How Much Do Taco Trucks Make? | Revenue & Profits [2024]

While brick-and-mortar restaurants still dominate the food service industry, food trucks have gained significant traction in recent years. In fact, IBIS World projects the food truck industry to generate $2.4 billion in 2024, with the market growing 10% each year over the last 5 years.

Additionally, food trucks tend to be a much less risky investment compared to traditional restaurants. As Jon Moy, owner of the Moyzilla food truck in Boston, told Harvard Business Review:

“Food trucks are a really good way for people to test the waters and get their chops in the industry. Restaurants and food businesses fail all the time. When you’re running a food truck, the worst-case scenario is you just sell the truck. But if you’re locked into a long-term lease, it’s a bit harder to move forward.”

Of course, one of the best food truck ideas is a taco truck, with their fast, affordable, and highly-customizable food options. However, is it worth it? How much do food trucks make? And what types of revenue, profits, and expenses can you expect?

Well, in this article, we'll answer all these questions and more. We'll start by exploring taco truck revenue and profits before jumping into a breakdown of monthly costs. Lastly, we'll look at a few effective strategies for increasing your food truck's revenue.

Key takeaways

• Taco trucks can be profitable, but you'll need to effectively manage costs while maximizing revenue.

• Because they typically have lower overhead costs than brick-and-mortar restaurants, food trucks can achieve impressive net profit margins.

• The three biggest expenses for taco trucks are typically cost of goods sold (COGS), labor, and vehicle-related costs.

• Great strategies for increasing your taco truck revenue include expanding your product offerings, refining your marketing strategy, improving customer experience, incorporating technology, and running events and promotions.

Are taco trucks profitable?

Running a taco truck can certainly be a profitable business venture. In fact, they often benefit from lower operating costs compared to traditional restaurants. However, in order to reach profitability, you'll need to maximize revenue while minimizing expenses.

Additionally, your profitability depends on several other key factors, such as:

• Effective cost management

• Choice of location

• Quality of products

• Marketing strategies

• Target market and demographics

Ultimately, if you're able to optimize each of the elements above, there's a great chance you can run a profitable taco truck business.

How much revenue do taco trucks make?

A successful food truck can expect to earn between $20,000 to $42,000 per month in total sales.

To generate $300,000 in revenue per year, you'd need to make about $25,000 per month, or about $821 per day. If you priced each taco at $3, you'd need to sell about 274 tacos per day to reach this level of revenue.

However, keep in mind that these figures can vary significantly. For example, a taco truck in a small town will likely generate less revenue compared to one located in a bustling city business district.

Other factors will also affect the your revenue potential, including:

• Location: Selecting high-traffic areas, such as business districts, college campuses, and events, can significantly boost sales.

• Product quality: Offering high-quality tacos with fresh ingredients can justify higher prices and attract more regular customers.

• Menu diversity: A diverse menu with options like burritos, quesadillas, and sides can appeal to a broader customer base.

• Marketing and branding: Effective marketing and a strong brand presence can attract more customers and encourage repeat business.

• Seasonality: Warmer months often drive increased foot traffic, leading to higher sales.

• Pricing strategy: Balancing competitive pricing with profitability is crucial for long-term success.

How much profit do taco trucks make?

Like revenue, taco truck profit margins can vary significantly from business to business. Fortunately, food trucks generally have lower operating expenses compared to brick-and-mortar restaurants, which typically have net profit margins of 3-5%.

The average profit margin for food trucks is between 6% and 9%. 

So, imagine your taco truck generates $25,000 per month, or about $821 per day, in revenue. Generally speaking, this is equal to selling about 274 tacos each day. With an average net profit margin, you could expect to earn between $1,500 and $2,250 per month in net profits.

Clearly, while driving revenue is incredibly important, so is maximizing your net profit margin by carefully managing your costs. Additionally, keep in mind that profit margins may be lower in the first year of operation as your business establishes itself and builds a customer base.

Breakdown of taco truck expenses

As we just mentioned, to run a profitable business, it's vital that you manage your expenses well. So, let's take a look at the costs you'll need to consider when budgeting for your taco truck.

1. Vehicle and equipment costs

One of the most significant expenses for a taco truck is the vehicle itself and the necessary equipment. The cost of a food truck can range from $50,000 to $200,000, depending on whether you buy new or used, and how much customization is needed.

Additionally, essential equipment for a taco truck includes:

• Cooking equipment (grill, fryer, etc.)

• Refrigeration units

• Food prep surfaces

• POS system

If you finance your truck and equipment with a 5-year, 6% interest loan worth between $50,000 and $200,000, you’d have monthly payments of about $970 to $3,870 per month. Meanwhile, if you finance with a 5-year, 12% interest loan, you’d have monthly payments of $1,110 to $4,450.

Finally, don't forget to budget for regular maintenance and fuel costs to keep your truck running smoothly.

Average monthly cost of vehicle and equipment: 10% to 20% of total revenue

2. Cost of goods sold (COGS)

Your cost of goods sold includes all the direct costs associated with making your tacos, such as:

• Meat

• Tortillas

• Vegetables

• Cheese

• Spices and seasonings

• Packaging materials

For food trucks, COGS is typically about 40% of total sales. This means that for every dollar of sales, about $0.40 cents goes towards ingredients and packaging.

Average monthly taco truck COGS: 40% of total revenue

3. Labor

Labor is often one of the largest expenses for any food service business. For a taco truck, you'll need staff to prepare food, serve customers, and manage the truck.

