurring and fixed costs as well as one-off purchases. Also include payroll, debt repayments and depreciation of business assets in your total expenses.

Once you’ve determined if your business is making a profit or a loss, you could decide how to move forward with your budget. You could set up the budget so you save money to reduce spending, or invest in growing your profits.

Balance sheet

Your balance sheet would show your assets, liabilities and overall worth of your business. To find the difference between what your business owns and owes, you would need to subtract monthly liabilities from monthly assets.

Your total assets should include the value of everything the business owns, such as real estate or equipment, as well as money in your business bank account and outstanding invoices.

Your total liabilities should be comprised of any loans or other business debt, bills that have not yet been paid and taxes due in the near future.

The balance sheet allows you to see all assets and liabilities to figure out the net worth of the business. This information would help shape your budget.

Writing your budget

The information on your financial statements would inform your business budget. Consider creating a spreadsheet separating your costs into two categories to track spending: one-time expenses, like equipment, and recurring costs, like monthly rent and utility bills.

You could create an individual sheet for each month, or combine data from each month on one sheet to track your yearly spending. Your spreadsheet should also include your projected sales, revenue and profit so you can compare your costs to your income.

Once you’ve filled out your spreadsheet, you could adjust the numbers to illustrate various scenarios. For instance, you could evaluate how increasing or adding a certain expense would impact your revenue or profit.

Choosing a business budget template

After becoming familiar with your monthly expenses and income, you would be better prepared to determine what’s essential to your budget. You could create a weekly or monthly budget, or both, to keep your spending on track.

Here’s an example of what your budget may look like:

Various websites offer online templates, often for free. Here are a few available to download:

  • Monthly budget template from QuickBooks– This template works with Microsoft Excel and Google Docs. It tracks monthly expenses and one-time expenses on a single sheet to calculate total monthly costs. This spreadsheet is designed for new businesses looking to estimate initial startup costs.
  • Monthly budget template from Smartsheet – This template works with Microsoft Excel or the Smartsheet platform. It includes sheets for tracking one type of income source and one type of expense as well as cash transactions each month. Smartsheet also provides multiple templates for various needs, such as a 12-month budget, a specific project budget and a first-year budget.
  • Money management template from Vertex – This template works with Microsoft Excel and Google Sheets. It records spending and income to create a yearly budget. Vertex’s template includes worksheets for service-based and product-based businesses.
  • Small business budget from Capterra – This template also works with Microsoft Excel. Capterra’s budget tool allows you to input your yearly spending goals to calculate what your financial activity should look like each month. You can update your spreadsheet with your business’s actual monthly results to see if you’re on track to meet your goals.
  • Small business budget management templates from PDFConverter.com – PDFConverter.com provides links to 15 downloadable Microsoft Excel spreadsheets. The templates are designed with specific budgeting goals in mind, like budgeting for marketing or manufacturing expenses, setting a business travel or event budget or creating a rolling budget to forecast future spending.

When filling out your business budget, most templates would require you to determine the number of months the budget will cover. Then, you would enter your costs and income into their respective fields on the spreadsheet. An embedded formula would automatically populate total amounts based on the information you entered.

Setting a budget and sticking to it

A premade template would take much of the legwork out of making your business budget. But you would still need to interpret those numbers to make changes within your operation.

You could refer to your budget to adjust variable expenses to offset any anticipated changes in your cash flow. You should also check your budget before taking on a major expense, like purchasing equipment or expanding the business, to make sure it fits within your current spending plan.

For startups, a business budget can be crucial. New business owners often underestimate startup costs and setting a budget can help you stay on track. You also may have to submit a budget as part of your business plan when applying for loans or investor funding.

Any business can benefit from budgeting, as it would help you make strategic decisions about the future of your company. You could use your budget to explore different scenarios, plugging in expenses to see what your business can afford.

