Is coffee truck profitable?
April 8, 2022 11:41 PM   Subscribe

I am interested in starting a coffee truck business in Massachusetts, but first I need to know if it makes sense. Many sites report the figure that 50% of food trucks report over $150k in revenue per year, but this guy's website says he made just $3k in one month (working half time, but still no where near even $100k per year working full time). It's hard to find objective information online because most sites are trying to get people into buying food trucks, so it seems like their projections are really inflated.

I have about $75k to invest in a coffee truck, and another $75k for living expenses but that's it. If I go over budget I don't have anyone I can ask to help me out. I know I won't be clearing $150k in the first year, but I don't want to go broke doing this.

I currently make about $70k per year (in academia) and I live well within my means, but I miss my family back home. I want to be closer to them and I'm tired of bullshit work politics.

I'm hoping to avoid most of the headaches reported by food truck owners in this article by not selling food, as it seems like many or most of them have gone out of business or accepted that their food truck is just an advertisement for their catering business). I think if I don't sell food I won't need to be associated with a commissary kitchen.

I'd like to sell from a single, consistent location in a moderately sized city (i.e., not Boston). Because the article linked above says to research startup costs in depth, I'm considering hiring a lawyer to figure out where and when I can sell and how much it will cost me in permits and fees.

Do you know someone who has done this and how they have made it work?
posted by anonymous to Work & Money (15 answers total) 5 users marked this as a favorite
Anecdotal: I have three friends who have started food truck businesses and one friend who started making ribs at a shared industrial kitchen (by order) and delivering them. Only the friend who did not buy a truck is still in business, and it’s pretty much poverty wages. I have one friend of a friend who has made a food truck work, but they’re working 80 hours a week and burnt to a crisp.
posted by Bottlecap at 11:45 PM on April 8, 2022 [7 favorites]

50% of food trucks report over $150k in revenue per year
Not to point out the obvious, but revenue is not the same thing as profit.

To contribute another anecdote, I used to slightly know several people who were each seemingly absolutely killing it at the food truck game: long lines, selling out every day, fairly high prices, great reviews. In each case, they jumped at the chance to abandon their truck business in favour of even a very modest and out-of-the-way brick and mortar location. I definitely got the sense that the food truck business is brutal and people can’t wait to get out of it.
posted by kickingtheground at 12:24 AM on April 9, 2022 [13 favorites]

You could check out/read about/ potentially network with Dispatch coffee. They started as a coffee truck in Montreal and now have several brick and mortar locations. I believe they are also a coffee roaster and sell bags of beans too
posted by winterportage at 12:29 AM on April 9, 2022

I used to own a coffee shop in the lower east side of Manhattan, Here's a few things to ponder over:

$150k a year in revenue is nothing. That breaks down to roughly $3k a week. If you're making 10% profit thats only a profit of $300 a week for you.

People often want more than just coffee when they buy coffee. I would suggest going to a coffee shop that has about the same amount of traffic that you would expect to get at your location and sit there for several days with a notebook during the hours you plan on being open and note down what customers buy and how much.

It's really really hard to make money with just coffee. You definitely need a higher volume location to exist on the meager profits of coffee. All the things that go around coffee are expensive. Cups with lids? $.35, cup sleeves $.9, All the milks...I don't know the current price of milks because it's been a while, but these things all add up very quickly. Know how much these costs are gonna be for you. Go to your local restaurant supply (and coffee supplier if you know who it'll be, do research on the internet or at local roasters if not) and write down prices and figure out how much every drink on your menu is gonna cost you and how much you're gonna sell it for. The other issue is the types of things that people want to order with their coffee have a shelf life of one day (baked goods). You have to order enough to provide when people want to buy, but not so much you're losing money on them because they don't sell. Also, it's hard to find distributors that will take accounts for small daily deliveries, and you'll learn pretty quickly that you don't want to have to run around picking up your own inventory every day.

