How to start a street food business
Mobile catering is experiencing an explosion in the UK – could this low-cost start-up be for you?
Key things to think about when starting a street food business are:
- 01 | Skills
- 02 | Business plan
- 03 |
What is a street food business and who is it suited to?
No longer the preserve of low-quality hotdog vendors, British street food is becoming big business, and there’s arguably never been a better time to enter the market.
With the industry growing at 20% year-on-year, new traders have been attracted by the country’s growing number of urban street markets, private events and street food festivals, which all present new selling opportunities. This has coincided with the less easy to quantify (but no less important) rise in “foodie” culture, with the British public increasingly amenable to new taste experiences and quality cuisine.
Unlike many other businesses, you can start a street food business for a very modest outlay indeed, scaling your offering as demand grows. Despite being unpredictable and competitive, the growth of the industry also means a new start-up can quickly generate hype and establish a profitable niche.
A street trading business can take many forms – from a full-time stall on a permanent market to a roving food truck attending festivals and specialist events. Generally, a street food business will trade outdoors or in an area with other food traders, using portable facilities, and will be able to serve customers their food quickly (although this isn’t always the case).
Street food businesses are particularly prevalent in city centres with established food markets, such as London and Manchester, and at outdoor festivals and other events during the summer months. Many businesses also ply their trade to guests at private events, sometimes for a fixed fee.
This wide definition means there are myriad approaches you can take to street food, with your start-up costs, earning potential, and level of risk varying considerably as a result.
In spite of this broadness, does street food in general suit a particular kind of person? Jonathan “Ozzie” Oswald, founder of hip-hop inspired fish and chip truck The Hip Hop Chip Shop, seems to think so. “It suits nutters, basically!” he asserts. “It’s crucial to stand out, so if your personality stands out then your business will stand out. You also need to be a certain type of person to take on the risk of starting a street food business.”
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. “We had absolutely nothing to do with food, apart from enjoying cooking and eating it,” explains Radhika Mohendas, co-founder of Dorset-based street food dumpling business Dorshi. “The lack of formal training hasn’t held us back – in fact, it has probably helped us focus on the creativity and creation of our own dishes.”
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. Atholl Milton is founder of Bunnychow, a street food start-up offering unique twists on a traditional South African bread and curry dish. He advises street food hopefuls that they “can’t be precious” about their food – you need to be willing to pivot at a moment’s notice. “So many people are arrogant and think they’ve got it right first time, never listening to any of the feedback they get,” Milton says. “I would say your flexibility is the single most important factor affecting the success of your business.”
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. “People with a background in marketing, branding or business tend to do well, because they know it’s really about selling a lifestyle and putting it forward,” explains Radhika Mohendas. “Sometimes you find the people who make a lot of money are the ones who look great, rather than the businesses which have the best food.”
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. “We’ve had shocker events where we’ve lost loads of money – sometimes it just doesn’t work,” explains Jonathan Oswald. “It could be down to lots of different things – other traders, footfall, or bad weather. You will learn a lot of things the hard way.”
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. “It’s very hours and commitment heavy,” admits Atholl Milton. “At one point, I was up at 4.30 every morning to get the bread ready, then I would drive the truck all day, following which I would go to my mate’s restaurant to prepare the food for the next day. Your work-life balance is non-existent.”
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. Read on to find out how.
Ready to get started? Find out everything you need to know about how to start your own business here.
Creating 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. “We can’t compete with the burger slingers, who can get through hundreds of covers within a short period of time – our food is fresh and cooked to order, so our typical customer might have to wait six minutes or more,” explains Jonathan Oswald. “You need to know your audience and choose how you present yourself very carefully.”
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
- 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. “Before I started last year, I created a huge Excel spreadsheet of every single festival in the UK – broken down by what kind of customer goes, the pitch fees, how long the festival has been going, how many other traders will be there, and so on,” explains Oswald. “You need to have a very clear plan.”
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 – “sometimes people just want a greasy burger and chips”, as Oswald succinctly puts it – whilst high-end street food traders fare better at events in which the customer will be searching for a new taste experience. “We know for a fact that when we place ourselves in a food-centric festival, that’s when we tend to do better,” explains Radhika Mohendas of Dorshi. “In those kinds of events, there’s a real trend with finding new food businesses, and people are actively seeking the obscure and the novel.”
“Food and drink festivals have been the most lucrative for us,” Jonathan Oswald agrees. “People know that they’re going to eat and have brought some disposable income – and they want to eat good food, which gives us an advantage.”
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.
To help formulate your street food business plan you may find it useful to download our free business plan template.
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. “I actually came up with the name Hip Hop Chip Shop before I developed the food, and spent a few years just selling T-shirts and merchandise to build up the brand,” explains Jonathan Oswald. “The name Hip Hop Chip Shop is interesting, and leads people to seek more information. It’s been crucial to our success so far, and has helped us get widespread press coverage.”
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. “Social media is the number one most important thing – you can’t just ignore it,” advises Atholl Milton. “I would advise using lots of photography online, as we’ve found a good photo of the food generates a lot of interest.”
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.
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. As Jonathan Oswald explains, this can sometimes cause problems. “We do a lot of our food preparation in a separate commercial kitchen, but you need to be inspected where you trade, and obviously we’re not preparing food in our truck’s garage.
“It means we can never get a health rating from the Environmental Health Office, and some festivals require it. It’s not something that will stop you from continuing to trade, but it can close a few doors for you.”
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.
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. “We started with just £500, which allowed us to do a couple of really successful events with something we had no idea whether it was going to work beforehand,” recalls Mohendas. “Soon, we bought a catering trailer and additional equipment, and we were able to pay £200 to give it a stainless steel finish – it was nothing, really, and we found it very easy to start.”
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. “We’ve gone for the no expense spared approach – it cost us around £17,000 to start through business loans and equipment finance deals,” he says. “I think it’s helped – if people can see your big idea has come to fruition, and you’ve not compromised on anything, it shows people you’re serious about the business and ready to make that leap.”
As well as the cost of equipment (don’t forget that it may be worth considering the available options for accepting mobile card payment), 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.
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. “I still work in my day job in an advertising firm – we’re still not in a position to take a wage from the Hip Hop Chip Shop, despite its success,” admits Oswald. “Most of our trading takes place on Friday and Saturday, so the intensity of it all can be very tough. A lot of it depends on your mindset.”
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. “It really completely depends – fees for pop-up events range from about £500-£2,000, depending on what you’re selling,” explains Jonathan Oswald. “If the footfall’s right, and you’re able to smash out 300 burgers at £7 a pop, you’re earning a lot of money.”
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. “There’s definitely room to make money, but also a massive amount of room to lose money,” Oswald continues. “Make sure you’ve got enough money to make those mistakes – we generally keep enough for three to six months so we can write it off if it all goes wrong.”
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. “We would sometimes be making £40-£45,000 a month in July and August, which would go down to just £3-£4,000 a month in the winter,” says Atholl Milton. “You have to budget and plan very carefully.”
Street food tips and useful contacts
- 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.
- 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.