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Small Business Grants: 10 Programs to Get Started

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.

Small business grants
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When you need funding for your small business, receiving money you don’t have to pay back would be the best case scenario. Various organizations award grants to small businesses without expectations of repayment. The catch: steep competition and stringent standards.

Government grants for small businesses, as well as corporate and private grants, are highly sought after, and are given to businesses that meet specific eligibility criteria. The application process can be time-consuming and competitive, but your efforts could pay off if your business is selected.

We’ll help you better understand what types of small business grants you may be eligible for, as well as a few programs that could be a good fit for your business.

Who can apply for small business grants?

Many grants are targeted toward certain types of businesses or owner demographics, such as women, minorities or military veterans. Grants could also be industry-specific, and recipients could be restricted in their use of funds.

Business grants can be separated into two general categories – grants from federal agencies and those from private groups or entities, including nonprofits.

Federal grants are available to all levels of government entities, like city or county governments or independent school districts, nonprofit organizations and for-profit businesses. Grants.gov provides a searchable database of federal grant programs. State and local governments also have grant and assistance programs for small businesses. In these programs, federal money is typically awarded through state agencies. Recipients are typically chosen based on statewide social or economic concerns. You can find resources for business owners in your state at USA.gov. It’s also possible your city or county could have available grants for small businesses, so check your local government websites as well.

Private grants are available from for-profit businesses or nonprofit organizations. Corporations and foundations offer private business grants to small business owners, and these programs are usually competitive and focus on certain types of business.

Government grants are usually distributed to businesses that could help advance certain causes or initiatives or stimulate the economy in a specific way. Private grants are typically awarded with similar intentions, and grant makers would select businesses that support a particular focus or goal.

How to apply

Grant eligibility requirements would be based on the goals of the organization: who they want to give money to and how they want that money used. You could also expect a grant application to ask for common business information including how many years you’ve been in business and your annual revenue.

You may have to disclose additional personal information depending on the grant program. Your gender or income level could be a factor. You could be required to submit a personal statement or resume, as well as a business plan and a proposed use for the grant.

10 business grant programs to get started

The competitive nature and strict requirements of grant programs could make it challenging to receive a small business grant. But if you are chosen as a recipient, you would have access to debt-free funding for your company. We’ve compiled a list of general small business grant programs for which you could apply.

Government business grants

1. Small Business Innovation Research Program

The Small Business Innovation Research program, or SBIR, encourages research and development among small businesses. Through the Small Business Administration-powered program, federal agencies allocate a percentage of their research and development budgets to eligible businesses. Participating agencies include:

Grants for first-time applicants could be up to $150,000. Recipients can then apply for a second grant up to $1 million.

2. Small Business Technology Transfer Program

The Small Business Technology Transfer program is associated with the SBIR program and promotes technological innovation in business. Five federal agencies participate in the SBA-backed program:

The program has the same maximum grant amounts as the SBIR program – up to $150,000 for new applicants and up to $1 million for recipients continuing in the program.

3. Environmental Protection Agency Grant Programs

In addition to providing grants through the SBIR program, the Environmental Protection Agency offers grants for a range of environmental activity, such as making improvements to air quality and public health. Grants are available to small business owners, as well as community organizations, tribal programs and college students.

4. Challenge.gov

Government agencies post contests on Challenge.gov to crowdsource innovative solutions. Small business owners, academic researchers, hobbyists and students have won past challenges, which come with prize money to carry out the proposed solution.For example, the Department of Health and Human Services is awarding a total of $400,000 to three winning ideas for improving Alzheimer’s and dementia care through technology.

5. State Business Incentives Database

To help business owners find local assistance programs, The Council of State Governments provides information on available resources through the State Business Incentives Database. For instance, the site lists the Kansas Tourism Marketing Grant Program designed to help businesses and organizations in the tourism industry with innovative marketing strategies.You can’t apply through the database, but it could be a valuable resource when searching for state grant programs.

Private and corporate small business grants

1. NASE Business Growth Grant

The National Association for the Self Employed awards $4,000 grants each month to business owners looking to grow their enterprises. Applicants must be members of the organization to be eligible. Purchasing an annual membership for $120 would allow you to apply immediately after joining, but you would have to wait 90 days to apply after buying a monthly membership for $11.95.

