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What is a Catering Van business?
A catering van business is a low-cost, low-risk venture for those looking to set up a food business. Rather than simply being a convenient way of eating, catering vans have become a gastronomical experience in themselves.
Food vans offer a unique eating experience and can be found at a variety of events and locations. Customers have come to expect restaurant-quality food at a more affordable price – but don’t be fooled into thinking the lower price will harm your profits. A catering van has significantly lower overhead and running costs compared to traditional food establishments, which increases your profits.
Catering vans have no culinary limits. You can serve any type of cuisine you choose, focusing on your culinary strengths and the type of food that is most likely to make a profit. Catering vans offer culinary diversity to their customers.
When setting up your catering van business, it may be recommended to focus on a specific type of cuisine. You can then fine-tune your menu. This can also help you to focus on your target market and stand out from your competition.
Some ideas for your catering van business include, but are not limited to:
- Cuisine from a specific country. For example, you could set up an Italian, Japanese, Mexican, or Greek food catering van.
- Focus on one specific food product, such as a pizza or burger van.
- A menu designed for those with specific dietary requirements, such as vegetarian or vegan food.
- A dessert van.
- A coffee and tea van.
- An alcoholic beverages van.
A catering van business can operate in several ways, depending on the type of business you choose to run. You could choose to be a street vendor, meaning you park your catering van on a street or roadside and serve food this way. Alternatively, you could choose to cater at different events. We will look at this in more detail later.
If you have a love for cooking, a flair for business and enjoy communicating with customers, starting up a catering van business could be an excellent business opportunity. However, you will also need a high level of commitment. Running a catering van business can be time-consuming and at times stressful. You will likely be driving to different locations and cooking and serving customers for hours at a time. However, if you put in the time and effort, a catering van business can be both lucrative and rewarding.
Types of Customers
The types of customers you could choose to target with your catering van business are endless. You could opt to focus on one specific target market or instead aim to attract a variety of customers.
One of the biggest contributing factors to the type of customers you are likely to attract is your location.
Some locations you could consider setting up your catering van include:
- Hiring a pitch at organised events such as festivals, fairs and music events.
- Markets and food fairs.
- Pop-up events.
- Social events and functions such as weddings, christenings and parties.
- Events for people with specific food requirements, such as vegetarian/vegan, or gluten-free.
- Street parking in areas with high foot traffic or high concentrations of your target market.
- Roadsides close to heavy traffic or motorways.
- City centres.
- Popular outdoor locations, such as beaches and parks.
- Business districts, industrial parks and office buildings with a high number of workers.
- Areas with high levels of nightlife, such as pubs, bars and clubs.
- Farmers’ markets.
- Organised outdoor events.
- Sporting events.
The locations you plan to set up your catering van business can have a significant impact on the type of customer you are likely to attract. For example, if you set up at a music festival, you are more likely to generate business from younger people, whereas setting up at a park may result in more families visiting your catering van.
Other factors are likely to influence the type of customers you attract.
The type of food you serve
Consider the type of food and/or drinks you will serve and which customers your food is most likely to attract. For example, if your van serves organic food made from local ingredients, you may be more successful at farmers’ markets and food fairs, rather than sporting events.
The price of your menu
Some customers may be more willing to pay a higher price than others. Additionally, people attending certain events may expect to pay more for their food. One way of determining your price point is to calculate the cost of ingredients. The more expensive your ingredients are, the higher your prices will be. You should also consider the cost of your pitching fees, if applicable.
Your brand identity
How is your brand identifiable? What makes you stand out from other catering vans? Your brand identity will be based on several factors, including your menu, the visual look of your catering van, your price point, your business name and your logo and displays.
Equipment You Will Need
Although much lower than traditional food businesses, a catering van still requires an initial investment. Below is a list of equipment you may require when starting up a catering business.
A van
This will likely be your biggest expense. Catering vans can be purchased new or second-hand. It is possible to buy a catering van that is already equipped with cooking appliances, such as a grill, hob and BBQ. However, you could also purchase a standard van and have the equipment installed separately. The price of a catering van can vary significantly from £20,000 to £200,000.
Separate handwashing and dishwashing stations
The law requires food businesses to have dedicated handwashing facilities for employees that are separate from the dishwashing facilities. You could choose to have an inbuilt sink installed in your van. Alternatively, a portable sink or a handwashing unit would suffice. Portable sinks retail for as little as £50.
