Are Coffee Trucks Profitable?

Are Coffee Trucks Profitable?

Do Coffee Trucks Make Money?

You can start a profitable mobile coffee business.

Yes, coffee trucks are profitable. If managed right, the income from coffee trailers can be significant and lead to impressive profits.

Making money with a coffee trailer will take a bit of hustle, but there is no mistaking that pound-for-pound coffee trailers or mobile coffee trucks can provide you with impressive coffee business revenue.

But how much money can a coffee trailer make? I can tell you that I made $3,000 per weekend on busy weekends, but what really matter is understanding the elements that allow you to generate those revenues and profits.

Some essential revenue factors will contribute to your coffee trailer income. In this post, we will jump into how much money a coffee trailer can make. We will also focus on the specific elements you want to know before setting up your coffee trailer business. 

Are Coffee Trailers Profitable?

Are coffee trucks profitable?  Yes, coffee trucks can bring in significant revenue (relative to their operating costs). It is feasible to generate $1000 to $2000 per day. Generating $150,000 to $250,000 in annual revenue is feasible.

Operating a profitable coffee trailer comes down to good management, offering superior products, delivering excellent customer service, choosing suitable locations, marketing, and staying ahead of the competition.

Coffee Trailer Profitability Relies On:

• Good Management
• Superior Products
• Excellent Customer Service
• Suitable Location(s)
• Marketing
• Beating the Competition

Diligent stewardship of your coffee trailer business will ensure all of these elements come together to generate the profits you need to make it worthwhile.

Coffee truck profitability: A well-managed coffee trailer operating 5-6 days a week with strong customer traffic could generate $150,000 to $250,000 in annual revenue, yielding net profits of $50,000 to $100,000 after expenses.

Much of the money generated by your coffee trailer depends on you, your schedule, and how often you want to utilize your trailer. Maximizing the time you serve customers and increasing your daily sales goals will help ensure long-term sales revenue.

Consider Your Daily Potential

Your average sales ticket (receipt) will drive your sales numbers. For example, let’s say your average sale is $6.50. If you serve 120 customers a day, you’ll bring in $780 daily, $3,900 (5-day week), and $15,600 per month.

While a coffee trailer may be considered a low-cost coffee business, it doesn't mean it provides lower revenue. However, it's important to note that a profitable business doesn't just happen. A good coffee trailer can't be made by “winging it” or playing things by ear.

To ensure your success, you have to have a game plan. Your coffee business success can and should be worked out long before obtaining your trailer.

Next, let's get more specific on setting up a profitable coffee trailer.

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How to Start a Profitable Coffee Trailer

Let's start with a plan. While you'll eventually put all your thoughts down into a coffee business plan, let's answer the first few questions.

• Who will be your customer?
• What will you serve your customers?
• Where will you serve your customers?
• How will you serve your customers?
• What practical considerations do you need to know before getting a trailer?
  • Where will you store your trailer when not in use?
  • Which local commercial commissary will you use?

The answers to these questions will be different for everyone. Additionally, consider what the current market conditions are. For example, is there steep competition? Is there a specific location where you are looking to set up and sell coffee? What is the likelihood that you will be able to get to that location? Are their zoning requirements for that area?

Sample #1: Revenue for a Coffee Truck

Let's have a little fun. For the sake of illustration, let's say that you want to open a small coffee trailer and you want to determine your weekly sales. Below is a sample of a modest coffee trailer revenue sample. You will take your average daily customers and multiply them with your average receipt or ticket price and come up with daily totals. Finally, you will add up your revenue for the week. With this information, you can extend this out per month.

Weekly Coffee Truck Revenue:

Total for the week: $3,357.67

Average for the month: $13,328

To make more weekly money, you must either increase your daily sales or your average receipt costs. In this scenario, you may add an extra day of work. You should be able to quickly and accurately get this information from a coffee shop POS system. Two things to keep in mind. This revenue does not reflect your gratuity tips or your trailer operational costs.

Sample #2: Revenue for a Coffee Truck

Sample Revenue for a Coffee Truck:

Info on the pricing:

• Coffee-only sales: Average receipt price is $4.
• Coffee & Snack Combo: Average combo price is $6.
• Coffee & Breakfast Combo: Average combo price is $8.

Monthly Coffee Truck Profits

Here’s a monthly revenue projection chart for a small and light coffee truck based on 30 operating days per month:

Informations Regarding Estimates:

• 30 operating days per month
• Average sales prices:
  • Coffee-Only: $4 per cup
  • Coffee & Snacks: $6 per combo\
  • Coffee & Breakfast: $8 per combo

Your Coffee Truck Profits

So, let's take the following numbers and estimate our profits from the gross revenue. Let's assume the following percentages:

Assumed Profit Margins:

• Coffee-Only: 70%
• Coffee & Snacks: 65%
• Coffee & Breakfast: 60%

If we run with the margins above, we'll get a monthly profit margin that looks something like the chart below:

What will your profit be?

