Starting a food truck business in the UK
Tips / 15.12.2020
- Start out by doing your market research
- Creating your business plan
- Obtaining the necessary licenses
- Financing and payments
- Lease or purchase a food truck?
- Marketing and web presence
- How much does it cost to start a food truck business in the UK?
The concert has just finished and you’re famished. Luckily, there’s a food truck nearby with delicious Egyptian sandwiches. You go for it and are amazed at the quality of the food!
You might not know it but behind these food trucks are individuals who specialise in creating delicious foods and this is usually coupled with a passion for all things food related.
And with the rise of the foodie culture in the UK, mobile food businesses are on the rise, too, catering to the demand for high-quality, unique foods representing cultures from all over the world.
Street food can be found almost anywhere these days – from concert venues, weddings, seasonal open markets, in pop-up markets and more.
If you’re on the flip side of the coin and are an aspiring restauranteur who’d like to test the market first before opening your brick-and-mortar restaurant, and you’re considering starting a food truck business, then this post is for you!
Start out by doing your market research
Although they’re not physically that large compared to a brick-and-mortar restaurant, you shouldn’t be deceived by the amount of work you’ll have to put into your food truck business as well as the financial preparation that goes behind it.
As a starting point, you’ll need to conduct your market research and analysis starting with the perfect locations. Where do you plan on offering your delicious treats? Will you be located in one place and one place only or will you move around as demand calls for it?
In addition, does your food truck business have a name, logo and design?
You also need to have a menu that you’ll be willing to offer your clientele.
Once you’ve figured out these basics, you need to research your customers. What is their average age? Are they males or females? What is their average monthly income? What prices will you be charging for your offering and will these prices offset all your expenses?
Starting out with market research is a great way of determining whether there’s current demand for your food. After all, there’s no point in offering the same thing that every Joe out there is offering – you need to set yourself apart from your competitors and try to ensure you’re not working in an over-saturated market place.
Creating your business plan
If your market research yields positive results, you’re ready to create your business plan. But what is a business plan and what information does it contain?
Let’s take a closer look:
Executive Summary: In this section, you’ll want to include a concise summary of what your business’ main aim is as well as what primary need it solves within the food industry. You can also consider adding information from your market research, particularly about what sets you apart from your competitors.
Company description: As the title implies, you should consider including a description of your company. This information should include your business’ legal entity type, its date of incorporation, your physical location etc.
Industry analysis: Based on the market research you conducted in the section above, here you can provide information on the current size of your target market, as well as any trends that you have witnessed. In this section, you can also provide a customer analysis by focusing on their demographics.
Competitor analysis: You already know that you’re not the first food truck business owner in the UK, so that means analysing the existing competition. Who are they? Where are their strengths? What areas are they lacking in? And how can you compete with them?
Personnel: In this section, you’ll want to consider discussing the number of employees that you plan on hiring to help you with your food truck business, as well as the management team, if any.
Mid- to long-term plans for your business: This section refers to the operational part of your business. You can add information that relates to the daily operations of your business and how you plan on ensuring that it yields profits and is ultimately successful in the long run.
Inventory: Although relatively small in size, food trucks are still assets and it’s not only the food truck itself which will count towards your inventory, but your food supplies, too. The type of stock that will make the bulk of your business offering and its costs will help you complete this section.
Marketing plan: Overnight success is unlikely and you’ll need to work hard to acquire and retain customers. This is why you need a marketing plan to show your investors or lenders how you plan on doing so. For example, will you send out flyers, will you have a website that advertises the next location you’ll be present at? How about the use of social media such as Instagram and Facebook to promote your treats?
Financial plan: Arguably one of the most important parts of a business plan is the financial analysis you’ll undertake. In this section, you need to include forecasts of projected income. Also, you may consider including a cash-flow analysis, profitability projections as well as projected expenses.
Obtaining the necessary licenses
Just like any other business type, you’ll need to ensure you get all the necessary food truck licenses if you’re planning on operating in the UK.
Here’s a quick preview of the licenses you’ll need:
Register as a business with the local council: On the one hand, you can’t start offering your meals to your food truck customers without registering with the government. On the other hand, this is free. The registration period is about four weeks and you can do so via the gov.uk website. When you register a food business, you will be visited by the Health & Safety Executive (HSE) who will assess the hygiene standards at your food truck. You can, however, begin trading before this visit but make sure your registration has gone through first.
Get a Level 2 or 3 Food Safety & Hygiene license: These certificates are necessary if you want to sell food in the UK. While the Level 2 certificate is necessary if you’re running your food truck by yourself, a Level 3 certificate is needed if you plan on employing or using the services of other individuals. The costs of these two certificates are 49.99 GBP and 84.99 GBP, respectively.