2. Tory Burch Foundation Fellows Program

The Tory Burch Foundation, created in 2009 by fashion mogul Tory Burch, awards $5,000 to women entrepreneurs as part of a one-year fellowship. Recipients also receive four days of workshops with experts in the Tory Burch office in New York, as well as one year of access to the foundation’s online resources and peer network. Each year, 50 fellows are chosen to participate in the program, and a select few are also invited to pitch their businesses to industry professionals.

3. FedEx Small Business Grant Contest

FedEx chooses 10 businesses each year to receive grants and FedEx Office services. One grand-prize winner receives a $50,000 grant and $7,500 in print and business services, while a second-place winner receives a $30,000 grant and $5,000 in print and business services. Eight additional winners each receive a $15,000 grant and $1,000 in print and business services. The general public can vote for contestants online, and FedEx selects winners from a pool of 100 finalists who received the most votes.

4. Street Shares Veteran Small Business Award

Business owners who are veterans, active-duty military members, spouses of military members or children of military members who died on active duty can apply for grants from the Street Shares Foundation. Eligible businesses must have some sort of social impact on the military community. The Street Shares Foundation awards a $15,000 grant to a first-place winner, while a second-place business receives $6,000. A $4,000 grant is reserved for third place. The Street Shares Foundation is a philanthropic branch of Street Shares, an online lender that specializes in loans for veteran-owned businesses.

5. Visa Everywhere Initiative

Visa awards business owners in the financial technology industry who pitch winning solutions to various business problems. For instance, Visa challenged applicants this year to create solutions that make it easier for consumers to access digital payment tools. Applicants’ ideas must be relevant to Visa’s business and should have the potential to add value to the company’s clients. The winning business receives $50,000 from Visa and a possible partnership with the company.

Alternatives to small business grants

Applying for grants may feel like a pointless effort because of tough eligibility requirements that are often tied to the agenda of the grant sponsor, whether it’s a federal entity or a private corporation. The way you use the funding could be regulated as well.

There are other ways to secure business financing if you would rather avoid the grant application process and competition for funding. Consider these alternatives, but keep in mind you would typically have to repay the money you receive, possibly with interest.

Small business loans

Different types of small business loans are available to meet your funding needs. You could take out a long-term or short-term loan and pay back the money over a set period of time. You may need a strong credit profile to qualify for a business loan, and lenders would also consider your business history, cash flow and assets that could secure the loan. If you need funding right away, you may want to consider a short-term loan rather than taking your chances on a grant. Short-term financing typically has fast time to funding because of minimal application requirements.

Crowdfunding

Small business owners can solicit funding from the general public through crowdfunding. Platforms like GoFundMe, Indiegogo and Kickstarter provide a platform for you to collect contributions for your business. Some platforms require you to offer products or equity in your company in exchange for funds, but others allow you to accept donations. Like applying for a grant, starting a crowdfunding campaign doesn’t ensure you’ll receive funding. It could take time to generate contributions, and you may not raise as much money as you’d like.

Microloans

Microloans are disbursed in small amounts less than $50,000 and are typically reserved for businesses involved in community development. Like many grants, some microloan programs target underserved demographics, such as the SBA Microloan Program that prioritizes low-income, women and minority business owners. A microloan may have higher interest rates than a traditional bank loan, and the small loan amount could result in a quick repayment schedule.

The bottom line

Small business grants are often referred to as “free money” from government entities or private organizations. Although you wouldn’t have to repay a grant, it’s not a handout for just any business.

Many grant programs are designed for certain types of businesses or business owners. You may have to meet strict requirements to be eligible. Competition is usually fierce for business grants, especially those from giant corporations like FedEx. Your chance of receiving a coveted grant could be slim.

However, if you do qualify for a small business grant, you would be able to fund your venture without the worry of paying off debt. There are numerous small business grants available both nationally and locally, so it could be worth your while to find grant programs that align with your 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
Melissa Wylie |

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

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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
Melissa Wylie |

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]

TAGS: