How Much Do Food Trucks Make in Manchester?

How Much Do Food Trucks Make? (Food Truck Profit Margin)

Food trucks in Manchester can make between £70,000 to £100,000, or more, a year. That is about £5,800 to £8,400 or more a month. We’ve made this article to give you a clearer idea of the amount of income your mobile food truck business could make, including its profit margin potential. 

We’ll also share techniques for boosting your food business’s income throughout the guide.

Costs to Start a Food Truck

There’s a lot of freedom and flexibility that comes with a business on wheels, but the initial costs can vary substantially, usually ranging from as little as £5,000 through to £200,000 depending on your investment and food truck idea. At this early stage of financial planning, it’s key to consider all expected costs. These are things like labour, materials, insurance, and marketing – in this way, the things you need, even for an unconventional food truck, are similar to those of a standard brick-and-mortar restaurant.

As well as those costs, there are bespoke expenses unique to the food truck scene (almost as unique as your funky new foodie idea). These are the cost of the vehicle, getting the right licences and permits, and investing in the right equipment to make your operation run smoothly. Also, you should plan to fund things only your business requires, and that could include a commercial kitchen lease, applying for parking permits, and more. 

Are Food Trucks Profitable?

The substantial initial investment for all equipment, the truck, kitchen space, licences, and more makes the first year of operation a cost-heavy one. And, on top of startup costs, it’s super important to put aside enough to account for each and every monthly cost in the first year. So, carefully consider the financial demands of your first year in business.

A stockpile of backup funds to cover you for the first 12 months until your business turns a profit is essential. It’s also important that these funds are liquid and accessible, such as personal loans or savings. You can allocate these funds, if needed, to cover staff pay and any other costs that come out of the blue. After all, even a successful business will have things go wrong.

• Startup - £5,000-£200,000+
• Equipment - £10,000-£100,000
• Permits/licences - £500-£2,000
• Contingency Funds - £5,000-£60,000

Average Food Truck Costs

On average, monthly operating costs sit at around 85-90% of revenue monthly – once your business starts to make a profit. In the first couple of years, you might need to continue to invest in your venture to offset losses from things like labour, food costs, or marketing expenses. Even if exceptional cuisine and excellent customer service are what your business will thrive on, the right financial plan will help create success and longevity.

• Operating Costs £10,000 - £50,000
• Commercial Kitchen - £1,000/month
• Parking - £400-£800/month
• Insurance - £400-£6,500/month
• Utilities - £800-£1,000/month
• Marketing - £200-£2,000 (3-6%) of sales
• Food Costs £2,000-£15,000 (30-35% of sales)
• Labour £1,500-£15,000 (24-40% of sales)
• Loan Repayment

Forecasting Your Food Truck’s Sales

Access and pour over any sales data you can get. These might be labour costs, food expenses, inventory levels, and even your food truck’s serving speed and maximum capacity to forecast potential future sales. Note that without any previous sales data, taking a punt at monthly growth estimates for your food truck might be tricky. However, if and when you do run some numbers, keep in mind variables like how seasonal weather affects demand, how your marketing is working (or not), and any other relevant key performance metrics (KPIs).

Kick things off by getting a handle on your service capacity daily. For a food truck like yours, this is basically how many people you can serve and serve well – a simple way to think about it is how many burgers or gourmet chip butties your business can cook and supply in a given amount of time. Then, by balancing the costs against profits over a specific time period, you’ll be able to work out your potential revenue.

Demand will vary, which means you won’t be operating at maximum service every time you fire up the burners and swing open your service hatch. However, with sales metrics from a period of a month (or a week), you’ll be able to view and learn from the average sales of that period of time. Leading technology, like the best mobile POS system for food trucks in Manchester, can make a big difference, providing data that could even help you calculate the average for a period of operation.

Average Food Truck Revenue

A rough average income, calculated as gross sales prior to accounting for costs, for food trucks in Manchester ranges from around £6,000 to £10,000 and beyond each month. You can get a sense of what your food truck might earn by accurately projecting your own estimated sales figures. Calculate this by taking your total estimated sales for the month across a season – while keeping an eye on those key performance metrics (KPIs) –  then divide the total estimated sales by the number of months in that season. Easy.

Food Truck Profit Margin Per Month

A general rule is that a restaurant or food business’s profit margin is commonly in the range of 3%-5%. Some might run with a very small margin of 0%, while at the other end of the scale, some can be as high as 15%. You can use the following simple equation to calculate your profit: monthly sales x profit margin = profit. Hypothetically, if your new business averages £10,000/month in sales, and the profit margin is 4%, your profit is £400.

 Profit is a sign of success, but remember that reinvesting this profit back into the business is a key ingredient of a long-term, growing and sustainable business.

Food Truck Owner’s Salary

When and only when your food truck business reaches profitability, it might be time to think about your salary. Staff in the UK in this industry usually see yearly pay between £24,000 and £35,000. But keep in mind that the salary you pay yourself is your call – you’re the owner, after all. But don’t forget, if this is your first truck and you’ve got grand plans to grow, keep focussed on scaling to multiple trucks (eventually) to enjoy greater financial rewards. However, it’s good practice to calculate your salary as less than 50% of the net profit.

You might be able to pay yourself a more significant piece of the profits in a niche or smaller food truck business, especially if you're wearing many different hats and taking on greater responsibility. For example, you might be the head chef, bookkeeper, and front of house running the POS, so you could see more profits go to yourself in pay when compared to a business with a larger team and higher wage costs.