Can you imagine making $28,000 in profit per month with your coffee truck business? Look at the numbers, where will you fall within these charts? What will your sample revenue table look like?

Do Coffee Trailers Make Money?

Essential Part of the Equation

Your Coffee Trailer Costs

Getting Your Coffee Trailer

How you obtain your coffee trailer will add to your startup costs. For example, if you buy your coffee trailer from a manufacturer or buy an existing trailer and refurbish it, it will have specific costs you will want to review before you purchase.

Ways To Get a Coffee Trailer:

1. Refurbish a Trailer
2. Buy a New Coffee Trailer
3. Buy a Used Coffee Trailer

Refurbishing a trailer

Refurbishing your trailer may be more challenging than you think. However, if you find a jewel you want to remodel, the costs of demolition and building out your trailer can be time-consuming and significantly add to your expenses.

Before you think about buying a used coffee trailer that would need to be repurposed as a coffee shop, consider the following questions:

• Do you have space to refurbish the coffee trailer?
• Have the ability and strength to refurbish your coffee trailer physically?
• Do you have the tools and skills to refurbish your coffee trailer?
• Do you know any licensed contractors who can help build your coffee trailer?

If you feel pretty good about answering these initial coffee trailer questions, you might be able to start looking for a used trailer to repurpose. If not, buying an existing coffee trailer or purchasing a coffee trailer from a manufacturer specializing in food trucks may be better.

While we won't get into specifics here, it is essential to note that time, money, and effort to refurbish your coffee trailer will significantly impact your startup costs and, thus, your profitability. 

You'll be deep in the hole by initially overspending before you reach profitability. That is why I recommend creating a budget to purchase and refurbish your coffee trailer.

For example, it may cost you $5000 for the used trailer and another $10,000 to get it ready to install your equipment. Either way, you will want to have a budget set aside for your trailer purchase and refurbishing.

Further Reading: How Much Do Coffee Shop Owners Make?

Buying a New or Used Coffee Trailer

Buying a new or used coffee trailer may be a more viable option to get your coffee trailer business.

Even if you are considering buying a trailer and refurbishing it as a coffee trailer, it never hurts to start your coffee trailer search early and look to see what options are currently available. You may need to get your new or used trailer from out of state, depending on your budget and availability,

Before you buy a used trailer, you want to remember the questions we started with – and determine who your customers will be and where you plan on utilizing your coffee trailer.

Consider that even new or used trailers may need to be retrofitted to serve coffee and hold the essential equipment for your planned coffee trailer menu.

You'll be better positioned to whittle down options once you have general answers to these questions.

Before purchasing your coffee trailer, I also recommend establishing a budget. Your budget will help keep your emotions at bay and keep your overall planning on track.

Building Out Your Coffee Trailer

Whether you get a new, used, or soon-to-be repurposed coffee trailer, you'll need to build it out. This means getting ready to pass a health and building inspection and have it ready to serve coffee.

Before you start to do anything meaningful with the buildout, you will want to review the codes that need to be addressed. Regulations can vary from county to county and state to state, so check with each agency first.

It's better to review the code requirements before buying any used or new trailer. What can pass inspection in one county may not pass in another. Even if you purchase a working trailer in one county, you may not get the green light in a neighboring county.

For example, the size of the entrance door to your trailer may need to be a specific height and width. In addition, if you purchase an old trailer, the doorway may have to be altered to pass inspection. The same can be said about your coffee trailer windows.

Commercial Auto Insurance

In my experience, getting insurance for your coffee trailer can be tricky. Commercial auto insurance is typically only given to a motorized vehicle. A pulled non-motorized vehicle may not fall under the category covered under many commercial auto policies.

Your policy may need to be tied to your pulling vehicle. So, for example, if you have a “work van” that pulls your coffee trailer – your commercial van may need additional insurance to cover the trailer. Each state has its laws regarding auto insurance, so be sure to check which one works best for you.

Side note: You will also likely need general liability and commercial auto insurance.

Do Coffee Trailers Make Money?

Coffee Equipment

Your coffee trailer equipment will vary – depending on the size of your coffee trailer and your menu.

If you have a larger trailer, you'll have wiggle room in your coffee equipment choices. However, a small trailer will require you to think creatively about which pieces of coffee equipment you'll need. This will include a coffee shop POS system.