The price of coffee is rising dramatically. I was reading several months ago (I think? Time is blurry, but it was definitely during pandemic times) how there was a really bad coffee harvest so we should all be expecting coffee prices to go up. My friend who has a coffee shop has confirmed this is happening to her, she buys wholesale beans and roasts them. There is a potential upside; my friend who lives in Phoenix told me that she recently went into an average coffee shop there and got a small iced matcha latte with soy milk and it costs $9. It was expensive enough that she brought it up in conversation, but she still payed for it and drank it, so maybe coffee is becoming pricey enough that the numbers are better than when I was trying to do it(I had my coffee shop in early 2000's).

I'm in NYC, so regulatory things may be different in MA, but I would say skip the lawyer, at least at first, and save that money and do your own legwork. I've had a dozen liquor licenses over the years, and that's something that a lot (most) people would pay a lawyer to do, but it's mostly just complicated paperwork that you can do on your own. And the last time when we did decide to hire a lawyer, he was telling us that we couldn't do something that I knew we could do because I'd done enough licenses myself to know it was a thing, and I ended up forwarding him the paperwork to prove it. There's a lot of value in doing your own legwork. Most agencies I've found have been pretty helpful when you ask questions, as long as you're polite. Don't be afraid of looking like you don't know something, the less you know the more info they like to give you. On the other hand, I always advise getting a good accountant to deal with all the taxes here because they are many and when problems occur they deal with it instead of me, so I guess do whatever your comfortable with.

Whenever I'm thinking about opening up a new place, the first thing I do is write up a quick dirty financial projection for the first year or two (Excel or google sheets is excellent for this). First I figure out how much my profit/expense margin is on the food or drinks, I usually figure 30% food costs, because traditionally it's supposed to be around 25% but I like being conservative in my projections. Also, based on recent prices I'm seeing here in the city, I suspect that food costs may have fallen to a 20% standard just to cover all the other expenses that have gone up. I take all my flat costs for the month (rent, insurance, electric, water, etc) break it down by day. Then I take my employee costs per day and add them in so that I have a daily nut that I need to cover.

Then on a separate sheet I would break down every single day into a couple of sections, sometimes into individual hours, and figure out how many customers would walk in the door and how much they would spend each. I would literally try to picture the people coming in on a tuesday morning on February 17th, for example.. it would be less than in May because there might be a snow storm, more than in august because people have left the city...It's very important to be realistic, if not downright conservative doing this, because this determines if you make money or go broke. And then I would see if the daily numbers made me enough money to cover the daily nut or not.

I recently did this for another food based business I was thinking about doing upstate. I calculated staff costs and insurance and taxes (here in NYC they tend to be high, so I count them as about 25-30% of gross revenue) but no rent as I would've been buying the building for cash (small and cheap but decent location) and realized I needed to make about $1200 daily to cover the nut. Not bad when weather is good, very easy to do on busy days, but in the several months of winter possibly very questionable.

Can you be the absolute best coffee and charge more for it than the going rate? This might be one direction to consider.

The other thing I might suggest, if you're really determined on this, is find a food item that you can make really really well and have it be your signature item (along with the coffee) that people will go specifically to you for. I'm thinking something along the lines of a notably great pressed egg an cheese with some unique ingredient, or malted waffles, or something that they could only get at your truck. But just have that food thing and not a lot or any other options. Maybe you can do that with signature hot drinks instead of food, but any new hot drink combo that you come up with can easily be copied by any other coffee shop if it uses standard ingredients.

Also, the trucks are hard. Are you gonna have any employees? Don't forget about when you get sick, you don't want to lose regular customers or become known as not reliably being in a spot your customers expect you to be in.

A lot to chew on and sorry if it's a bit all over the place, it's early morning during my first coffee of the day, but I guess the bottom line is do all your legwork first before you drop a penny into it and you'll have a much better idea of the businesses viability.
posted by newpotato at 2:52 AM on April 9, 2022 [111 favorites]

They can be, there's a few near me that have succeeded but I live in an area that's gaga about food trucks and there's very few coffee trucks around which indicates a limited market. The one that I know is pretty successful's niche is Mexican day laborers gathering to look for work in the morning, but unless you're part of the community, I don't know that it would be easy to duplicate that.