A food warmer
If you operate in busy areas with a high number of customers, you may want to cook some of the food ahead of time. A food warmer allows you to keep the cooked food at a safe temperature before you serve it. The cost of food warmers ranges from £40 to £250, depending on the size and specification.
Utensils and accessories
The utensils you require will vary, depending on the type of food you cook. However, most catering vans will need a good set of kitchen knives, spatulas, ladles, tongs, food processors, pots, pans, food thermometers and timers.
Other accessories and equipment
There are a huge number of accessories you could choose to purchase as part of your catering van business.
This could include:
- A grease trap.
- A waste disposal system.
- An extractor fan (if one is not installed in your van).
- A cash register and Point of Sale system.
- Sauce dispensers, pumps or squeezy bottles.
- Salt and pepper dispensers or sachets.
- Rubbish bins.
- A sanitising or handwashing station for customers.
Equipment for serving and eating
You will need to provide something to serve your food in. Many customers will desire convenience, as they may want to take their food away or eat it on the go. Options for you to consider include cardboard containers, polystyrene trays, paper napkins and paper bags. You may also need to supply cutlery, paper cups and paper straws.
Display boards and pricing
Eye-catching display boards can help you to attract customers. It should also be easy for customers to see your menu and pricing and any additional information you supply, such as allergen information. Ensure your display boards match your business brand.
A gazebo, tables and chairs
Not all catering vans opt to purchase these, but it can help to attract customers who want to sit down while they eat. A gazebo retails for £400+.
Storage for food and ingredients
Your catering van should have an inbuilt fridge and freezer. If it does not, you will have to purchase these separately to ensure food is stored at the correct temperature. You will also need storage for your other food stock and ingredients, such as shelves or boxes.
Cleaning equipment
It is important to keep all areas of your catering van clean. This helps to avoid cross-contamination and the breeding of bacteria. You will need to purchase different cleaning materials for different parts of your van. You may need to invest in cloths, sponges, antibacterial surface cleaners, bleach, sanitiser, dishwashing soap and a sweeping brush and mop.
Typical Pricing
A catering van business is usually a low investment enterprise. However, it is also important to consider your ongoing expenses and any running or overhead costs. This allows you to create a budget and estimate your profits. Below is a list of the typical pricing you can expect when running a catering van business.
Equipment costs
As mentioned above, your catering van will be your biggest equipment expense. The design, size and specification of the van can significantly affect the cost. Equipment costs can range from £25,000 to £200,000. You could also consider renting a catering van instead of buying one until your business is established and making a profit.
Replacing and repairing equipment
This is an ongoing cost you need to factor into your budget. As you are working with large cooking equipment, you may need to pay to maintain it. If your equipment is no longer functional, you will need to fund repairs or replacement equipment.
Cost of maintaining your vehicle
There are several costs to consider for your catering van, including the cost of petrol, MOTs and services, vehicle insurance and any maintenance and repairs.
Pitching fees
Some events are much more expensive to pitch at than others, with prices ranging from £20 to £2,000 per day. Costs can vary depending on the types of events you cater for. If you cater for private events, such as weddings, you are not likely to have any pitching fees.
Street trading licence
The cost of a street trading licence can vary, depending on your local council. You can expect to pay approximately £75 to apply for your licence and may then have to pay weekly or monthly fees to trade. Contact your local council for more information or visit gov.uk.
Insurance
There are several types of insurance you may require, including Legal Indemnity Insurance, Product Liability Insurance, Public Liability Insurance, Business Vehicle Insurance and Contents Insurance. The cost of these varies depending on your coverage level and insurance provider. You can expect to pay between £100 and £500 for insurance.
Advertising costs
If your catering van business requires advertising, the recommendation is that you spend no more than 10% of your annual revenue on advertising costs, so if your annual revenue is £90,000, your maximum advertising costs should be £9,000. You may be required to advertise more heavily when you initially open your business as a way of attracting new customers.
Running costs
Running costs are the costs associated with running your business. You may be expected to pay these costs monthly or yearly. Your running costs could include your overhead costs such as electricity, gas and petrol. You should aim to have low running costs to help maximise your profits.
Food stock and ingredients
To maximise profits, the cost of your stock should be no more than 30%-40% of your food sale price. Some ingredients are more expensive than others, meaning you will need to price your menu higher to account for this. If your stock and ingredients cost you £3,000 per month, you need to make at least £10,000 in menu sales.
Now we have looked at your outgoing costs, you can begin to think about the pricing of your menu.
You should base your menu prices on the following factors:
- The type of food you sell.
- The quality and cost of your ingredients.