A simple coffee menu with pre-packed snacks will require a limited equipment set while preparing waffles and smoothies requires an additional oven, blender, and extra permits.

Your coffee equipment decisions will also need to be based on the design and layout of your trailer and the plumbing and electrical structure. For example, while your coffee equipment will entirely depend on your menu, you'll need to factor in the capacity of your electrical outlets and water capabilities. 

Your Coffee Trailer Design & Layout

Your coffee trailer should be designed for safety and easy workflow. This may be challenging if you are restricted by the size and shape of the trailer.

In your design, consider how you will work in your trailer – from the position of your espresso machine, grinders, and refrigerator to where your cups and syrups will be placed. For example, you might want to put your espresso machine on the same side as the service window. You don’t have to turn your back to the clients as you are making coffee.

Before your buildout, you'll want to check on the types of materials that your health department accepts. For example, your floor and counters must be impermeable to water.

Further Reading: How to Start a Coffee Shop Successfully

Do Coffee Trailers Make Money?

Keeping Your Coffee Trailer Costs Down

Ultimately, you want to come out on top when it comes to your expenses versus your revenue. Unfortunately, the startup costs you incur will set you back and other fixed and variable expenses that come with doing everyday business.

The coffee trailer buildout expenses

The more planning and research you do before buying and building out, the less money you spend on costly mistakes. Keeping your buildout expenses lower can make you closer to being a profitable business.

Find out what materials you must use and look for the most suitable option in the market. Figure out what kind of jobs you can do yourself (cutting metal, adjusting the floors and other surfaces) and where you will need to hire a contractor (plumbing, electrical).

Not paying much for rent

One of the main benefits of operating a mobile coffee business like a coffee trailer or coffee truck is that you are a financially self-sustaining operation. But you may also have to pay rent at particular locations. So whether you rent a spot in a city park, city sidewalk, or private lot, you'll probably have to pay some type of rent.

Inventory management

Poor inventory management can financially bleed any business, especially mobile coffee businesses. This is because your space is limited, and closing up shop to run to the store may not be an option if you’re hitched up. Over time, your better inventory management will increase your profit margins.

Do Coffee Trailers Make Money?

Finding The Perfect Location for Your Coffee Trailer

Your coffee trailer profitability will primarily be due to finding great locations to serve coffee. As a mobile coffee business, working in several areas during the week is common – as many as two or three a day. Some may be better than others when it comes to generating income. However, mediocre locations may still contribute significantly to your overall monthly revenue.

Here are a few items to consider when finding the perfect location:

Traffic, Accessibility, & Visibility

High foot and vehicle traffic are essential to capture passerbyers who want coffee, which will be a critical part of your location selection. Easy and safe access to your coffee will be necessary for your potential customers to reach you. This could mean plentiful parking and other features such as lighting or high visibility.

Customers who don’t see your coffee trailer won’t buy from you. The perfect location for a coffee trailer would be on the side of a busy street, in a park, near office buildings, shopping malls, or anywhere close to your target customers.

Zoning & Permits

In the U.S., Canada, or other parts of Europe, you may need prior permission to sell coffee in a public setting. For example, if your coffee trailer is based in a city park, state beach, or municipal street, you need to do business in a permissible zone and have the appropriate permits.

You may have to work with the agency responsible for those areas. The city’s park and rec department may give a city park permit. The city’s transportation department may provide a city street permit.

Competition

You will want to offer coffee where there is minimal competition. One of the benefits of having a mobile coffee business like a coffee trailer is that you can pick and choose which areas are best for your business. One aspect of this decision-making is the level of competition.

Security

It may not be a front-and-center topic, but security is an essential aspect of where you decide to sell coffee. You will often be busy serving customers and maintaining your workspace to pay attention to those who may seek to steal or vandalize your operation. The reality is that when parked in a street or city park, you may have to watch out for those who wish to steal from you or open your towing vehicle. Therefore, you want to always be vigilant for your safety and property. The first step is always to lean on choosing a secure place to do business.

Location Costs

Location costs can add to your operation and decrease your profit margin. Prices can include various elements, including gas to travel to the location, tolls, rent, and labor costs. Be aware that your chosen locale can decrease your revenue.

How to Increase Your Coffee Trailer Revenue

•  Increase the Volume of Sales
• Boost Marketing
• Add Items to Your Menu
• Efficient Inventory Management
• Decrease Expenses
• Better Hiring Practices
• Take Steps to Avoid Theft

Profits and Volume of Sales

You want to have as many sales as possible to generate the most revenue. You can increase the number of sales by expanding your hours, choosing the right location, or offering a variety of menu items.

Essential Marketing (Building a menu board)

Your coffee trailer marketing will be an essential part of boosting your revenue. Your marketing can constitute anything and everything from your coffee shop website, local advertising, and exterior signage to your interior menu board.

