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What is a Street Food business?
Once seen as a source of convenience or a passing phase in the affections of Millennials, street food businesses have soared in popularity in the last decade. Now worth an impressive £1.2 billion, street food has become a favourite of all generations, and for good reason. Street food offers restaurant-quality food at more affordable prices.
Gone are the days where street food consisted of simple burgers and hot dogs. Street food businesses now offer a huge variety of cuisine from around the world, as well as British classics that we all know and love.
This culinary diversity is one of the reasons why street food has become a great option for those looking to open their own food business. A street food business allows you to play to your culinary strengths, focus on food that you are passionate about or focus on niche or untapped markets.
Compared to other culinary businesses, setting up a street food business requires a relatively low investment. The absence of a bricks-and-mortar establishment will also result in lower overhead costs. You also have the opportunity to start small and scale up your equipment and menu as your business grows.
Setting up a street food business also does not require you to have any specialist knowledge or training. You simply need a flair for business, a strong commitment level and the ability to create great food.
There are a variety of ways you can run a street food business.
- A food van.
- A food trailer.
- A permanent market stall.
- A pop-up stall that can be transported to different events.
- A bicycle with an attached cart.
Although originally associated with big cities such as London, Manchester and Liverpool, street food can now be found all over the country. As well as on the streets of our cities and towns, street food vans, stalls and carts have become increasingly popular at festivals, outdoor events, fairs and markets.
Setting up a street food business does not simply require you to cook delicious food. As the business owner, you will also be responsible for ordering and replenishing stock, marketing and advertising, bookkeeping, customer services, taking orders and serving food and beverages.
A street food business can be financially and emotionally rewarding. Although it can be time-consuming and often physically demanding, setting up a street food business can also be lucrative and enjoyable.
Types of Customers
Street food businesses can attract customers of all ages. Some vendors choose to focus on a particular type of customer, or target market, whereas others find that focusing on one target market can be limiting.
Choosing a potential target market could be beneficial when creating your business plan. It could help you decide the type of stock you need to order and the food you plan to sell. It can also help you choose where you will station your street food business and decide on your brand.
You can operate your street food business in a large number of places, including:
- Hiring a pitch at organised events such as festivals, fairs and music events.
- Street food markets.
- Food fairs.
- Pop-up events.
- Social events such as weddings and parties.
- Street festivals.
- Events for people with specific food requirements, such as vegetarian/vegan, halal, or gluten-free.
- Street parking in areas with high foot traffic or high concentrations of your target market.
- Business districts, industrial parks and office buildings.
- Farmers’ markets.
- Organised outdoor events.
- Sporting events.
- Popular outdoor locations, such as beaches and parks.
When determining your target market and the locations or events you will set up your business, there are several important factors to consider.
What type of food are you going to serve?
This should be your first consideration when creating your business plan. Focusing on a specific type of cuisine allows you to perfect your menu and differentiate your business from others. You could choose to focus on cuisine from a particular country by setting up a Mexican, Greek, American or Indian street food business. Alternatively, you could choose to focus on one particular food product, such as pizzas, burgers, jacket potatoes or baked goods. Some street food businesses offer a variety of food types. You may also want to consider whether you will offer beverages and, if so, the types of beverages you will offer. For example, soft drinks, hot drinks or alcoholic drinks.
What will your business identity be?
This is how your brand will be identifiable and what will make it stand out from other street food businesses. Your brand identity will be influenced by the visual look of your business, the types of food you sell and the name and logo of your business.
What are your price points?
How much do you plan to spend on your ingredients and how much do you plan to charge your customers? The cost of your food can influence your target market as some consumers may be prepared to pay higher prices than others. The more expensive your ingredients, the higher your price point will need to be.
What competition is there?
Research your competition to identify the types of street food businesses that already exist. It may be beneficial to focus on a previously untapped niche or a product that is more likely to guarantee your success. Keep in mind that events will seek diversity in the street food that is offered. If an already established business sells the same products as you, you may not be accepted for a pitch.
Equipment You Will Need
Although setting up a street food business can be a low-investment enterprise, the type of equipment you require, and the associated costs, can vary significantly. To help you plan your equipment requirements, below is a list of the equipment you are likely to need when setting up your street food business.
If you opt to run your street food business from a vehicle, this is likely to be your biggest expense.
Prices will vary significantly, based on the type of vehicle you choose:
- A food van – This is the most expensive option. They usually come with inbuilt cooking facilities and a fridge, although some may require you to pay separately to purchase and install these facilities. Food vans can range in price from £20,000 to £200,000.
- A food trailer – This is a cheaper option and is recommended for those who don’t need to transport their business regularly. A food trailer can often be larger than a van, allowing you to have larger cooking facilities, more stock and extra staff. The average price of a trailer ranges from £5,000 to £50,000.
- A bicycle with an attached cart – This is a cheaper option, although your menu will likely be limited to pre-prepared food. You will also be much more limited with the amount of stock you can hold. A bicycle with an attached cart can be purchased for £2,000 to £5,000.