Your business budget is a flexible document and can change as your business evolves. Maintaining a budget as you grow would help you understand your spending habits and revenue patterns, so you can feel comfortable making purchases that benefit the business.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Melissa Wylie
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Melissa Wylie is a writer at MagnifyMoney. You can email Melissa at [email protected]

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How to Start a Food Truck

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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Food trucks are the focus of festivals, neighborhood events, movies and TV shows. And their trendy appeal doesn’t seem to be diminishing anytime soon, which means there’s room for growth if business owners are willing to do the work it takes to stand out in a crowd.

The food truck industry in the U.S. is expected to reach $1 billion in revenue in 2019, according to IBISWorld, an industry researcher. Nearly 24,000 food trucks and their owners can benefit from increased consumer spending, but also must deal with increased competition.

“Probably a large misconception most people have is, first of all, that this is going to be easy,” said David Stuck, co-founder of The Tin Kitchen food truck in Charlotte, N.C.

Stuck is also the chief operating officer of Tin Partners, a food-services group that Stuck and his partner Nick Lischerong launched following the success of the food truck. Tin Partners offers catering and event planning services, as well as culinary consulting.

When Stuck and Licheron opened The Tin Kitchen in 2010 they had trouble finding places to park, as the food truck scene hadn’t yet taken off in the city and businesses didn’t want trucks on their property. Now, there are three Tin Kitchen trucks among the dozens of trucks driving around Charlotte, similar to cities across the country.

“Just be aware that there is a tremendous amount of competition at the moment,” Stuck said. “You better be able to cook good food and you better have a good plan or you’re going to flounder.”

7 steps to start a food truck

To get your food truck up and running, there are several steps to follow. Here’s how to get the process started.

How to Start a Food Truck

1. Set up your business entity.

When starting a food truck business, you would need to choose a structure, or entity, for your operation. The structure you choose would impact how much you pay in business taxes and whether you would be personally liable for the business.

A limited liability company, or LLC, is a common entity choice for food truck owners, said Zana Tomich, a business attorney and founding partner of Detroit-based law firm Dalton and Tomich. According to Tomich, an LLC isn’t as formal as other entities, like a corporation, but it would protect you from personal liability.

2. Check your state and city regulations.

As a mobile food establishment, a food truck may need to follow state and local rules, Tomich said. In her home state of Michigan, food truck owners not only need permits to operate in the state, but also local approval to set up shop in a specific city. Focusing on a single city, at least at first, might make the most sense for new food truck owners who may not have the resources to juggle multiple municipalities with different sets of rules.

“Usually food truck operators will focus on one place to make sure they’re within the bounds of the rules,” she said.

On average, food truck owners in the U.S. must complete 45 separate government-mandated procedures to start and maintain the business for one year. In that year, owners spend more than $28,000 on permits, licenses and ongoing legal compliance, such as regular safety and health inspections and vehicle registration, according to research from the U.S. Chamber of Commerce Foundation.

To obtain operational licenses, you would likely need to start with your state agency, which varies by state, Tomich said. In Michigan, food truck owners must first go to the state department of agriculture, but owners in other areas may need to start with their state’s secretary of state office, she said.

Next, your local health department would need to approve your food truck. Then, you’d need to make a visit to your city planning and permitting offices to get additional approval to park in certain areas of the city or on private property, Tomich said.

“Once the state permits are obtained, which are a little more cumbersome, going through the local permitting process is pretty straightforward,” Tomich said.

3. Purchase a truck.

Purchasing a used food truck is often an economical option for new business owners. You could find a truck for as low as $15,000 to $20,000, though it may not have the layout and equipment needed for the type of food you plan to prepare, Stuck noted. For instance, Stuck initially purchased a former barbecue truck, which wasn’t outfitted to make tacos, The Tin Kitchen’s primary offering.

“If you’re doing scoop-and-serve barbecue, that’s different than cooking things to order,” he said. “We sort of forced it to work.”

If you have a bigger budget, you could buy a custom truck from a food truck manufacturer. A brand-new truck could cost between $50,000 and $150,000, but you’d be able to design the kitchen layout and install equipment that works best for your business, Stuck said. You may be eligible for financing to ease the purchasing process — we’ll discuss financing options for food truck owners in a later section.

