How to start a street food business

As little as five years ago, street food stalls weren’t something typically associated with the UK – given our infamously rainy climate and lack of high quality public spaces.

But now, post-Covid, the industry has undergone a rapid surge in growth. Trade has been bolstered by the country’s massive new demand for outdoor dining and drinking, prompted by lockdown restrictions put in place following the COVID-19 outbreak. Indeed, a 2021 market report by Lumina Intelligence shows 37% of respondents said that outdoor seating would get them to eat out again following the lifting of coronavirus restrictions.

Plus, a growing number of urban street markets, private events, and street food festivals all present new selling opportunities.

However, just like the cuisine you choose to serve, there are many different approaches you can take to running a street food business – with your start-up costs, earning potential, and level of risk varying considerably as a result. So which is the best fit for your small business idea? And how has the consumer need for greater health and safety measures affected the industry?

Our experts have been taste testing the street food market for the past two decades. In this guide, we’ll talk you through all you need to know to start a small street food business, helping you understand the likely outlays and potential profits.

How has COVID-19 affected the street food business industry?

Outdoor dining was one of the biggest shifts in consumer behaviour following the outbreak of the COVID-19 pandemic in March 2020.

To combat regulations around social distancing, small firms opened up their doors and moved onto the streets to keep business booming. Plus, the natural ventilation made street eating a smart solution to the spread of the virus.

This behavioral change isn’t going away. While restrictions have now lifted, many local authorities are still permitting leisure and hospitality businesses to use the pavement for their trading space.

All this means that outdoor eating – whether for passers-by or events – is here to stay in the UK.

What are the challenges?

There are still some things every business needs to consider in the post-Covid world. Chiefly, food safety and hygiene. Most people have gotten used to having regular cleaning stations and sanitisers on-hand to ensure that they can’t contract the virus from their fellow consumer.

Ensure you are keeping up with the latest regulations, and investing more in cleaning practices, so that your customers can feel safe.

Do you need to follow government guidance?

Government advice for food businesses was withdrawn in July, following the lifting of restrictions. However, the advice still has some useful tips for safe food preparation and delivery which you can choose to keep in place if you choose.

Many eateries – both outdoor and indoor – continue to utilise stricter cleaning and sanitisation practices while the number of COVID-19 cases remains high.

Is a street food business ideal for you?

Founding a street food business means catering for a particular niche within the hospitality industry. So what kind of individual qualities do you need to start one?

If you don’t have a background in the catering or hospitality industry, it needn’t hold you back; many successful mobile catering businesses were founded by people with no prior experience of serving food.

Indeed, flexibility is one of the most crucial attributes of a successful street food trader; it is not unusual to completely change your offering when something doesn’t sit right with customers, and you need to be comfortable in doing so.

As a mobile food business, you will normally be one of a number of options available for your target customer, so your branding and marketing activity will be crucial to success. Therefore, whilst a background in catering isn’t crucial, it is certainly advisable to have some kind of marketing expertise on board.

As you will see from our section on costs, a street food business can be an extraordinarily lean start-up, and it is perfectly feasible to start trading with an initial investment of just a few hundred pounds. However, it can also be extremely risky due to the volatile nature of the food industry, and all the traders we spoke to said unexpectedly losing money on a big event is seen as part and parcel of the business.

It’s also not a business which offers a particularly appealing work-life balance – the hours can be long, and unless you are lucky enough to have substantial investment available you will normally be juggling your new venture with your day job.

However, if you are passionate about good food and start with a well thought-out plan (and a healthy dose of pragmatism), there is every chance you could make a roaring success of your street food start-up.

Create a street food business plan

Despite the low start-up costs involved, jumping in to street food without any kind of plan is a sure-fire recipe for disaster. The space is extremely competitive, and you need to have a very clear idea of the niche you plan to fill before taking the plunge.

You will normally have an idea of what kind of food you plan to serve, which should be the starting point for your plan of action. If you plan to serve generic, low-cost fast food, like burgers, hotdogs or pies, you will be competing against many similar businesses wherever you go, and your byword should be efficiency – you will want to get through as many customers (known in the industry as “covers”) as possible in a short amount of time, keeping wait times low and maximising profit.

If, on the other hand, you are one of the growing number of street food businesses planning to offer a unique, unusual, or high-end product, you won’t be able to compete on sheer volume of customers. You should focus on developing your food and branding to justify the higher price and differentiate yourself from your competitors – and this means working out who your customer is.

Indeed, your business plan should have a very clear strategy for which events, markets or private events to target. Pitch fees will vary widely, and there are a whole host of other variables to take into account including total attendance, other traders present, and the demographic of customer that will attend. Your options will include:

• Street markets
• Pop-up malls (such as Boxpark in Shoreditch)
• Music festivals
• Food and drink festivals
• Weddings and corporate events
• Parties
• Street-side and lay-by stalls (for which you will generally need a special license)

The amount of options available can seem daunting, and it’s often difficult to know where to begin. Start by thinking about what kind of event or environment you would expect to see a street food business similar to yours, and then try and attend a few events – noting down which businesses appear to be doing well and why. You should then approach it methodically, weighing up the pros and cons of different venues before approaching them.

As a general guide, generic fast-food businesses that focus on volume of customers should do well at large music festivals and other events where the food is incidental to the main experience whilst high-end street food traders fare better at events in which the customer will be searching for a new taste experience.

However, all the preparation in the world can’t account for the unexpected, and you will find some events simply fail to produce the expected revenue. Your business plan should account for this, and you should always have enough spare cash in reserve to act as a safety net when you run up against the inevitable disastrous pitch.

