Calculate Margin & Sales Of Your Food Truck

The sales of a food truck are simply the total receipts or how much money you make from customers buying your food. The margin is what is left over after you pay all of your bills, such as food, supplies, wages, fuel, rent, etc. You can also express your margin as a percentage of your total sales. So how do you calculate margin and sales?

Calculate Margin & Sales Of Your Food Truck

  • Add the total of all expenses for your food truck for the selected period of your analysis. Include truck or equipment maintenance bills, employee wages, food and supplies, taxes, rent, professional services and all other expenses.
  • Add the total receipts for the given period. Include sales for meals as well as catering or other services your food truck business provides.
  • Subtract the total expenses from the total sales to get your margin. For instance, if your total expenses for a quarter are $24,000, and your total sales are $30,000, your margin is $6,000. If your final figure is negative, you are running at a loss.
  • Calculate the margin as a percentage of sales by dividing by the total receipts. In this case, the $6,000 margin divided by $30,000 total sales would be .20, meaning 20 percent of your sales are profit.

Margin Formulas/Calculations:

  • The gross profit P is the difference between the cost to make a product C and the selling price or revenue R.
    • P = R – C
  • The mark up percentage M is the profit P divided by the cost C to make the product.
    • M = P / C = ( R – C ) / C
  • The gross margin percentage G is the profit P divided by the selling price or revenue R.
    • G = P / R = ( R – C ) / R

RELATED: Calculating Cash Flow For Your Food Truck

The Bottom Line

Knowing which of your products generates the biggest profit margins is critical to building a sustainable food truck business. It helps you determine where you should focus your resources for future growth, and where you should be trying hardest to cut costs or raise prices.

Do you have any additional tips or advice for those looking to calculate margin & sales for their food truck? You can share your thoughts on this topic in the comment section below or on social media. Facebook | Twitter

2017-05-17T09:34:11+00:00 By |Business|

About the Author:

Richard is an architect by degree (Lawrence Technological University, Southfield, Michigan) who began his career in real estate development and architectural planning. In September of 2010 he created Mobile Cuisine Magazine to fill an information void he found when he began researching how to start a mobile hotdog cart in Chicago. Richard found that there was no central repository of mobile street food information anywhere on the internet, and with that, the idea for MCM was born.

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