Do you have coffee/food service experience? Have you spent time in a food truck? If not, you might find that it's a little less comfortable than you might imagine. They're hot in the summer and cold in the winter. Bouncing around driving is hard on plumbing and having it go out can lead to expensive repairs or losing a day's income to fix it. If you can't find a spot that can provide power, you have to deal with running a generator which is noisy and smelly.

If you're a sole proprietor, having a bad cold for a week means losing 2% of your year's income. And consumers are fickle so if you're out sick or on vacation, they may just switch to Starbucks. Finding a spot with customers and a lack of a sit-down coffee shop may be a challenge. The office parks near me are still mostly empty. Pedestrian traffic in my downtown is still low and a lot of food and beverage places are struggling. People like Starbucks (and they've done a lot of work with their online ordering experience, they like bathrooms, they like shelter from bad weather while they wait.

this guy's website says he made just $3k in one month (working half time, but still no where near even $100k per year working full time

$36K profit working half time sounds like a reasonable goal. Unless you want to work 7 days a week and can find locations with both office workers and a weekend crowd, you will probably find that there's limited hours where there's enough demand to make it worth staying open to the point that hitting 40 hours might be a challenge. Demand for coffee is going to drop after lunch. If it was easy to make $100K profit with a coffee truck, there'd be a lot more of them.

If you're serious about this I'd look for some coffee trucks in your current location. Spend a few hours watching how many people approach the truck and how many place an order. Talk to the owners. See if any of them will hire you for some part time hours on the weekend so you can see what the routine is like.
posted by Candleman at 2:54 AM on April 9, 2022 [2 favorites]

If your city has a lot of construction or a film industry, a food truck can be hired as an occasional treat for those workers. On film sets often the lead actors will hire a nice food truck for a couple hours, as a thank you for the crew.

Stroopwafels might be a good treat to offer- I think you can quickly make them on demand, they pair well with coffee, and the warm caramel smell is addictive and is great advertising for the truck.
posted by nouvelle-personne at 3:12 AM on April 9, 2022

For coffee-only, around here what seems to work well (ie, they stay in business and often have long lines) are the drive-up coffee stands, often in a gas station parking lot. (So more of a permanent structure, even if technically it is portable/temporary.) The best locations seem to be where you can have drive up windows on both sides, rather than just one. I used to know someone who ran one as a side business (with employees, not working there themselves) and it was profitable but not so profitable that they could quit their day job. Around here, a portion of those stands are bikini coffee places (meaning slightly higher prices with the main selling point being the barista in extremely skimpy attire) but I don't see those usually having longer lines when I pass by, so I doubt that is a magic bullet.

I see very few walk-up coffee-only trucks, usually in a "pod" of food trucks.
posted by Dip Flash at 6:33 AM on April 9, 2022

The places that have the same reliably-open food trucks in my city are nearly all on college campuses, where they are busy with breakfast and lunch business on weekdays. Many are no longer there after Covid. I don't think a drinks-only truck would be profitable unless you sold the best damn coffee or milkshake in the city. Without food I think a drinks-only truck would lose business to a full-service truck as students shuttle between classes and want to stand in line only once.

One thing I remember reading specific to trucks is that there are a lot of regs, and securing a steady location can be a pain. Also food and sanitation inspectors tend to inspect regularly so your daily cleaning needs to be thorough - there are several niche businesses here that thoroughly clean food trucks every single night, just like a commercial kitchen, breaking down and cleaning all the equipment, so the exhausted truck operator doesn't need to do this themselves. Some will restock in the morning with non-perishable items like cups and napkins, bottled water and also ice so operators are ready to go. Another cost to consider.

I agree that a unique and delicious item sold only at your truck would add to your profile and can be spread on social media. Don't forget about on-line ordering, doordash, etc. If you decide not to do that, your competitors are definitely doing it.
posted by citygirl at 7:37 AM on April 9, 2022

Clover Food Labs began as a food truck in Boston run by someone who had been a researcher at MIT. As I understand it, their food trucks' margins are a lot slimmer than their brick-and-mortar margins - plus they're apparently doing pretty well on meal delivery or "food boxes" these days.