If you opt to run your street food business from a stand or stall, you will have different equipment requirements.
You could choose to purchase:
- An integrated stall with a built-in canvas roof – £200–£500.
- A standard stall with an additional gazebo – £400–£1,000.
If you choose to run a food stall, you will likely need to purchase cooking equipment and fridge/freezer separately, so factor this additional cost into your calculations.
A catering table
If you need a work surface to prepare and cook your food, stainless steel catering tables look professional and are easy to clean. It is even possible to get a foldable catering table for easy transportation. Prices can range from £50 to £250.
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 a small food warmer usually starts at £40, although if you require a larger warmer, the price will be higher.
Food preparation equipment
The equipment you will require for preparing food will vary depending on the type of food you are preparing. Required equipment could include chopping boards, kitchen knives, a food processor, pots and pans, a food thermometer and timers. You may also require cooking and serving utensils, such as tongs and spatulas.
Display boards and pricing
Standing out from the crowd is essential, especially if you trade at events with other street food vendors. Eye-catching display boards can help you to attract customers. It should also be easy for customers to see the pricing of your food products and any additional information, such as allergen information.
Eating and takeaway equipment
You will need to provide something to serve your food in. Options for you to consider include cardboard takeaway containers, polystyrene trays, paper napkins, cones, and paper bags for larger orders. You may also need to supply cutlery and paper straws.
There are a huge number of accessories you could choose to include as part of your street food business.
This could include:
- Tables and chairs for customers.
- Sauce dispensers, pumps or squeezy bottles.
- Salt and pepper dispensers or sachets.
- A cash register and Point of Sales system.
- Rubbish bins.
- A sanitising or handwashing station.
Keeping all areas of your street food space clean is imperative. You will need to clean areas regularly throughout the day to avoid cross-contamination and the breeding of bacteria. Different cleaning materials are needed for different parts of your area so you may need to invest in cloths, sponges, antibacterial surface cleaners, bleach, sanitiser, dishwashing soap and a sweeping brush and mop.
UK law requires food businesses to have a separate area for handwashing. This area cannot be the same area you use for pot washing and other cleaning. You could choose an inbuilt sink, a portable sink or a handwashing unit.
Typical costs associated with running your street food business can vary significantly, depending on the type of business you run. To help you plan your street food business more effectively, below is a list of approximate costs.
The cost of equipment can vary significantly, depending on the type of business you run. For example, food vans are significantly more expensive than a pop-up stall. Some equipment can be bought second-hand or rented. Alternatively, you can start small and purchase cheaper equipment and buy more equipment as your business grows. Equipment costs can vary from £2,000 to £200,000.
The majority of the registrations and licences you will need to apply for will be free. However, if you require planning permission, there may be an associated cost, depending on your local council. A street food licence will also have a £75 application fee + additional weekly or monthly fees.
Pitching fees or rental fees
Some events are much more expensive to pitch at than others, with prices ranging from as little as £20 to as high as £2,000 per day. If you trade at a permanent market, you may receive monthly or annual discounts.
Food hygiene certificate
You can complete Food Safety and Hygiene training on our website for as low as £20 + VAT. If you hire any employees, it is also recommended that they also undertake food hygiene training.
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.
Running costs includes any costs you encounter when running your street food business. This could include your overhead costs such as electricity, gas and petrol. It could also include the cost of replacing or upgrading your equipment.
Stock and ingredients
The cost of your ingredients should never be above 30%-40% of your food sale price. This means that to estimate your food stock costs, you first need to estimate the price of your menu and the number of sales you plan to make each month. If your business plan estimates you will make £10,000 per month, your stock and ingredients should never exceed £3,000-£4,000. The lower the cost of your ingredients, the higher your profit will be. Source your suppliers and consider buying in bulk to reduce costs.
The prices you will charge will depend on several factors. Street food businesses can charge as little as £2 to as high as £15.
You should price your food based 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.
Safely Running a Street Food Business
As a food business, you have a legal and moral responsibility to ensure you have implemented safety measures and that relevant procedures are followed at all times.
Food businesses should receive a visit from the Environmental Health Officer (EHO) in the early stages of opening their business. The EHO will examine your food safety and hygiene practices and check whether you have the correct protocols in place. If you do not meet the safety standards, the EHO may provide you with an improvement notice. If they believe there is an immediate risk to customers, your business could be closed, you could be issued with a fine or even face imprisonment.
Below is a list of safety protocols you, and your employees, should follow at all times.
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. For more information on HACCP, consult our knowledge base.
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.
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.
Safe storage of stock and cooked food
Depending on your business, you could be dealing with frozen, chilled and cooked food. Ensure stock and food are stored at the correct temperature and frozen food is defrosted safely. Visit our knowledge base for more information.
Ensure food is thoroughly cooked
Serving food that is not thoroughly cooked can be dangerous, especially if you serve meat or other high-risk foods. Cooking at the correct temperature can reduce or eliminate the risk of food poisoning. Be aware of the different cooking times and temperatures for different foods and the higher risks associated with some foods.
