Your Mobile Coffee Business Startup Budget

Mobile Coffee Truck Budget

Start a Mobile Coffee Business:

Overall Budgetary Items to Consider

Starting a mobile coffee business can be a fun and more affordable way to enter the retail coffee market. This article will explain your mobile coffee truck budget and other items to consider before you jump all in.

There are a lot of great benefits to starting a mobile coffee business. While the economy may continue to firm up in many parts of the country, it remains a challenging landscape for small businesses everywhere.

This is especially true for coffee businesses with volume sales to make the rent and cover other costs.

In today’s volatile business environment, going mobile may seem to be the better way if you want to reduce your financial risk, reduce startup money barriers, and deliver more flexibility.

Additionally, in many local cities, local leaders have a growing sentiment to utilize mobile food trucks and street vendors to encourage more dynamic public spaces. These veins create an excellent opportunity to create a thriving coffee business.

Your mobile coffee truck budget

Starting a coffee food truck or mobile coffee trailer can potentially deliver additional profits by:

• Reducing your rental or leasing costs
• Driving to your customers (a bad location doesn’t have to last too long)
• Prioritize events that deliver greater revenue

Still, the costs of starting a mobile coffee business can’t be dismissed. This article aims to discuss a few budgetary costs associated with running a mobile coffee business. We hope that it helps you better understand the on-going budgetary items you are responsible for as a mobile coffee business owner. 

Starting a mobile coffee business is one affordable option to start a coffee business.  For steps on how to start a coffee stand business, consider visiting our in-depth coffee business blog.

Your Mobile Coffee Truck Budget

The Overall Budgetary Items to Consider

How much does a mobile coffee business take to run? Like other businesses, a coffee food truck or mobile coffee business takes cash to operate once it’s ready for service before reaching the break-even point.

To be sure, there are costs associated with purchasing and getting your mobile coffee business built and set up.

In this article, however, we will focus on the costs associated with running a coffee business once it has already been given the “green light” to start serving coffee.

Budget Items for a Mobile Coffee Business

Inventory Costs

Everything you sell costs money. How you manage your inventory cost can determine your mobile coffee truck’s profitability in the long run.

Inventory costs may include coffee beans (caffeinated and decaf beans), milk, syrups, foods, snacks, etc…

How much inventory you require for your business, of course, depends on how many days your mobile coffee business is actively selling to customers.

Your inventory can be categorized under your costs of goods sold or COGS.

As you start your mobile coffee business, your inventory cost may fluctuate. Even if you plan out every day of the working week, it may take some time of trial and error to find your sweet spot.

So give yourself a little slack while you diligently climb your inventory learning curve.

Milk and Milk Substitutes

Besides coffee and water, milk will be one key variable cost in opening your mobile coffee business.

Like your inventory, managing a perishable item like milk will take some growing into. This is especially true if you are at multiple locations throughout the week.

Milk can be expensive, especially if it is wasted (if it’s not used or thrown out for poorly made drinks).

Your “milk product” provides you with various options for your customers that you must consider shopping for.

These include:

• Non-fat Milk
• 2% Milk (Reduced Fat)
• Whole milk
• Soy Milk
• Almond Milk
• Oat Milk
• Coconut Milk
• Hemp Milk

These are the major milk options and substitutes. If you have a mobile coffee business, space will often be critical in deciding which options you can provide.

Depending on where you are located, your customer may ask you if you have any milk substitutes. You should offer at least two options, but not all of them.

Even if you had all the refrigeration space, your customers might not have created such a high demand for every single option.

This is where your own market research will come in. You’ll have to determine what a majority of customers will want and whether it will be economical (profitable) for you to provide them with greater options.

This is especially true if you are moving to different locations throughout the week.

Milk and milk substitutes can be expensive and will always contribute to a significant proportion of your operating costs.

Paper Coffee Cups & Lids

As a mobile coffee business, you will serve your coffee in paper cups and lids about 99% of the time.

The more coffee you serve, the more paper cups and lids you’ll need to buy.

The great thing about cups and lids is that they have a long shelf life. So, finding the best prices and stocking up early can never hurt.

As the variability in milk, so will your size options. A variety of cups can cost a lot upfront. Costs for your coffee cups multiplied by as many options can add up quickly.

Consider the cost of X cases of:

• 8 oz. cups and lids
• 12 oz. cups and lids
• 16 oz. cups and lids
• clear plastic cups (8 oz. 12. 16 oz.) and lids and straws

Decide on the sizes that work best for you and add that to your operating budget. Over time, you will find that your coffee cups and lids will add to your mobile coffee shop’s operating expenses, so be prepared to spend money on this every month.  Therefore, consider picking 2 or 3 of the most popular options and stick with those.

For a detailed breakdown of coffee expenses and profit margin, consider reading our article, How to Determine the Cost of Selling 100 Coffees.

