How Much Does It Cost to Start a Food Cart Business?
Starting your own business without huge investments seems like a pipe dream? It’s time to leave all the stereotypes behind. With a flexible, easy-to-operate, and affordable cart, you have more freedom to realize your wildest ambitions and start getting profits as soon as possible. However, careful budget planning is still crucial for success, and there are many things to consider when calculating the cost of running a food cart. We have prepared an insightful reference guide so that you know what to expect when setting up a mobile catering business.
How Much Does a Food Cart Cost?
First things first, you should consider the cost of mobile food cart, as this may be the biggest part of your initial investment. Indeed, a cart is the heart and soul of your business, and the model you choose can make a huge difference in the entire operational process.
What is the cost of a food cart? Well, it depends. Not all vending units are created equal, so food cart costs may vary greatly:
- Basic food carts: $2,000 – $5,000
- Mid-range food carts: $5,000 – $15,000
- High-end/custom food carts: $15,000+
Factors Influencing the Cost of a Food Cart
- Size: the cost of a small food cart is typically lower due to a smaller working surface and storage space. However, such vending units are more lightweight, compact, and maneuverable. Bigger carts, in turn, come with additional features, increased cargo compartments, and larger space for cooking and serving dishes.
- Type: carts come in different types, including simple stands, wheeled units, and models attached to a bicycle. The last ones are more expensive since the bike’s cost is also included. Still, they are more mobile and potentially profitable.
- Equipment: some carts come equipped with a freezer/refrigerator, sink, or grill, which increases their price.
- Materials: the cost of a food vendor cart gets higher if a manufacturer uses top-quality, heavy-duty materials like stainless steel or high-grade wood.
- Customization: cart upgrades and modifications (e.g., custom-tailored design or branding options) require additional expenses. However, it’s a great way to make your vending spot stand out.
Additional Food Cart Startup Costs
Besides the cart itself, there are a number of other expenses required for starting a mobile catering business:
- Licenses and permits: the cost of opening a food cart includes certain licenses and permits you must get to operate legally. Each state and city has its own requirements, and the costs for handling the paperwork vary accordingly. US businesses usually get:
- Food cart license: $200 – $1,000
- Health permits: $100 – $500
- Special location licenses (include the cost of a food cart license in Central Park and other regulated areas): $200 – $1,000 per year or season
- Insurance: just like any other business, your food cart should be insured. Hence, you will protect yourself from financial loss in case something bad happens to your vending spot. How much is insurance for a food cart? It depends on its type and coverage. For example, general liability insurance may cost you between $300 and $1,000 annually, while workers’ compensation insurance ranges from $500 to $2,000+.
- Initial inventory: dedicate a portion of your startup budget towards purchasing everything you need to prepare and serve dishes. These expenses include ingredients, packaging, and supplies. Therefore, you may spend from $300 to $3,000, depending on your menu.
- Customization and branding: you can order a bespoke cart design from Ferla or customize your vending unit by yourself. Be it a full-wrap paint job, canopy branding, or logo decal, you should set aside about $200 – $2,000 for this category of food cart startup costs.
- Additional equipment: these are different specialized tools that add up to the overall cost of starting a food cart business. Depending on the concept of your vending spot, you may need to spend between $300 and $3,000 on additional equipment (espresso machines, blenders, fryers, etc.).
Also read: How to Choose the Best Food Cart Name for Your Business?
Food Cart Operation Costs
As your business grows, you will have some ongoing expenses to take care of. The average monthly cost of operating a food cart includes:
- Inventory: as a cart owner, you will need to replenish your food supply regularly so that customers can enjoy their favorite menu items whenever they visit you. Street vendors operating small carts typically spend between $500 and $1,500 on food and beverages. For those owning high-end carts, these expenses get two or three times higher each month.
- Rent for space: renting a vending spot may cost you $200 to $1,000+ per month, depending on your city and the location you choose to serve dishes. The best spots in high-traffic areas cost more, although your earnings will also grow due to higher brand visibility.
- Fuel and utilities: this category includes gas for cooking equipment and utility expenses for water supply or lighting. Some carts (e.g., Ferla Mini and Ferla Grande) may be equipped with battery-powered water packages and freezers/refrigerators, which allows you to save on utilities. How much does it cost to run a food cart in this case? Somewhere between $50 and $200 per month.
- Maintenance: top-quality food carts require minimal maintenance and serve well for a long time. You just need to clean your vending unit at least once per week and inspect it for mechanical damage. If something breaks, the repair may cost you from $50 to $3000+, depending on the issue you are dealing with.
How Much Do Food Carts Make?
The question “how much do food cart vendors make?” comes to mind for every aspiring entrepreneur interested in starting their own catering business. Here’s what statistics say:
- Average earnings:
- $20,000 – $70,000 per year for basic and mid-range food carts.
- $70,000 – $150,000+ per year for high-performing carts.
- Factors impacting revenue: how much food carts earn depends on a range of factors. It’s crucial to keep them in mind when setting up your business:
- Location where a cart is placed
- Operating hours
- Menu items
- Marketing campaigns
- Seasonality
Renting vs. Buying a Food Cart
How much is it to rent a food cart? The options are very diverse and depend on where you would like to get a vending unit. Its type, brand, and equipment also matter. You may find cart rentals on the web at $500 – $2,000 per month, or turn to Ferla if you live in California.
Considering that the average cost of a food cart ranges between $5,000 and $10,000, buying a unit is a smarter idea if you are committed to long-term operation. Renting, in turn, is a great option for testing the market and breaking into the industry if the budget is tight. Learn more in the table below:
|
Renting a Cart |
Buying a Cart |
|
|
Customization |
Limited or no customization |
Full control over cart design |
|
Cost-efficiency |
Lower upfront investment, but monthly costs add up over time |
Higher upfront investment, but it’s made only once |
|
Availability |
May be limited in your area |
Ease of buying a cart online, irrespective of your location |
Tips for Reducing the Cost of Food Cart Business
Bothering with the question “how much money do I need to start a food cart?” may be discouraging – every aspiring entrepreneur knows that feeling. But do not put your dream aside, as there are some good ways to cut the costs for your venture:
- Get a used cart: the cost of used food carts typically varies from $1,500 – $4,000, and you can find such units through Ferla.
- Finance a cart: Ferla also allows you to pay for a cart in installments to help you set up a business with less initial investment.
- Optimize your menu: keep it simple and focus on popular items that require fewer ingredients.
- Supply inventory smartly: compare suppliers to find the best deals regarding product price and quality. Plus, purchase ingredients in larger quantities to cut costs.
- Start small: do not rush to scale right after starting a cart. Give yourself time to get more profit.
- Navigate regulations carefully: watch for changes in legal regulations and keep all papers updated to avoid penalties.
Read also: Best Food Cart Menu Ideas to Generate Good Sales
Conclusion
Food cart startup costs may be as low as $3,000+ or exceed $28,000, depending on a variety of factors like the type of vending unit, licenses and permits, inventory, customization options, and equipment. With thoughtful budgeting and planning, such a venture can bring you over $100,000 per year, which makes it a worthwhile business option to try out. Whenever you are ready to make the first step, Ferla has your back. Tell us about the cart you need, and we will help you get the right vending unit at the best price.
