How to start a takeaway business from home

Everyone loves an excuse not to cook, so if you’re considering starting a business, a takeaway business could be a great option.

Still, if you think this is the right path for you, there’s more to it than simply pressing the “Order Now” button. From preparing food for customers to collect or delivering it directly to their doorstep, there are several factors to consider when planning your launch.

In our guide below, we’ll break down all the ways you could set up and manage your takeaway venture, covering everything from how to conduct market research, to the costs involved, and how to write a business plan.

Why should you start a takeaway business?

Starting a takeaway business in the UK is a very popular option for new business owners. Ordering food has become more popular since the pandemic, and sometimes is a cheaper option for families to treat themselves than eating at a restaurant.

Takeaway services boomed during the pandemic when in-person dining was not possible. The pandemic led to many existing businesses such as pubs and restaurants adding takeaway services so they could diversify their business model and continue to trade.

Food delivery apps like Deliveroo have had a major impact on takeaway and food delivery services in the UK. This trend started before the pandemic but accelerated during it, and in many different ways.

“The pandemic heightened health awareness among consumers. We saw an opportunity for our healthy quick-service restaurant to serve office workers in their lunch breaks with fresh, and healthy food options,” said Indika Wanigaratne, co-founder of Salad Republic, which launched in London in early November.

“Consumers have redefined convenience, demonstrating a preference for shorter wait times. They are generally unwilling to wait more than 15 minutes for a pick-up order, and are particularly averse to waiting 45 minutes for deliveries” said Wanigaratne.

With the evolution of takeaway businesses in the UK – and the competitive market it’s created – it’s important that you’re fully prepared if you want your business to succeed.  

Step 1: Market research and writing a business plan

Good market research will help you write your business plan and give your takeaway business the best chance of success.

If you want a chance to survive in this challenging industry, market research is crucial before you get started. We recommend beginning your research by finding out the following:

• Location and premises type
• What types of takeaways are the most popular in your chosen area
• Who your target customers are
• What other takeaway businesses are operating near you
• What these businesses are doing to attract their customers
• Possible food suppliers
• Costs of hiring or purchasing catering equipment
• Additional costs such as cleaning services

Writing a business plan

Once you have conducted your market research, you should be able to use the information to write a business plan that can be used to streamline your next steps in setting up your takeaway business. It’ll also help you to plan short and long-term goals, and a well-research, coherent business plan is vital when petitioning banks for business loans or financial aid. 

When creating your business plan, it should include:

• Company information such as name and address
• A summary of the services that your takeaway business will offer
• How your business is structured and the parties involved
• Your target market and local competition
• Your selling strategy including your delivery plans and any potential partnerships with services like UberEats
• Your branding, marketing and advertising strategy
• Operational plans, such as what type of takeaway you’re planning to open and what menu and pricing examples you have
• Financial plans including costs, cash flow forecast, sales forecast and profit targets

Step 2: Legal requirements

You must comply with all legal requirements and health and safety obligations when running a takeaway business. 

Hospitality businesses involved in serving food have some of the most onerous legal and health and safety obligations of any business type in the UK. Legal requirements vary depending on the type of takeaway business you operate and its location.

Takeaway businesses must register with the local authority 28 days before trading. Once registered, you may be inspected by the local authority’s environmental health department to ensure it complies with food health and safety standards, including the Food Safety Act 1990 and the Food Hygiene Regulations 2006.

An environmental health officer will assess how your business handles, prepares and stores food, the cleanliness of the kitchen, food preparation areas and the takeaway business food safety management systems.

Takeaway businesses must also display certain information to customers, including:

• The business name and address
• Its food hygiene rating
• Details of any allergen information relating to the food that is served.

Staff must also be trained in food hygiene and safety and records kept of this for easy viewing.

If you cook on-site you need to apply for a food premises licence. To lower the risk of serving unsafe food, the industry follows the ‘Four Cs’ policy covering cleaning, cooking, cross-contamination and chilling. When delivering food, ensure it’s safe to eat by serving it in clean containers and that it remains hot.

It’s a good idea to include all of this information in a health and safety policy that staff can easily refer to.

Other legal requirements for a takeaway business include public liability insurance to protect customers on your premises. You will also need business premises, and contents insurance and may need some or all of the following insurances:

• Commercial property
• Commercial vehicle
• Personal accident
• Employers’ liability insurance

As with any business, you must register with HMRC and comply with aspects of tax and employment law, including The Employment Rights Act (1996) and The National Minimum Wage Act (1998).

When taking orders online, you are storing customers’ personal information, so you must comply with the General Data Protection Regulations (GDPR) and The Data Protection Act (DPA).

 Step 3: Researching costs and pricing food and services

Be realistic about your costs and research properly so that your sales can offset your spending.