Labor costs can vary depending on your location, hours of operation, and staffing needs. Food trucks generally aim for a 25% to 35% labor cost percentage, so it's a good idea to try to stay within this range.

Remember, while you want to minimize expenses, you shouldn't compromise on the quality of your service. After all, this could hurt customer retention, ultimately leading to decreased revenue over time.

Average monthly taco truck labor costs: 25% to 35% of total revenue

4. Marketing and advertising

Effective marketing is crucial for attracting customers and building your brand, which is especially important in the competitive food truck industry. You marketing budget might include:

• Social media advertising

• Email marketing

• Local print or online ads

• Loyalty programs

• Participation in food truck events

As a general rule, food trucks often allocate 3% to 6% of their revenue to marketing. However, you might need to spend more in the early stages of your business to establish your brand.

Average monthly taco truck marketing costs: 3% to 6% of total revenue

5. Insurance and licenses

You'll need several types of insurance to protect your business, including:

• Commercial Auto Insurance

• General Liability Insurance

• Workers' Compensation Insurance

Altogether, insurance costs for a food truck can range from $300 to $800 per month, depending on your coverage and location.

Additionally, you'll need various licenses and permits to operate legally, such as:

• A business license

• A food service license

• Health department permits

• Vehicle registration and licenses

The cost of licenses and permits can vary greatly depending on your location, but budget for at least $100 to $500 per month.

Average monthly cost of insurance and licenses: 2% to 5% of total revenue

6. Commissary and parking fees

A food truck commissary is a commercial kitchen or facility where food truck owners can store, prepare, and sometimes even cook their food. Many cities require food trucks to use commissaries for sanitary and regulatory reasons, as these facilities are equipped with sinks, refrigerators, and prep areas to handle food safely.

Commissary fees generally range from $400 to $1,500 per month, depending on the location and services provided.

You'll also need to factor in parking fees, which can vary widely depending on your location.

Average monthly cost of commissary and parking fees: 5% to 10% of total revenue

7. Other operational expenses

Finally, it's important to account for other miscellaneous expenses such as:

• Credit card processing fees

• Cleaning supplies

• Office supplies

• Professional services (accounting, legal, etc.)

• Staff uniforms

While some of these may seem like minor expenses, they can add up. So, it's important that you budget for them accordingly.

Average monthly other operational expenses: 5% to 10% of total revenue

How to increase taco truck revenue

While managing your expenses is key to maximizing profitability, so is boosting revenue. So, to help your taco truck business generate more sales, consider the following strategies.

1. Expand your product offerings

One effective way to increase revenue is by diversifying your menu. For example, you might consider adding:

• Seasonal specialty tacos

• Mexican-inspired desserts

• Vegetarian or vegan options

• Breakfast tacos to capture the morning crowd

Likewise, it's a good idea to cater to special dietary needs. By providing options for customers with dietary restrictions, you can tap into new market segments. For instance, you might include products like:

• Gluten-free tortillas

• Low-carb options

• Plant-based meat alternatives

Ultimately, by offering a variety of options, you can appeal to more customers and encourage larger purchases.

2. Refine your marketing strategies

Marketing is crucial for attracting new customers and retaining existing ones. While there are tons of strategies you can implement, be sure to think about the following advice as you develop and refine your tactics:

• Leveraging social media platforms popular with your target demographics

• Collaborating with local influencers or food bloggers

• Participating in food truck festivals and local events

• Implementing a referral program to encourage word-of-mouth marketing

Remember to track the performance of your marketing efforts and adjust your strategies accordingly. This will help you figure out what works best, allowing you to invest more in effective tactics and increase your return on investment (ROI).

3. Focus on customer experience

Providing an excellent customer experience can lead to positive reviews, repeat business, and word-of-mouth referrals. To foster an incredible and memorable customer experience, be sure to:

• Ensure consistent quality in your products

• Implement a loyalty program to reward repeat customers

• Create an inviting atmosphere around your truck

• Train your staff to provide friendly and efficient service

Overall, prioritizing customer satisfaction is the best way to build a strong and loyal customer base that keeps your business thriving in the long-term.

4. Streamline operations with technology

Implementing the right technology can help you serve more customers efficiently and gather valuable data. For example, consider implementing tools like:

• A robust POS system for quick transactions and inventory management

• A mobile app for easy ordering and loyalty program management

• Online ordering and delivery options through platforms like UberEats or DoorDash

Additionally, you can use the sales data from your POS system to guide key business decisions. For instance, determining your peak business hours can help you with staffing decisions. Likewise, this can help you run promotions during periods that are typically slower.

Of course, you can also easily see your top-selling products, which can help you with marketing decisions and introducing new menu items.

5. Host events and run promotions

Lastly, regular events and promotions can drive traffic to your taco truck and create a buzz. Some effective ideas might include:

• "Taco Tuesday" specials

• Collaboration events with local breweries or other food trucks

• Limited-time menu items to create urgency

• Catering for local businesses or events

Ultimately, promotions are a great way to drive more foot traffic to your truck, while events are the perfect way to help build a community around your business.

Make more money with a comprehensive POS system for taco trucks

As we've seen throughout this article, taco trucks can certainly make a good amount of money. However, it's key that you provide high-quality products and create an excellent customer experience to achieve profitability.

Of course, it's also vital that you incorporate the right tools, like Toast’s comprehensive POS system, so you can efficiently process transactions, offer loyalty programs, provide online ordering options, and much more

To discover all the ways Toast can help you run a better taco truck, be sure to check out all the awesome features!