Get an approved HACCP plan: The Hazard Analysis and Critical Control Point (HCAAP) is proof that you have a clear understanding of the way in which food needs to be stored and further, that you have the right storage facilities for the food you plan to keep on your premises. A floor plan will be necessary for this plan, especially one that indicates your various storage facilities, and you’ll also need to clearly indicate where each ingredient will be stored.
LPG and PAT certificates: Liquefied Petroleum Gas (LPG) and Portable Appliance Testing (PAT) are applicable to food premises that serve hot food. The LPG certificate is for the usage of gas stoves, whereas the PAT certificate is for electric cooking devices.
Public liability insurance: This is necessary in the event of any mishaps or accidents that may happen in or around your food truck, and relate to both your customers and your employees as well as any damage to public or private property. The average cost for such insurance varies between 100 and 150 GBP per year.
Street vendor licence: A license from your local council is also needed for you to be able to sell food in public. This license is paid for each day that you sell food and its costs vary depending on your location. Prices vary between 5 and 30 GBP per day.
Financing and payments
Financing your food truck will also require some careful consideration. You will also need to ensure that your business is able to accept all types of payments. Considering the increasingly tech-savvy clientele in the UK, you need to be prepared.
Here are some factors you’ll need to consider.
Personal loans or obtaining credit: The costs of getting a food truck (whether you rent or buy it – for more on this in the section below) are not insubstantial. You will also need to think about financing your food supplies, equipment, licenses, etc. That’s why you will probably need to apply either for a personal loan or for credit from a reputable financial institution.
Obtaining a POS system: Once your funds are in hand, you will also need to consider investing in a credit card machine. These devices – whether traditional or smart – are a great way of ensuring you don’t miss a client. Some card machines enable you to print receipts while others allow you to send digital receipts to your customers via SMS or email. Choose the device that’s best suited to your needs.
Using online payment tools: If you’re more tech-savvy than your competitors, you can also consider sending your customers Pay Links or Payment Requests. These are personalised links that you issue and which enable you to send to your customers. When they receive the link, they can click on it and make the payment.
Lease or purchase a food truck?
The question of whether you should lease or purchase a food truck will be critical in terms of your finances and expenditure, and the answer to this question will depend entirely on your situation.
For example, are you in this business for the long-haul or are you considering doing this for a short period of time? This will determine whether you rent or buy.
If deciding to purchase a new food truck, costs vary between 5 000 GBP and 50,000 GBP, depending on the outfitting, equipment and all the accessories. Meanwhile, second hand vans can go for as little as 1,000 GBP.
Further cost considerations you need to factor into your calculations are the fact that you’ll need to wrap your food truck with an adequate design.
Marketing and web presence
Of course, no business can survive without marketing. Whether you plan on using pamphlets and flyers to advertise your food truck business, or you plan on going the techier route such as Instagram or Facebook, you need to make sure that your food truck business gains as much exposure as possible.
In addition, you may also want to consider creating a website for your food truck business, so that your loyal customers can follow you whenever you go to a new location or if you’re offering special one-time deals.
How much does it cost to start a food truck business in the UK?
There are several startup costs related to your food truck business which you need to consider and we list these below. Ultimately, there’s no single cost for a food truck business, as each owner will invest in different areas of their business’ future development.
Let’s take a look at some of the factors for consideration in the table below:
|Payroll and HR||License and permit fees||POS device||Advertising and marketing||Web hosting|
|Food supplies and inventory||Truck wrap and design||Equipment||Generators||Supplies (napkins, cups, cutlery etc.)|
|Office supplies||Cleaning products||Truck maintenance and insurance||Fuel||Liability insurance|
|Repairs and maintenance||The food truck itself – whether leased or purchased||Electricity and water||Business and vehicle insurance||Vehicle tax|
If you’re wondering about street food profit and how much do food trucks make in the UK, you’ll be able to make this calculation by adding up all your costs from the table above, and substituting them from your income.
That’s a wrap!
A lot of effort will go into your food truck business, but if you have the willingness and motivation to go for it, it can be a truly worthwhile venture. You can not only test out new dishes if you’re a budding chef, but you can also slowly build up to your brick-and-mortar restaurant over the long term by experimenting with different dishes, prices, and locations.
Disclaimer: Please be aware that the contents of this article and the myPOS Blog, in general, should not be interpreted as legal, monetary, tax, or any other kind of professional advice. You should always seek to consult with a professional before taking action, since the particulars of your situation may materially differ from other cases.
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