You might look at what they're doing and/or try to reach out to the owner, possibly, but this does sound really challenging.

From a friend in the performing arts, my understanding is that Cambridge, MA, where Clover started, is extremely relaxed about permitting the use of public or semi-public space. Suburbs further out may be extremely hostile to any use of their space that might "be disruptive" or "cause congestion," for extremely expansive definitions of those things.
posted by All Might Be Well at 7:51 AM on April 9, 2022 [1 favorite]

I know some people that operate a coffee truck in Seattle. If you want, memail me, and I'll see if they'd be willing to chat with you about their experience.
posted by Gorgik at 8:06 AM on April 9, 2022

IMHO, you won't get rich selling buck-fifty coffee, but you MAY get rich if you sell $5 not-frappucino and $6 espressos. But that means you need barista training and equipment and have more convenient locations than their typical local coffee place. But as you can see Starbucks getting into the snack and sandwich business, the margin is HIGHER with those than with coffee itself, esp. with everybody, even burger and donut joints selling coffee.

So you basically need your own unique "schtick" with your coffee.

Or pick a DIFFERENT schtick altogether... Like, I dunno... boba tea?
posted by kschang at 8:06 AM on April 9, 2022

Maybe the fancy food truck is over-priced? I can tell you that in Portland, Maine, a guy named Mark made a solid living with a hot dog trailer and a really good location. You're going to be basically outside in some really crappy weather, and sales likely go way down in winter. If lots of food truck businesses go under, that means there are 2nd hand food trucks. Find food truck owners; trade some hours of work, which will mostly be cleaning, for an interview. What works, what doesn't. Work in some different food trucks. Get in touch with SCORE, do a business plan, let the numbers tell the story.
posted by theora55 at 10:52 AM on April 9, 2022

Could you possibly partner up with a local and beloved coffee shop, selling their coffee and baked goods? I guess basically a food truck franchise? That way, you already have some built in name recognition, you know you're working with a business that's already profitable, you could sell their baked goods without having to make your own.

Because honestly, without some kind of "in", it's hard to see how well a "just coffee" truck would work in a lot of places.

As mentioned above, food trucks are very popular on the campus I'm familiar with (in the Boston area), but they're primarily breakfast/lunch. So many places sell coffee. Here in the Boston area, there are so many Dunkins and Starbucks. Lots of workplaces have a kitchen with a coffee maker. Unless the coffee is really good or special in some way, or unless you can find a location with tons of foot traffic and no near by coffee locations, it seems like it would be challenging to get this off the ground.
posted by litera scripta manet at 6:11 PM on April 9, 2022

Maybe look into Aroma Joes? They aren’t trucks, but small drive up stands that have proliferated in Maine but don’t appear to have a lot of Massachusetts locations yet.
posted by Sukey Says at 7:34 PM on April 9, 2022

I need to know if it makes sense.

It does not. Gently, the odds are very strong that you would go broke doing this. This is an over saturated market and a rough time to start a coffee business even if you already had all your suppliers, licenses, and logistics lined up and had been working in the field for years. This doesn’t sound like where you are.

IME there are very few skills that transfer from being an academic to running a small business. The only people I know who have pulled this off have been coming from food service management and had already built up dedicated local clientele before formally incorporating. And even though they’re both somewhat “successful,” in that they’re making a living from the business, I’m pretty sure neither of them is making a comfortable middle-class wage with benefits. There are a lot of other things to consider, but unless you’ve got a lot more experience and local knowledge than indicated from the post, I think you’d be setting yourself up for a painful experience.

One nice thing about academia is generally more flexible leave options; would you be able to take a temporary leave to test the waters before diving in?
posted by aspersioncast at 12:49 PM on April 10, 2022 [1 favorite]

« Older How to buy a car I won't drive much?   |   I hate how I look and it’s affecting my life Newer »
This thread is closed to new comments.