You’ll face big decisions on salaries and what proportion of profit to reinvest to grow the business. Hurdles in the first year are almost guaranteed, but putting profit back into the business and boosting your sales with effective marketing tactics and the right technology gives every chance of your truck cruising happily down profit street in no time.

Timeline for Breaking Even for Food Truck

For most food trucks, profit typically becomes apparent between the first one and a half to two years, but this varies depending on your business, its costs, and other KPIs.

Working hard to reach a profit prior to exhausting any backup or emergency funds is essential. Now that you can forecast revenue for your business, you can get a sense of when it’s likely for you to reach the hallowed break-even point. That’s when you tick over your first month of profit against startup and operating costs.

Always seek seasonal opportunities, like summertime festivals and events. These can help you forecast a boon in sales. Next, work out the sales you need through your POS system to pay off all start-up and running costs. You can use the example below to calculate. Note that this is a hypothetical to help you calculate. You should use our own figures to match your circumstances:

Freddy’s Freakin’ Good Fish ‘n’ Chip Truck of Manchester starts with a loan of £350,000, with a repayment period of 5 years at 5.6% interest:

Equipment (including the Truck): £100,000

Permits & Licences: £1,000

Contingency Funds: £249,000

Freddy’s Freakin’ Good Fish ‘n’ Chip Truck manages to cut down on labour costs since Freddy himself covers most, but not all, of the roles in the first eighteen months of operation; nonetheless, his parking costs are a touch high because he’s been putting in the hours.

Commercial Kitchen Rental: £1,500

Parking: £900

Insurance: £2,200

Utilities: £1,000

Food Costs: £9,000

Labour: £3,000

Marketing: £1,500

Loan payment: £4,400

Total: £25,500

At £25,500, the annual cost of operating Freddy’s Freakin’ Good Fish ‘n’ Chip truck is £306,600.

Freddy’s most famous plate, his biggest seller, brings in a profit of £6.75. Complementing the dish are side options of bread and butter, yielding a profit of £1.50, and mushy peas, which yield £3.50 in profit. With the capacity to produce 150 plates per shift, Freddy can make a profit of £1,012.50. If they include bread and butter with a third of the orders and mushy peas with another third, he can bump up business revenue by £206.25 per shift. At maximum capacity, Freddy’s has the potential to earn £7,312.50 over a six-shift week.

Monthly Sales: £29,062

Operating Expenses: £25,500

Profit: £3,750

Profit Margin at 100% capacity: 8.8%

At an average of 50% capacity, Freddy’s can potentially gross £43,403 annually (50% of the gross profit potential x 52 weeks), with monthly revenue of £11,950. That rises to £286,806 annually at 100% capacity.

• The startup costs of Freddy’s Freakin’ Good Fish ‘n’ Chip Truck was £451,000 and the monthly operating costs were £25,500. Freddy’s first year will cost £467,500. 
• Freddy’s operates at 50% capacity for the first three months – £43,593
• Freddy’s had a great second quarter (a surprisingly busy summer in Manchester) and operated at 70-85% capacity for that quarter – about £65,398 in total revenue. 
• He kept the momentum going past the peak of summer, operating at 60-70% capacity in quarter 3, earning an additional £56,607.90.
• Manchester’s food market does vary with the weather, so Freddy’s is back to 50-60% in quarter 4 and ends the year with £47,952.30 in revenue.
• Freddy’s earns £213,551.20 in revenue for the year.
• Luckily, Freddy’s contingency funds let him stay afloat this year, making up the £262,949 shortfall.

For Freddy’s Freakin’ Good Fish ‘n’ Chip Truck to make a profit, operating at 87% capacity is the target. Using effective marketing strategies and tidy and accurate record-keeping, Freddy can forecast that he’ll reach profitability just before the end of its second year serving the people of Manchester his fancy take on a chip butty.

Improving Your Food Truck’s Sales

There are a number of essential strategies to increase your sales and head towards profit. Nail down your food costs with accuracy and train your team on how to sell more of your most profitable dishes. Capture your customers’ attention by designing your menu to make your hero dish not only entice but really stand out. Another effective strategy is joining in at local events and festivals to introduce your food truck to new people across the community and grow your market.

Naturally, in the digital era we live in, websites and social media pages for online marketing are everything. Keep up with an active and effective digital marketing strategy to get to new people, keep them connected, and help them easily locate your business as it moves around Manchester.

The Right Tech

The right technology in your food truck business makes a big difference to your earnings, too. Make this a priority at the start: get inventory systems, time-tracking tools, and finance apps right at the beginning. A smart and effective point of sale (POS) system will combine these features and make it easier to operate your business as seamlessly and smoothly as possible. So, make sure you find the perfect portable POS solution for your street food vendor business in Manchester. But don’t neglect your customers. Make it smooth and easy for them with tech like mobile order and pay. When you choose the right technology, you’ll be all set for a sustainable business that’s on track for healthy growth.

Related Resources

• How to Design a Food Truck Floor Plan, Layout and Blueprint
• How to Open a Food Truck With No Money in Manchester
• How to Write a Food Truck Business Plan
• How to Open a Food Truck: Starting a Food Truck Business Steps
• 12 Licences and Permits Needed to Open a Food Truck