Your kitchen equipment would depend on the type of dishes you plan to sell. Common food truck appliances include:

  • Ovens
  • Fryers
  • Grills
  • Refrigerators
  • Pots and pans
  • Storage containers
  • Knives and other utensils

How you arrange your equipment is also crucial, said Stuck. Work stations should be organized in a way that allows you to quickly prepare and serve food to waiting customers. In addition to kitchen equipment, you would also need a point-of-sale system to take orders and a generator to power the truck with electricity.

4. Buy insurance.

Several types of business insurance policies exist to protect certain assets, like your equipment, inventory and personal property. According to Tomich, as a food truck owner, you should at least consider purchasing general liability insurance. General liability insurance protects business owners from property damage and bodily injury claims, and also covers costs involving claims of false advertising, libel and slander.

Business vehicle insurance or a commercial auto policy would also be a necessary purchase, as you would be required to provide collision and comprehensive coverage for the food truck. It could also cover any equipment that is permanently attached to the truck. If you have employees, you’ll likely be required to buy a workers’ compensation policy as well, to protect them if they are injured at work. Unemployment and disability insurance would also be required.

“When it comes down to it, it’s a vehicle,” Tomich said. “Accidents happen.”

5. Hire employees.

Unless you’re able to take orders, cook food and drive the truck yourself, you’re likely going to have to hire employees to help operate the business. According to Tomich, you would need to classify workers correctly in the eyes of the Internal Revenue Service or risk facing penalties. You can classify workers either as independent contractors or employees of the business, the latter of which would result in federal and state employment taxes.

But while it may be tempting to classify workers as contractors to avoid paying taxes on their earnings, you may end up owing back taxes if you misclassify your staff, Tomich said. If workers earn a regular wage at an hourly or weekly rate or have access to benefits like health insurance, they should be classified as an employee and not a contractor.

6. Develop your menu.

Your menu should include dishes that can be prepared in a tight space. You may want to consider items that can be made in advance or cooked quickly to prevent your customers from waiting outside your truck too long.

A new food truck owner could initially spend upwards of $1,000 or $2,000 on cooking supplies, including menu ingredients, cooking oil, spices, napkins, plates, cups and other serveware.

Wholesale food retailers like Restaurant Depot or Chef’Store are typical choices for food truck owners, Stuck said. You would likely need to stock up on supplies each day or every other day. Determining how much inventory to buy can be tricky, and you don’t want to make the wrong calculation, he said.

“That’s a very delicate line to walk,” he said. “If you buy too much, a lot of it can perish before you sell it. If you don’t buy enough, you’ll sell out of food.”

You could rent space in a shared commercial kitchen or commissary kitchen to store supplies and prepare food if you don’t have room on the truck. Most kitchens are fully equipped, and some are even specifically designed for food truck owners.

Propane is also necessary inventory for food truck owners to power gas stoves, water heaters or other kitchen equipment in the truck. Filling up once or twice a week is common practice, and you may want to plan around your busy days, said Stuck; for example, he noted that the Tin Kitchen trucks fill up on Mondays and Fridays, bookending the weekends. Businesses like U-Haul have propane refill stations onsite that food truck owners can use.

7. Find a place to park.

Once you have your truck, supplies and employees ready to roll, you would be ready to open your windows and start serving customers. Where you can park your truck would depend on local regulations and permits you’ve acquired, Tomich said. Be wary of private property, as some locations may require food trucks to get permission to operate on the premises, she said.

There may be rules about how close a food truck can park to schools, parks, restaurants, crosswalks, building entrances or another food truck. Some may even limit street parking or how many days in a row you can park in the same spot.

Community events can be valuable, according to Stuck. However, the growing number of food trucks has upped the competition for spots at large gatherings, he said. In some cases, you may have to pay a fee for entrance into the event. For instance, the International Night Market in Atlanta requires food truck owners to pay $1,000 for a space at the three-day event.

Financing a food truck business

From food to permits to propane to maintenance and repairs, the costs of running a food truck can quickly add up. Securing financing for your business could help you cover major expenses and allow you to reserve your daily operating capital, Stuck said.