Costs will be split into one-off costs as you set up and launch your takeaway business, and monthly recurring costs as you trade. These should be included in your business plan and cash flow forecasts to help you run the business confidently and professionally. They can also help you plan investments, inform your pricing strategy, and allow your takeaway business to be profitable. 

Unless you operate a takeaway and delivery service from your home, one of the biggest costs will be the commercial premises you use as you will need to pay rent. The cost will depend on the location. If it’s on a busy road with many other businesses and lots of people around it will cost more.

Most commercial premises are rented per square metre. Prices can range from £500 to £15,000 per square metre annually. Most takeaway premises will require between 20-30 square metres at least. One cheaper popular option is to combine a business with a home you pay a mortgage on. You can search business property listings to find suitable premises.

You also need to budget for refurbishment and redecoration of the premises, equipment, furniture and the cost of installing it. A major cost will be installing a commercial kitchen, including water, gas and electricity services if they are not already there.

The exact cost of equipment will depend on the size of your business, how many customers you cater for and the scale of your menu. You could start with the basics and gradually build up equipment as your takeaway business grows.

Other typical costs usually include:

• Staff costs, including training
• Maintaining and replacing equipment
• Delivery costs
• Ingredients
• Food containers, cutlery etc.
• Branding, marketing, and advertising
• An ecommerce website for customer orders
• Utilities, and other running costs
• Business and other types of insurance

Pricing your food and services

These costs must be estimated and recorded accurately so you can balance them out with sales prices. Customer prices need to be competitive but also need to cover these costs and make a profit to operate a takeaway business as a going concern.

Each item on your menu will be priced differently. You can include budget options, set menus and premium options to cater to and for a range of customers. Many factors can influence prices, such as:

• The type of food you sell
• Where you source your ingredients from
• The labour that goes into menu item preparation
• The average number of sales you make
• The location and rental costs
• Competitor prices
• Other overheads you must pay before you even sell a meal

Step 4: Decide your takeaway type, write a menu, and do customer research

The type of takeaway you choose to run will determine your customer base and your menu. 

There are a range of different types of takeaways you can launch:

• A traditional restaurant with a takeaway option
• A takeaway-only service that could be for collection only, delivery only or offer both services
• A mobile food van that operates from a popular location

Each option has its own pros and cons, challenges, pitfalls, and overheads.

Once you have chosen the takeaway business type, you need to decide on the food type. Will you select Chinese, Indian, or Italian, or opt for fast food like burgers or fish and chips? Or will you decide to specialise in a less common option for takeaways such as Indonesian, Cajun or Greek?

It also be useful to consider the demographic of people who live near your takeaway. Don’t forget to also refer back to your market research to make sure there is a large enough market for your cuisine choice so that your takeaway business has the best chance of success. 

Writing a menu

Now you can start selecting items to go on your menu. Again, refer back to market research and include popular meals, but also try to include a few unusual options to distinguish your menu from competitors. 

It might be tempting to market your takeaway towards affluent customers offering premium food, but for most new businesses, having a range of price points including budget options will widen your potential customer base. 

“Recognising concerns around the higher costs often associated with healthy foods and salads, we made a deliberate choice to offer more affordable options for our customers,” said Wanigaratne.

Customer research

Many factors can influence who your customers are likely to be, including your prices, menu options and, of course, what type of takeaway food your business offers.

You can use a range of methods to capture as wide a consumer group as possible, such as:

• Offering a range of dietary options
• Running special offers
• Offering a children’s menu
• Providing set menus

Whether you offer delivery, collection only or both options will also impact your customer base. Takeaway customers prioritise speed and ease of service, so whichever options you choose, ensure it is reliable and high quality to retain customers.

There are other less obvious factors to consider when you set up your takeaway business. For example, how close you are to public transport, your opening times, and parking access near your premises.

Remember, takeaway restaurants usually only deliver within five miles of their location (less if in a highly populated area with many competitors), so the location will be the main influence on who your customers are going to be.

Step 5: Branding, marketing and advertising

Use targeted marketing to reach your audience, and make use of a wide variety of marketing methods.

Your customer research will inform branding and marketing strategies. To start with, you should decide which of the three main customer segments you are targeting: budget, mid-range or premium. Once you’ve made this decision, you can market accordingly.

Here are some approaches you can take for each customer segment:

• Budget: focus on pricing options, value, and special offers in your marketing materials
• Mid-range: convey a range of food options, price points, and balance value and the deals on offer with information about the quality of your service and ingredients
• Premium: focus on offering high-quality food and service, emphasising the quality of ingredients and the cooking talent that goes into producing the food.

“Our menu emphasises the quality and quantity of ingredients used in each salad bowl, and offers customers flexibility to customise orders by adding or removing,” said Wanigaratne.