- Your overhead costs.
- The location or event you are catering for.
- Your target market.
The price of food purchased from a catering van can vary significantly. Some food can be purchased for as little as £1.50, whereas other food can be as expensive as £10.
Safely Running a Catering Van Business
Safely running your catering van business will be one of your key responsibilities. Unsafe practices can result in the cross-contamination of food, uncooked food being served and unclean food areas. Not implementing safety protocols could result in illness or food poisoning.
All food businesses will receive a visit from the Environmental Health Officer (EHO) within the first weeks or months of opening their business. The EHO will examine your food safety and hygiene practices and check whether you have the correct protocols in place.
Failure to meet safety standards could result in the EHO providing you with an improvement notice. If they believe there is an immediate risk to customers, your business could be closed, a fine issued and, in serious circumstances, you could face imprisonment. For more information on preparing for a visit from the EHO, consult our knowledge base.
Some safety protocols you should follow at all times in your catering van business are as follows:
Hazard Analysis and Critical Control Point (HACCP)
HACCP helps you to manage food safety hazards that could arise when storing, preparing and cooking food. You can identify potential risks and implement measures to ensure these risks are reduced or removed. Keeping records of the actions you have taken in line with HACCP is recommended.
Risk assessments
Risk assessments should be carried out before setting up your business and at any other time you require them. An additional risk assessment is now required for risks relating to Covid-19. For more information on carrying out an effective risk assessment, consult our knowledge base.
Food hygiene training
During a food hygiene inspection, you will lose marks if you cannot provide evidence that employees have undertaken food hygiene training. Employees who handle, prepare and cook food require a Level 2 certificate. If you are managing employees, you will need a Level 3 certificate. You can complete Food Safety and Hygiene training on our website.
Cleaning and washing of equipment
Having effective cleaning procedures is essential to any food business. It is recommended that a cleaning schedule or cleaning policies are in place. As part of your cleaning requirements, ensuring the personal hygiene of you and your employees and providing handwashing stations for staff and customers can also help you to safely run your business. It is also imperative that all equipment is washed thoroughly with the correct cleaning agents.
Store food safely and at the correct temperature
As part of your catering van business, you are likely dealing with frozen, refrigerated and cooked food. This food must be stored at the correct temperature to prevent spoilage or deterioration. It is a legal requirement in England, Wales and Northern Ireland that chilled food must be kept at 8°C or below at all times. If chilled food is out of the fridge for more than four hours, it must be disposed of. You should also make sure food is covered at all times to prevent it spoiling or deteriorating in quality. NI Direct has some great information on their website on how to safely store food stock.
Keep records
The EHO may want to see up-to-date records of your business’s cleaning schedules, risk assessments, health and safety policies, allergen information and temperature checks. Keeping these records helps to protect your business and ensures procedures are followed at all times.
Legal Requirements
Ensuring you adhere to all legal requirements is imperative. Failure to follow legal guidelines could result in delays opening your business, a fine or the forced closure of your business. Below is a list of legal requirements you should be aware of.
Apply for a food business registration
There is no cost associated with business registration and it is quick and easy to apply for on gov.uk. You must register your catering van business at least 28 days before you begin trading.
Apply for a street trading licence
Different councils within the UK have different rules regarding street trading licences. Some councils do not have restrictions on where you can trade, whereas others only allow you to trade in specific pitch areas. Contact your local council directly for more information.
Obtain a Gas Safety Certificate
Any gas equipment used for catering purposes must be inspected every year by a gas safe engineer. If your equipment is deemed safe to use and complies with government requirements, you will be issued a Gas Safety Certificate.
Register as self-employed with HMRC
Running your catering van business as an individual or as a self-employed person requires you to register as a sole trader. You will have to think of a name for your business and keep records of all your income, profits and expenses.
Implement a Food Safety Management System (FSMS)
Food businesses in the UK must implement a Food Safety Management System. An FSMS is a systematic approach to controlling food safety hazards. It ensures that your business is following safety protocols and will influence your food hygiene rating. For more information on the food hygiene rating system, consult our knowledge base.
Alcohol licences
There are several licences you may require for serving alcohol, including a premises licence and a personal licence. You may also require a Designated Premises Supervisor (DPS). Contact your local council for more information.
Food hygiene certificate
As mentioned above, food hygiene training is a legal requirement.
Allergen requirements
If you sell packaged foods, it is legally required that you correctly label your food products with information regarding the 14 allergens. For more information, visit Natasha’s Law.
