The Phantom Costs of Operating a Coffee Truck

Hidden Coffee Truck Costs

Coffee Truck Business Success

Phantom Costs of Operating a Coffee Truck

Starting a coffee truck may seem like an affordable way to enter the coffee business compared to a brick-and-mortar shop, but hidden expenses can quickly eat into your profits.

New owners often overlook These ” phantom costs, ” leading to financial strain or even business failure.

As you begin your coffee truck business planning, it will be essential to explore the often-missed costs of running a coffee truck and how they impact your bottom line.

I invested significant time crafting a detailed budget and business plan for my coffee truck, yet I still encountered unexpected expenses that pushed me over budget multiple times. Understanding these hidden costs before launching your coffee business is crucial. It can help you make informed decisions about your mobile coffee concept and develop strategies to safeguard your budget from costly surprises.

Let’s talk about some of them below:

Hidden Coffee Truck Costs

The True Cost of Hiring and Scheduling Baristas

Hiring employees isn’t cheap, and without the proper planning, you’re sure to add to your costs.

If you plan on hiring baristas, you’ll need to account for more than just their hourly wage. Labor-related costs include payroll taxes, workers’ compensation insurance, and any benefits you offer.

Hiring also involves expenses related to recruiting, training, and turnover—especially in an industry like retail coffee, which is known for high employee turnover.

Scheduling inefficiencies can further drive up costs, as having too many employees during slow hours means wasted labor while understaffing can lead to burnout and high turnover.

Every new coffee business will have a learning curve with hiring and scheduling, especially in the beginning. Knowing this is a potential money pit will help you carefully consider your barista hiring decisions.

Further Reading: How Much Does a Coffee Truck Cost?

Food and Beverage Waste and Spoilage

Managing inventory in a coffee truck can be challenging. Unlike a brick-and-mortar coffee shop, space is limited, and supply deliveries may not be as frequent.

Planning for your menu and inventory will take additional administrative time, but it will be well worth it.

This means keeping the right amount of milk, syrups, pastries, and coffee beans on hand without overstocking.

However, spoilage due to expired milk or syrups, incorrect espresso shots, or customers changing their orders at the last minute can add up. Every wasted cup, lid, or sleeve contributes to these invisible costs.

I estimate that wasted ground coffee, spilled or spoiled milk, paper products, and disposal of perishable inventory can be as high as 25% of your cost of goods sold. Taking steps and creating systems to avoid waste, investing in barista training, and practicing good inventory management can significantly reduce your costs and improve your coffee truck revenue.

Coffee Equipment Wear and Tear

Your espresso machine, grinder, generator, water pump, and refrigeration units require regular maintenance.

Over time, these machines will need repairs or replacement parts like filters, seals, and hoses. Unexpected breakdowns can mean costly emergency repairs and lost sales.

Proper daily cleaning, maintenance, and regular servicing of your coffee truck equipment will help avoid unnecessary repairs and larger expenses down the road.

Tow or Truck Vehicle-Related Costs

Beyond the initial purchase, your coffee truck or trailer has ongoing expenses such as fuel, commercial vehicle insurance, parking fees, and annual registration renewals. Depreciation also reduces its resale value, and mechanical repairs can be frequent, especially if your truck operates daily.

Like any vehicle, regular servicing, such as oil changes, engine flushes, brake services, and other issues, can be significant – but largely unavoidable.

You might want to consider opening a separate savings account and adding vehicle maintenance dollars every month to help avoid big financial hits.

Coffee Truck Costs

Hidden Permitting and Compliance Fees

Many cities require coffee trucks to obtain health permits, fire safety inspections, and business licenses.

You may also need to rent a commissary kitchen for food preparation. Depending on your location, this commissary may cost between $200 and $400 monthly! This can significantly add to your overall costs.

Temporary event permits can be another recurring cost, mainly if you operate at festivals or farmers’ markets.

Time-Related Costs

Many new coffee truck owners underestimate the time spent outside serving their customers.

I learned this the hard way.

Time taken for traveling to various locations, working with potential clients and property owners, prepping before your coffee service, and cleaning up afterward take time but don’t directly generate revenue.

Additionally, bad weather or unexpected slow days can drastically impact sales without reducing your fixed costs.

In addition, you need time to address marketing, posting on social media, dealing with vendors, administrative work, taxes, and other things that can eat up hours you’re not getting paid for.

Credit Card Processing Fees

While cash transactions avoid fees, most customers prefer to pay with credit or debit cards. Payment processors take a percentage of every sale, which can add up over time. Chargebacks or disputes can further reduce revenue.

In addition, upfront costs for a coffee shop POS system, monthly changes, and transaction charges can all add up fast.

Since we live in a time when people pay with cards or their phones for nearly everything, we need a POS system that can work for us.

Check out my coffee shop pos recommendations here.

Hidden Coffee Truck Costs

Hidden Coffee Truck Costs: Marketing

As mentioned earlier, posting on social media, developing social media ads, promotional discounts, and customer loyalty programs cost money but are necessary for maintaining a steady business.

You may either have one of your employees help you with this, or you may hire a professional social media consultant, which may not be cheap.

Giving away free drinks to promote your brand can help build awareness and contribute to operating expenses.

My Final Thoughts on Costs

While operating a coffee truck has lower upfront costs than a café, these hidden expenses can quickly add up – coffee shop business owners often have these commonly overlooked phantom fees as well!

Hidden coffee truck costs are everywhere.

Cutting these costs down should be among your top priorities as a business owner. If they are not addressed, they could cost you thousands of dollars of lost revenue every year, put pressure on your existing revenue streams, and delay reaching profitability.

By being aware and tracking these commonly overlooked costs and building them into your pricing and budget, you can avoid shocking surprises and keep your coffee truck business thriving.

Next, knowing your costs will also help you create better and more focused coffee truck sales volume goals and price points.

Avoid Hidden Coffee Truck Costs!

Action Steps:

• Develop your Business Plan
• Develop Your Budget
• Add a 15% margin to every expense
• Learn what you don’t know

Developing a coffee truck business plan and budget will be key to reigning in your costs right from the beginning. My recommendation is to add 15% to every budgeted expense. This will help give you more breathing room as you make decisions at each stage of your business launch.

And finally, keep learning.

By investing a little in your knowledge, you’ll better understand what expenses you should be making and which to avoid – I believe my coffee truck guide will help you with this. My kit will help give you a strong foundation for starting your mobile coffee business and save you money and precious time, too. 

Further Reading: How Much Does a Coffee Truck Cost?

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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.