Food Truck Econ

LOW COST OF ENTRY

LowHighnotesCost of truck$50,000$125,000Much lower than restaurantSmallwares etc.$1,200$10,000Similar to restaurantLicense fees etc.$1,500$2,500Slightly higher than restaurantInsurance pre-pay$2,500$5,000Higher than restaurantFuel$250$400Higher than restaurantTraining$800$5,000Similar to restaurantRent pre-pay$500$10,000Lower than restaurantOther$7,500$25,000Legal fees, logo, website, etc.

Total$64,250$182,900Much lower than restaurant

SALES ESTIMATEHow many people can you feed every 10 minutes?

- What is your max serve speed?

- How popular are your offerings?

Example: 1 customer/ 2 minutes = 5 customers/ 10 minutes = 30 customers every hour

HOW MUCH CAN YOU CHARGE?100 meals @ $5.50/ meal = $55030 meals @ $12.00/ meal = $270

Higher prices can make profitability easier as they better cover some costs (e.g., food, labor), but food trucks may have difficulty getting many customers to pay higher prices.

ECONOMICS: SALES ESTIMATE

35 minutes for 22 cust, ave ticket $12.00

ECONOMICS: SALES ESTIMATE

Est. 150 meals/ day (30,000 meals Oct Jul)

ANNUAL SALES ESTIMATESKogi $380,000/ year/ truckMomogoose MIT $220,000/ yearCA taco truck $56,000/ yearThese are based on Ayrs estimates. For Kogi I read an article where they gave their annual sales number and number of trucks. This number might be high if not all of those trucks were on the road all year. For Momogoose they state on their website 20,000 meals served in three months (across six locations), estimates are based on these number.

BASIC PROFIT AND LOSS

$% salesnotessales$100,0004 cust /10 min @$7, 10 mosCost of food$38,00038%20-30% higher than restaurantCost of packaging$6,0006%Slightly higher than restaurantGross profit$56,00056%

Labor$40,00040%10-30% higher than restaurantUtilities$8,0008%50-80% higher than restaurantInsurance$7,0007%30-50% higher than restaurantMaintenance$6,0006%Slightly higher than restaurantRent$10,00010%Can be lower than restaurantOther$3,0003%Administrative stuff, can be higher

EBITDA-$18,000Red is not a good color here

HOW THINGS CAN GO WELLOther avenues for revenue generation (e.g. catering)Very low food costs and labor (e.g., taco truck on W. coast)High utilization and high prices (e.g., Sweets truck NYC)Owner/operator, doesnt need to make much money (long hours, but low labor costs, e.g. falafel cart)Operate in city that doesnt require much (e.g., no GPS, low license fees, low commissary fees, lower cost of truck, etc.)