Positives of Owning a Catering Van
There are many benefits to owning a catering van business. Some of the positive aspects include:
Popularity
Catering vans have soared in popularity in recent years. They are popular as street food, at the roadside or in busy outdoor locations, and as caterers at organised events. This increases your potential for profit and means your business is more likely to succeed.
Easy to organise and know when revenue will be made
As you will have to pre-book or reserve a spot at organised events and some outdoor locations, it is easier to predict your revenue. Organised events, such as festivals and markets, are also likely to welcome back previous vendors, making it easy to organise trading once you are established. If you cater for private events, you are also likely to receive repeat business or recommendations.
No specialist training is required
Unlike running a restaurant, you do not need any qualifications. Even if you have no cooking experience, you could still set up a catering van and focus on products that don’t require culinary skills, such as ice cream or confectionary.
Great fun
You can create your own menu, travel around and attend different events, converse with customers, and build relationships with other food vendors. Running a catering van can be a fun and engaging job that still offers great profit opportunities.
Easy to link into other industries, such as weddings, private parties and food festivals
You can choose to cater to a wide range of events or specialise in a specific industry. This increases your business opportunities and allows you to choose the events that are likely to be the most profitable. It can also help to keep your job fun and engaging.
Less risk while still having a high-profit potential
A catering van business requires less initial investment than traditional food businesses. This means there is less risk involved. It also means you are likely to begin turning a profit sooner. Food ingredients can be purchased at a low cost, especially if you order in bulk. You can expect to charge a high markup cost for your food, especially if you cater for events, festivals and fairs, which also increases your profit.
Negatives of Owning a Catering Van
However, there are some negative aspects of owning a catering van business that you should consider.
Large equipment requirements
Food businesses require a lot of equipment, with a catering van being a particularly large expense. You will have to consider the associated costs of the equipment, as well as where you will safely store it.
Cost and maintenance of owning a van
Not only will you need to pay out initially for your catering van, running costs and maintenance costs can also add up. Make sure you consider the costs of petrol, MOTs and services, insurance, and maintenance and repairs.
High risk of food poisoning and cross-contamination
Storing, preparing, cooking and serving food have some associated risks. You should be aware of the risk of cross-contamination, especially as you are working in such a small space. Additionally, as you may be serving meat and dairy products, there is an increased risk of the food products becoming spoiled or being undercooked, which creates a risk of food poisoning.
Food waste
Many catering van businesses choose to prepare and cook food ahead of time, to reduce waiting times and increase the number of customers they can serve. Any products that are not sold will need to be thrown away, which can have a detrimental effect on profits. Additionally, if you work with perishable food, they only have a short shelf-life. For more information on food waste, consult our knowledge base.
High competition
As food vans have become more popular, the number of businesses has grown. This can result in a long waiting list for pitches. You are also competing with restaurants, cafés and fast-food establishments.
Limit to the number of staff and amount of stock
A catering van has an extremely limited amount of space available. This means you may be limited in the number of employees you can hire and the amount of equipment and stock you can store in your van.
Planning Your Catering Van Business
An effective and well-designed business plan is imperative to the success of your business. There are several steps you should follow when planning your business.
Finalise your menu
What type of cuisine will you serve? What food products will be on your menu? Will you serve side dishes and beverages?
Decide where you will operate your business
Are you going to be a street vendor? Will you trade at events, such as festivals, fairs, markets and social events? Are you going to focus on private events, such as weddings and parties?
Determine your target market
This can help you to plan your business more effectively. Your target market is connected to the first two points of your business plan as it can help determine how you will run your business, the locations and events you will trade at, and your business brand.
Plan your equipment requirements
Look at our list of equipment above to help you plan the equipment you require for your catering van business. Once you have determined your requirements, you can begin to source and purchase your equipment. Consider renting equipment or purchasing it second-hand if you require lower equipment costs.
Calculate start-up and running costs
Calculating your initial investment requirements can help you see how long it will be until you start turning a profit. Can you fund the start-up costs yourself or do you need to apply for a loan or investment? Being aware of running costs helps you to see how much net profit you need to make each month.
Determine your menu pricing
How much do you plan to sell your food for? Consider the cost of ingredients and your overhead costs when determining your price points.
Develop your business plan
A business plan ensures you have a clear plan, aims and actions. It can help you to establish costs, potential profits, your product range, and your trading plan. Take a look at our business plan template to help you effectively plan your catering van business.
Ensure you have followed all legal requirements and have your paperwork in order
Consult our list of legal requirements above to check you have complied with all requirements.