Your Coffee Truck Buzz: Power Source

Usually, a mobile coffee business requires generator power or a large 50 Amp hookup that needs to be connected to a power source.

If you use a high-watt generator, you may go through 5 gallons or more of gas per day.

Multiply this cost by the number of days you work in a week, and you’ll see that the costs for your mobile coffee operation can get expensive.

Additionally, you will need a larger truck, van, or SUV to pull your trailer.  The costs associated with driving to and from your various sites can also add up.

Your schedule and your weekly routes will determine the cost of mileage, so it’s hard for us to predict your costs.

But let’s take your power generator costs as an example:

Let’s say you work your mobile coffee business 4 times per week. And it costs you $15 cost per day.

4 shifts X $15 = $60 per week.

$60 gas X 4 weeks = $240 per month.

Your equipment will ultimately determine how much power you need and what kind of power your mobile coffee operation requires. Keep these costs in mind as you work to figure out your mobile coffee trailer’s on-going expenses.

Labor Costs

While a mobile coffee business is often a smaller retail operation than a full-fledged coffee shop, you may need to hire baristas.

Whether you hire baristas weekly or for special events, there will be times when you need to pay others to help you.

Hourly wages and tips will eat into your profit margin, but they will be necessary at times.

Consider budgeting for your labor costs, as they will add up throughout the month.

Besides paying other baristas to help your business, you may need to think about taking a salary or hourly wage for yourself, too!

Mobile Coffee Insurance

How much is your mobile coffee business worth? How will you protect it? This is the question your insurance will help you answer.

When you invest your savings, time, and money (and other people’s money) in your mobile coffee business, you will want to protect it.

Your ongoing expenditure on insurance premiums isn’t something to overlook and should be considered in your coffee business budget.

Your General Liability Insurance – as a coffee business owner, you will most likely be required to have general liability insurance. This is a basic insurance policy that protects your business assets and insures you against a customer or employee injury. Each insurance policy is different, so consult your insurance company of choice and inquire about what type of policy you will need for your business.

Commercial Auto Insurance – If you drive a van and have a coffee truck or trailer, you may also need commercial auto insurance. A policy like this would help protect your coffee truck or mobile coffee trailer in case of a “hit and run” or some other type of auto accident. Again, like your general liability insurance, consider taking some time to speak with an insurance agent.

Further Reading: How to Start a Mobile Coffee Business

Mobile Coffee Rental Costs

As a mobile coffee business, you will have plenty of options when it comes to the locations you serve. You may decide to sell coffee in public spaces or private locations. 

Even so, you may still need to enter into an agreement with the operator, owner, or manager of that location and pay a rental fee.

If you would like to set up at a festival or other public event, you may need to submit a fee with your application, as well as a rental fee for your space.

Your rental costs depend on the type of locations and events you decide to participate in, but having a good eye on your budgetary needs will be vital for you.

Choosing a Coffee Commissary for your Coffee Truck

What you decide to serve your customers is essential to your sales as well as your budget expenses. Your inventory is a given cost, but you might also consider the need for a commissary.

Your local health department often requires a commissary. It provides the space for you to prepare your food and wash your utensils and dispose of greywater.

Usually, an ongoing commissary agreement is required to maintain your health department permit in good standing.

A commissary agreement can be a significant expenditure to your monthly budget.

Coffee Training & Education

Barista training or other business training or consulting may be an additional – though intermittent – the cost for your business. You may elect to train your baristas yourself or work with your coffee roaster for coffee training.

Nevertheless, you may want to block out some funds for this specific purpose when it comes to your annual budget.  

Barista training for yourself or your employees is a worthwhile expense. Your product and service quality often depends on your own coffee serving skills, your hiring choices, and your barista training.

Coffee Business Marketing

Competing in today’s market can be a challenge. There is always competition. Working daily to stand out will be an essential part of running your business.

Building your brand, developing awareness, and creating a devoted following takes effort and money.

It is especially challenging for a mobile coffee business since you are not locked into one physical or geographic area.

Basics include logo development, printing out business cards, creating a coffee business website, a social media account (or two), etc. All of these things take money… and have ongoing business expenses.

Mobile Coffee Truck Budget:

Summing Up Your Mobile Coffee Operational Costs

You have selected to start a mobile coffee business to make money. But it takes money to run a business, as well as following some key steps. Be sure to consider the elements of a coffee business budget and perhaps add your own specific to your own coffee business.

By budgeting and planning your coffee business's operational expenses ahead of time, you will be better prepared for most costs.  

Your total operational costs of running your mobile coffee business can be best worked out in your Coffee Shop Business Plan.

Our coffee shop business plan template allows you to walk through the elements that will easily cost you money. It is located in our Complete Coffee Shop Startups Kit.

Your Mobile Coffee Truck Budget

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