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.
Training for staff
As mentioned earlier, food hygiene training is essential to food businesses. Any employees who are handling, preparing and cooking food require a Level 2 certificate. If you are managing employees, you will need a Level 3 certificate.
There are several legal requirements you should be aware of when setting up your street food business.
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 street food 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 pitches or on private land. Contact your local council directly for more information.
Apply for a market stall licence
If you plan to run your street food business from a stall, you must apply for a licence from your local council. You can apply for a temporary licence or a permanent licence. Your licence will include restrictions on when and where you can trade and the size of your stall. To apply for your licence, visit gov.uk.
Get 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.
Obtain alcohol licences
If you plan to serve alcohol, you will need to apply for the correct permits and licences. You may need to apply for a Temporary Events Notice and Personal Alcohol Licence and an Alcohol Beverage Control certificate. Visit Street Food Central for more information on alcohol licences.
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.
If you sell packaged foods, it is legally required that you correctly label your food products with information regarding the 14 allergens. If any of the food you sell contains any of the 14 allergens, this information must be visible and easily accessible for customers.
Positives of Owning a Street Food Business
There are many benefits of owning a street food business.
A high investment amount is not required
Depending on the type of street food business you set up, only a low initial investment will be required. Not only does this mean you will begin turning a profit more quickly, but it also reduces the level of risk involved.
Pitching fees and rent are reasonably low
It is possible to find events that charge as low as £25 per day. Alternatively, if you choose to trade at the roadside, you will only have to pay for your street trading licence.
Opportunities for private work
It is becoming increasingly popular to hire street food vendors for private events, such as weddings, parties and business events. This could be a great way of boosting your income and keeps the type of work you do varied and interesting.
You can choose how little or often you work to fit your business around your lifestyle and determine your own working hours. Choose to only cater for specific events or run your street food business daily. You can choose whether to work weekdays and weekends, whether to operate seasonally or year-round or whether to work during the day, evening or night.
Potential for high profit
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. The popularity of street food also increases the number of customers you are likely to serve and puts you in high demand.
Many of the UK’s eating hang-outs are street food markets
Street food markets have soared in popularity thanks to the excellent food, the culinary variation, attractive prices, and the potential for socialising. These markets offer customers the opportunity to eat delicious yet affordable food with family and friends in an environment that has been designed with a great experience in mind.
Negatives of Owning a Street Food Business
However, there are some negative aspects that you should first consider before setting up a street food business.
It is a lot of work and effort
Running a street food business can be physically and mentally demanding. Not only will you have a large number of responsibilities, but you may also be working long hours on your feet. A street food business requires hard work and commitment – especially when you first begin trading.
As most street food businesses trade outside, the success of your business could be dependent on the weather. As the UK is famed for its cold and rainy weather, be prepared for the potentially negative effect on your profits. Because of the unpredictability of the weather, especially in Autumn and Winter, many street food vendors choose to only operate in Spring and Summer, meaning your business may only run seasonally.
Initial profits may be low
Developing your menu, building up your customer base, finding the perfect pitches and events and learning patterns in the amount of business you make can, mean the initial profits are low. Unless you have a financial cushion and the commitment to persevere through this initial stage, it may be difficult for your business to succeed.
As street food has become more popular, the number of street food businesses has grown. This can result in a long waiting list for pitches. You also need to consider your local competition when choosing the type of street food you will sell. Not only are you competing with other street food businesses, but you are also competing with restaurants, cafés and fast-food establishments.
Limit to the amount of stock you can store
Depending on the type of street food business you run, you may be limited to the amount of stock you can store in your vehicle or stall. If a product on your menu proves particularly popular at an event, it may run out of stock quickly. You also may not be able to offer a menu that is as extensive as you envisioned.
Planning Your Street Food Business
Creating a business plan should be the first step you take when setting up a street food business. There are many factors to consider when planning your business and some important steps you should follow.
Finalise your menu
Decide what type of cuisine you will serve and exactly what will be on your menu. Consider whether you will offer sides and what beverages you will serve.
Determine the cost of your food products
How much is each item going to sell for? Will you adapt your pricing based on the event you are catering for? Consider the cost of your ingredients before determining your pricing.
Decide your target market
This can help you to plan your business more effectively. Your target market can help determine how you will run your business, the locations and events you will trade at, and your business brand.
Consider where your business will operate
Are you going to trade at organised events, such as festivals and food fairs? Will you cater for private events, such as weddings? Are you going to trade at a market or operate as a street trader?
Plan your equipment requirements
Look at our list of equipment above to help you plan the equipment you require for your street food business. Once you have determined your requirements, you can begin to source and purchase your equipment. Consider the pros and cons of renting vs buying and new equipment vs used equipment.
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.
Develop your business plan
A business plan 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 street food business.
Ensure you have followed all legal requirements
This helps you to avoid any fines or delays in opening your business. Consult our list of legal requirements above to check you have complied with all requirements.