If you need funding to keep your food truck on the road, consider these types of food truck financing that you could obtain from traditional banks or alternative business lenders.

Food truck equipment loan

Equipment financing can be used to buy tools like ovens and refrigerators, as well as the food truck itself. Many lenders categorize food trucks as equipment and you can secure a loan with the vehicle. Because the truck or other asset would act as collateral, an equipment loan is less risky for the lender and more accessible for you as the business owner. But you may need to make a 10% to 20% down payment when obtaining an equipment loan. If you need to finance equipment that you plan to replace often, an equipment lease may be a better choice. You would make payments to use the equipment for the length of the lease, then return the asset or purchase it for a discounted priced when the term ends.

Microloan

Microloans are available in small amounts up to $50,000 and are usually reserved for community development efforts or certain types of business owners, such as women, minority, veteran or low-income entrepreneurs. Microloans can be used to cover working capital expenses like inventory, supplies or machinery, and you may need to offer collateral to secure funding. Microloans are also a useful tool to build your business credit profile so you could apply for a larger amount of financing in the future. The U.S. Small Business Administration has a well-known microloan program.

Short-term loan

Short-term business loans also typically come in smaller amounts with repayment terms between three and 18 months. Interest rates could be high depending on the length of your term, your business’s cash flow, your credit profile and collateral. If approved, you could use a short-term loan to cover any business expense. The repayment schedule could be quick, so be prepared to make daily, weekly or monthly payments.

Business line of credit

A revolving business line of credit would help you pay for ongoing food truck expenses. You could draw funds from your credit line on an as-needed basis and only pay interest on what you borrow. However, you could be required to pay a maintenance fee to keep the line open. To qualify, you may need to offer collateral, and your interest rate would depend on your credit profile. Low-credit applicants typically have a higher likelihood of securing a line of credit than a traditional business loan, so it could be an attractive option if your credit is less than perfect.

Crowdfunding

Online crowdfunding platforms like GoFundMe, Kickstarter and Indiegogo would allow you to raise funds for your food truck from the general public. Some platforms simply let you accept donations, while others would require you to offer a product or stake in the business in exchange for funding. Compared with other types of financing, it may take a long time to raise enough money to cover substantial business costs. However, exposure on a crowdfunding site could help you build a fan following before opening your food truck.

Is the food truck industry right for you?

If you have experience in food service or have dreamt of owning your own dining establishment, a food truck may seem like a relatively affordable way to start your entrepreneurial journey. Food trucks have cheaper average startup costs than brick-and-mortar restaurants — less than $200,000 compared to $1 million or more. Full-time food trucks typically generate $100,000 to $150,000 in annual gross revenue, according to a survey from Food Truck Enterprise.

However, the expenses of running a food truck aren’t limited to startup costs. Ongoing maintenance could cost $40,000 to $50,000 a year, Stuck said. Older, used trucks need near-constant repairs as machinery like water pumps, propane tanks, coolers and generators wear down, he said.

“Stuff breaks all the time,” Stuck said. “I knew there would be some of that, but I don’t think I anticipated how substantial that workload was at first.”

Owning a food truck instead of a restaurant also wouldn’t allow you to escape the scrutiny of regulatory industries, as food trucks and restaurants must comply with strict food safety policies, Tomich said.

“They both have to go through health department approval,” she said. “But with brick and mortar, you’re dealing with a larger space and a larger menu.”

Competition within the industry adds increased pressure to make your food truck stand out. Social media can be a valuable asset when building your brand if you make a consistent effort across all your platforms, Stuck said. You should take time to post crisp, clear photos along with captions and content that establish a brand personality.

Market saturation could make it difficult to build a following and regular customer base, but the crowded industry shouldn’t deter newcomers, Stuck said, as long as you’re prepared to put in the work.

“I would do extra diligence at this time,” he said. “You really need to think through it and prepare.”

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Melissa Wylie
Melissa Wylie |

Melissa Wylie is a writer at MagnifyMoney. You can email Melissa at [email protected]

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