When marketing your business, use a variety of methods to get the word out. Make use of social media, email, and leaflets to promote your services to a targeted audience. We also recommend utilising Trustpilot and other customer review sites to build a quality reputation locally.

Step 6: Sourcing suppliers

Research suppliers thoroughly and look at more than just cost when choosing who to purchase from.

A takeaway business needs to find high-quality and reliable suppliers for a range of goods, even if you buy ready meals cooked and prepared externally.

The most important suppliers you need are drinks and ingredients suppliers. The exact number and type of suppliers will depend on your menu, but unless you operate a vegetarian, vegan or dairy-free-only business, you will need to find suppliers for the following:

• Meat
• Fish
• Dairy
• Vegetables
• Salad
• Others for specialist, more niche high-quality ingredients.

National wholesale food suppliers have the benefit of operating nationwide, buying in bulk from farmers and other wholesalers. They can offer a huge range to select from and they will also be able to supply drinks, desserts and catering equipment. You should also be able to benefit from discounts and bulk deals. 

“Shop around and look for a lot of things other than just prices,” said Wanigaratne. “Look at reputation, the story behind the ingredients, where suppliers source ingredients from, how often they deliver, and minimum order values.”

You will need to source suppliers for many other operational aspects of running a takeaway business, including cleaning, equipment, IT, packaging, cutlery and an online ordering service.

When researching suppliers, prioritise quality at a competitive price for the service levels you need and excellent customer service. Building good relationships with key suppliers will help your business succeed.

An online ordering and payment system is an important service to source. You can opt for an online ordering app, a mobile app, or a website. Whichever online ordering system you choose, though, it needs to include a secure payment option.

Wanigaratne opted for Storekit for Salad Republic. “They offer excellent features, the app is user-friendly and allows the customer to place an order without any friction,” he said.

Step 7: Choosing the right location

Choose a location that strikes a fine balance between high footfall and delivery potential. 

Location, location, location!

This is crucial. Especially if you offer an eat-in service as well. You need to select an accessible place with high footfall, such as a high street, but this also needs to be close to residential areas to encourage people to order takeaways and to support fast deliveries. Ideally, there will also be parking spaces close to or outside the premises.

If you want more flexibility, you could opt for a mobile food truck which can be used in various locations. This option is good if you want to offer takeaway services at events where the location varies.

Food trucks can also be used if you only trade in one place, too. This could be in a car park, industrial estate, near offices, or a layby. The key is to select a location with regular foot traffic, or that is easy for drivers to stop and buy food.

So, what do you need to set up a takeaway?

You need lots of different equipment when setting up a takeaway business.

The type of equipment you will need depends on the size of your operation and the range of food you need to prepare for your menu. However, there are a few high-quality, reliable pieces of kitchen equipment that are essential, including:

• An industrial fridge
• An industrial freezer
• An industrial oven with grills and multiple hobs.

You may also need specialist ovens such as a pizza oven. A bain-marie is useful for a takeaway business as it can be used to store food and keep it at a safe temperature. This is essential for busy periods as you can batch-cook popular menu items and store them safely.

Other equipment you are likely to need include:

• Cookware
• Deep fat fryers
• Food processors
• Mixers
• Blenders
• Storage facilities
• An industrial dishwasher
• Stainless steel worktops
• Cutlery

It’s also important to have an online presence, including on social media and other channels. This helps to promote your brand, advertise your services, interact with customers, and let them know about special offers and other promotions.

The final and perhaps most important requirement is reliable, qualified staff who will prepare menu items, serve customers, take payments, deliver takeaway orders, and be proud brand ambassadors, spreading the word about the business at all times – not just during their contracted work hours.

How much can you expect to pay?

The cost of the raw ingredients that are used to make your takeaway menu items will vary, according to their quality, availability and seasonality. Generally, food costs more out of season. Overall, the price of food has increased dramatically in the last three years as inflation has been high.

Other costs can be more accurately estimated. Takeaway premises commonly cost between £500 and £15,000 per square metre annually. The cost of a mobile food van can also vary depending on its size and facilities. A basic option with minimum equipment can cost as little as £1,500. Larger options can cost up to £20,000 or more. You can search for them on marketplaces like Alibaba or eBay.

An industrial kitchen is likely to cost at least £10,000 to have the minimum level of equipment needed to operate a takeaway business. If you serve a wider range of food types, this can cost nearer to £100,000. This commercial kitchen cost calculator is a useful tool.

Other costs include interior design and premises fit-out expenses, lease deposits, web design, marketing and recruitment fees.

“The total investment required for such an endeavour may range from £140,000 to £220,000, depending on factors such as the specific location and site characteristics,” said Wanigaratne.

“It is also very difficult to stick to a set budget, so be prepared to allow a variance of 10-20%.”