Adding Items to Your Menu

Every location where you serve coffee may be a little different. If you make coffee in the early morning, your customers may also be interested in buying muffins, donuts, or breakfast burritos. If you make coffee in the afternoon, your customers may be interested in more savory items often eaten for lunch or afternoon snacks. To boost your existing revenue, you may need to add items to draw your prospective customers in. To do this effectively, listen for customer feedback or ask them what things they want.

Do Coffee Trailers Make Money?

Coffee Truck Profitability

Coffee Trailer Revenue Busters

Inventory Items

Mismanaging your coffee trailer could lead you to leak profits every day. Over a month, this inventory mismanagement could lead to significant losses. Keep track of your inventory with a system that works for you. Consider investing in a coffee shop POS system that lets you keep better tabs on the list coming in and going out.

Rents & Fees

The cost of renting a location or space can be expected for your coffee trailer. But paying too much rent for a bit of revenue can chip away at your revenue and profit margins. You will have to weigh the rent and obligations of your various sites. A trial and error may occur, but you should expect to pay reasonable rent.

Hiring Practices

Your hiring practices and your scheduling could bleed your business dry. Over a month or two, having one or two more employees on staff can siphon your profits. You’ll need to examine whether or not your business can sustain your hiring and scheduling practice and make the necessary adjustments.

Theft

Employee or customer theft could wreak havoc on your inventory and income revenue. Hiring the best baristas will be an essential aspect of your coffee business. You will want to create systems where theft is a challenge; this means always having a paper trail, possibly putting up cameras or other checks and balances.

Are Coffee Trucks Profitable?

Additional Questions:

Should I think about a coffee truck instead?

Coffee trailers offer a variety of benefits, but getting a coffee truck is also an excellent option for your mobile coffee business. Buying a coffee trailer versus a coffee truck depends on your budget, available time, and space.

Owning and operating a coffee truck can provide you with excellent mobility and convenience that a coffee trailer can't. By all accounts, to get your coffee truck going, all you have to do is start up the engine and drive to the location you'd like to serve coffee. A coffee trailer may require you to hitch up and then detach your trailer before you can start serving customers. This process may be more cumbersome than one realizes. Things like this are essential considerations for the long-term sustainability of your coffee business.

For more information, read our post, How to Start a Coffee Truck Business.

Would it be easier to open a drive-thru coffee stand?

In addition to starting and operating a coffee truck, you may be eying the possibility of opening a drive-thru coffee stand. A drive-thru coffee stand offers a variety of benefits that you can't get with a coffee trailer or a coffee truck.

In some respects, setting up your mobile operation may take just as much effort as a drive-thru espresso stand. However, operating a drive-thru coffee stand may be easier in the long run because you don't have to carry your inventory back and forth daily. For the most part, your drive-thru stand will be stationary.

For more information on setting up your drive-thru coffee stand, read our post, How to Open a Drive-Thru Coffee Stand.

How to Fund Your Coffee Trailer Business?

Once you develop your coffee trailer budget, you will need to create a coffee trailer funding mix. Your funding mix will help you develop a strategy to secure the necessary funds to start your coffee business.

Are there any other low-cost coffee shop business ideas?

There are plenty of low-cost coffee business ideas that you can choose from. The key to selecting the right coffee business for you is determining where you'd like to do business and which customers you are trying to reach. Finding a niche in the current marketplace and a target market segment that is not being served are two elements you can't overlook when deciding which coffee business concept will work for you.

Still, it's good to brainstorm which coffee business is best for you. For more information, read our post, Low-Cost Coffee Shop Ideas.

Get The Ultimate Guide!

How to Start Your Mobile Coffee Business

 Starting a coffee trailer is an incredible opportunity to create a profitable business and impact your community.

It can be a fun and challenging life endeavor. However, it can be especially tough if you don't know where to start. That's why we've written a helpful guide to help you get your mobile coffee trailer started.

Our 280+ page coffee trailer guide will help prepare you to launch your business, discuss building out your coffee trailer, and how to position yourself for future success.

Get The Ultimate Mobile Coffee E-book

Successfully Plan and Launch Your Coffee Trailer

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Coffee Shop Startups

Based in Seattle, Washington, USA, Coffee Shop Startups is dedicated to providing you with the most relevant information on how to start a coffee shop business successfully. Over the last 11 years, we've helped thousands of aspiring coffee business owners worldwide. We harness the experience, wisdom, and knowledge of many successful coffee shop owners to help you increase your chances of success and profits. We support business owners who want to start a coffee business by providing them with valuable information on starting their coffee business successfully.