Your approach to branding and marketing should be a crucial part of your business plan. A strong brand will help you stand out from the crowd, which is not just important for attracting customers but also securing spots at venues. Especially in the more established street markets, securing a pitch is more about who you know, and a strong social media presence or positive press coverage can help raise your profile and convince venue owners you are a credible business.

Remember you are often selling a lifestyle with street food, so your brand should have a strong story and clear ethos that reflects this. As an example, Dorshi has a “story” section on its website, detailing the journey that Mohendas and co-founder Jollyon Carter undertook to arrive at their concept, and Bunnychow’s website also contains a visual breakdown of how the concept took shape and what makes the business different.

Social media should obviously be central to your branding, and a strong Twitter and Facebook presence can help create an army of online followers who you can spread your message to. At the least, you should clearly display a Twitter handle at your events so customers can find out more about your business.

Street food rules and regulations

Because you will be serving food to the public, you will have to contend with a fair amount of red tape as a street food trader depending on where you will be serving it. This is particularly true post-Covid, as hygiene requirements have gotten stricter following the healthcare crisis caused by the pandemic.

As a starting point, you will need to register your food preparation premises with your local Environmental Health Office at least 28 days before you start trading – this will be the area you pay council tax to, or if you operate a vehicle, it will be where your vehicle is normally stored.

You will also have to put food safety management procedures in place in order to trade legally, which should be based on the Hazard Analysis and Critical Control Point (HACCP) system. Most smaller street food traders use the “Safer Food, Better Business” packs, which are resources intended to help small businesses comply with their hygiene obligations. Any employees you have should be trained in food hygiene, with the level of training dependent on the job.

As the business owner, you also have to ensure your business complies with health & safety law; you need to carry out a risk assessment at regular intervals, and if you employ more than five people you need to produce a written Health & Safety Policy Document (a guide to writing one can be found here) and a Fire Risk Assessment.

Furthermore, you should take out public liability insurance to guard against the effect of a customer being taken ill and suing your business – even if you are confident this will never happen, it’s better to be safe than sorry.

Separate to this, if you plan to sell directly to customers from a street-side stall not affiliated with a venue, you will need a street food trading license from the relevant local council. Getting one of these can be a long process, and the general trend is moving away from granting such licenses. However, Leeds city council recently approved a new scheme in which traders can pay a fixed fee to set up shop for just one day, which could represent an excellent opportunity to test the level of demand for your business before committing to something long-term.

Getting a license isn’t something you need to worry about if you plan to sell from street markets or other dedicated venues, as the venue owner will almost always take care of it themselves.

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Street food costs

There is no best way to start a street food business; some launch with a large amount of investment and attempt to make an impact right away, whilst others test the waters by starting small and scaling with demand. Because of this, start-up costs can vary widely, but it is perfectly feasible to start up with £5,000 or less.

In contrast, Hip Hop Chip Shop founder Oswald saved up for three years before buying the business’ first vehicle, a catering van shaped like a giant boombox.

As well as the cost of equipment (don’t forget that it may be worth considering a mobile card payment machine), your start-up costs will depend on what kind of events you will target. Pitch fees for mainstream music festivals and popular street markets can be thousands of pounds, so if your goal is to start lean and minimise risk, start with some well-chosen smaller events and try and raise your profile as much as possible.

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Potential earnings from a street food business

A street food start-up is also a business which you can feasibly juggle with other work, and indeed this is how most traders start out. Earnings in the early stages are likely to be highly volatile, and your profits will be modest, meaning you are likely to appreciate the safety net of a day job. However, you should be prepared to sacrifice the vast majority of your free time.

It would be unwise of us to tell you how much you can earn from a street food business; earnings depend on a huge number of factors, from initial investment, to the type of food, the pitch fees, and so on. Generally, your largest expense for an individual event is likely to be the pitch fee, so you should work out how much business you expect to do in the time to see whether you can turn a profit. Many traders adjust their prices for individual events, accounting for the cost of being there and how much other vendors will be charging.

But even if you appear to have found the perfect event, sometimes it just doesn’t work – perhaps the weather wasn’t right, there were more competitors than you expected, or your stall ends up being tucked away in an obscure corner out of customers’ sight.

Additionally, your earnings will fluctuate depending on the season. Apart from a surge at Christmas, most street food traders do the bulk of their business in the summer, with a plethora of outdoor events presenting opportunities galore. During the winter months, the amount of business you do is likely to tail off dramatically, so ensure you are prepared for this.

Street food tips and useful contacts

Remember:

• Be flexible with your offering – if something isn’t working with your food, let go of your ego and change it
• If you are producing generic fast food, efficiency should be your goal; for more high-end or niche street food, focus on quality and branding
• Make sure you always have enough cash to keep the business going if a particular event goes wrong
• Use social media and web marketing to create a story for your brand
• Speak to other street food traders and read all you can before starting up – but remember that some business lessons can only be learned the hard way
• Create a detailed business plan and constantly update it to reduce unknown factors affecting your business.

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Useful contacts

• StreetFood.org.uk: A resource for street traders run by the Nationwide Caterers Association (NCASS). Contains a directory of street traders and guides to starting up.
• British Street Food: Popular blog on street food run by food critic Richard Johnson.
• Evening Standard guide to London’s street food markets: This article should provide a good starting point for potential venues in the UK capital.
• Food Standards Agency: Contains a wealth of guides on regulations affecting food traders in the UK.